Going beyond Google
Search is only the beginning for Endeca's founders, who boast a more sophisticated search engine than Google and an ambitious plan, says Fortune's Matthew Boyle.
By Matthew Boyle, Fortune writer

NEW YORK (Fortune) -- It all started with a beer can.

Seven years ago, Steve Papa and Peter Bell got frustrated while searching eBay for a commemorative beer can that bore the logo and colors of their alma mater, Princeton University. Their searches either resulted in thousands of hits, or none at all.

Papa and Bell eventually found the can, but more importantly, a business took root that survived the dot-com crash and today serves over 300 customers, including 20 percent of the Fortune 100. The company they founded, Endeca, makes search software that helps employees quickly and easily search corporate intranets, assists law enforcement agencies in their hunt for bad guys, and powers online shopping sites like walmart.com.

And oh, by the way, Endeca's so-called "enterprise search" software makes Google's (Charts) ballyhooed link-popularity algorithms look downright quaint by comparison. (The name "Endeca" comes form the German word "entdecken," meaning "to discover.")

But tech giants like Google and Microsoft (Charts) will not play catch-up forever - Steve Ballmer is now investing heavily in search technology - and Endeca also competes fiercely with firms like Autonomy and Oslo-based Fast Search & Transfer.

Thus, Endeca has endeavored to position itself as more than just a provider of souped-up search engines. Papa, now CEO, believes that Endeca cannot only find information, but help companies act on it as well. In other words, the search, once completed, is only the beginning.

"We did not set out to be a search company," says Papa, who previously worked at data warehouse giant Teradata (now part of NCR) and search specialists Inktomi (since bought by Yahoo!) "Search is just one component of the broader stuff that we do. A lot of people - people we are trying to sell to, for instance - do not fully understand that."

While privately held Endeca is growing quickly - revenues surged 116 percent in its most recent quarter, and it should do nearly $80 million this year - industry analysts are eager to see Endeca stretch its wings beyond search. That makes sense, as the market for so-called "business intelligence" software is several times larger than that for corporate search. "Endeca has a great product and interesting technology," says Forrester Research senior analyst Matthew Brown. "The question I have is, 'What's next?"

Monday, Cambridge-based Endeca took a step towards answering that question, announcing that IBM Global Business Services will use Endeca's software to provide its far-flung consultants with real-time analysis of project metrics and data. IBM (Charts) already uses Endeca to manage project staffing, and has saved a whopping $500 million by reducing its need for outside contractors. Now, IBM will give those consultants an easy-to-use "dashboard" that unites information from multiple sources across Big Blue.

In doing so, IBM hopes to make its employees more productive, with an impact that hits the bottom line. According to one study, managers spend 17 percent of their time - or six weeks a year - searching for information, and the Fortune 1000 as a whole wastes $2.5 billion annually due to an inability to locate and retrieve information, say analysts at IDC.

Eighty-five percent of respondents to a recent survey from Teradata, meanwhile, said that decision makers need more up-to-date information than in the past, up from 71 percent who said so last year.

The significance of IBM, which is putting together its own search offering, choosing Endeca for this task is not lost on Papa. "They are systems integrators," says Papa "Their job is to know about all the technologies that can solve a problem. And they chose us."

IBM is not the only blue-chip client in Endeca's stable. Harvard University uses Endeca to analyze alumni giving campaigns, while its business school's publishing arm relies on the software for quick access to large collections of published materials. Engineers at John Deere, meanwhile, use Endeca to access data strewn across dozens of product lines, saving money on design costs.

A typical client brings in between $300,000 and $400,000 for Endeca, but Papa says seven-figures deals for more complex jobs are becoming more common. If the IBM deal is any indication, Endeca's life beyond search is just beginning. Top of page