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IBM Looks To Dominate Content Management Market With FileNet Buy: Page 2 of 3

"We'll continue to invest in the FileNet infrastructure," says Jon Prial, IBM's VP for enterprise content management. Under IBM, FileNet will also continue to work with partners that happen to be IBM rivals, including Hewlett-Packard and BEA Systems. "This is about the information, not the underlying systems," Prial says. The FileNet brand identity will live on within IBM, he adds.

IBM will add FileNet's operations to its Information Management unit, led by general manager Ambuj Goyal. It also plans to train IBM and FileNet partner and services teams on both IBM and FileNet technology.

Some observers believe the acquisition most immediately boosts IBM's position against storage vendor EMC Corp., which has been looking to reduce its reliance on hardware sales by emphasizing add-on products such as content management and information lifecycle management software. In these areas, "EMC has been ahead of the curve" compared to IBM, says Chris Foster, an analyst at Technology Business Research.

Forrester Research estimates that the market for enterprise content management software is growing at 19% per year and will reach $3.9 billion by 2008.

IBM's acquisition of FileNet is its latest in a string of purchases of data and information management software companies that began in 2004 with the buyout of Venetica. Last year, IBM acquired Ascential Software, a maker of data integration products, for $1.1 billion.