IBM and FileNet - EMC Bites Back

August 15th, 2006: IDM's recent story regarding IBM's purchase of FileNet, we approached several competitors to respond. Andrew Littleproud, General Manager, Enterprise Software Group, EMC Australia, is the first to the post.

IDM comment: It should be borne in mind that this response from Andrew Littleproud is taken verbatim. What follows should be taken as one industry contender responding to what is, quite conspicuously, a major play by a major competitor. IDM's caveat in regard to this comment is that it should be read as the first salvo in what is going to be a lengthy conflict for the billions of dollars available in the information management space.

The contention regarding technology overlap between IBM and FileNet has merit, if (and only if) the integration is handled in such a way as to negate the enormous market reach provided by IBM combined with the specialist knowledge to be garnered from FileNet.

When all is said and done, however, Littleproud's response does indicate that EMC is not prepared to retreat from its stance that it is now an information management company rather than simply a storage vendor. This can only bode well for the professional considering new investments.

While the combination of IBM and FileNet will firmly place IBM in the #1 market share position, EMC is growing faster than both companies (and both combined) in the content management market and will benefit by the customary customer confusion created through the merger of two companies with overlapping technologies.

Both companies lost share last year while EMC gained share in a highly fragmented, yet rapidly growing market.

IBM has been losing share in content management - one of the fastest growing segments of the software market. This is an attempt to reverse that trend. It is unclear, however, how they can accomplish that by buying a slower-growing company with a highly redundant product portfolio.

IBM and FileNet have a tremendous amount of overlap between their respective product sets. Both companies have their own content managers, workflow engines, content management repositories, imaging capabilities, etc. This scenario typically results in customer hesitation/confusion and will take several quarters to sort out.

In contrast, EMC's acquisitions in content management have represented no technology overlap, only added value for customers. Captiva added market-leading imaging and capture technology, Acartus added next generation report capture and management, Authentica added digital rights management, and ProActivity rounded out the EMC Documentum business process management suite. All but one of these companies was strong EMC Documentum partners with existing integrations prior to the acquisition by EMC.

This acquisition demonstrates two large, but slower-growing vendors attempting to keep pace with the market leader.

Neither IBM nor FileNet kept pace with the overall content management market last year, according to IDC. In fact, EMC grew its share of the content management market at the expense of both IBM and FileNet.

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