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If content is king, IBM wants the crown

Analysts expect content management to be a pivotal component of Big Blue's on-demand strategy in 2004.

IBM is well positioned to reign over the estimated $10 billion content management market next year, analysts say. And if the strong customer demand for ways to capture and manage information continues it will remain a pivotal component of Big Blue's on-demand strategy.

In addition to the slew of content management offerings it announced this year, the company also upped its investment in research and development by 25%, increased its content management sales staff by 2,000, and in June, acquired Aptrix, an Australian maker of content management and collaboration technology.

Big Blue has all its ducks in a row, analysts say. With products such as its DB2 Content Manager system, Lotus Workplace Content Management and a number of similar offerings to be introduced next year, industry watchers say IBM is poised to deliver the most comprehensive portfolio of content management capabilities of all of the vendors in this space.

Demand for these products is fueled in part by explosive growth in records management and government regulations, such as the Sarbanes-Oxley Act, the federal financial reporting law.

"IBM has marked us as a key growth area," said Deb Taufen, director of marketing for IBM's enterprise content management group. "Expect us to be out front and center."

Vertically challenged

Analysts agree that while content management will be the major focus of IBM next year, targeting small-to medium sized businesses (SMBs), addressing vertical markets and "componentizing" its middleware will also be pivotal parts of Big Blue's software strategy.

Earlier this month, IBM announced that it would restructure its software group to be more aligned with vertical markets, such as finance, human resources and manufacturing. In addition to delivering more software for vertical industries, IBM will focus its sales force more on industries than brands. This is a radical move and one of IBM's more significant shifts in software strategy since it exited the application business in 1999.

IBM will also spend hundreds of millions of dollars to boost partnerships with ISVs that provide leading applications within each industry sector.

Taufen said that IBM is building a content management ecosystem and driving it to SMBs as well as vertical markets. She added that in 2004, the company will continue to focus on its SMB-tailored Express content management offerings, as well as added support for Linux.

"We'll be looking at all kinds of opportunities, buying, partnering or whatever makes the most sense," she added.

Content is king

"Content management is going to be really big for IBM," said Kevin Fogarty, an analyst at Illuminata Inc., Nashua, N.H. "And Microsoft and IBM are going to increasingly compete head to head in productivity suites for the office worker, not on the desktop, but within the IT infrastructure. They're moving upstream."

Big Blue has about 34% of the content management market and claims to have roughly 9,000 companies using its enterprise content management technology.

IBM's content management strategy is no surprise to industry watchers given the company's frequent pitch that it focuses on offering solutions instead of products.

Analyst Stephen O'Grady, with RedMonk in Bath, Maine, said that he believes content management will emerge as a service -- something he says will be like a plug-and-play repository.

"Which all plays into IBM's on-demand strategy."

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