IBM Looks To Dominate Content Management Market With FileNet Buy - InformationWeek
Software // Enterprise Applications
10:33 AM

IBM Looks To Dominate Content Management Market With FileNet Buy

IBM will continue to develop both platforms, an executive promises, and the FileNet name will live on.

IBM said Thursday it will pay about $1.6 billion in cash, or $35 per share, to acquire FileNet Corp., a Costa Mesa, Calif.-based developer of content and business process management software.

The move is an effort by IBM to bolster its presence in the lucrative market for products that help companies capture, process, and act on critical business information.

FileNet's main products include Content Manager, which allows users to more easily store and manage digital content; Email Manager, designed to help businesses deal with ever-increasing volumes of electronic messages; and Records Manager, software that can help companies in regulated industries comply with government regulations.

FileNet's customers include Amerada Hess, Citigroup, and Mutual of Omaha. The company posted revenues of $421.8 million in 2005.

FileNet's content management backbone is its P8 platform, which competes with IBM's Content Manager software. IBM executives say IBM will continue to develop both platforms.

"We'll continue to invest in the FileNet infrastructure," says Jon Prial, IBM's VP for enterprise content management. Under IBM, FileNet will also continue to work with partners that happen to be IBM rivals, including Hewlett-Packard and BEA Systems. "This is about the information, not the underlying systems," Prial says. The FileNet brand identity will live on within IBM, he adds.

IBM will add FileNet's operations to its Information Management unit, led by general manager Ambuj Goyal. It also plans to train IBM and FileNet partner and services teams on both IBM and FileNet technology.

Some observers believe the acquisition most immediately boosts IBM's position against storage vendor EMC Corp., which has been looking to reduce its reliance on hardware sales by emphasizing add-on products such as content management and information lifecycle management software. In these areas, "EMC has been ahead of the curve" compared to IBM, says Chris Foster, an analyst at Technology Business Research.

Forrester Research estimates that the market for enterprise content management software is growing at 19% per year and will reach $3.9 billion by 2008.

IBM's acquisition of FileNet is its latest in a string of purchases of data and information management software companies that began in 2004 with the buyout of Venetica. Last year, IBM acquired Ascential Software, a maker of data integration products, for $1.1 billion.

IBM's Prial says the moves, including about a dozen smaller acquisitions, reflect what IBM customers want--access to critical content on demand. "To unlock all this information, you need to get access to it," he says.

IBM says it expects the deal to close in the fourth quarter of 2006, subject to shareholder and regulatory approvals.

IBM shares (NYSE:IBM) were flat in early trading Thursday, while shares of FileNet (NasdaqGS:FILE) were up 2.05% to $35.36.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
[Interop ITX 2017] State Of DevOps Report
[Interop ITX 2017] State Of DevOps Report
The DevOps movement brings application development and infrastructure operations together to increase efficiency and deploy applications more quickly. But embracing DevOps means making significant cultural, organizational, and technological changes. This research report will examine how and why IT organizations are adopting DevOps methodologies, the effects on their staff and processes, and the tools they are utilizing for the best results.
Register for InformationWeek Newsletters
White Papers
Current Issue
Digital Transformation Myths & Truths
Transformation is on every IT organization's to-do list, but effectively transforming IT means a major shift in technology as well as business models and culture. In this IT Trend Report, we examine some of the misconceptions of digital transformation and look at steps you can take to succeed technically and culturally.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll