You’ll probably know by now of Michael Dell’s plan to purchase EMC for an eye-watering $67bn – (Here’s a good piece from US business magazine Forbes that will bring you up to date).
I can see a lot of logic in it from the business operations point of view. Dell was famously getting more and more uncomfortable with having to dance to the tune of the quarterly numbers report system on Wall St, and going private – and this is a great way to get flexibility and freedom to make really long-term bets.
And I think the move has to be seen in the context of other big computer companies reacting to a rapidly changing world. HP, which as of the start of the month, is two companies – a move it says is fundamental to its prospects for long-term profitability and of survival.
Deep pockets – and big stakes
But all that is less a concern to us in the document management community than what the ramifications of EMC/Documentum’s fate could be in a Dell-EMC conglomerate. I believe we should spend a minute or two reflecting on them on the dmcollaborators, so here’s my take:
• The shine’s come off the Documentum brand a bit This software used to be a shoo-in at large enterprises, and it did well in that market for a long time. I think that’s less the case these days. There have to be a lot of question marks over the product’s immediate development roadmap. Big mergers like this take time (Remember HP-DEC-Compaq?) and there are indigestion problems and sometimes products get pushed overboard as a result. That’s not likely to happen to Documentum – but it’s more likely than say a year ago
• To cloud or not to cloud? There are interesting possibilities around platforms. EMC’s strategy was to link system software and CMS (Documentum) to hardware. Dell, on the other hand, has made a lot of headway in cloud, especially around hybrid. What’s going to shake out as the result of a Dell-EMC combination in terms of pushing Documentum? Will it be as a part of a hardware stack or a standalone cloud or a mixed message? Which option will make the most sense to the market? I think that remains to be seen – especially by VARs of Documentum, as well as direct enterprise customers
• We’ve seen before how lumpy a big acquisition can be in our market I think only the most nerveless amongst us wouldn’t see any disruption coming out of this. Lexmark caused some big ripples in its partner and distribution ecosystem with some of its M&As in the past few years; the fallout tends to be disruption and distraction, especially at management level. People in the Documentum or EMC space need to plan for this.
• A big Documentum could mean a new Documentum – or a totally new twist on CMS I mentioned why a man like Michael Dell took his company private. Part of what a merged EMC-Dell-Documentum could do is the kind of long-term R&D and transformation that product development teams not tied to three month windows could put their back into. I am talking about buying up small firms or incubating new ideas internally that could result in a new form of Documentum, or a completely new approach to working with content in the cloud, from a company that has deep pockets – and an incentive to dip into them to preserve margin over the next decade or so.
Put it all together, it’s clear that Documentum’s fate is of great interest to all of us in the UK DM community, even if we are not directly involved – and as a result the next few months could be very interesting. ‘May you live in interesting times,’ as the old Chinese curse has it – I hope we won’t have to remember that in a while, how about you?
Howard is Sales and Marketing Director at experts in document management solutions EASY SOFTWARE UK
With over 15 years experience of driving software sales and growing profitability year on year, Howard’s career spans retail, banking, telecoms, BPO and IT sectors