Interesting article in Forbes (http://www.forbes.com/forbes/2011/0117/technology-emc-joe-tucci-hp-idc-ibm-cloud-warrior.html)  – (note – wait for the article – advertisement will come up first) in regards to Joe Tucci and EMC’s pursuit of the cloud through alliances with Cisco, VMWare and Intel to compete with IBM and HP.  While the article doesn’t mention Documentum, it does mention that Tucci has “kept EMC competitive by snapping up software companies…the biggest being VMWare”.

Documentum and the Cloud

TSG does have some experience in regards to Documentum and the Cloud.  Back in 2001, we attempted to be one of the first cloud vendors when we created an Application Service Provider with Documentum as the back end.  Our offering, ConnectSite, hoped to leverage Documentum in a pay as you go service model.  Similar to the thoughts in the Forbes article, we struggled with the sales model more than anything else.  Of our many issues:

• How to engage Documentum sales reps – How do they receive commission on something that is pay as you go and doesn’t easily calculate to a % of a software sale or satisfy a quarterly target?
• How do you engage customers – our typical customers are IT and already own Documentum.   Why would they want to move it and lose control for something they have already purchased?

While we agree that Documentum is doing the right thing in positioning themselves with VMWare as part of the cloud or internal offering, we see the Sales model as the biggest struggle.  One issue with the EMC/Documentum relationship has always been that the EMC guys are selling infrastructure (to customers who can understand the infrastructure savings of the cloud) and the Documentum guys are selling to application development or end users (who don’t necessarily see benefits or like the security concerns with the cloud).

Lastly, a major issue would be who is supporting the Documentum infrastructure from a service perspective.  As a consulting firm, we have seen many large firms provide outsourced services for years from names like IBM, HP, Accenture or Cap Gemini who are competing with EMC for the cloud space and are very focused on service.  It is hard to understand how a EMC/Intel/Cisco – all product vendors, would be able to provide that same level of support.

Documentum and EMC

In a post last year, I surmised shortly after EMC World that it would make sense that SAP would buy Documentum from EMC.  The article continues to get traction (shows what a good title will do).  In reading the Forbes article and writing the points above, I still would predict that EMC will sell off Documentum to a software vendor as they look to pursue infrastructure more heavily.  The successful purchaser should be a software company that could leverage the combined client base for additional sales and a more efficient sales model.  Diving again into the rumor mill, I would say the candidates are:

• SAP – still my leading candidate although I would have liked to have seen more progress on the Insurance applications discussed at EMC World in May as the trial balloon.  I still think SAP could leverage their customer base to upsell Documentum if positioned correctly.
• Oracle – Larry likes to buy and consolidate.  As a San Fran company, easy to see technologies combining.  Sales approach and culture between Oracle and Documentum is virtually identical.

I don’t really see any other viable acquirers out there.    Unless Dave DeWalt comes back and some pulls that Intel/McAfee thing (still don’t understand the synergies there).   Who it would not be includes:

• Microsoft – San Fran/Seattle, .Net/Java and the most obvious reason – why?  They have so much traction with SharePoint, I think Microsoft would rather steal market share than buy it.
• IBM-  anyone counting just how many content management solutions they have already?  FileNet and DB2 Content Manager are direct competitors already.  Another purchase would confuse their buyers even more.  I have always thought IBM bought FileNet for their insurance client base – don’t see IBM as interested in the client base of Documentum.
• HP – it is hard to see HP helping EMC with a purchase of Documentum given how much of a direct competitor HP is with EMC.

Those are our thoughts – it’s the beginning of the year so feel free to comment and share yours.