Wednesday, October 22, 2003

EMC buys Documentum

Interesting — I just saw on my blog that one year ago today, I linked to Documentum’s purchase of eRoom. Last week, in case you missed it, hardware storage company EMC bought Documentum for $1.7b.

This is a non-obvious growth strategy. I think consolidation among the content management players makes sense (for instance, my old company, iManage, is close to merging with Interwoven). But how does EMC (a hardware company) make sense of this acquisition?

EMC, Documentum and LEGATO have achieved a combined total of more than $2 billion in software license and support revenues in the most recent 12 months. People ask me if this means EMC is really becoming a software company. The correct answer is to think of EMC as the one company that offers the best choice of comprehensive information storage solutions for the widest range of customer needs. (source: An Open Letter from EMC President & CEO, Joe Tucci)

Come again? This consolidation would seem a preemptive strike to be competitive ahead of Longhorn’s 2006 release, but EMC seems focused on the storage problem when it seems to me that the real challenge is retrieval. And from what I know about Documentum (admittedly not much — it’s been a while since they were a competitor), they’re focused on the classification, not the retrieval.

Though I can’t fully articulate my feelings on the subject, I’m also increasingly certain that the disruptive innovation posed by blogs, wikis and hybrid products from companies like SocialText will result in less centralization to the enterprise storage challenge, not more. Which makes me wonder whether Documentum’s roll-up under EMC isn’t at least a bit like tilting at windmills.

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