IBM completes acquisition of FileNet

Big Blue aims for top-dog status in enterprise content management.

IBM has completed the acquisition of enterprise content management system supplier FileNet, and will integrate the company's operations into its Information Management software division. 

The US$1.6 billion deal, announced fewer than eight weeks ago, was expected to generate rival bids from other leading enterprise content management players, including EMC Documentum, OpenText and Interwoven. But not one offer emerged. 

IBM has acquired FileNet to advance its Information on Demand initiative, which aims to help clients capture insights from their information to use as a strategic asset in business processes.

Further consolidation is expected, as the enterprise content management market is awash with smaller players. IBM is looking to outsmart them by playing up corporate concerns over scalability and integration.

Tim Robertson, manager of content management sales at IBM Software Group, said: "Smaller players will find it harder to compete in delivering an overall content management solution that will address all areas of content throughout the enterprise and be flexible enough to be integrated with customers' existing environments, as well as scalable to meet the future demands of the business."

IBM is conscious, however, that smaller vendors can have more flexibility in terms of pricing, and has admitted that this can be very attractive.

"Niche vendors offering aggressively priced point solutions seem tempting to businesses whose focus is solely price," said Robertson.

"But when integrating these solutions with other critical components of enterprise content management there are often challenges which can result in the discontinuing of such 'closed' point solutions in favour of a solution that is more open and more easily integrated into the existing IT environment."

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