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IBM Acquisition Aimed at Microsoft?

As the competition for information management and control platforms heats up, IBM announced late this week that it will acquire content management vendor FileNet in a deal valued at $1.6 billion in cash.

The purchase could be seen as an expensive play by IBM to compete head-to-head with Microsoft, which plans to integrate its own content management capabilities into Office SharePoint Server 2007.

A public company, Costa Mesa, Calif.-based FileNet, which was founded in 1982, will go for a tidy $35 per share. IBM touted the deal as the 20th acquisition in support of its Information on Demand initiative. The companies hope to close the sale in the fourth quarter.

"The FileNet acquisition solidifies IBM's position as the market leader in enterprise content management, a key component of Information on Demand and one of the hot growth areas of the market with an estimated market opportunity of $3.9 billion in 2006 and an estimated growth rate of more than 10 percent over the next five years," IBM said in a statement.

FileNet's software supports both Java as well as Microsoft's .NET development platforms. IBM has also been aggressively expanding its enterprise products to work with Linux, as can be seen in its release last month of a Lotus Notes client that runs on Linux desktops.

Meanwhile, Microsoft is hard at work integrating its own Microsoft Content Management Server technologies into SharePoint Server 2007.

About the Author

Stuart J. Johnston has covered technology, especially Microsoft, since February 1988 for InfoWorld, Computerworld, Information Week, and PC World, as well as for Enterprise Developer, XML & Web Services, and .NET magazines.

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