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6/28/2005
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In Focus: RedDotting the "I"s and Crossing the "T"s

Who said enterprise content managment consolidation was played out? Just last week, Hummingbird added to its portfolio by acquiring Web content management player RedDot Solutions.

Who said enterprise content managment (ECM) consolidation was played out? Just last week, Hummingbird added to its portfolio by acquiring Web content management (WCM) player RedDot Solutions. The deal was aimed as much at tapping into the growing small and midsize enterprise (SME) market as adding the German company's technology to the Hummingbird ECM suite.

Hummingbird's purchase of RedDot, for roughly $50 million, had been a long time coming. The two companies have been partners for three years, with RedDot offering Hummingbird a WCM solution and the ECM player opening a few doors for RedDot at the larger corporations it caters to. The two companies have about a dozen joint deals, Hummingbird CEO Barry Litwin told analysts, including at least three major customer deployments, last week.

It seemed obvious from the start that Hummingbird would buy the WCM vendor, but the deal waited even while competing ECM players were acquiring companies left and right. Meanwhile, RedDot grew at a health 20-percent-per-year clip. Most of that growth was in North America, where it now derives at least 40 percent of its $20 million in revenue. The company even added a lightweight XCMS collaborative document management solution based on code from U.K.-based Datum International.

Hummingbird's Enterprise suite is already integrated with RedDot's CMS Web content management product at the API level. But according to Andrew Pery, Hummingbird's senior vice president of marketing, one motivation for the deal was that ECM customers didn't like the idea of going through two separate sales and service organizations. Although RedDot will continue as a subsidiary of Humminbird, Pery says the two teams will now be able to cross-sell and upsell each other's solutions. He noted that all RedDot products, including the XCMS module and RedDot's LiveServer content aggregation engine, will continue to be developed.

"XCMS offers ECM light--basic functionality for managing documents and no more," Pery says. "When those [midsize] customers need more extensive and robust document management and records management, they'll be able to add those capabilities from Hummingbird Enterprise."

Would that introduce overlapping repositories? Yes, Pery admits. But he points out that most enterprises draw from multiple repositories and adds that RedDot's LiveServer will provide unified access through leading portals. XCMS was introduced last year, and less than 10 percent of RedDot's 1,300 customers have deployed the product, according to Pery.

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