Document Automation Vendors Emerge As Enterprise Solution Players

The recent acquisition announcements of Document Sciences by EMC and Exstream Software by HP are "more of the same" as expressions of the continuing consolidation of the content management solutions space, along with Skywire's recent acquisition of Whitehill Technologies. However, these acquisitions also signal the maturity of document automation solutions and their ascendancy in the content management vendor space relative to many of the traditional large content handling players, such as IBM/FileNet and Documentum.

Seen simply as an example of consolidation, the HP/Exstream deal builds upon HP's very significant print output business, according to Matthew Josefowicz, insurance practice director at Novarica (New York). "Exstream has carved out a very strong position in high-volume, complex document composition in insurance as well as other areas, and this move clearly strengthens HP's overall position in document creation and output," Josefowicz says. "This is part of HP's general strategy of moving up the value chain in business technology into applications and value-added areas like business intelligence."

At the same time the deal represents a different approach to content management, according to David Murphy, senior vice president in HP's Imaging and Printing Group (IPG). Whereas many important players have adopted a model whereby enterprise content is distributed from a centralized location, HP's acquisition of Exstream exemplifies a strategy that "is not trying to shove [content] into one place but focusing on the end product," Murphy says. "Right now the only other companies thinking about it in remotely the same way are client oriented content players, like Microsoft and Adobe-companies who have more of a relationship with customer at the point of consumption."

New York-based Celent analyst Jeff Goldberg sees a similar fault line in the approaches client companies can take toward building an enterprise-wide content strategy. Content handling and document automation solutions come at the problem from opposite ends of a content continuum, in Goldberg's view, but both are vying for the lead role in enterprise solutions. "Companies like Documentum and FileNet started with managing the archives and pushing into handling content across the board, while document automation solutions started by handling printing and letter handling and started to push downward into the content," he says.

As document automation solutions have become more broadly useful with the emergence of Web-based systems, the vendors have been able to say, "'We're dealing with a content end-to-end result and we don't care where it gets stored-it's more about how we're going to use it,'" Goldberg claims. "Document automation has always been about how to maximize the benefit of content-and that's why the vendors have become such strong players and such attractive acquisition targets."

The document automation vendors owe their increased prominence to two major factors, Goldberg argues. "One is that the vendors have done a fantastic job of having up-to-date technology-everything is at the very least wrapped in SOA if not built from the ground up with SOA. The second piece is that the meaning of a document today is completely different than it was."

Once the exclusive locus of content, today documents are variegated repositories of pieces of content-a term that embraces a larger notion of information that includes ongoing interaction between parties. As this new paradigm has emerged, "document automation systems have become the Web-enabled systems that are handling what's most important about a document, which is the content," Goldberg says.

From a business point of view, acquiring important document automation vendors at this time show the importance of moving upstream from platforms to specific business solutions, says Novarica's Josefowicz: "With Exstream, HP gets a front-end business solution that generates demand for its back-end output offerings. DocSciences gives EMC a verticalized industry solution, which makes it easier to talk to customers in that target segment."

EMC's move could be compared to acquisitions of Webify and FileNet in the latter respect, according to Josefowicz, but he suggests that it is still unclear whether the value to insurance vertical customers will prove durable. "The risk is whether the industry focus that makes these solutions attractive can survive being integrated into large, matrixed, organizations that are still in their bones horizontal by product and territorial in approaching the market," he says.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio