Information Retrieval Software Expanding Reach, Role, says New Delphi Group Report; Market Notched $403M in Software License Revenue in 2001

BOSTON, MA, Sept. 12, 2002 -- In its most recent research into the business use of information retrieval technologies, market advisor Delphi Group will report that the information retrieval software market topped $400M in software license revenue in calendar 2001. This represents a pullback of 10% from the comparable market performance in calendar 2000.

"2001 was a challenging year for all enterprise software suppliers, and the Information Retrieval market was no exception," explains Hadley Reynolds, Delphi's Director of Research. "But we project that this software segment will grow disproportionately going forward, as the business use of new generation information retrieval technologies becomes more widespread. Enterprises are now recognizing the contribution this set of technologies can make in helping leverage information assets for increased commerce and a smarter workplace."

In the 2002-04 period, Delphi forecasts that this market will build from continued weakness in 2002 to expand at a rate in excess of 20% through 2004. "Driving the growth will be the adoption by both Government and Global 2000 firms of advanced information retrieval and content Web services to enhance the performance of online commerce initiatives, Web service/self-service experience, and internal collaborative applications," stated Reynolds.

Delphi's research identifies five segments of information retrieval software: Basic Search, Advanced Search, Taxonomy & Classification, Expertise Management/Question Answering, and Ontologies/Topic Maps. On a revenue basis, Basic Search is still the leading segment with 40% on a revenue basis, but both Advanced Search and Taxonomy & Classification areas have grown substantially, commanding 27% and 23% of the market respectively in 2001.

Verity Shows Market Leadership in Primary Segments

During the technology investment slowdown of the past two years, a handful of companies have distinguished themselves as revenue leaders in the respective segments. Verity, Inc. registered leadership performance in the three largest segments of Basic Search, Advanced Search, and Taxonomy & Classification, while commanding an overall market share of 22%. Autonomy, PLC held a strong second position in the emerging areas of Advanced Search and Taxonomy & Classification, and commands the second spot in market share with 12% overall. Convera, Inc. held the second position in the Basic Search segment, and registered an overall market share of just over 7%.

Overall, Delphi Group identified 70 companies as participants in the information retrieval software market. Among the many companies active in this market were four broad classes of participants: the established enterprise information retrieval specialist firms (including notably Autonomy, Convera, and Verity); a large number of new, venture-funded startups offering innovative technologies in a large number of functional areas from intelligence/security applications to commerce enhancements; the larger platform and enterprise software suppliers (e.g. IBM, Microsoft, Oracle, and others) who offer proprietary information retrieval technologies as an element in their extensive catalogs of enterprise software; and a set of new entrant firms repositioning from the Internet search space to tailor their technologies to enterprise use (these include brands like Alta Vista, Ask Jeeves, Google, and Inktomi).

The full text of the Delphi Group report will be published September 24, and released at Delphi's Taxonomy Proving Ground Workshop in Boston, MA.

About Delphi Group

Delphi Group (www.delphigroup.com) is the leading provider of business advisory services that illuminate the value proposition of technology in digital business practice. Delphi Group's market advisory services, consulting, research, and community-building educational events worldwide have assisted more than 20,000 professionals in the Global 2000. Delphi market research is available on the World Wide Web at www.delphiweb.com. Contact Delphi Client Services at (617) 247-1025 or 800- 575-3367 to subscribe.

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      CONTACT: Delphi Group
               Mary Ann Kozlowski, 617-247-1511
               mak@delphigroup.com