Dell buys EMC…what will happen to Documentum

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Dell has agreed to acquire EMC for LOTS of money, as per the press release, following are the highlights of this deal:

  • Brings together the industry’s leading innovators in digital transformation, software-defined data center, hybrid cloud, converged infrastructure, mobile and security
  • EMC stockholders to receive approximately $33.15 per share (based on the assumptions described below) in a combination of cash as well as tracking stock linked to a portion of EMC’s economic interest in the VMware business
  • VMware to remain an independent, publicly-traded company.

But why it is important for me, I neither own stocks in Dell or EMC nor I work in any of those companies. I care about the future of EMC-ECD (Enterprise Content Division) which is the home of Documentum. If Documentum is vanished, it wouldn’t hurt my job but it will hurt me because Documentum has been a leader in ECM for a very long time and it is the second largest ECM vendor in terms of market share.

Will it be dumped or set-free?
The ECM-ECD (I prefer Documentum) has been on almost on the same place as it was in 2006, since EMC acquired it and it been generating single digit revenue. Also since a large part of this deal is being financed with a new debt, and it has to be paid quickly to provide flexibility to Dell in future. Therefore there are chances that Dell might offload some of the EMC components (e.g. Documentum) to raise more money.

Therefore the question comes for the future of Documentum under Dell leadership, will it be dumped or set free.

Alan Pelz-Sharpe, 451 Research Group analyst, once said, “Documentum wasn’t a good fit within EMC and there doesn’t seem to be a logical fit for them within Dell.”

The ECM-ECG products are valid business applications, but Dell is not a business application company; it provides provides the infrastructure for applications to run on. I think if Documentum were to become independent, then it would have a fresh incentive to fight hard, refresh the product and revive the brand. It’s something that Documentum enthusiasts have been hoping for  a long, long time.

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