Gartner predicts competing bids from other vendors.
Gartner predicts competing bids from other vendors.
IBM will have a fight on its hands as it attempts to tie up its proposed purchase of content management provider FileNet for $1.6bn in cash, Gartner predicted today.
The deal is expected to close in the fourth quarter of 2006, subject to shareholder and regulatory approval.
But Gartner expects that Big Blue will have to fend off at least one counteroffer for FileNet, which has a particularly strong presence in the banking, insurance and government vertical markets.
"We expect that the transaction between IBM and FileNet will take place, but consider it likely that competing bids from other vendors will be proffered before the deal is completed," said the analyst report.
"After it closes we believe this acquisition will consolidate the enterprise content management market, turning the high-end segment of the market into a head-to-head between EMC and IBM."
The study goes on to assert that the consolidation of the traditional enterprise content management market is only one of several drivers behind this acquisition.
"IBM has cited market demands for compliance solutions as another reason for purchasing FileNet. But Gartner does not believe that FileNet will add significant compliance capabilities that IBM did not already have," said the report.
However, Gartner noted that FileNet has developed its offerings over the past five years to embrace content-centric business process management (BPM), providing its own BPM capabilities. FileNet also has a strong human-to-human capability.
"From a tactical perspective, IBM's acquisition would strengthen its position against competing BPM systems and vendors focused on service oriented architecture (SOA), such as BEA Systems, Oracle and Tibco Software," the study noted.
Elements from the recent acquisitions, combined with existing IBM technologies, could lay the groundwork for a business services repository that could aid future efforts at managing web services, according to Gartner.
"We believe IBM's vision is sound, but that it faces several challenges in executing on the FileNet acquisition. There is a significant overlap between FileNet and IBM technologies," the report stated.
"IBM will have to achieve a balance between maintaining existing products to satisfy the installed base, integrating where necessary, and rationalising future offerings to manage development costs.
"This challenge will be exacerbated by the need to coordinate efforts by various IBM groups (such as the Information Management and WebSphere divisions) and across multiple acquisitions that are all intended to fit within its larger SOA framework."
Gartner advises FileNet customers to anticipate IBM maintaining and supporting most FileNet applications for at least three years, at which point customers may have to evaluate whether to migrate.
The analyst predicts that IBM customers are unlikely to be affected in the short term.