by John Gallant

How to marry content, business process management

Jul 11, 2016
BPM SystemsContent Management SystemsIT Leadership

Alfresco Software’s CEO Doug Dennerline discusses his company’s open source strategy, the evolution of private clouds for content management and the changing competitive landscape.

Alfresco Software was born a decade ago as an open source enterprise content management (ECM) provider and the company has enjoyed growing success with major corporations and government agencies struggling to deal with an explosion of information. More recently, Alfresco jumped into the business process management (BPM) market and its integration of ECM and BPM is gaining from enterprise buyers.

doug dennerline

Alfresco Software CEO Doug Dennerline

In this installment of the IDG CEO Interview Series, Doug Dennerline talked with Chief Content Officer John Gallant about the value of blending these two usually distinct technologies, as well as how Alfresco – cited as a “visionary” in Gartner Group’s ECM Magic Quadrant – is helping a growing number of companies build private content clouds on Amazon Web Services and Microsoft Azure. Dennerline also discussed how the ECM market is changing – owing to landmark events like the planned Dell/EMC merger – and what’s ahead in 2016 and beyond for the San Mateo, Calif.-based Alfresco.

[ Related: Tech Titans Talk: The IDG Enterprise Interview Series ] Let’s give people who aren’t familiar with the company a 30,000-foot overview of what Alfresco does.

Alfresco Software CEO Doug Dennerline: Alfresco was started by the co-founder of Documentum, John Newton [Ed Note: Newton is currently Chief Technology Officer of Alfresco]. Close to leaving Documentum he wanted to build a next-generation enterprise content management platform and he decided to do that in the open-source model, which is what we’ve been doing for the last 10-plus years. I’ve been here about 3-1/2 years and we’ve gone from a model of a traditional open-source company where you downloaded our free community application and when you wanted to buy support you contacted us and we sold you a support contract. We changed the licensing model to a term model, but we also put value in the application itself as well as the support you receive.

We’ve gone largely into large corporations and governments around the world and we are helping them with their content challenges. Enterprises around the world today are developing content at a furious pace and [they’re] trying to find the right content and have that content delivered to you when you need it. The process is becoming more and more complex and we think we have a next-generation platform that makes it easier for you to do that both on the content management side and the business process management side. You’re in the content management and BPM markets. Can you talk about two key products just so people understand what they are: Alfresco One and Alfresco Activiti?

Dennerline: Alfresco One is our core content platform. It has all the standard services that you get with content platforms in terms of burgeoning metadata support and then, being open. We’re open standard as well as open source, and support things like CMIS for content management, web dev, REST APIs, making it incredibly flexible for organizations to write applications on top of a platform supporting an endless number of user-based applications that you might want to build on it.

Some of the more popular ones are things like contract management, case management, HR onboarding, loan origination, invoice management, just to name a few. Then we wrap a layer of capabilities around that core platform that we call content services that identify who the user is, what their permissions are, what content are they allowed to interact with and where in the process and what content in relationship to that shows up in the process.

A number of years ago, John, we decided we needed a workflow application on our own platform and we had to either find one or build one ourselves. We ended up building one in the open-source model and we called it Activiti. It’s a business process management platform. Maybe a year and a half ago now, we decided to monetize that open-source project the same way that we did Alfresco and it’s become our Activiti process engine. It’s got the ability for you to create workflows and an editor to see what they look like and then test them, as well as the platform to put them into production. We’ve been doing very well with that product. Many folks around the world have used the open-source project and wanted the same kind of licensing model we built for Alfresco. What are the open-source projects that these products are built on?

Dennerline: Our open-source projects are basically just JavaScript. We estimate we’ve had some 30,000 developers over the course of time on both platforms contributing code to the development of the platform and bug fixes. We still put both of those platforms out into the community before we make them available to our enterprises so we make sure that we identify and fix as many bugs as possible. Many of the features we bring into our software come from the community itself. The enterprises that use the software can create their own fixes, features and functions to that software over the course of time. It’s a large code base that’s contributed to by developers around the world. What percentage of your revenue is coming from the content management side vs. the business process management side?

Dennerline: We’ve been selling enterprise content management for 10 years and business process management software for one year so it’s predominately still the enterprise content management. But we’ve been doing very well and are very happy with the success in the first year of production of Activiti. Analysts have talked about the ECM and BPM markets coming together. How are you integrating the product lines?

Dennerline: We feel strongly about that. For some reason the industry has kept those two things separate. We feel that what is happening, at least with our customers, is the notion of being able to deliver content to an end user at the correct point in time that they need to interact with that content. That’s the process side of things. The actual content lives inside of the repository on the ECM side of things.

