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Commentaries & Highlights

Wednesday, October 22, 2003

EMC Acquires Documentum (Commentary)

EMC's acquisition of Documentum should strengthen both its software and hardware sales and market position. EMC's strategy aims at becoming a provider of Information Lifecycle Management technology. Their acquisition of Documentum fits this strategy and will improve EMC's position as a major player in the content and information lifecycle management space. Content and information lifecycle management continue to grow in importance to companies in all industries and as the size and type of content to be managed grows, is a driver for storage related hardware and software sales. The integration of EMC storage management solutions with the new acquired Legato and Documentum product suites will enable EMC to offer a comprehensive information management lifecycle solution.

From a Product Lifecycle Management (PLM) perspective, this acquisition positions EMC as a potential player in that market also. Within PLM, content creation and management - as part of the overall product information lifecycle - has become an important component of any comprehensive PLM solution and environment. Documentum has been delivering components of PLM solutions for several years, with some 40% of its PLM-related revenues coming from process oriented industries and a presence in many other industry sectors. During the past years, Documentum has been expanding its product suite through acquisitions of records management and compliance, rich media asset management, and collaboration technologies. These are all areas of increasing emphasis in PLM solutions and will provide EMC the opportunity to establish itself in that space.

Acquisition by EMC should ensure that Documentum remains a leader in the content management market, rather than potentially being relegated into a niche player. However, as a storage vendor EMC has no history of content or document management or as an end-user application software company. There will be uncertainty in the Documentum user community until EMC has developed a positive track record in this sector. Additionally, EMC will need to effectively integrate the Legato product suite both with Documentum and its storage management products. Further, to be truly effective, any information lifecycle management solution must be effectively integrated with the sources of the content and information authoring applications, e.g., publications, presentations, MDA and EDA, and ERP. Such integration will require EMC to invest in further developing relationships with many of the leading suppliers in each of those areas and to develop and support integrations between their respective product suites.

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