Market consolidation, market evolution, market creation: Any or all of these definitions could apply to yesterday’s announcement that EMC Corp. will acquire Documentum Inc.

However you look at it, the $1.7 billion transaction will put pressure on competitors at the high and low ends of both companies’ customer bases: IBM, with its DB2 Content Manager solutions, and “pure-play” document- and content-management vendors like FileNet and Open Text eventually should feel some heat as the “new” EMC – which let’s not forget also now includes Legato Systems and, by virtue of that acquisition, the former OTG – orchestrates its new business units. And there remains the question of the relationships with the VAR and integrator partners of both EMC and Documentum: how will they fare in the face of a new direct sales channel with broader product capabilities to offer?

Some companies buy others in order to checkmate competitors, and some just because they can – especially in a weak economy such as the one from which we’re now struggling to emerge. The pace of EMC’s acquisitions has become torrid: the ink on the agreement to acquire Legato is barely dry, and Documentum itself hasn’t been sitting idle, completing acquisition of both TrueArc and eRoom in just this past December. But there is apparently a method to this merger madness.

EMC’s recent acquisitions may make it harder to label the company with the convenient “storage company” tag, but still do follow a logical path that leads back to the firm’s original business as this builder of storage boxes becomes a marketer of storage networks and eventually a manager of everything that gets stored in those networks of boxes. EMC’s name for this scheme of world domination is “Information Lifecycle Management,” and there is a certain logic to it.

Documentum, meanwhile, has augmented its core document management capabilities with records management, collaboration, and process services, and has grouped them all under the banner of “Enterprise Content Management.” The linkage between its broadening vision and EMC’s – encompassing structured and unstructured content, enterprise content management, and storage – made yesterday’s announcement possible, and perhaps even inevitable.

Compare this pair of corporate evolutions to that of IBM, which broadened its application management portfolio by acquiring Lotus, Tivoli, and Rational. Or contrast it that of Oracle, which – despite its push to become first an applications powerhouse and then an ERP kingpin – still is generally perceived as being “a database company” (albeit an enormously successful one) beyond all else.

Whether EMC can turn its vision into reality and move beyond its persona as a “storage company” remains to be seen. But there’s little question that the path it is following is a correct one. We wrote months ago about the need not merely to think outside of the box, but to “bust the box altogether.” This EMC has done, and it will be interesting and fun to see what happens next. Contact Us for More

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