By Forrester Research
Special to CNET News.com
October 15, 2003, 7:30AM PT
By Galen Schreck, Analyst
EMC has announced that it plans to buy content management software vendor Documentum for about $1.7 billion in stock. Customers will get an integrated content management and storage system that enforces business policies all the way down to the disc.
With information life-cycle management (ILM) products finding acceptance in the market, the link between storage hardware and applications is becoming stronger. As demonstrated by its acquisition of Legato Systems in July, EMC is quickly positioning itself as a leading supplier of ILM software.
EMC's acquisition of Documentum will do the following:
Solidify EMC's ILM portfolio. The company has a foundation of ILM products, but it needs vendors like Documentum and FileNet to provide a front end for systems like Centera.
Give Documentum critical competitive ammunition. Documentum's competition increasingly comes from software giants like IBM, Microsoft and Oracle. Acquisition by EMC should bolster Documentum's strong enterprise content management features with solid data infrastructure, as well as industry clout that would allow it to compete on equal footing with a colossus like IBM. This acquisition will also force smaller enterprise content management vendors like FileNet and Interwoven to scramble and partner with unwed systems vendors like Hewlett-Packard and Sun Microsystems.
Create integration challenges. Documentum has built out its enterprise content management platform through an aggressive acquisition strategy. It has purchased four companies in the past two years and is still challenged with integrating these acquired technologies. EMC's plan to run Documentum as a separate business will allow Documentum to continue to sort out its portfolio of enterprise content management products, but EMC's fully integrated ILM vision is still two to three years away.
© 2003, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.