Transcript from Kurt Reiter's speech delivered just now to the DAM Users Group in London

Below is a transcript of Kurt's address, delivered a short time ago in London regarding Digital Asset Management trends.

- TRANSCRIPT BEGINS -

Ladies and Gentlemen Good Morning and thank you very much for the kind invite to address you briefly this morning to open your meeting and discussions. I am most honoured.

By way of a brief introduction, my name is Kurt Reiter, I am Australian (as you can tell from the awful accent) and the Managing Director of Digital Quay – a unique consultancy that provides specialist advice about and implementation of Digital Asset Management systems in Australasia and South East Asia.

Digital Quay is almost nine years old and started life as WAM!NET Australia with a sole focus on selling the well known WAM!NET file transfer and DAM applications. While we still sell WAM!NET solutions today and continue to support an extensive WAM!NET user base in Australasia, our company expanded its offering to provide a number of other digital content management solutions all of which are imported from Europe and the USA.

As far as we are aware, we are the only IT consultancy in the world with this business model whereby we do not deviate from our core strength and seek to be the leading expert in the DAM space.

My role has been to lead the evolution from WAM!NET alone to the consultancy that we are today and to source the partners from around the world that we believe are providing the best of breed applications for DAM.

By doing the research, conducting trials and investing our time to personally meet the people behind each technology we represent we save our clients the need to re-invent the wheel. Of course, many still do but for those who get their heads around our unique model, they quickly come to realise that it’s far easier and more cost effective to outsource the technology search to an Expert. That’s why our strapline as you can see on the bottom of the logo on the screen behind me is “Choose the Expert”.

Our research into the best technologies in the DAM space can be leveraged across the Australasian client base which provides for sound business for Digital Quay in that our clients value highly our offering and are prepared to say so to others in their respective sectors.

Today, I’ve been asked to speak about what my thoughts are on the future direction of DAM and where the industry is heading globally. Hopefully our research and experience at Digital Quay has equipped me to do so properly.

To kick off, let me first say that DAM is indeed morphing into a non-niche area. Management of large amounts of digital assets is no longer a strange requirement of a select few in the creative sectors but almost everyone now has a need to manage digital assets if only the management of our own personal digital photography. Software to manage such content is already buried within the OS of our computers, tablets and smart phones.

It is extremely easy to take and manage photos, store them, find them, distribute them to friends or even post online to social networking sites. Not so long ago, these DAM fundamentals were not as mainstream.

Of course, there is still a huge difference between managing personal assets versus having to manage stock photography collections for an ad agency, the music files for a record label or the massive libraries that underpin the work managed by publishers and print management companies. Therefore, there is still a need for DAM applications that can handle the higher end requirements and there is no reason to believe that will change despite my earlier assertion that DAM is morphing into a non-niche space.

I further believe that while the market of DAM software users has matured somewhat, it still has a long way to go, particularly in the SME space. Huge orgranisations in the creative sectors have by now typically implemented a DAM solution of some variety and overtime will continue to upgrade, modify and migrate to newer and better solutions as they are released. But most companies still do not manage their content properly. The argument for SMEs is that they cannot afford to invest in expensive DAM solutions despite the obvious benefits because of the upfront expense and/or the ongoing hard costs of subscribing to SaaS or ASP based services.

This is changing.

Many of the DAM vendors are now providing low cost points of entry, allowing SME’s or marketing groups within very large organisations the ability to pay a small monthly fee to start using a DAM app that later leads to deeper implementation when too many people are paying a small fee and it makes better commercial sense to bite the bullet and invest properly.

As this trend continues, we will no doubt see a significant increase in the number of companies globally who will be using proper DAM apps to manage their content.

The vendor war is being waged and the big players are in for a huge fight to win in order to grow in the long term. While our partners in the USA and Europe don’t like to hear it, my strong view is that only one technology vendor will ultimately win this battle. While many DAM technology vendors will continue to exist and mostly due to niche functionality and deep client implementations that provide an addictive like revenue stream, there will be a Google like winner that will have well over 80% market share and the rest of the vendors will have limited growth opportunities post this war I speak of.

The winner will benefit from OS integration and all sorts of other benefits from the likes of Apple, Microsoft and Google in the same way that so many others have once they’ve climbed their way to the big boys table.

Of course, the question I am asked the most is: who will it be? ADAM, celum IMAGINE, WAM!NET, MediaBin, Canto? There are many many players.

As it stands, there is no obvious standout although at Digital Quay we’ve made a strategic choice to take on the celum IMAGINE technologies and my view is that celum IMAGINE is right now winning this war and the likes of Gartner are suggesting that celum IMAGINE is the ‘hottest’ growing technology. That said, the company does not have the muscle that some of its competitors do even though I believe what celum offers is by far the best DAM technology available on the global market. Whether their strengths are sufficient to overcome their weaknesses will be fascinating to watch.

The depth of our research into these companies identifies weaknesses and dirty secrets that serve as reminders that no matter how well one might think they’ve identified the strengths and weaknesses there is almost always more to the story. We review staff turnover, current staff satisfaction, former staff views and a bunch of other issues in addition to the usual Gartner like analytics. Sometimes the best information lies below the hood.

It would be inappropriate to go into more detail – I think you get the gist. We do a LOT of homework before we partner with anyone and review our partnerships very regularly.

