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Jan. 9, 2008

Yesterday, Microsoft announced that it plans to make an offer to acquire enterprise search technology provider Fast Search & Transfer (FAST) for about US 1.2 billion. The acquisition is expected to be finalized in the second quarter of 2008.

The software giant says it has received approval from FAST’s board of directors to go ahead with the transaction.

Jeff Raikes, president of Microsoft’s business division said "underscoring the partnership deal is a common vision for enterprise search, and the belief that it will be for workers of tomorrow what Web search is for consumers today."

Raikes offered some statistics from an IDC report published in 2007 suggesting that a company employing a thousand information workers can expect to lose more than US $5 million in annual salary, simply searching for specific corporate information.

He added that several key factors have come together to bring enterprise search to a tipping point, including the realization among companies of the importance of the technology to their business and the fact that the technology has become better and easier to use.

Raikes also said "furthermore, companies will face the challenge of merging increasingly sophisticated enterprise search technology with broader infrastructure tools."

The overall combination of the two merged companies will mean users will have a single vendor for enterprise search technologies, said Raikes, adding that before this, customers were forced to choose between high-end specialized and mainstream infrastructure search tools.

He also added "I find it mind-boggling that today you can find football scores faster online, but inside somebody’s company it can take five hours or more to track down last year’s business plan."

Being acquired by Microsoft will allow FAST to “further extend its reach” and take its technology to “the next level,” according to FAST’s CEO, John Lervik. The company will also be able to take advantage of the “tremendous momentum of SharePoint and also use Microsoft’s extensive partner and developer network,” he added.

In terms of what FAST brings to the table, Lervik added that the company has been working on expanding search capabilities beyond the usual e-mails and documents to content like numerical data, for instance. In defense of its offering versus IBM’s OmniFind search tool, Lervik said its technology is based on services-oriented architecture, and is global and scalable. “It’s much larger scale than anything else that is out there.”

"The partnership will allow FAST to more effectively serve its existing customer base and rake in new clientele through SharePoint," said Lervik.

Raikes declined to comment on the go-to-market strategy and the integration of both companies’ software models moving forward, citing the necessity to complete a “period of review” before joint planning can begin. However, on the topic of Internet search engines, and Windows Live in particular, Raikes did say the company is pleased for the relevance of FAST’s work in the area of search.

Six years ago, Vancouver-based telecommunications services provider Telus Corp. announced a partnership with FAST to use its technology to drive search on its customer sites. However, following yesterday’s announcement by Microsoft, a spokesperson for Telus could not confirm whether that relationship still exists, adding it is too early to comment.

Toronto-based ACIS Consulting Inc., a reseller and systems integrator of FAST’s technology, doesn’t see this acquisition as affecting Microsoft's existing customer base. Instead, “FAST now has the opportunity to be deployed at a wider customer base and that can only mean more opportunity for us,” said Efrem Habteselassie, principal with ACIS Consulting.

Habteselassie added "the benefit is in the potential for FAST’s technology to be more tightly integrated with Microsoft products. If anything, future customer offerings will be better."

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Source: Tech Crunch