Microsoft’s FAST move could shake up enterprise search market

Microsoft Corp.’s $1.2 billion imminent purchase of Norwegian search company Fast Search & Transfer (FAST) could benefit its SharePoint Server customers and apply pressure on enterprise search competitors to consolidate soon, say analysts.

Oslo-based FAST was likely shopping for a buyer after the company that designed’s search technology experienced a collapse last year and was forced to lay off one-fifth of its employees.

Microsoft, which will present a formal offer next week to pay 42 per cent more than FAST’s shares are valued at, already has support of FAST’s board of directors and 37 per cent of share holders, the company announced Tuesday.

Microsoft says the move will give them end-to-end enterprise search capabilities.

Many industry observers agree, and note that FAST technology’s high-end search capability – it’s ability to handle billions of files across multiple servers – is something Redmond’s existing search and content management products do not offer.

While Microsoft Search Server 2008 Express caters to low-end businesses, Microsoft Office SharePoint Server 2007 is for middle-of-the-road enterprise search.

It’s been suggested that SharePoint users could soon be digging up that five-year-old report with the same technology that makes consumer Web sites such as eBay successful.

For instance, Jared Spataro, group product manager for enterprise search at Microsoft, points to FAST client as an example of what the search can do.

“You can first look for plasma televisions, he says, “but once you start with that initial query, you can then refine your query, based on the size of the TV, or the number of pixels, or price.”

Displaying search results in categories and clusters is the signature of FAST technology, and a feature that helps users sift through copious amounts of data.

The search also identifies questions as being general or specific, and identifies phrases, not just key words.

Some analysts put Microsoft ahead of competitors in the enterprise search field, including IBM Corp., Google Inc., and Oracle Corp.

But niche companies such as FAST that offer enterprise search may soon be snapped up by those very competitors.

FAST competitor Autonomy Corp. “could be set up for acquisition now,” says Timothy Hickernell, an associate research analyst at London, Ont.-based Info-Tech Research Group. “They’ve had some strong relationships with Oracle in the past.”

The FAST move fits with a January 2006 decision by Microsoft to invest in search technology.

The first results came last November with the release of Search Server Express for the low-end market. To pad out their high-end search service, Microsoft considered purchasing other providers before deciding on FAST in the end, according to Spataro. “They had the right combination of people, vision, and the goods to back it up.”

Some analysts believe Microsoft’s high price per share was designed to beat another interested buyer to the punch.

But Redmond itself would only say they assessed the company’s performance over the last couple of years and offered a fair price. FAST was the second-largest IT company on the Oslo stock exchange in 2003.

FAST technology will likely boost SharePoint – already a fast-growing piece of software with $800 million in sales worldwide for 2007 – but it’s not miles ahead of the competition in an industry the IDC group estimates was worth over $1.5 billion last year.

“They’re future-proofing and patching a hole to compete with high-end enterprise search…with IBM and Oracle in particular,” Hickernell says.

Critics were quick to raise the possibility of integration woes giving Microsoft and FAST’s clients more headaches than search results.

But the integration after the merger won’t be the first between the two companies – FAST already supports Web Parts and could be used directly from the SharePoint interface, explains Spataro. (Web Parts are an integrated set of ASP.NET controls for creating Web sites that enable end users to modify the content, appearance, and behavior of Web pages directly in a browser).

Hickernell echoes these views and points out that FAST is already running on Microsoft products. “Out of the box, it is already a good fit for Microsoft.”

Though the details of integration are still being ironed out, Spataro promises benefits for SharePoint customers.

He’s say moving forward, SharePoint users will be able to manage the Web face of their business far better.

“This is a part of SharePoint business growing faster than any other part,” he says. “People are realizing in these companies that search is a really important interface for people who come to business Web sites.”

Microsoft estimates the purchase will be a done deal by the second quarter of this year.

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Brian Jackson
Brian Jackson
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

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