IBM to Acquire FileNet for $1.6B

The acquisition supports IBM's Information On Demand strategy and its interest in SOA.

IBM made its 20th "Information On Demand"-based acquisition on Aug. 10, with the announcement that it plans to acquire FileNet for $1.6 billion, or $35 per share.

FileNet marks IBMs third acquisition in less than two weeks. The company also acquired asset management vendor MRO Software on Aug. 3 for $740 million, and the day before it purchased Webify Solutions for an undisclosed sum.

In addition to fitting into IBMs Information On Demand strategy, the FileNet and Webify acquisitions also fit into a category most software vendors are pursuing these days: SOA (service-oriented architecture).

Webify, which will become part of IBMs Software Group as part of the WebSphere brand, provides infrastructure software that helps with the creation, deployment and management of composite applications.

/zimages/1/28571.gifClick here to read more about FileNets records management portfolio.

The FileNet acquisition, subject to regulatory conditions, is expected to close in the fourth quarter. The company, based in Costa Mesa, Calif., brings to the table a solid content management platform as well as business process management, or workflow, capabilities.

Content management software captures, stores and manages all sorts of unstructured information—audio, video, Web pages, podcasts, documents, images—and allows users to integrate and deliver that content in different formats.

The virtual explosion of information from different sources (such as the Internet, blogs and cell phones) is a factor in the movement toward SOA. SOA, in theory, allows the use of Web services to create composite applications based on a specific business process—procure-to-pay for example—that calls on a number of different application areas, content and services.

The goal of IBMs On Demand initiative is to help customers take better advantage of all types of information, regardless of format, platform or location, according to Ambuj Goyal, general manager for Information Management at IBM. Its also a play to align IBMs massive software, services and partner arms around a single initiative.

/zimages/1/28571.gifRead details here about open-source content management options.

"[FileNet] is one of the key strategic priorities for us where information is freed up from different sources and used to improve compliance or workflow flowing into a business process," said Goyal, in Armonk, N.Y. "Content management … is driven by the needs of companies to manage a substantial increase in information, not only in relational forms, but also in different formats."

IBM plans to build on FileNets content management software—as well as its own content and process management software—to enable content management as part of a business process, officials said.

Once the deal is closed, IBM plans to combine FileNets operations with IBMs Content Management business, reporting to Goyal. Most of FileNets 1,800 employees will migrate over to IBM. The company also plans to integrate its own BPM and SOA technology with the FileNet platform, and cross-train both companies partner and services teams on each platform.

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