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The Web CMS Report 2009 looks at... Vignette Content Management

"One area where experienced content engineers will find Vignette lacking is in XML support. With its optional integration tool called "VBIS," you can import and output XML content, but while managing content, Vignette sticks to a straight relational model. Like most other CMS tools, Vignette can represent content as XML, albeit using its own schema (you cannot use arbitrary or industry-standard schemas in the management environment). The problem is not that the product uses a database for storage (most packages do that). Rather, by natively lacking strong notions of hierarchy, the product can work in unexpected ways, such as..."

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Mortgage crisis: The least of Vignette's worries

30-Apr-2008

Vignette announced its first-quarter numbers last week, and the results weren't pretty. For the first three months of 2008, the company lost $839,000 (down sharply from the $4.8 million earned in the same period a year before). The poor performance was due in part to a severe drop in license revenue, down 37 percent for the quarter (to a little under $10 million) compared to Q1 of 2007, continuing the trend we reported on last January.

Company president Mike Aviles, in the earnings call of April 23, confirmed what we've long suspected, which is that Vignette suffers from an agility problem: The company is slow to innovate, and has trouble taking its innovations to market on a timely basis. "We're late," Aviles said in response to a question about time-to-market. "As an innovator in the marketplace, [Web 2.0] is something we should have been on years ago . . . But over many years I think we lost an edge at Vignette that we are now starting to get back." Still, Aviles candidly admitted: "The bottom line is we did not execute. We are not making any excuses for it."

Aviles noted that the recent turmoil in the financial services industry has been disruptive to Vignette's business. (Financial services has historically constituted an important vertical for Vignette.) If indeed the sub-prime loan crisis is partly to blame for Vignette's woes, it could be a troubling portent for the likes of Day Software and Terminal Four, who also do significant amounts of business with customers in the financial services industry. It's certainly a trend worth watching.

In any event, we think Vignette's troubles are probably larger than any temporary tumult in the banking industry (or even in the U.S. economy). Vignette's product release cycles are long. Its sales force seems unfocused. The company is under pricing pressure (something CFO Pat Kelly admitted in the earnings call). And as CEO Mike Aviles himself suggested, Vignette is not the bastion of innovation it once was.

Vignette is hopeful that its (not yet completed) acquisition of online-video-technology company Vidavee will help get innovation jump-started again. Whether it will succeed remains to be determined. We're watching closely. Stay tuned.

- Submitted by: Kas Thomas, Analyst

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