It is to acquire its enterprise content management (ECM) competitor, FileNet. To state that this has come completely out of the blue is something of an understatement, says Sue Clarke, senior research analyst with European IT research and advisory organisation, the Butler Group. Whilst it was always on the cards that FileNet would be acquired at some stage, it is rather surprising that IBM is the vendor to snap it up.

In Clarkes opinion the price being offered by IBM, of approximately $1,6bn, demonstrates that IBM views this as a strategic move, and an extension of its Information on Demand initiative.

IBM has stated that technology from both companies will be integrated into its content management and business process management (BPM) platforms. It believes that the acquisition will allow it to integrate information into critical business processes. It is also touting compliance as a big driver.

Both companies have stated that both products will be preserved and enhanced, enabling customers to take advantage of the broader set of capabilities without having to replace their existing systems. However, neither company has talked about the long-term future of FileNet as a separate brand.

At first glance, it is difficult to understand why IBM has taken this step. In addition to its ECM product, FileNet also has a fully-featured BPM platform, but so does IBM. Both companies also have extensive ECM products. However, IBM is TNA 2002-approved, for its Records Management solution, which will help it to bid for and win orders from the public sector in the UK.

FileNet does not have TNA 2002 approval. A cynical explanation may be that IBM simply wishes to remove a competitor from the marketplace, or prevent another competitor from acquiring FileNet, and increase its own market share at the same time, but $1,6bn would be an extremely expensive way of achieving this.

A much more realistic explanation is that IBM is realising that the world is changing. With tight budgets, organisations are no longer content to pay potentially millions of pounds for a systems integrator to build solutions to run on top of a platform for which they have already paid a large sum of money. For years IBM has claimed to provide an infrastructure on which customers and systems integrators can build applications and solutions.

With many ECM vendors moving away from just supplying a platform for ECM solutions into providing the solutions themselves, most notably Open Text, IBM is coming to the realisation that to compete in the future it will need to provide ready-packaged solutions for a variety of vertical markets that incorporate common content-centric processes. FileNet provides a range of solutions for a number of vertical markets, including in the area of compliance.

Despite this, it is difficult to see what real benefit IBM will gain from the acquisition of FileNet. In terms of functionality both vendors provide broadly the same capabilities, so that there are limits to the number of features that could realistically be integrated together. Of course it will immediately increase its market share in the ECM market, and this will invariably raise its profile as an ECM vendor.

In the near future it looks as though it will be business as usual for both products, although there will be greater integration between the capabilities of both. In the longer term there is no indication about the future of FileNet as a separate brand, and therefore, to settle FileNets customers nerves, IBM must make its long-term intentions for the company clear very quickly after the completion of the deal.