Autonomy buys Interwoven for $775M

In a week full of content management news, the biggest news without a doubt was the announcement that search vendor Autonomy bought content management vendor Interwoven for the princely sum of $775 million. That's a lot dough for a content management vendor, but it's not the price that has people buzzing so much as the stunning idea of having a search vendor make a major deal like this. In the past it's been traditional for content management vendors to buy the various pieces they need to offer the most complete solution. A good example of this is Open Text, a company that has purchased various pieces including Red Dot for web content management and Artesia for digital asset management, to name a few.

What's interesting about this purchase is that most observers, myself included, have viewed search as a neutral piece of the puzzle. The typical enterprise setting has multiple data and content repositories and needs a search tool that can traverse them all. But Microsoft, which sells Sharepoint, bought Fast last year and changed the dynamic. Suddenly, it was OK to tie a search tool to one vendor.

So why is a search vendor buying a content management piece? There's nothing inherently wrong with this strategy, but it does make me wonder if some potential customers will come to believe, rightly or wrongly, that Autonomy will eventually be tuned to work best with Interwoven content management.

But if you look below the surface, as the smart folks as The 451 Group did this week, the purchase begins to make more sense. 451 believes this is less about content management and more about eDiscovery, which is after all a search-heavy endeavor and a market that continues to grow.

Autonomy has made a bold move, make no mistake about it, and perhaps there is a method to its madness. What's more, if this is successful, we could be seeing a new era of consolidation where search vendors and other related players begin to combine into larger organizations. In fact, by this time next year, we might not see this type of deal as so unusual.

For more information, see:
- the Autonomy press release
[1]- The 451 Group blog post [2]