EMC Acquires PI – What’s the Relevance?

Last Thursday, EMC announced it acquired PI Corp. Like many of you I had never heard about PI. But I really like naming conventions. Many of you missed the one from last week’s post that still makes me laugh. Alchemy was a science that failed in its attempt to turn ordinary metals into gold. PI makes me think of a number that goes on and on forever.

The PI site reminds me of Relevance, Documentum $3.65M acquisition in 1998. Relevance proclaimed to be able to read a collection of content and pull out the relevance. The demo was shear magic. PI’s claims are no less grandiose, to simply read all of your content on your desktop and put it in context.Now I will admit, i have not seen PI”s product but then nor has anyone else. (The bottom of their site says that they are going into beta soon.) It makes me wonder what 100 people have been doing for the past four years or roughly 10,000 engineering weeks (and when you’re the VC, who invested five years ago, you wonder too). And think about it. It’s hard enough for us to manually organize all of our nuggets of personal knowledge, how can we even imagine an application can do it? Those of us that have played with Relevance’s ultimate instantiation Content Intelligence Services have seen that we ordered off the menu didn’t match what was put in front of us. Logically classification requires defining ways to help identify how to categorize content, a task few companies are willing to do manually and some products perform poorly. How will PI measure up?

But what if I’m wrong? Something we’ll find out in five years based on previous experience. Will we ever know what PI could have been? There is a reason for startups. They let you break the rules. No one’s watching over your shoulder asking where the next buck will come from. People are hungry and eager. This is place ideas are born not in engineering leadership meeting and technical councils. Put any bleeding edge idea inside a 20,000 person company with all its rules, processes, and drive for immediate profit and you will suffocate the life out of it. Why not wait for customer number one or at least a beta, before acquiring?

In the end, the fact that no price is mentioned is what really matters. A publicly traded company can make an acquisition and not say the price only if it’s immaterial. Anything that can really affect the bottom line or stock price must be announced to investors. So we’re talking about less that $5m purchase price or a rounding error, a relatively cheap lesson learned. Then again maybe EMC should have been talking to its team from Documentum and could have learned this lesson over lunch. We all know there’re better places EMC could have spent the money.

Note – While I do say that the product promised by Relevance missed it hype, I will say that to this day I’ve never met a such a collection of brilliant minds. The impact that the Relevance team has made across the Documentum platform was worth every penny of the purchase price. And don’t ever bet against them in a game of ping pong either.