Are You Overpaying for Content Management

Jupiter Media Metrix predicts content management backlash, increase in homegrown systems

New York  June 17, 2002  In what is likely a lingering effect of the dot-com bubble, Jupiter Media Metrix, an Internet and new technology analysis firm, has reported that businesses are drastically overspending on digital content management systems. According to the first report from Jupiter's new Content Management Service entitled "The Content Management Threshold," overly optimistic predictions for Web-based business initiatives have led companies in some cases to spend a hefty $25,000 per non-technical employee per year to manage simple content on a Web site.

According to the study, customization, integration and deployment costs in many cases can rise as high as six times the basic licensing fees. Jupiter analysts have found that businesses with Web sites that do not operate at scale (e.g. scores of users, tens of thousands of assets) are better off evaluating lower-cost solutions, sometimes even homegrown systems.

"We're seeing companies overspending on online content management systems mainly because they don't know how to properly solve their own content management problems," said Matthew Berk, Jupiter Research analyst. "The majority of the first-tier content management platforms are only cost-effective at a very high scale. Despite the maturity of broad solutions, businesses need to be vigilant about matching their content management requirements to the appropriate solution and its cost."

Despite the prevalence of costly, failed content management systems, most organizations still view content management as the key to operating their Web sites and, increasingly, their enterprise. Content management systems provide value by limiting the efforts of technical personnel required to support the productivity of non-technical content workers.  According to a April 2002 Jupiter Executive Survey, 53 percent of companies will have deployed new document, content or media asset management systems by the end of 2002.  Moreover, nearly one-fifth of Web site managers (19 percent) said they will be involved in content management consolidation projects as they unify systems to manage multiple Web properties.

Although just under one-third (31 percent) of companies surveyed have developed homegrown content management systems, Jupiter analysts expect the number to potentially double by 2004 as companies recover from  and react to  expensive, failed systems. Jupiter analysts advise companies to consider a homegrown system if the content management initiative applies to a single Web property, the parent company has no desire to manage content across the organization, the number of contributors is fewer than 20 and the workflow is no more complicated than a few steps. Longer term, Jupiter analysts expect that decisions about the scale and scope of content management systems will be extended to include the broader needs of the enterprise, and not simply for Web site management.

"Web sites with specific content management needs often focus on the platform that will 'do it all,' rather than match specific problems to specific, often lower-cost, tactical solutions," said David Schatsky, Jupiter research director. "Jupiter's new Content Management Service, created in response to client and vendor feedback, will help businesses make opportunistic decisions about how digital content is created, managed, distributed and monetized."