SUCCESS STORY

KnowledgeTree Takes Root in New ECM Markets

In 2004, KnowledgeTree CEO Daniel Chalef had no idea his interest in developing an open sourcedocument management product would thrust his South African company into prominence.That’s the time a government agency there approached him to help the Medical Research Council retain control of its documents and track sharedaccess.

That South African council is an agency much like the U.S. NIH(National Institutes of Health). Being summoned to help such aninfluential group was an unexpected boost in growing his business.Chalef maximized the opportunity by using the open source model to hiscompany’s best advantage — he developed a community-based free versionto get his product known. He then grew its sales potential through acommercial version available as both stand-alone andSoftware-as-a-Service (SaaS) products.

Today, more than 60 percent of KnowledgeTree’s subscribers are based inthe U.S, supported by a Raleigh, N.C., office. A large portion of thecompany’s chain is located in South Africa.

KnowledgeTree, a turnkey electronic content management (ECM) providerwith a focus on document management, developed the software forbusiness people to easily install and use without a lot ofhand-holding from IT. KnowledgeTreeLive, which issued an updated version just last month, offers all the featuresavailable in the on-site version of KnowledgeTree 3.6.1, including itsMicrosoft Office add-on, which allows users to view, edit, save andemail documents in the KnowledgeTree repository from within Officeapplications. KnowledgeTreeLive also integrates with Zoho Writer,making it possible to edit documents without desktop software.

“We target the small- to medium-size company and governmental agencies.We are seeing a momentum pick up. The product has received 650,000downloads of the open source community edition. Also, we have 300 pluscommercial subscribers. Many of these users are small-to-largegovernment agencies,” Chalef told TechNewsWorld.

Nifty Niche

Entering the ECM market with an open source product gave Chalef a legup. The ECM world of documents and files has fewopen source options in it, according to Alan Pelz-Sharpe, analyst atCMS Watch.

“Currently, it remains dominated by the likes of IBM, EMC andMicrosoft, with some other larger vendors such as Autonomy and OpenText making up the numbers. This is in direct contrast to the world ofWCM (Web content management), where open source vendors make up halfthe market and regularly win deals,” Pelz-Sharpe told LinuxInsider.

ECM has so few open source players due to the sheer complexity ofinternal information management requirements, which are typicallyworkflow-driven. This field is highly differentiated from industry toindustry, he explained. Open source vendors tend to be more of avanilla platform from which to develop. Many buyers do not want to dothat. Instead, they want a solution that will work to some degree outof the box, he noted.

That is the approach Chalef uses. Plus, KnowedgeTree is one of threeopen source vendors in a field of several commercial contenders. SoChalef’s company stands a fairly even chance due in part to the fact that anyonespecifically looking for open source options has few options to choosefrom, noted Pelz-Sharpe.

Money Crunch

Chalef faced the early growing pains that are typical of most newcompanies. Chief among them was getting capital.

“Having access to funding was a problem in South Africa. So I had togo outside the continent for backers,” noted Chalef.

He solved that dilemma with organic funding from institutions. He alsotapped into venture capital funding.

Chalef also faced design challenges in building up capacity. That wentalong with developing the system.

Growth Targets

“KnowledgeTree is well-known globally but oddly enough has littlevisibility in Europe and the U.S., which are the main commercialmarkets,” said Pelz-Sharp.

That assessment is driving Chalef to raise his company’s profile. A U.S. office in North Carolina is helping to get a focusoutside South Africa. So are new product versions with more features.

Those efforts gained KnowledgeTree more notoriety recently. Thecompany was nominated for the Forge.net Community Choice Awards thisyear.

Field Wide Open

Open source vendors are starting to make a mark in ECM, according toPelz-Sharpe. For instance, Alfresco has captured a few headlines, asthey have the marketing savvy that many open source projects lack.

Alfresco, as an example, has strong funding and is staffed by formerbig wigs from Documentum, Business Objects and Interwoven. Nuxeo, fromFrance, has also done well with open source in this market, thoughon a more more low-key level. They have exploited France’s penchant for all thingsopen source and used that as a bridge, expanding first into the UK andnow the U.S., explained Pelz-Sharpe.

“KnowledgeTree has a fairly substantial following too and is well-known particularly in markets not well-served by traditional vendors,such as India and Africa,” he said.

Without a doubt, 2009 has been the year for open source ECM providersdue to the troubled economy worldwide and the perception that opensource solutions are cheap, he concluded.

Measuring Success

“We saw a very vast undeserved market. Many small organizations lackan ECM solution because they can’t pay a high price for one,” Chalefsaid.

KnowledgeTree sells its ECM solutions at a price point that allows themanager to undertake the purchase without major corporate funding. Forexample, a typical purchase starts at US$2,000 and ranges upwarddepending on the number of users, he explained.

That pricing strategy appears to be working. The company experienced 22 percent in quarterly growth between Q1 and Q2 this year. In addition,KnowledgeTree saw an 88 percent year-end growth in 2008 over 2007,Chalef noted.

“Open source has seen a significant growth spurt,” said Chalef.

More To Come

Chalef has set his sights on developing new versions of KnowledgeTreethat will include a social application to document management. Thiswill allow collaboration among users of the program, adding aFacebook-like element, he said. Among his targeted new sales will betwo new markets.

“It will allow more interaction with users and offer a trustplatform,” he said. “I have seen significant uptick in interestfrom federal government and life science spaces in meeting complianceregulations.”

KnowledgeTree already has a Web-based platform for Linux and Windows.The company is adding the ability for users to access Mac platforms.Another feature soon to be added is interdependability amongplatforms.

Two more features Chalef sees as rocketing new sales for the companywill be a built-in Web content management capability that will allowusers to publish documents to Web sites. KnowledgeTree will alsoprovide access to other repositories.

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