Earlier today, Oracle announced an agreement to acquire knowledge management vendor InQuira.  Given InQuira’s deep integration with legacy Oracle products, and despite partnerships with SAP and Genesys, it was just a matter of time that Oracle absorbed InQuira.  R.Ray Wang explains why Oracle finally pulled the trigger:

InQuira “is one of the top knowledge management vendors in the business,” said analyst Ray Wang, CEO of Constellation Research. “They’ve been positioning for a sale to Oracle or SAP for the past 24 months.”

While knowledge management is “a critical component” of CRM systems, most have “a big gap in this area,” Wang added.

It might seem that a vendor such as Oracle, which already had content management and enterprise search capabilities, could build out its own knowledge management system. But the fact is that knowledge management is “a specialized niche,” not only in terms of technology but the customer base, Wang said.

via Oracle Buys InQuira to Boost Fusion CRM | PCWorld Business Center.

The last point that Ray makes is key, knowledge management is a specialized niche, a niche that ultimately wasn’t big enough to sustain standalone vendors.  To put it another way, enterprise KM turned out to be a small pond.

Having spent many years in that pond, I can tell you it was a tough place to swim.  While we all might have thought we were creating a blue ocean for ourselves, market realities and shortsighted sales strategies ended up creating a red ocean.  Knowledge management in this red ocean required access to channels, or flows of knowledge.  That meant ultimate dependency on the owners of those channels – the CRM vendors.  So it comes as no surprise that the last fish in that small pond gets gobbled up by the largest CRM vendor.

The era of bulky, on-premise enterprise KM is over, but that doesn’t mean a blue ocean doesn’t exist for KM.

Forrester’s Kate Leggett also offers some good insight on the announcement as well.