Recent acquisitions of document automation vendors by players in the content management space illustrate not only consolidation in this arena, but also a shift in focus to more end-to-end, enterprisewide solutions. The recent announcements that EMC (Hopkinton, Mass.) would acquire Document Sciences and HP would purchase Exstream Software signal the ascent of document automation solutions in the enterprise content management space.
The HP/Exstream deal builds upon Palo Alto, Calif.-based HP's print output business, notes Matthew Josefowicz, director at research and advisory firm Novarica (New York). "Exstream has carved out a very strong position in high-volume, complex document composition [in financial services], ... and this move clearly strengthens HP's overall position in document creation and output," he says.
At the same time, the deal represents a new approach to content management, according to David Murphy, SVP in HP's Imaging and Printing Group (IPG). Whereas many content management vendors have adopted a centralized model for content distribution, 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.
Content handling and document automation solutions approach enterprisewide content management from opposite ends of a content continuum, adds New York-based Celent analyst Jeff Goldberg. 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 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."
A New Document Paradigm
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 [in the past]."
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 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."
Still, Josefowicz suggests that the long-term value of the EMC/Document Sciences deal to financial services customers is unclear. "The risk is whether the industry focus that makes these solutions attractive can survive being integrated into large, matrixed organizations," he says.
Courtesy of Insurance & Technology, a CMP Technology property.