By
Tom Taulli
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October 21, 2003
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Sometimes an acquisition is more than just an acquisition. It's a signal that a major trend is underway. This appears to be the case with EMC's (NYSE: EMC ) recent purchase of Documentum (Nasdaq: DCTM ) .
The price tag -- $1.7 billion -- is a clear sign of serious interest in the content management space. Let's face it, corporate America is inundated with data. With new federal legislation, like Sarbanes-Oxley and the HIPAA privacy regulations for healthcare, companies must manage data in a structured way (just ask Frank Quattrone about the importance of storing and managing data).
But this is only part of the story. Hardware companies are rethinking their strategies and as a result, looking at software. IBM (NYSE: IBM ) , the first to do this, is a powerhouse in hardware and software for storage. Now, with its acquisition of Documentum and Legato, EMC has a similar platform.
Put plainly, consolidation in content management is inevitable. Hardware companies such as Network Appliance (Nasdaq: NTAP ) , and Brocade (Nasdaq: BRCD ) do not want to be left without a software strategy. And don't overlook Sun Microsystems (Nasdaq: SUNW ) , which is desperately in need of a new strategy for growth.
The targets? Prospects will share the attributes of Documentum -- solid technology and market share. And only a handful make that cut: FileNet (Nasdaq: FILE ) , Interwoven (Nasdaq: IWOV ) , Open Text (Nasdaq: OTEX ) , and Vignette (Nasdaq: VIGN ) .
Let the deals begin.
You can reach Tom Tauli at tom@taulli.com.
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