In-Depth

Behind Big Blue’s $1.6 Billion Bid for FileNet

Big Blue already markets several content management-related offerings, so what does FileNet bring to the table?

• By Stephen Swoyer
• 08/16/2006

IBM Corp.’s information management portfolio got a big shot in the arm last week when Big Blue ponied up $1.6 billion to acquire enterprise software stalwart FileNet Corp., which in the early 1980s helped take document imaging—and more recently, content management—mainstream.

Founded nearly a quarter of a century ago, FileNet developed and marketed a combined hardware and software solution for document imaging. In addition to its innovations in the document imaging space, FileNet also designed and marketed one of the first commercial workflow automation products, the FileNet WorkFlo Business System. Finally, FileNet developed the first computer output to laser disk solution, appropriately branded COLD, which helped jumpstart another new (and eponymous) product category.

FileNet is also a prominent player in a growing market segment—the enterprise content management (ECM) space—in which IBM itself is an emerging player, thanks to a string of acquisitions that have included content management specialists Venetica Software, Green Pasture Software, and Tarian.

Of course, Big Blue already markets several content management-related offerings, including its WebSphere Information Integrator EII tool and its WebSphere OmniFind Edition search tool. Moreover, Big Blue’s Venetica, Green Pasture, and Tarian acquisitions (among others) have given it highly specialized content management capabilities. So what does FileNet bring to the table?

It’s all about content-centric business process management, IBM officials say. “It’s one of the key strategic priorities for us where information is freed up from different sources and delivered in context to improve either compliance-oriented business processes or workflow-oriented business processes where businesses get significant value moving forward,” said Ambuj Goyal, general manager of IBM’s Information Management division, during a conference call with reporters.

The impetus, Goyal says, is largely regulatory: in the post-SOX landscape, companies want to clearly define their business processes, in part to make them easier to regulate. As a result, he says, they need a way to manage the unstructured (and often informal) content that’s generated or consumed by these processes. “[This is] driven by the needs of companies to manage substantial entries of information, not only in relational form, but also in formats, like forms and images, that need to be managed through content-centric business processes,” Goyal told reporters.

In spite of its demonstrable information management and content management chops, IBM hadn’t yet articulated a compelling story in the content-centric business process management space, says Andi Mann, a senior analyst with consultancy Enterprise Management Associates (EMA). “You saw it [during the teleconference] with them talking up business process management, the BPM stuff. IBM had a big hole in their information management strategy around that capability of passing content from place to place to place in a structured manner to support the business process,” he explains. “IBM obviously has the middleware for delivering the information, and with DB2 Content Manager On Demand, they have a pretty good repository for storing unstructured data, but this really does complete that play for them. It gives them the ability to pass information in a structured way from person to person to person.”