IBM to acquire FileNet for $1.6bn

IBM has agreed to pay $1.6bn for FileNet , a leading US vendor for enterprise content management (ECM), business process management (BPM) and compliance solutions.

The deal will add another weapon to IBM's arsenal of Information on Demand technologies, pitching IBM into a deeper battle with rival EMC, whose Documentum division competes against FileNet.

IBM predicts considerable expansion in the ECM market, which it regards as " one of the hot growth areas", with an estimated market opportunity in 2006 of $3.9 billion and an estimated growth rate of more than 10 percent over the next five years.

“The growth in enterprise deployments of ECM and BPM technologies is fueling a global market expansion,” said Lee Roberts, chairman and CEO of FileNet, in a statement. “The combination of IBM and FileNet will deliver increased innovation and industry-focused content management solutions."

FileNet marks the 20th acquisition supporting IBM's Information on Demand initiative, which the company launched in February this year, backing it with approximately $1 billion in IBM R&D investment.

The company believes that a convergence of challenges facing businesses today – including globalisation, mergers and acquisitions, information overload and regulatory compliance - is driving companies to find new ways to gain insight from their information so they can use it to grow their businesses.

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