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Microsoft Looks to Leverage the FAST Track in Enterprise Search
Posted On January 10, 2008
In a move that is likely to shake up the enterprise search market, Microsoft Corp. ( has announced that it will offer to acquire Fast Search & Transfer ASA (FAST;, an Oslo, Norway-based firm, in a cash deal valued at $1.2 billion, which the company said represents a 42% premium on the closing share price of Jan. 4. The deal looks very solid as FAST’s board of directors has unanimously recommended that its shareholders accept the offer and FAST’s two largest institutional shareholders are committed to the deal. The transaction is expected to be completed in 2Q of calendar year 2008. The acquisition is generally seen as a win-win for both companies and disruptive to their competitors. It will significantly bolster Microsoft’s enterprise search efforts, bring them a solid customer base with strength in Europe, and provide a strong collection of technologies that should prove useful across a number of Microsoft products. FAST in turn gains the resources and strengths of one of the Big Guys.

Jeff Raikes, president of the Microsoft business division, sums up the rationale for the acquisition this way: " Enterprise search is becoming an indispensable tool to businesses of all sizes … Until now organizations have been forced to choose between powerful, high-end search technologies or more mainstream, infrastructure solutions. The combination of Microsoft and FAST gives customers a new choice: a single vendor with solutions that span the full range of customer needs."

"This acquisition gives FAST an exciting way to spread our cutting-edge search technologies and innovations to more and more organizations across the world," says John Lervik, CEO of FAST. "By joining Microsoft, we can benefit from the momentum behind the SharePoint business productivity platform to really empower a broader set of users through Microsoft’s strong sales and marketing network. It validates FAST’s momentum and leadership in enterprise search."

In a teleconference to discuss the acquisition, Raikes said the three reasons Microsoft chose FAST are that it brings the best people, the best technology ("to complete what we’re doing"), and a great opportunity to get more R&D talent, especially in Europe. These company assets were echoed by Lervik, who added that the deal meant that "our dream is coming true."

One industry analyst, Susan Feldman, research vice president for search technologies at IDC, has been following FAST since its early web search days, as have I. Feldman says this acquisition is likely to change the enterprise search market permanently—and quickly. It also signals that search has reached the big time: "It is a necessary part of the enterprise software stack. Moreover, it is not just search but information access in general that has been validated."

Most important for FAST, according to Feldman, is that it now acquires the much-needed resources to support the company’s strong vision—one that sees a broader role for search in the future. And, she says, FAST brings Microsoft an array of "very nice technologies and products [that] will fit well with both Share[P]oint and Microsoft’s Live group of products." She specifically pointed to the FAST architecture that provides unified access to content and data, its rich media search capabilities, semantic features, contextual search, hosted solutions, Ad Momentum, and more. But, she stresses FAST’s scalability (to billions of documents) as its major selling feature.

Guy Creese, an analyst with the Burton Group, calls the acquisition a "huge coup for Microsoft in the enterprise search space" ( He also stresses that it will make Microsoft "a one-stop shop vendor"—with enterprise search offerings at all three market tiers. He describes these as 1) cheap and OK (Microsoft Search Server 2008 Express), 2) relatively inexpensive and an 80% solution (SharePoint Search), and 3) expensive and sophisticated (FAST Search).

Stephen Arnold, search expert and author of the first three editions of the "Enterprise Search Report," who has closely tracked FAST for more than 7 years, posted an extended commentary on the acquisition on his new blog, Beyond Search, which is also the title of his next book ( He summarizes his views with these observations:

  • Microsoft SharePoint is complex and the Fast Search enterprise search platform (ESP) is complex. Integrating two complex systems will be a challenge. The companies’ engineers are up to this task, but the question will be "How long will the meshing take?"
  • Customers may be wary of escalating risk. Microsoft will have to keep Fast Search’s more than 2,000 customers in the fold while other vendors try to pick them off.
  • More investor interest in companies in the search sector and a series of shifts in the search landscape may occur over the next year.
  • Further consolidation in search will take place in 2008 and 2009. In the midst of these buyouts, customers will vote with their dollars to create some new winners in "behind the firewall" search.

