From the ashes of the economic meltdown, ECM could thrive

To put it mildly, it has not been a good month for the economy. Everywhere we look there is more devastating news: a crash here, a bankruptcy there, major financial services companies being absorbed or bailed out. The country stands poised to invest $700 billion dollars to prop up the financial markets. It boggles the mind and makes me wonder when the troubles on Wall Street will begin to affect the technology sector. From all this bad news, however, there could be a silver lining for ECM vendors. Why? Well, because all of this unrelenting financial failure will undoubtedly lead to some stern regulation, and where there's regulation, there's opportunity for enterprise content management.

I began to think about this idea seriously last week when I wrote a post about Gartner's prediction that recent troubles in financial services will lead to more regulatory compliance [1]; I also touched upon it in my Editor's Corner (Everything is looking up for ECM [2]). What really caught my eye this week, though, was an article [3] in Business Week about regulation in which author Michael Mandel writes with confident certainty:

"The 30-year era of deregulation came to a sudden and surprising end on Sept. 16. Late that evening the Federal Reserve extended $85 billion to take an unprecedented 80 percent stake in American International Group (AIG) in order to save the floundering insurance giant."

The last time we saw this type of unrelenting greed come crashing down, it involved firms like Enron and WorldCom. This time, it involves the pillars of our financial community, and it has literally shaken the foundation of our economy. With that in mind, the regulations being crafted by Congress could be quite severe.

As you are no doubt aware, the regulatory consequences of the last financial meltdown resulted in the Sarbanes-Oxley Act of 2002 [4], and you may recall that ECM vendors did fairly well with that. As a new era of regulation looms, it seems likely that companies are going to need help tracking their content to keep up with the government's growing regulatory requirements. Sarbanes-Oxley involved SEC oversight. It's hard to say what exactly will be covered in the new regulations, but given that the roots of this crisis can be found in the subprime lending market, one could speculate that every mortgage transaction (maybe every loan) could be subject to more careful government scrutiny in the future. Whatever it is, it's going to be a huge opportunity.

So all of this gloom and doom actually could bode well for enterprise content management. A whole new ECM business could rise from the ashes of the economic meltdown of 2008, and with it, another opportunity looms for ECM vendors. The question remains whether the industry will respond with the necessary tools to meet the potential demand for services, or if the weight of the economic crisis will stunt industry growth. But if these regulations come to pass, it could be a golden age for content management. - Ron [5]