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Microsoft announces bid for FAST Search

Tuesday, January 8, 2008 by

Microsoft today announced that it has offered to acquire Norwegian search vendor Fast Search and Transfer (FAST) for approximately $1.2 billion, or 19 Norwegian kroner per share.

There are two interesting aspects to this. Firstly – assuming the acquisition goes ahead – the removal of FAST as an independent company will leave Autonomy to truly dominate the enterprise search market. Following its acquisition of arch-rival Verity in 2005, the head-to-head battle between FAST and Autonomy in terms of quarterly revenues fell by the wayside, and by Q3 2007 Autonomy’s revenues were more than double those of FAST for the three month period. Alongside this, FAST has apparently been having some problems for the last few months; its Q3 07 revenues were down 16% on the same quarter in the previous year, and there have since been rumours in the blogosphere of accounting fraud accusations. So against this backdrop, the acquisition bid is perhaps less surprising.

However, the other interesting factor is that it is Microsoft doing the bidding. Microsoft is reknowned for picking up small software companies with good technologies – often to plug gaps in its offering, either in terms of technology or market coverage. However, at $1.2 billion, this can hardly be described as a small acquisition, and furthermore, its search focus is something into which Microsoft has already invested significant resources in terms of R&D. Clearly, as a best-of-breed solution, the FAST ESP software is more sophisticated, powerful and flexible than Microsoft’s own capabilities, and its configurable, non-black box, approach to search has the potential to fit in well with Microsoft’s products. However, FAST has a significant existing customer base which will need to be handled carefully to avoid giving too much advantage to Autonomy or smaller players such as Endeca, and it will be interesting to see whether the software remains a distinct business or becomes part of the Microsoft SharePoint Server solution.

A final point of note is that FAST has itself made a number of acquisitions in the last year which may be of interest to Microsoft: AgentArts, acquired in July, provides personalisation and recommendation technology; bWise, also acquired in July, provides business intelligence capabilities; and RetrievalWare, acquired from struggling search vendor Convera in August, provides yet another substantial enterprise search platform, this time with a distinct public sector focus. If the acquisition does indeed go ahead, Microsoft has got some serious work on its hands to sort out the FAST technology.

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2 Responses to Microsoft announces bid for FAST Search

  1. Archie Tetchy says:

    I think this says everything about MS’s Enterprise Search offering.

    I’ve done a lot of work in this area in the last two years and whilst it is clear that MS offer a better search capability now than in the past, it still falls well short of the breadth of capability FAST Search offers and their own 80/20 standards.

    The problem MS will have with FAST’s technology is FAST configure their ESP (enterprise search platform) specifically for their customers which involves numerous tasks and technologies. They do not offer an “out of the box” solution you can install and configure yourself. This is clearly what MS would want.

    It’ll be interesting to see what happens.

  2. Archie Tetchy says:

    I think this says everything about MS’s Enterprise Search offering.

    I’ve done a lot of work in this area in the last two years and whilst it is clear that MS offer a better search capability now than in the past, it still falls well short of the breadth of capability FAST Search offers and their own 80/20 standards.

    The problem MS will have with FAST’s technology is FAST configure their ESP (enterprise search platform) specifically for their customers which involves numerous tasks and technologies. They do not offer an “out of the box” solution you can install and configure yourself. This is clearly what MS would want.

    It’ll be interesting to see what happens.

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