Microsoft buys FAST to accelerate search wars

Microsoft Corp. announced Tuesday its intention to make an offer to acquire Oslo, Norway-based enterprise search technology provider Fast Search & Transfer ASA (FAST) for US1.2 billion.

The transaction is expected to be completed in the second quarter of this calendar year, and has received approval from FAST’s board of directors.

Underlying the partnership is a common vision for enterprise search and the belief that “it will be for workers of tomorrow what Internet search is for consumers today,” said Jeff Raikes, president of Microsoft’s business division during a conference call announcing the deal.

“I find it fascinating that today you can find football scores faster online, but inside somebody’s company it can take five hours to track down last year’s business plan,” added Raikes.

He cited stats from an IDC report last year stating that a company employing a thousand information workers can expect to lose more than US$5 million in annual salary searching for corporate information.

He said 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.

Furthermore, he said, companies will face the challenge of merging increasingly sophisticated enterprise search technology with broader infrastructure tools.

The combination of the two companies will mean customers 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.

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.

Lervik said the partnership will enable FAST to more effectively serve its existing customer base and rake in new clientele through SharePoint.

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 Web 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 Web search.

In terms of what FAST brings to the table, Lervik said 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.”

Toronto-based ACIS Consulting Inc., a reseller and systems integrator of FAST’s technology, doesn’t see the acquisition by Microsoft as affecting its 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.

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

Vancouver-based telecommunications services provider Telus Corp. announced a partnership with FAST in 2002 to use its technology to drive search on its customer sites. However, following Tuesday’s announcement by Microsoft, a spokesperson for Telus could not confirm whether that relationship still exists, also adding it is too early to comment on the acquisition.

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