IBM to acquire FileNet in $2.5 billion deal

Content management boost is goal of purchase

In an effort to beef up its presence in enterprise content management, IBM will buy FileNet for US$1.6 billion (NZ$2.5 billion) in cash.

According to market research firm IDC, IBM was third in enterprise content management, with US$291 million in revenue, and FileNet was second, with US$293 million, in 2005. Combined, they would overtake EMC, currently the leader with US$362 million in revenue from the field.

IBM says it will combine FileNet’s operations with IBM’s content management business in the Information Management unit led by Ambuj Goyal, with the goal of preserving and enhancing user investments in both platforms.

Integrating IBM’s business process management and service-oriented architecture technologies with the FileNet platform is also on the agenda.

IBM says it is investing US$1 billion in research and development in an initiative it calls Information on Demand, of which it considers enterprise content management a key component.

The acquisition is subject to FileNet shareholder approval and regulatory reviews and is expected to close in the fourth quarter.

For IBM, the deal is another in a line of recent SOA purchases. Earlier this month, it agreed to buy Webify Solutions for an undisclosed sum, and service management company MRO Software for US$740 million. Webify develops tools for linking business processes in an SOA, optimised for IBM’s software platforms and aimed at four vertical markets. MRO Software develops software for managing services and assets, including IT assets.

— Peter Sayer of the IDG News Service contributed to this report

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