Once a winner in this vendor war emerges, the whole DAM space will change dramatically in my view. For example, right now there is no real ‘industry’ that sits above DAM like there is for most parts of IT. While most of the vendors provide certification for people who are trained on how to manage their software apps, there is no real value in these qualifications as there is with Cisco, Microsoft, Apple etc.

Once there is a world-leading player in DAM and SMEs take it up properly, I foresee there will be a basis for a proper industry of professionals.

Let me give you an example: in Australia we have a number of not-for-profit organisations who presently use celum IMAGINE to manage their extensive image catalogues and the ‘librarians’ who are responsible at each site have cottoned on that they now have a niche professional market worth because their celum skills would be valued by those at other organisations that have implemented celum.

It’s easy to see that if celum were to become the standard then people who are trained and certified by celum would be able to benefit from such expertise professionally and in turn, celum’s certification becomes valuable. This then provides a platform for a real DAM industry wherein partners around the world will be able to provide training and implementation services that people will actually seek out, pay for and benefit greatly from.

While this happens now and each vendor would argue they already work in this way, it hasn’t happened properly on a global scale with one leading and accepted DAM solution.

Experience with any one DAM app that exists on the market today is incredibly niche and people are more likely to be valued for their sector experience than their knowledge of a particular app.

I think we will in part know when the war is over when we see that this has changed. Right now a librarian for a not-for-profit may move to another not-for-profit using the same application but in the future a Librarian will be able to move from one sector to a completely different one – say from not-for-profit to advertising because their certification and experience with the app will be what the market will seek of them, not their sector experience.

Beyond this mini DAM boom I speak of, the technology will become less visible as it will morph again and become more deeply integrated within mainstream IT. Microsoft’s SharePoint is many years away from achieving what it sets out to achieve but DAM players already know that with most of the SOEs in the world being based on the MS OS it is simply not possible to avoid the SharePoint world and the big boys fighting this war already facilitate SharePoint integration at various levels of complexity and competence.

Cloud computing, increasing individual knowledge on managing content and deeper integration of the winning technology into corporate IT SOEs will mean more people will be using DAM at work than they actually appreciate or are even aware of.

Given this likely trajectory it is no surprise to me to hear regular rumours about the likes of Apple doing their own research into which company to buy out now and simply integrate into their offering but as the jury’s still out on who this market leader will be I doubt we will see any big player acquiring one of the existing DAM market leaders. Of course anything can happen and both Microsoft and Apple have both acquired companies that provide DAM functionality that are used for other purposes but not at the scale that I am predicting.

Apple’s iCloud and its competitors will provide a lot of DAM like functionality at the consumer level pretty quickly and arguably some of those offerings have been expedited through acquisition of software companies rather than internal software development but mass take up of DAM at the SME and corporate workgroup level has not happened and that is mostly because there is no one ‘winning’ technology that corporations can standardise upon. This is yet to occur and the lucky winners will be most lucky indeed.

Based on all of this, I believe the mid term future of DAM to be quite bright and that practitioners will be more sought after than ever before as the SME world is forced to grow up and take managing their content more seriously as organisations continue to find ways of becoming more efficient with the budgets they do have.

The first GFC did not adversely affect the DAM market, in fact it helped it. The predicted second GFC, perhaps depression, may be so devastating that things will be dramatically different but I doubt it. I think as more people are laid off, the ones left behind will be forced to automate even more.

I believe this trend has begun within Government already. We’ve seen more Australian and Asian Government tenders for DAM applications in 2011 than in any year of our existence and the background business requirements while written by different firms and internal IT departments all read from the same hymnbook – Government departments need to smarten up the way they are managing their digital assets and content.

I don’t believe that trend will change in the event of a 2nd GFC even if a mass corporate uptake is slightly or even indefinitely delayed.

For people looking to acquire DAM applications right now who might be troubled by my comments in that you don’t want to back the wrong horse now, I would say that you should not delay while the vendor war is being waged. I would say, however, that you should not select a DAM app for your business or client that isn’t a player in the war – all of the likely candidates are candidates because they are addressing future integration needs such as SharePoint, underlying scalability, Active Directory and other like functionality that ensures them a position on the starting grid.

If you don’t know who they are or the questions to ask, that’s OK – I believe that is why Digital Quay’s proposition is so strong. In most industries, decision makers seek external professional advice from experts before making purchasing decisions. This has not occurred well in the DAM space but I think that too will change.

I’m unaware of any real equivalent to a Digital Quay here in the UK or indeed Europe and would be happy to discuss partnering opportunities with anyone who is looking to benefit from our research and experience in this space.

I’m also sticking around today to join in so if anyone wants to talk more about our model or the various thoughts I’ve thrown at you this morning, please do grab me for a quick chat.

I of course have some views that I cannot share and I am also conscious to make this short talk not an ad for one or more of our partners, as much as they’d probably prefer that to be the case.

Thanks again for your invitation. I hope I’ve met your request and that some of what I’ve discussed has provoked thought.

I believe we have ten minutes allocated for questions?

- TRANSCRIPT ENDS -

This speech was not read, Kurt spoke from notes. E. & O. E.

In this Issue

• Transcript from Kurt Reiter's speech delivered just now to the DAM Users Group in London

About Kurt Reiter

Kurt is the Managing Director of Digital Quay and a recognised international public speaker on digital content theory.

Learn more here.