So HP has acquired Autonomy, including iManage document management for some $10 billion. What does this mean? Historically, when hardware/networking companies acquire software companies, the results have been fairly disastrous. This goes all the way back to Novell’s acquisition of WordPerfect. And of course, more recently LexisNexis’ acquisition of TimeMatters, PCLaw, Juris, etc.
The reason is basically simple: the acquiring company knows nothing about the legal/software industry (the acquiree). This was already true when Autonomy acquired iManage. An article by Evan Koblenz in Law Technology News quotes an anonymous law firm source close to Autonomy as saying “"iManage took a nose dive when Interwoven got bought by Autonomy. Their customer service was top notch, and it was painful when it got bought.”
Over the past 10 years or so and multiple sales and acquisitions, PCDocs, now OpenText, has similarly gone downhill.
So there is no reason to expect things to be different this time around. If I were at a firm using iManage, I would start looking around. Judi Flournoy, chief information officer at Loeb & Loeb was quoted in the same article as saying: “I don't think it is HP's area of expertise, software specifically, and software that we rely upon for document production. It will be very interesting to me if they do keep the document management.” If iManage gets spun off again, things could get even worse. There has already been what could be the beginning of a brain drain at Autonomy with the departure of it’s vice president for e-discovery and compliance to Google.
What this means is that the remaining players, primarily Worldox and NetDocuments, will start picking up slack from dissatisfied customers (this has already started happening, in fact). It also, once again, raises the issue of cloud-based document management. I addressed this issue in a recent blog but will no doubt be returning to it frequently, since it will be a critical issue in the next year or two.