EMC Captures Captiva

EMC has snapped up input management specialist Captiva Software for $275 million in an effort to bolster its Information Lifecycle Management (ILM) efforts. (See EMC to Acquire Captiva .)

Input management software uses scanning and other techniques to convert paper-based data to digital formats and is being touted as a key weapon in users attempts to digitize mountains of corporate data. EMC is planning to add Captiva’s technology to the content management software it acquired when it bought Documentum in 2003, which forms the heart of its ILM strategy. (See EMC Cops Documentum.)

ILM has become the battle cry in EMC's marketing plan. Since the term encompasses the entire lifecycle of all types of content, including documents, graphics, and Webpages, it sets up a wide umbrella to peddle its storage wares. That fits well with EMC's effort to expand its software presence to offset the commoditization of storage hardware. (See EMC Swings Into Software Big Leagues.) Earlier this week, the vendor credited ILM for its solid quarterly results. (See EMC Earnings Credit ILM Uptick.)

According to Daniel Renouard of analyst firm Robert W. Baird, EMC will use the San Diego, California-based Captiva's software as the “front end” of its content management line. Additionally, EMC will use the Captiva scanning and data organizating software to digitize content that to be usedfor use with the Documentum product line, he thinks.

Initial signs suggest that integrating the two product lines should be relatively straightforward. “Captiva is a long-standing partner of Documentum and its competitors,” writes Renouard in a note this morning. Rivals include the likes of IBM and FileNet.Despite the synergies, Renouard warned that EMC will have to devote some thought to its handling of Captiva’s partners. “As 40 percent of [Captiva's] revenues are indirect, we believe EMC must carefully manage Captiva’s channel relationships," he said, then added that a typical Captiva customer is slightly different than a typical EMC customer.

That said, EMC getting its paws on a sizeable customer base. Captiva currently has a client list that numbers more than 5,000 organizations, half of whom are in the Global 2000.

The deal is the latest in a string of acquisitions by EMC, which include VMWare Inc., Rainfinity, and Smarts. (See EMC to Buy Rainfinity, EMC Completes VMware Acquisition and EMC Buys Smarts.)

EMC execs have already promised that the storage giant will continue to develop Captiva software as an open platform, although the vendor has yet to reveal its plans for Captiva’s 300 employees.

In early trading this morning, shares of Captiva rose $3.51 (19.18 percent) to $21.81. EMC shares were also slightly up, rising 7 cents (0.52 percent) to $13.66.The deal is expected to be completed in late 2005 or early 2006.

— James Rogers, Site Editor, Next-Gen Data Center Forum

Companies mentioned in this article:

EMC Corp. (NYSE: EMC)

EMC DocumentumRobert W. Baird & Co. Inc.IBM Corp. (NYSE: IBM)

FileNet Corp. (Nasdaq: FILE)

Rainfinity

VMware Inc.