In Focus: IBM's FileNet Play Amounts to More ECM Consolidation - InformationWeek

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8/14/2006
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In Focus: IBM's FileNet Play Amounts to More ECM Consolidation

Increasing its portfolio, regaining its market share dominance and foiling its chief rival are part of the deal, but IBM also gains FileNet’s ready-made applications and solutions.

Despite IBM's insistence that its planned acquisition of FileNet is about broadening its portfolio and driving growth, the deal--announced August 10--looks like a defensive play. After all, the enterprise content management (ECM) mainstay for both companies is in document imaging.

Asked what technology IBM gains through the deal that it does not already own, Jon Prial, vice president of content management and discovery, focused more on applications and solutions. "FileNet brings hundreds of applications from [partner] ISVs that we can now take to market," he says. "They bring e-mail integration into business process, and we can integrate WebSphere Process Server with their content-centric business process management."

Unique technologies are, indeed, rare in the mature ECM market, but more than one observer remarked on the overlaps between the two portfolios. Meanwhile, mainstream media outlets such as The New York Times speculated that IBM is "preparing for broader competition with its biggest software rivals, Microsoft and Oracle."

IBM's announcement came less than a week after Open Text declared victory in its bid to acquire Hummingbird, and the two deals will leave fewer than a dozen credible vendors in ECM. That includes Microsoft and Oracle, which are stepping up competition with low-cost platforms aimed at every-seat ECM. If the acquisition proceeds as planned, it will close late this year--just as Microsoft releases its next generation of SharePoint, which will combine document management, records management and Web content management capabilities.

The IBM-FileNet deal also comes as EMC is crowning itself the new market leader, having more than doubled its ECM revenues through aggressive acquisitions. Last year's purchase of imaging capture vendor Captiva Software brought EMC into more direct competition with IBM and FileNet.

By acquiring FileNet, IBM regains its market share dominance in content management and keeps its biggest independent ECM competitor out of the hands of a larger, more formidable rival such as Oracle. The company also gains ready-made applications and solutions that may not be technologically unique, but they will give IBM a bigger foot to put in the door of big business and big government.

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