The Digital Asset Management Value Chain: The Future Direction Of DAM In 2013 And Beyond
This article was written by both Ralph Windsor and Naresh Sarwan of DAM News.
In 2011 and 2012, we assessed the prospects for the DAM sector with reference to the technology and business aspects of the industry. This year, we have elected to handle things slightly differently.
DAM gives the impression of a fast-moving sector, but many of the trends take place over a longer period that lasts many years and the pace of change in the industry is not quite as rapid as many of the participants would like to think. A number of the problems have been present for not just years but decades now – still without plausible solutions in many cases.
Although it might make good copy to write some pithy one-liners about what will happen over the forthcoming year, in reality it is rarely that straightforward and many of the predictions for 2013 look like re-statements of trends that are already taking place. The question with most is whether they will be more or less significant at the end of the year than the start, often they are not really very new developments.
With all that in mind, this year we have decided to drop the 2013 predictions and examine how the wider trends might develop over a longer period. Some of this might manifest itself in 2013 (and has even started already in some cases) but you might be waiting a number of years for them to become more obvious – and the other distinct possibility is that we just got it plain wrong!
The Digital Asset Management Value Chain Defined
If there is one big idea in this article, it’s what we are calling: “The Digital Asset Management Value Chain”. This sounds like a phrase we borrowed from a management consulting textbook and the sort of meaningless business jargon which we regularly take people to task with on these pages. However, after reading through our explanation, we hope you might agree that is an accurate description that does describe what DAM users are increasingly looking for and how the industry may develop as a result.
So what is the Digital Asset Management Value Chain? To understand this concept, you need to agree with two important principles:
- Digital assets means more than just digital files. While files are the core essence of an asset, it is the other DAM related activities, for example, cataloguing them with metadata, which transform a binary object (file) and add value so it can become an asset.
- The second principle is that DAM doesn’t describe a single unit of activity but groups together a variety of related tasks. Some of these need to be performed in close proximity to each other (both in time and physical space) but others may be carried out entirely independently by different individuals.
There are a series of key stages or processes though which digital assets will pass. The importance of each of these increases or decreases depending on the individuals and what they need to do at that time. The same is probably true for most computer software, but in DAM, the diversity of tasks in combination with the number of different individuals involved is often greater than other applications. This is one of the reasons the functional scope of DAM systems is in a constant state of flux as end users think of more activities they want to integrate into their DAM initiatives.
The following are some examples of more straightforward tasks that different DAM users will need to carry out:
- If you have just acquired or originated a set of digital assets, your priority is getting them uploaded and into the system rapidly so they are available for colleagues in minimum time.
- If you already have many assets but you are concerned about whether they are all being made use of, your interest might be more metadata and cataloguing quality oriented to maximise findability.
- If you are a user of digital assets, the first key issue you encounter is being able to identify the assets (find them in searches) then it might be how to quickly get access to them (downloading)
- As well as being able to get lots of assets out quickly, you might also want to enhance the efficiency of onward processes (when assets leave your DAM) by carrying out some of the more rudimentary processing tasks in the system itself so you don’t have to spend time importing/exporting to various third party applications.
There are further ancillary tasks that users want to put DAM systems to, such as social media distribution, business intelligence, management reporting, more in-depth asset manipulation, integration with third party systems, the list goes on (and on – as we shall discuss).
It is clear to anyone who has been involved in Digital Asset Management (either as user or system developer) that DAM is an integrating technology where many different processes and activities all need to be coordinated and combined together.
The range of ways in which end users want to be able to add value to digital assets is increasing at an exponential rate. Further, the volume of digital media they are generating which they need to manage is accumulating at an even faster pace. Assets will also persist for even longer durations than they may have done in analogue form because users want larger repositories that will house their ever-growing collections of content. Unlike analogue assets, there are potential cost-effective solutions to the storage issues too which end users will want to be able to connect their digital media libraries into.
The ‘Digital Asset Management problem’ is getting bigger and will become harder to solve via a single software application – whether you access it via the Cloud or installed internally on your organisation’s own servers. In our view, what is required is a more modular and process oriented approach, i.e. a Digital Asset Management Value Chain where end users can mix and match all the elements that contribute value to their Digital Asset Management strategy.
How The DAM Value Chain Differs From The DAM Island You Inhabit Now
Most DAM users currently have what we term ‘DAM Islands’. They probably have either a single product, or one central DAM with some supporting tools that cover the features the main application wasn’t designed for or doesn’t do very well.
There are methods of getting digital assets on and off these ‘islands’, but they are a kind of systems integration equivalent of a digital media ‘ferry service’ for the transportation of media that involves no small amount of prior planning and probably some technical expertise from all the parties involved.
Vendors are often keen to tell you about their APIs and generally over-rationalise this as a ‘solved problem’. This article by Matt Mullen from Real Story Group explains the ‘Lego bricks’ myth of modern APIs more succinctly than most. You can’t ever take the availability of an API at face value if you have to integrate systems and get them to work together.
Since most DAM vendors offer DAM islands, they all have to pack out their own strip of land with as much functionality as they think buyers will be looking for. As we have mentioned, the functional scope of DAM is getting wider with more features being considered as essential by end users, so the products are getting correspondingly more complex and difficult to reliably maintain also.
While the technology market in general and DAM specifically might be enjoying a boom in demand right now, the wider economy hasn’t been for around 4-5 years. In Europe and North America, it is likely to stay that way for at least the same period again. This means the buyers of DAM systems are going to face increasingly constrained budgets and a need to do ever more with even less. This is the other underlying trend driving the collective ‘scope creep’ effect in play in DAM right now and why vendors are constantly complaining that their end users can’t seem to focus on solving one problem at a time and are often looking for ‘kitchen sink’ applications that can cover every conceivable need.
