IBM agrees to buy FileNet for $1.6 bln

IBM is making a strong move in the ECM market by this acquisition. Not so long ago, back in March, FileNet announced integration with the Microsoft platform. The ECM marketplace is consolidating in quite a rapid pace. Very recently also Humingbird switched owners a couple of times in a short timeframe.

The approach of IBM in this field differs from Microsoft’s. Microsoft is building the capability as part of the collaboration platform with SharePoint Server as the centerpoint, whereas IBM seems to focus more indepth on the pure ECM functionality. I wonder how Lotus Notes / Domino / Hannover, etc. will fit in this new emerging ECM software picture …

IBM on Thursday said it agreed to buy business software maker FileNet Corp. for $1.6 billion, a move that would boost its competitive edge against EMC Corp. in the market for corporate content management.

The all-cash transaction is the third software-related acquisition that International Business Machines Corp., the world’s largest information technology company, has announced in a week.

IBM is trying to boost profit margins in its services business, which accounts for about half of revenue, by selling sophisticated software that can be replicated across companies and industries.

It said it entered into a definitive agreement to buy FileNet at $35 per share, which would be a 1 percent premium over FileNet’s Wednesday closing price of $34.65 on Nasdaq.

IBM said it expects the all-cash deal to close in the fourth quarter, subject to shareholder and regulatory approval.

Software led growth at IBM in the second quarter, helped by strong sales of IBM’s Websphere "middleware" used by businesses to connect different software components.

The acquisition would put IBM in a stronger position to compete with rival EMC in the market for enterprise content management software, or programs that corporations use to manage text documents along with images, audio, video files.

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