Along with Skywire's (Frisco, Texas) recent acquisition of Whitehill Technologies, the recent announcements that EMC (Hopkinton, Mass.) would acquire Document Sciences and HP would purchase Exstream Software are further expressions of the continuing consolidation of the content management solutions space. The deals, however, also signal the maturity of document automation solutions and their ascendancy in the enterprise content management vendor space.
Seen simply as an example of consolidation, the HP/Exstream deal builds upon Palo Alto, Calif.-based HP's very significant print output business, according to Matthew Josefowicz, insurance practice director at research and advisory firm 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.
At the same time, the deal represents a different approach to content management, according to David Murphy, SVP in HP's Imaging and Printing Group (IPG). Whereas many content management players have adopted a model whereby enterprise content is distributed from a centralized location, HP's acquisition of Exstream (Lexington, Ky.) exemplifies a strategy that "is not trying to shove [content] into one place but focusing on the end product," Murphy says. "The only other companies thinking about it in remotely the same way are client-oriented content players, such as Microsoft and Adobe."
New York-based Celent analyst Jeff Goldberg sees a similar fault line in the approaches client companies can take toward building an enterprisewide content strategy. Content handling and document automation solutions approach 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 such as 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.
With the emergence of Web-based systems, document automation solutions have become more broadly useful, and 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," he says. "The second piece is that the meaning of a document today is completely different than it was."
A 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 adds.
From a business point of view, acquiring important document automation vendors at this time shows 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," he explains. "DocSciences gives EMC a verticalized industry solution, which makes it easier to talk to customers in that target segment."
Still, Josefowicz suggests that the long-term value of the EMC/Document Sciences deal to insurance vertical customers is unclear. "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