What to make of yesterday’s announcement of the acquisition of Exalead by Dassault Systems?
Dassault is the French software company (8 thousand employees, €1.25 billion in 2009 revenue) that makes what we used to call CAD/CAM software, designing three-dimensional stuff for everyone from Boeing to … the Yellow Pages. Now, in the old days (when we still called it CAD/CAM), the Yellow Pages itself was the three dimensional object, about 3 inches thick with enough dead trees to make Al Gore cry. So what motivated the acquisition?
Actually, the Yellow Pages is a use case that should be familiar to Lucene/Solr users, as AT&T uses it to drive their YP.com, and Yelp, the 2.0 competitor to the yellow pages, uses Solr as well. As Adrian Bloem of the Real Story Group observes, this is one fine example of new search-based applications. Dassault’s no doubt eyeing Autodesk, which Carol Bartz ran before she took over Yahoo.
But that’s one application. Other Exalead customers? There are a few out there, but clearly not enough for Exalead to resist this exit, especially one that was likely signed, sealed, and delivered en français.
For Dassault, who’s acquired 115,000 customers, they wanted more ownership in the dimension of the growing footprint of data and user experience, and so now they own their own search technology. The price: €135 million. So what if you are not French and you want to control your own search destiny?
Even with the declining value of the Euro, that’s a pretty steep price to pay. What if you want to get search technology that lets you control your search destiny? The price advantage of open source is nice enough, but that’s not the most important part. It’s about control.
What happens if your legacy commercial search vendor has been acquired and your market segment is not what their new owners happen to be in? There’s one part of the search market that in the last few years has come to resemble ERP: just buy something really expensive from a name-brand vendor, subject yourself to their proprietary way of doing things, and settle for mediocre, costly results.
The second part of the market is companies who need search to deliver competitive advantage, who can own the intellectual property they develop and have the flexibility make their search-based application fit tightly to their data, their customers, and their business.
If you’re in the first part of the market, the Dassault acquisition won’t make much difference to you. But if you need competitive advantage, you don’t want to be orphaned when your search technology supplier is swallowed by a company in a different business than your own. With commercially supported open source, you won’t be an orphan.