Microsoft deal heralds further consolidation

Microsoft’s planned acquisition of enterprise search engine specialist Fast Search and Transfer (Fast) could prompt further consolidation in a shrinking range of corporate search tools, according to experts.

The software giant will integrate Fast technology into its Office SharePoint Server product when the estimated $1.2bn (£600m) deal closes, expected in the second quarter of 2008.

The supplier will need to combine various pieces of Fast code added through acquisitions and open source adoption ­ including Linux cluster technology ­ into SharePoint, as well as taking on up to 3,500 Fast customers.

Microsoft’s enormous size will be central to the success of the takeover, according to Ovum analyst Mike Davies.

“Fast has had some difficulties in the past few years, with misreporting and things, so only an organisation such as Microsoft could take any financial nasties that may come out further down the line,” he said.

Microsoft is not the only major supplier in the enterprise search market ­ significant rivals include Google, Autonomy, IBM and Oracle.

And market leader Autonomy ­ with an estimated 17,000 customers worldwide ­ looks a prime acquisition prospect for vendors such as Oracle and HP with which it already has strategic partnerships.

The implications of market consolidation for users remain to be seen.

“Larger customers like consolidation because they do not like multiple contracts, but if you do not have anything outside the big suppliers then innovation may be stifled,” said Davies.

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