When Dell announced its intent to acquire EMC I felt it was a sign of the end for Documentum. Documentum’s fit was never really understood inside EMC. It was even hard to keep up with the name changes. Last year it was called the Enterprise Content Management Division, the most obvious one in a decade. The rumors of a spin-off have been going on for years. The TSG Group had a great post on this last year. But I think this time it is out of Documentum’s hands.
First off, these are my personal opinions and not those of Big Men On Content (BMOC) as a whole, any other BMOC blogger, nor our affiliated companies. This opinion has been formulated based on my years in the industry along with what I’ve seen or heard in the news.
Documentum continues to be a great product. While over the years it may have strayed away from it primary direction, it has quickly maintained its course as the leader in the most complex of document problems. I’ve lost count of how many times Documentum has “departed pharma” to return right back. Aerospace and pharmaceuticals are their stronghold. The product has been a Gartner Magic Quadrant leader since the beginning of the report. All of these were reasons why EMC bought Documentum for $1.7 billion in the first place.
What’s Dell going to do with Documentum?
At least parts of Dell already know how to talk about Document Management. Today Dell partners with Lexmark (Perceptive). Lexmark (Perceptive) is rarely a name one thinks of as competing with Documentum. But the concepts are there in part of Dell. EMC never really understood Documentum. Pie (a.k.a. Laurence Hart) bumped into a few “Core” EMC employees once and got their view. Dell may be able to make a better run at it.
Will Dell get to make that decision before the merger or will EMC make that as part of their restructuring?
EMC started the year confirming its plans to have layoffs as part of its $850 million restructuring plan. EMC’s first move on January 26th was to have VMWare lay off 800 employees . Three days later, on January 29th, VMware beat analyst expectations by $20 million. Usually a healthy company doesn’t lay off employees. EMC itself announced on January 27th that it missed its earnings. The Enterprise Content Management Division continued to decrease year over year, this year by 6.3%. Both Dell and EMC are positioning themselves for this larger merger.
So what do I think is going to happen?
EMC stated that a substantial part of the reduction in force will be completed by the end of the quarter. I hate to say it but a strong layoff within the division would be a good sign that Documentum is part of the long haul. I would think that to sell or spin-off Documentum you’d want to keep most of your people until that event happened.
I would love to see a spin-off but it is a tough call. The division is under its fourth leader, now that Rohit took over, since the acquisition in 2003. The “heart” of Documentum left when Howard Shao departed for the second time. With the 25th birthday party for Documentum this past summer, I thought maybe there was a chance. It was odd that the party was the same week saw the rebirth of iManage. I think that the old Documentum’s leadership has moved on. So it will most likely be an acquisition.
Who could buy Documentum?
Documentum could beef up Oracle WebCenter. But I don’t think Oracle sees the need.
There’s always Computer Associates. CA could use a boost in the enterprise software market. Not sure on this one.
I like thinking outside of the box. I like the data warehousing market. Leaders, like Teradata, would be a great fit. Documents are most often a part of another larger business process, like ERP. Documentum could give Teradata a great story to tie those “unstructured” records into their intelligence engine.
Right now we will all just have to wait and see.