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SDA India spoke to Hugh Sutherland, Vice-President, Asia Pacific Operations, Enterprise Content Management, IBM Software Group, to understand the big blue's business strategy post acquisition of FileNet in October 2006, the customer and market driven growth opportunities for Asia Pacific, the technology roadmap going forward, and the competitive marketplace (primarily against EMC Documentum and Oracle – acquisition of Stellent) in terms of ECM and content-driven BPM. While Sutherland was resorted to the usual "cannot comment on speculation" and "more information on a later date", some important takeaways emerged from the discussion...

SDA: Can you tell us about the business strategy involved in IBM’s acquisition of FileNet in October 2006?

Hugh Sutherland (HS): Through acquisitions, IBM seeks to add important, missing pieces of technology or expertise to our portfolio; increase market share; and greatly expand the reach of acquired middleware to new customers. FileNet enhances IBM’s capability to design, connect, manage and optimize business processes.

SDA: Can you brief us about how this acquisition helped IBM?

HS: The FileNet acquisition extends IBM’s investment in Information on Demand to make the company’s business operations more efficient, effective and collaborative.

SDA: What are the customer and market driven growth opportunities for Asia Pacific?

HS: Asia/Pacific provides massive growth opportunities for the Enterprise Content Management (ECM) business, driven primarily by local business issues. First and foremost is the explosion of information that organizations need to manage. This is growing at an annual pace of 80% with the key challenge being that 85% of this information is “unstructured business information” and cannot be stored in conventional database. Add to this the business pressures to be more agile, more competitive, more efficient and make more accurate decisions faster coupled with the challenges imposed by increased compliance and regulation requirements and you have major drivers to adopt a unified approach to content, process and compliance management.

SDA: What does this means to customers and prospects in its target industries, such as Banking and Financial Services Insurance (BFSI), and Public Sector, and so on?

HS: The business opportunities for customers and prospects will expand as the joint IBM and FileNet capabilities enable them to expand and/or improve their solutions.

SDA: Can you brief us about the technology roadmap ahead for IBM?

HS: IBM is in the process of working on a combined technology roadmap and we will provide more information at a later date.

SDA: Why did IBM choose FileNet among all the content-management software makers today?

HS: The acquisition combines complimentary technologies and services from both IBM and FileNet. The combination of IBM and FileNet technologies delivers industry focused content management solutions.

SDA: While the acquisition was being done, IBM said that it would integrate FileNet's products with its own content-management software developed in its Information Management division, which is led by general manager Ambuj Goyal. Has this been working out as expected?

HS: IBM will preserve and enhance customer investments in both IBM and FileNet content management platforms. We are in the process of working on a combined product roadmap and will provide more information at a later date.

SDA: In addition, IBM said it would seek to combine FileNet's content-management software with its business process management tools for automating complex business workflows. How is this coming along?

HS: IBM is committed to preserving and enhancing customer investments. We are in the process of working on a combined product roadmap and will provide more information at a later date.

SDA: The acquisition was done only one week after IBM's software division spent USD 740 million to buy MRO Software. IBM also purchased privately held Webify Solutions last week. IBM's software group has bought more than 50 companies in the past 10 years. So how come IBM is making so many acquisitions?

HS: IBM acquires software companies for two primary reasons: 1) to get a jump start into emerging market opportunities; and 2) to add important, missing pieces of technology or expertise to our portfolio; increase market share; and greatly expand the reach of acquired middleware to customers.

SDA: Why are large software companies, like IBM expanding their product portfolios into content management for businesses?

HS: The deployment of content management platforms across the enterprise is accelerating with business process management and compliance as key drivers. IBM has long been a leader in the ECM space and together, IBM and FileNet will deliver the most innovative and industry-focused content management solutions, providing customers and partners high value capabilities to make them more efficient and competitive.

SDA: Standalone content management companies are getting more competition from database companies. Also, many corporate customers are seeking to purchase content management systems from their infrastructure software vendors. Is this one of the reasons why the acquisition took place?

HS: We believe that customers will benefit from a holistic approach to meeting all of their information management requirements, along with their specific needs of ensuring content-centric process align with their business.

SDA: FileNet deals with a number of financial, insurance and banking companies. Can you tell us about the security risks involved (if any); what are your offerings to protect a company’s data from security threats?

HS: Being an organization that has many customers in financial, insurance and banking, we take security very seriously. Organizations in these industries have aligned with us for multiple reasons, security being one of them.

In the public sector space on a global basis we are ensuring that our solutions meet stringent security requirements such as Dodd 5015.2 for records management. The product utilizes a robust roles based access control approach which can provide a highly restrictive security model on who sees what and also what objects can see other content based objects.

From the e-governance perspective security, access and privacy all come down to a factor of trust, and giving citizens that level of trust is a government issue and not necessarily a technical one. Trust becomes more of a cultural and marketing issue for the e-governance program.

SDA: Tell us about your strategies to tap the Asian market among emerging competitions from global leaders as well as the local players?

HS: Prior to the IBM acquisition, FileNet had been in the Asia Pacific region for more than 10 years, where we continued to grow and strengthen our business operations to meet the rapid expansion and demands in the region. We are committed to this region and to ensuring that we have the expertise and technology in place to continue to provide best in-class solutions for our customers. We will continue to lead in our chosen markets – Banking, Insurance and Government, and will expand to cover additional markets using IBM’s established footprint in the region. One of our ongoing developments for Asia Pacific is our channel strategy which is about continuing to grow and empower our partners to broader and deeper reach with customers in the region.

We are the clear market leader both globally and regionally and the first to provide a unified approach to content, process and compliance management.