17 August 2004 ECM vendor Interwoven has purchased records management specialist Software Intelligence. The purchase will take Interwoven further away from its web content management roots and into enterprise content management (ECM).

The deal is worth just $2 million in cash, but will expand Interwoven’s sphere of influence into paper and electronic document management and email, under an umbrella platform now known as Interwoven Records Manager.

It comes as ECM vendors face increased pressure to offer a cohesive strategy to meet compliance regulations.

“In today’s business environment, demand for record management is strong,” said Interwoven CEO Martin Brauns. “We have made a strategic move in buying a leading records management product and are making it part of our complete ECM platform.”

Meta Group analyst Andy Warzecha has praised the buyout. “They absolutely had to have this,” he said. “The bottom line is most of the clients we talk to want the vendor to provide the services… The other dilemma they face is they really require certification in certain situations.”

Despite the merits of the acquisition, it is unlikely to return the company to the head heights it enjoyed up until 2000. Set up to support the Internet boom, it had focused solely on web content management and at one time boasted a market value of $8 billion.

Today it stands at just $275 million.

As a result, rivals have suggested that Interwoven has been left behind. “You literally don’t hear any more about Interwoven and Vignette,” said FileNet CEO Lee Roberts. “It’s not that they are gone or that they have bad products, but I think they missed the [ECM] boat.”

Ovum analyst Alan Pelz-Sharpe even suggested in an early 2004 research note that the best outcome that Interwoven could hope for was an acquisition by a major vendor, such as Oracle.

The main problem it has is the complexity of its disparate set of products, he suggested, that rely on highly skilled and dedicated support from the product developers and integrators.

Interwoven had previously offered records management capabilities through third party vendors such as MDY and TruArc. Although TruArc has been snapped up by Documentum, the MDY partnership will continue, says the company, with customers able to choose which platform works best for them.