We’re trying to make it easy for customers. Cisco is a very large user of our product. They were spending an enormous amount of time looking for content to present to customers – up to the point where they were spending, as individuals, 21 hours a week on their systems engineering teams trying to find the right content. They decided that was an inefficient use of time and so we’ve made it easy for them through a thing that they called Sales Connect that they built on Alfresco. They do collaboration in creation of that content. They collaborated on it collectively vs. every person creating their own piece of content. Then that content is distributed out to the world and rated and people can say: This is the most valuable content that we’ve used in front of customers.

We think the marriage of those two markets as not just being a dumb repository, if you will, but to bring intelligence to it and have the content delivered to you at the point that you would like it delivered and that is what we’re doing differently than anybody else today. Do you see them ultimately being one product line vs. two product lines that are integrated?

Dennerline: You can look at it that way, John, as an integrated product line today, Activiti plus our Alfresco One. But Activiti can stand on its own as a business process engine and work with anybody’s content on anybody’s platform. We’ll bring it together, make sure it works really well, integrate it to our own capabilities but we’ll also leave it independent so we can run independent of Alfresco One if it needs to. I wonder if you could go into the cloud strategy and how your business is evolving with the cloud.

Dennerline: When I came to Alfresco I had just been at a couple of pure cloud SaaS companies and I came with a notion that I was going to, what I call, SaaS-ize the content market. I’ve been surprised at how many of the enterprises we do business with aren’t thrilled about putting all content in the cloud.

We have a couple really big customers, Cisco and GE for example, where they divide their content into five distinct layers, going from casual content all the way to top secret. Casual content they will allow to reside in consumer files so you can share applications but the other four layers all sit inside of Alfresco. The more critical your content, the more important it is, the more likely you are to be a customer of Alfresco.

We recognize that much of that content wants to be shared with external people beyond your own corporation – your partners, your suppliers – at some point in a business process so we have a pure SaaS application that can take that content beyond your firewall. You can collaborate around it. You could put into, say, an approval process and once it’s complete, it comes back on-premise and it cuts the link to the cloud, therefore protecting that content back on premise. We call that hybrid and many of our customers are fond of Alfresco for that capability. But we really wouldn’t care if you used our cloud-based product or if you wanted to use any one of the files so you could share products that are out in the market today. What percentage of your customers would you say have that kind of hybrid content management approach?

Dennerline: We haven’t been out in the market that long with the hybrid model but it’s probably 15 percent of our customers are using the hybrid approach. Is it your expectation, Doug, that this is something we’ve seen in other cloud areas, that it’s just a matter of time before people get comfortable with storing more in the cloud and using the cloud more as a core component of content management?

Dennerline: Again, having come from two SaaS companies, I think over the course of time people will become more comfortable. I want to be clear about cloud because cloud is getting confusing in the market. On a multitenant cloud you’re sharing storage and sharing compute. What we are seeing, and we’re big believers in, is a very big move to single-tenant cloud where people are hosting their content and applications in either Azure or AWS.

We’re building a complete capability for our customers to be able to deploy their software very quickly in AWS as an alternative to buying on-premise hardware and software to run those applications. We see a lot of our customers, some 30 in the last year, have gone to putting their infrastructure in AWS and doing it in what we’re calling private cloud. There are a lot of folks in [enterprise] content management and business process management. Who do you see as your core competitors?

Dennerline: On the ECM side, we see the traditional players that have been in the market for a very long time, the IBM FileNet, the OpenText, the Documentums of the world. On the BPM side, again we’re new to this market, we’re running into the likes of players like Appian and Pegasystems as our competitors.

The customers who appreciate what Alfresco brings are the ones that tell us they’re tired of being in a closed system. Think about it, if you want to make a change to a workflow – and businesses are very dynamic today – you have to go back to the manufacturer to get those changes made. In our applications, because they’re open source and you own the code, if you have the right permissions with our Activiti product then you can change a workflow on the fly if you need to, maybe add a secondary approver or remove somebody as an approver if you’re the person responsible for managing that workflow.

That’s not something that you can do with some of the traditional vendors and it gives a flexibility that our customers are looking for both on ECM and BPM. When you’re talking to a potential customer what do you tell them are the critical aspects that make Alfresco a better choice than one of those traditional ECM vendors?

Dennerline: We think about four key things that we do differently or better than most. We work hard at making sure that our software is engaging. It’s easy to use, it’s intuitive. You can interact with the software the way that you want to on your desktop, your mobile device or your iPad. We try to put content into context with this content services layer that we built, this intelligence layer, so instead of you having to find your content, your content finds you in the process.

Third, we think it’s highly integrated into all sources of content, whether that be on-premise, inside of an SAP or inside of a SharePoint application. It really doesn’t matter. We have lots of integrations built into lots of sources of that data. Lastly, what I talked about briefly before, it evolves. Our software evolves as your organization evolves because you own the code, you own the ability to change those workflows on the fly and give your users the kind of experience that they expect. They just want to do their work. They don’t want to have to learn the software and our software allows you to do that. We think those are our key differentiators in the market. With so much valuable information in these documents, what steps are you taking and what security capabilities do you offer to keep this information safe?

