Coming as a “bolt from the blue,” as Ovum describes it, the $1.7 billion acquisition of Documentum by storage vendor giant EMC says as much about the critical role that enterprise content management plays in business today as it says about the financial and market realities of mergers and acquisitions.“Our mission is to become the ultimate information lifecycle management company,” says EMC CEO Joe Tucci, whose company has often been buffeted by the boom-and-bust nature of the mass-storage hardware industry. The distinction in terms is not lost on the various industry analysts whose job it is to sort it all out.
“EMC has seen very mixed fortunes over the years,” says Ovum analyst Alan Pelz-Sharpe. “From EMC’s standpoint, acquiring a top-notch software vendor like Documentum makes a great deal of sense.”But it will be the customers who ultimately determine the value–and success–of the move. “Documentum and EMC customers will greatly benefit for two reasons,” reports Giga Research analysts Anders Lofgren, Connie Moore and Robert Markham in a recent report. “(EMC) is a strong player that competes in the IT infrastructure market (reducing its vulnerability to future consolidation); and EMC will move quickly to integrate enterprise content, data and storage management.”
Although the analysts view the purchase as mostly positive, there is concern about the smooth integration of the company’s very different cultures, and the degree to which the two companies’ staffs and operations overlap, especially in their local sales organizations.
One thing is certain: the remaining content management software companies are now forced to respond to this new competitive pressure. How much pressure depends on EMC/Documentum’s next steps. Will it integrate both companies' products into a “one-stop-shop” solution, or will the two organizations remain essentially independent?