ECM Report

Following other, relatively minor deals in the industry, EMC’s acquisition of Documentum could start the ball rolling on an even larger group of “mega” deals that will seriously shake the content management industry.

This deal does not exactly come as a major shock to me from EMC’s perspective. Following their acquistion of Legato in July which brought them to the fringe of CM space, EMC hinted that another deal of similar size was possible. I am a little surprised that Documentum was the target. Though Documentum’s financials have been suspect, if executed on properly, the product set appeared to be in a position to potentially dominate the newly consolidating and recently bullish market. Documentum might have done better had they waited a little longer.

Technically speaking, I am not quite sure what EMC brings to the table. Tighter Centera integration is likely but that wouldn’t exactly be big news. Being able to sell a complete solution that manages the total lifecycle of content is a compelling story to tell. But from Documentum’s perspective, I just don’t see how the solution will look that much more attractive to customers a year from now. Documentum probably means more to EMC customers than the other way around.

There has also been speculation and rumor of additional acquistions by the blue chips. Perhaps they were simply attempting to preempt any forthcoming deals. SAP my want to push into this space, Oracle has been rumored to be looking around despite the Peoplesoft problems, and IBM, if they aren’t already, should be. So who are the likely targets of the big boys? OpenText and FileNET are the closest competitors to Documentum. I think OpenText would be particularly attractive. Their offering is solid but could probably use a fresh set of batteries, though their positions might make a deal difficult. FileNET, meanwhile, maintains that they are not talking to anyone.

The consolidation in the industry up until now has been primarily relegated to the acquisitions of industry players by other industry players. This deal represents the first in what is likely to be a set of large scale acquisitions of industry players by the heavyweights. Keep your eyes and ears open.