Not surprisingly, some competitors in the enterprise search space issued statements responding to the acquisition that provided a different spin on the deal. ISYS, which sells into the mid-market, says that "The mid-market should continue unaffected, as it will take months for the two companies to merge, and the resulting product will likely be too aggressive (both in costs and implementation timeframes) for most mid-market needs … news such as this only further highlights the need for powerful yet affordable enterprise search" (

Jeff Dirks, CEO of SchemaLogic, had this comment on the news. "This acquisition expands the capabilities of Microsoft’s SharePoint platform and furthers [its] goal to provide a complete information management solution for the enterprise. For SchemaLogic this is further validation of the continued market demand for enterprise-wide information management solutions and the value large enterprises are placing on finding and sharing information. SchemaLogic provides connections to SharePoint 2007 and FAST search for several large enterprise customers, and we predict the combination will allow us to provide even more value to these customers in the future."

Ali Riaz, former president and COO of FAST (2000–2006), is currently CEO and founder of Attivio, Inc., an "Information Fabric/Information Infrastructure platform provider." (The company doesn’t have a product yet and Riaz says it actually isn’t competing against his old company because it is approaching the problem differently.) Riaz sees the Microsoft move as a shot across the bow of Google. He says that FAST has the experience and technology Microsoft needs to counter Google’s forays into the enterprise with its search appliance. He does bring up some concerns, mostly from the perspective of FAST’s customers, such as level of support (FAST has an extremely high customer satisfaction rate), level and speed of innovation, possible changes in pricing strategy and business model, and FAST’s use of Java and non-Microsoft technologies.

I found the media and blog coverage of this news fascinating—it almost inundated me as I tried to sort through it all. Comparing some of the headlines was most intriguing, and showed the range of opinion on what this deal means.

  • Did Microsoft Just Pull A FAST One?
  • Microsoft Acquires FAST, Will Other Biggies Follow the Trend?
  • Microsoft goes for Google jugular with search buy
  • Microsoft’s Fast deal boosts Autonomy
  • Microsoft’s FAST Bid Highlights Growth Of Enterprise Search
  • Microsoft, Fast Combo To Yield Better Search Dev Tools
  • Microsoft Vaults to Enterprise Search Top Rung With Fast Buy
  • Microsoft FAST Acquisition Suffers From Brain Drain (Asks " What kind of brain drain might have FAST suffered during the 2007 layoffs?")
FAST, founded in 1997, is now a global organization with offices on six continents. It is publicly traded under the ticker symbol FAST on the Oslo Stock Exchange. It sold its internet search business, AlltheWeb, to Overture Services in 2003. FAST’s solutions are used by more than 2,600 global customers and partners, including America Online (AOL), CNET, Factiva, IBM, Knight Ridder, LexisNexis, Overture, Reed Elsevier, and Reuters. Following some disappointing financial results in 2007, the company went through a strategic realignment that involved a series of cost reductions, job cuts, streamlining of internal operations, and a renewed focus on key markets. FAST now has about 750 employees and had projected its 2008 revenue to be in the $200 million to $210 million range. Competitors in the enterprise search space include Autonomy (which owns Verity), Endeca, ISYS, Exalead, Siderean, Vivisimo, IBM, and Google.

Paula J. Hane is a freelance writer and editor covering the library and information industries. She was formerly Information Today, Inc.’s news bureau chief and editor of NewsBreaks.

Comments Add A Comment
Posted By Avi Rappoport1/11/2008 6:47:05 PM

I find it interesting that Microsoft chose FAST, which is a
heavy-duty enterprise-oriented search platform. This is much bigger than SiteServer Search, which let them tick the box for "search". I'd say that not just Autonomy, but Endeca and the other faceted metadata search engines will be competing against this, and it will probably be incorporated into a number of Microsoft server systems.

Then again, some things just languish and die at Microsoft. That
would be a shame, as FAST has been a good search engine and kept the other companies on their toes. But the best technology doesn't always win.

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