Content management sector set for more twists

Vendors of enterprise content management (ECM) tools and other business software firms are bracing for more mergers in the wake of IBM’s agreement to buy FileNet.

The $1.6bn IBM-FileNet deal is likely to pave the way for yet more consolidation in the ECM sector. According to most analysts, the combination will overtake EMC to create the most powerful force in the category.

That change will turn the spotlight on rivals, including Open Text, which recently agreed to purchase Hummingbird, but also Oracle and Microsoft, both of which have been developing ECM capabilities.

In June, Oracle announced plans to ship its Content Database and Records Database by the end of August. Microsoft, meanwhile, boasts an impressive customer roster for its SharePoint program, and plans a new release next year.

Consolidation has a long been an ECM theme and the consensus is more will follow, with some intrusion from complementary software sectors.

“The size of the market means that only the big guys will take over,” said Mike Davis of analyst firm Ovum. “Larger business intelligence vendors will look at ECM products to bring corporate information into one package and these firms, like Business Objects and Cognos, are considerably larger than the ECM firms.”

Both Business Objects and Cognos have market capitalisation values well in excess of $2bn.

Alan Pelz-Sharpe, a former ECM analyst and now a consultant for Indian services giant Wipro, wrote on his blog  that IT giants are likely to follow IBM’s lead.

“The ECM Suite vendors are document-centric vendors and now we have two very large players dominating - behind that we have Open Text, and behind them Interwoven, Stellent etc. We also have a lot of infrastructure vendors looking to take a slice of the growing pie - HP, Oracle, CA, Microsoft. The market is big enough and has more than enough growth in it to encourage others to enter. Most likely it will be an infrastructure player via the acquisition path, but which one is the question.”

Pelz-Sharpe also doubted that IBM would maintain FileNet’s portoflio in the long term.

However, even the IBM-FileNet deal is not done and dusted as Gartner has said that it expects competing offers for the ECM veteran.

See also:

IBM to acquire FileNet for $1.6bn

IBM claims dominance in the enterprise content management market after snapping up rival of EMC Documentum  10 Aug 2006

OpenText adopts Oracle ECM

Enterprise content management vendor gets cosy with dominant database provider  11 Jul 2006

OpenText ECM tools integrate with Office 2007

OpenText in the Office  19 Jun 2006

Symphony buys out Hummingbird as Content Management market shrinks

Hummingbird flies into private hands to seek out new markets  12 Jun 2006

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