EMC Expands Its Reach
EMC Corp.s second billion-dollar-plus acquisition in three months should propel the company further in its effort to not only store enterprise data but also manage the information inherent in that data.
For starters, the company plans to pair the document management offerings from its $1.7 billion purchase of Documentum Inc. last week with some of the software from its $1.3 billion acquisition of backup software maker Legato Systems Inc., which was announced in July.
"Content management is the perfect fit for EMCs strategic direction in information life-cycle management," EMC President and CEO Joe Tucci said during a conference call last week. "The vast majority of all information is now unstructured. With Documentum, we are now adding the intelligence layer." EMCs existing software is designed for structured data.
Documentums Enterprise Content Management suite will be a natural complement to EMCs object-based Centera storage software. But where EMC will see even greater technology-sharing opportunities is between Documentum and Legato, officials said. The Legato deal is expected to close this week.
When EMC completes both of its billion-dollar acquisitions, Documentums document management software will be positioned as the solution for large customers, EMC officials said. Meanwhile, the records management technology that Legato bought from OTG Software Inc. early this year will be targeted at small-to-midsize businesses, officials said. The OTG software already uses some Documentum technology, according to Legato Chief Technology Officer George Symons.
In addition, the usability features in Legatos products could help improve the usability of Documentum software, which is more complicated, Symons said.
The easiest and first step could be integrating Legatos hierarchical storage management tools into Documentum, which could happen within a few quarters, Symons said. Symons was involved in strategic planning for the integration of the companies.
After that, Documentums workflow capabilities will likely be integrated with Legatos ApplicationXtender. Lastly, integration of Legatos EmailXtender into Documentum will come "beyond 2004," said Symons, in Mountain View, Calif.
EMC officials, in Hopkinton, Mass., declined to comment on their long-term plans for integrating Legato and Documentum software.
One IT manager said the EMC deal may be worthwhile but only after the technology is truly integrated, not just rebranded. "You can certainly see from the long-term perspective how the technologies fit together," said Boston Capital Corp. CIO Tom Gardner, a Documentum customer. "Well look at what kind of synergies we can take advantage of" in terms of reducing costs, Gardner said.
Bill Gatewood, director of IT operations at Progress Energy Inc., in Raleigh, N.C., said he believes the same, although he runs six other document management products in addition to those from Documentum.
Price and performance recently made Progress stop using EMCs Symmetrix storage in favor of rival products, Gatewood said. Now, "it is bringing two issues we deal with every day closer together. Im always open to being an EMC customer. That is certainly a solution that well continue to look at" if EMC offers a better answer, he said.
Documentum competitor FileNet Corp. last week said it had enhanced integration between its FileNet P8 content management product line and EMCs Centera. However, officials at the Costa Mesa, Calif., company said it will look to more tightly integrate P8 with Network Appliance Inc.s NearStore storage device, a rival to Centera, if EMC provides Documentum developers with access to EMC technologies but withholds that access from FileNet.
In addition to technology, EMC receives Documentums 265 software engineers and more than 2,500 enterprise customers, a majority of which are already EMC customers.
In the big picture, the deal is "a very good maneuver," said Evaluator Group Inc. analyst Jack Scott, in Greenwood Village, Colo. "EMC is probably the best company I know in terms of digesting acquisitions."
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