The big news today was Dell buying EMC for a huge amount ($67 billion) in cash. Our Documentum clients have been pinging us with our thoughts. Look for a longer post as the deal reveals itself but this post will present our preliminary thoughts.
EMC/Documentum – going from public to private
While VMware will continue to be a separately publicly traded company, EMC will go private (like Dell) and become part of Dell. The deal is expected to close in mid-2016 and is subject to regulatory approval.
In the short-term, here are some of our thoughts:
- Documentum, formerly less than 3% of EMC’s revenue will be an even smaller portion of the Dell/EMC combined company’s revenue.
- Dell isn’t buying EMC for Documentum.
- EMC sold off Syncplicity in June.
As a private firm, Dell can decide what they want to do with Documentum. In the past, as a public firm, outside investors could be pushing for short-term focus versus the long-term focus required for Documentum. We would guess that the new venture, focusing on storage and security options, would look to spin off Documentum and the Enterprise Content Division rather than divert resources from the bigger security and storage market. The effect for clients will be determined by the new buyer. A buyer that wants to invest in the offering is better than one that just wants to milk the revenue stream. Questions to be answered:
- What would the procuring company’s focus be?
- Would any of the Documentum engineers stay after EMC options have been exercised?
Look for another post later in the week. Also, if you’re interested in our take on the future of the ECM industry, check out our post from earlier this month and attend our breakfast meeting with Doculabs on October 15th. Let us know your thoughts or predictions below.