If you need further evidence of the disorganised state of the DAM market, you only need to look at the activity on forums like LinkedIn or the vendor directory here at DAM News. The DAM News vendor directory has around 70 different vendors. Each of them would probably consider nearly all the others who are listed as either direct competitors or still a bit too close for comfort, yet they also have a unique take on DAM which may or may not match each prospective user’s expectations. As a buyer, you can’t pick and choose features from one and plug them into another, you have to sift through reams of potential options and try to select the least worst choice that has more of what you want and less of what you don’t for a price compatible with your ever-shrinking budget.
Any time anyone on LinkedIn is brave enough to ask for suggestions about which DAM system they should go with, they usually get mugged by DAM vendor marketing personnel on auto-pilot where basics like identifying user requirements get brushed aside and boiler plate sales copy is copied, pasted and posted in a single motion.
The DAM system market when viewed collectively is highly inefficient. Most vendors commit major proportions of their development team’s time (and their own profits) replicating functionality that a section of their competitors already offer so they won’t be seen to be falling behind in RFPs and pitches. As we observed last year, although DAM might be a $1bn industry now, it has cost as much again in implementation and marketing.
DAM is a ‘me too’ software sector, par excellence and the situation is further exacerbated by ever-widening functional needs. It represents a massive and unsustainable global duplication of development resources that either the industry must solve or have it fixed for it by a process of commercial natural selection. This might also include the replacement of the entire sector by some other newer alternative technology that is better organised from the start. If for no other reason than self-preservation, we believe the DAM industry needs to properly address the issues discussed.
A number of non-mutually exclusive outcomes are currently in prospect:
- Many vendors will be forced out of the proprietary system market because the investment cost required to keep building ever-more sophisticated product (and maintain them) will become prohibitive.
- The market may try to fragment into sub and super-market strata composed of mega vendors and micro-vendors with few points in between.
- Other vendors from outside DAM will eye the demand for rich media management and dilute the market so it ceases to have definition in the same way that not many people refer to the ‘database application market’ much because it is too broad as a definition, even though it evidently does still exist.
- Significant sections of the DAM industry consolidate around a smaller number of DAM value chains.
An issue for those pursuing the sub-market strategy will be how they handle requirements which fall outside their new niche (e.g. a client who wants a video distribution system when they sell marketing media management tools). In our view, the fragmentation won’t stop cross-sector competition as too many vendors will still want to go after every opportunity, however tenuous.
What Might The DAM Value Chain Look and Operate Like?
It is our view that DAM value chains offer the best opportunity to develop in a more specialist ‘best of breed’ manner that prioritises user’s needs. So how might this theory develop in practice?
DAM value chains may have these characteristics:
- They will be equally interchangeable on the Cloud or On-Premise: but will incrementally encourage end users towards Cloud adoption. The on-premise elements will be more of a necessary obstacle (for example, higher than average security requirements) that end users will increasingly tire of having to deal with.
- Integration will be an essential element for successful DAM value chains. The more successful ones will be widely embraced and their momentum will further increase adoption in a compounding effect. Different value chains will compete on their ability to integrate more widely and expand their functional coverage to secure this advantage.
- The integration advantages of DAM value chains will allow more vendors to specialise in a given functional area. Rather than needing to duplicate what numerous competitors already offer and spread themselves too thinly as a result, those vendors who participate will be able to specialise and develop more sophisticated components. They might be offer groups of products that link up with each other, but they also will not feel pressurised into going after every single functional sub-segment in order to compete.
- The owners of the DAM value chains will increase the power and leverage they have over the rest of the market. They will own the tracks upon which other vendor’s trains will need to run. That fact may also restrict the initial development of the value chain principle as numerous vendors battle for their DAM value chain to acquire pre-eminence.
- Those larger DAM vendors who have the scale and capacity to establish DAM value chains with long-term permanence might also find themselves competing with Cloud providers – or the latter’s channel partners.
- Some end users will favour the choice and flexibility, but others at the less sophisticated end of the market might desire a pre-built solution that someone else has assembled for them. To meet this need, many who might formerly have decided to become SaaS DAM vendors might instead turn to ‘application packaging’ (or ‘integrators’ to use a more conventional industry term). Those operators will review, select and assemble custom applications using a variety of component choices available.
As is evident, there are contradictory factors which may speed up and slow down the pace of adoption of DAM value chains and also present some new problems to deal with.
A number of vendors who do not directly operate in DAM but offer products that may integrate with DAM systems, for example, collaboration tools, have already begun to grasp this idea. They have the benefit of not needing to fill in every functional gap in their offerings to customers and that fact alone might offer them the opportunity to gain a perspective which many in the DAM industry appear to lack.
What Capabilities Might Be Available To DAM Value Chains?
As mentioned earlier in this article, there are a number of points where value is added to digital assets to make them worth more to end users. These will map across to many of the core items of a DAM value chain, but that is probably just the beginning.
We have discussed some wide-ranging industry trends and business factors which might encourage the adoption of DAM value chain. Over the next few days and weeks in DAM News, we will asses how these might directly impact many of the components a typical Digital Asset Management solution. The areas we will cover include:
- Asset Manipulation
- Social Media Part 1 & Social Media Part 2
We will also debate flaws in this theory and what circumstances might lead it to be less effective than a single product or platform solution.
We hope you find this subject of some interest and relevance to your own experiences of Digital Asset Management and we would look forward to discussing it with you over the course of 2013 and beyond