EMC's Documentum Buy Spotlights Enterprise Content Management

EMC's $1.7 billion acquisition of Documentum last week proves it is serious about enterprise content management.

With the acquisition, data storage and management vendor EMC now becomes one of the top drivers of the enterprise content management space. The Documentum software brings to EMC more robust tools for managing documents, records, Web content, digital assets and collaboration.

"[EMC believes] Documentum's rich software development talent, its management strength and depth %85 and its blue-chip customer base will add significant strategic value as EMC continues to evolve," said Joe Tucci, president and CEO of EMC, Hopkinton, Mass.

INTO THE FOLD Terms of the Documentum acquistion>> Targets EMC's information lifecycle management plans >> All-stock transaction worth about $1.7 billion >> Documentum will operate as software division of EMC

The enterprise content management market has been consolidating for the past two years, with Documentum itself making four acquisitions last year.

"The big surprise is that the consolidator is EMC. We all thought it would be Oracle," said Arsenio Batoy, president of Optical Laser, a Huntington Beach, Calif.-based distributor of storage and content management products.

The acquisition will put pressure on Oracle, IBM and Microsoft, all of which are developing enterprise content management strategies, said Carl Frappaolo, co-founder and vice president of research firm Delphi Group. "It showed them that competition is coming from surprising areas," he said.

While Pleasanton, Calif.-based Documentum has a limited channel presence, it works with several influencer partners, many of which also work with EMC, said Tanuja Randery, vice president of global strategic initiatives at EMC.

She said the vendor has not given a lot of thought to how Documentum's applications will fit into EMC's channel strategy. However, one of Documentum's recent acquisitions, eRoom, offers collaboration software.

EMC's Joe Tucci touts Documentum's 'blue-chip customer base.'

"That's one that could be packaged for a broader channel base," Randery said.

Joe Cunningham, general manager at Computer Professionals International, an Albany, N.Y.-based EMC solution provider, said his company hasn't looked much at the enterprise content management space but plans to do so now that EMC has made it a part of its business.

"I hope Documentum will help drive more business for EMC's storage devices," he said.

Leo Binkowski, document management consultant at Sound Foundation, an Ottawa-based consulting firm, said it is still too early to see how EMC's Documentum acquisition will affect his business.

But if the point of the acquisition is to make it easier to sell bigger combined storage and content management solutions, it will be good news for everyone, Binkowski said.

"EMC seems to be trying to come up with a complete solution they can drop on customers," he said.

BARBARA DARROW contributed to this story.