Dennerline: We offer the ability to encrypt your content at rest but to be honest, John, many of the organizations that buy our software are very competent around protecting all of their on-premise software through hardware encryption and not even involving Alfresco in the solution, but the way they harden their own protection of all their content. Does that make sense? It does make sense. Recently, you announced enhanced security capabilities for government customers. Is there an evolution of your security strategy?

Dennerline: One of the things that we are working very hard at is allowing the government to meet the government mandates that are coming out around retention of email and retention of records by 2019 – email by 2016 and all content by 2019 – and being able to make any piece of content or email a record and we encrypt that as well. We meet the DoD standards that are required for that content to become a record. How do you see the two markets that you’re involved with evolving? Let’s start with the content management market. Where do you see that going in the next year to two years?

Dennerline: I think it’s under disruption, John. If you look at what’s happening in our market, there’s been a lot of activity. Lexmark is being acquired by a couple of Chinese companies. EMC has publically been told they’re going to spin out Documentum and so we don’t quite know what’s going to happen to Documentum.

It’s a market under construction and we feel like we’re exceptionally positioned to be the next-generation platform. We’re seeing momentum in our business. We’re seeing growth which is in the 20 percent range where many of our competitors are showing little to no license growth at all. I was going to ask you about a couple of those big things going on in the market. How do you take advantage of that? I imagine it’s generally very had to dislodge a customer from an ECM solution they’ve already installed but does this open up an opportunity for you to get people to switch?

Dennerline: It does and it’s an avenue that we are focused on. We did 120 competitive wins last year where there were some of these competitors I’ve talked about. Can you also talk about the BPM market and how you see that evolving?

Dennerline: We’re a new entrant and we’ve had some fantastic wins on the financial markets on Wall Street. We had one who stood up for us at Alfresco Day in New York and talked about the fact that they have already built two processes in the first month that would have taken them substantially longer using the other competitors that they had. Unfortunately, John, I can’t quite name the company yet, but they’ve gone all in with us both for BPM and ECM. This is a New York bank and he asked me to meet him at his innovation center in Palo Alto and said: ‘Look, I’m moving my entire infrastructure to OpenStack, open systems because I can’t recruit people out of college with the kind of skills I need. I can’t hire them because they don’t know how to write code in the code that I have because it’s so old. I want to move to a new infrastructure for the delivery of IT in the bank.’

He’s chosen us for BPM and ECM because we’re open standards and they can own the experience they’re building for their customers. We’re excited about where we’re going. It’s a relatively immature product but we’re working hard. We have a very large team on our Activiti product now given the success that we’ve had and we’re hopeful that we can, over the course of time, build more features and functions in there that will take us more into the core market for business process management. Again, we’re early days. Can you talk about some of the key partnerships that help drive your growth?

Dennerline: We’re seeing a lot of change, John, in that. We have some 200 partners around the world today that are fantastic partners, content management-centric. As we’ve gone upmarket into these large organizations that we’re selling to now, the global organizations, we also are going after a second tier or first tier partner in a way that we haven’t historically done, the Sopras of the world, Tieto, Tata Consultancy Services, Tech Mahindra. We’re seeing a very large change in the growth of the partners that we have around the world to meet the growing needs of these very large organizations that we’re selling to now. What does the next or two hold in the way of development or key milestones that you’re striving to hit?

Dennerline: We’re focused on making sure that we can give our customers time-to-value as quickly as possible. We support some seven different technology stacks today that are used on premise by our customers. There is a very large movement to these infrastructures of AWS and Azure, so we’re developing a capability so you can quickly get your software up and running in that environment and we’re working hard on the DevOps side of our business to make sure that you can quickly [bring] up Alfresco in that environment and get your time-to-value of that software down from what might be over a year today to just a few months. We’ve made a substantial change in the market. What do you see as the biggest obstacles you have to overcome to continue the growth you’re enjoying?

Dennerline: For me, it’s all about execution. We have to make sure that we mature our processes and our organization at the same rate that we’re winning this business and making sure we’re doing the right thing by our customers as we measure ourselves in retention of our customers. To me, we own our own success at this point and it’s a matter of making sure we hire the right, capable people and bring the right, capable process and talent to the organization to make sure we hit the needs of our customers.

I would tell you a bit of a change that we’ve gone through in the three and a half years is we were a kind of technology company culturally – more technically oriented – and we’ve tried to pivot that to be more customer-centric. We’ve done a lot to make sure that we know who our customers are, we know what they want from us to be successful and we’re very committed to their success. We’ve become more of a go-to-market organization with strong technology behind it.