The field of “independent” ECM vendors just shrank again, as Autonomy announced that it plans on acquiring ECM vendor Interwoven for US$775 million.  In a word – WOW.

This announcement is loaded with sub-plots and interesting twists and turns.

It underscores the financial strength of Autonomy, who also just posted their best quarter ever.  Autonomy expects to have a cash balance of at least $75 million after the deal.  What recession??

Armed with this level of cash, if properly and effectively used to launch a frontal assault on competitors such as EMC Documentum, OpenText, IBM/Filenet and Oracle(Stellent), Autonomy could be the biggest shaker that the ECM market has seen in several years, especially in the legal and compliance sectors.

That said, this acquisition reduces the direct (i.e. standalone ECM providers) competition faced by OpenText, further strengthening their position in this sub-market. The combination of Interwoven with Autonomy’s IDOL clearly rivals the rich mix of functionality of OpenText, and the IDOL platform rivals the OpenText Bloom philosophy.

Back to Autonomy:  The Interwoven technology will likely be integrated into the Autonomy  IDOL (Intelligent Data Operating Layer) search technology.  Leveraging Interwoven’s core competencies/product strengths and customer base, Autonomy will be thrust into being a major contender in the ECM for legal and compliance applications.  Interwoven has a long history in this market niche of ECM, complementing Autonomy’s other acquistions targeted at legal and compliance including Zantaz and Meridio.

The consolidated group will have a client base of 20,000 businesses. Businesses using both Interwoven and Autonomy include Bank of America, Bayer, Deutsche Bank, DLA Piper, Shell and Tesco.  This is a heck of a starting point from which Autonomy can go forward to make its mark on the ECM market.

While the Interwoven name and product names are likely to be fully consumed (aka disappear) in the Autonomy mix, (Does anyone remember Verity and the K2 server), this is actually good news for customers, as integration is likely to be swift. Autonomy has consistently demonstrated the ability to do just that with other acquisitions such as the aforementioned Verity, Meridio, Zantaz and Virage.

I had more or less written Interwoven off as an “also ran”, in the ECM space, but with this acquisition, they are likely to remain a major player,  albeit under the name of Autonomy.