Unlike Sandy, I’m not “totally speechless,” but on balance pretty surprised by today’s announcement that IBM is buying FileNet for $1.6 Billion in cash.  It’s really about enterprise content management, but there are BPM implications.   The ECM vendor landscape has been consolidating for several years now.  There used to be 3 top-tier vendors — IBM, FileNet, and EMC — so now there are just 2.  Usually M&A in the ECM space is about filling in a missing slot in the portfolio, like records management, imaging, media asset management, rights management… 

This is different.  IBM and FileNet both got started in CM via document imaging back in the 80s, and “fixed content” is still the strongest component of their respective portfolios, although FileNet tends to emphasize production imaging and workflow, while IBM emphasizes database and search architecture.  EMC, the other competitor, has ramped up its own imaging and production workflow capabilities in the past year with considerable success (see my 2006 BPMS Report on EMC Documentum Process Suite when it goes up next week), so perhaps IBM is feeling the heat from that.   Or beyond that, seeing the next generation of content management competition coming from database/infrastructure providers like Oracle and Microsoft, IBM is just bulking up.

I just caught the tail of the conference call, but a few items of interest pop up in the slides.

  1. Customer investments in both IBM and FileNet platforms will be protected and enhanced.  Yeah, they always say that in M&A, but there is a LOT of overlap here.  It took years for IBM to sort out the ECM overlaps out of its Lotus acquisition, and this won’t be any different.
  2. IBM admits FileNet BPM’s strength is in content-centric processes, and WebSphere BPM’s strength is in business integration.  Bowing to the obvious, yes, but before today neither company was willing to say it out loud.
  3. IBM is talking about this as part of their SOA strategy.  There is nothing SOA about FileNet.
  4. “Expanded value” for existing IBM clients is purportedly integration of BPM with email management, forms management, and records management.  Hmmm, IBM already has those 3 ECM components, but they just never bothered to integrate with their own BPM.
  5. “Expanded value” for existing FileNet clients is federated records management and email archiving compliant with SEC/NASD regulations.  Hmmm, a dig at FileNet’s records management?

But this is all just tea-leaf reading.  Hopefully the implications will become less murky as the dust settles.