IBM Updates Business Software Suite

IBM(IBM), which last year spent $1.6 billion to acquire FileNet, is putting the acquisition to work, pressuring the remaining pure-play content management providers in the rapidly consolidating sector.

On Tuesday, IBM announced a new version of FileNet's flagship suite that is integrated with other parts of Big Blue's growing software portfolio. The new product is aimed at increasing the company's share of the multi-billion-dollar market for software that manages the ever-growing streams of data in documents, emails, Web pages and more.

Before purchasing FileNet, IBM was third in the content management market, trailing EMC(EMC) -- which entered the space with acquisitions of Documentum for $1.7 billion and Captiva for $307 million -- and FileNet, according to IDC, a market research company.

Although current market share figures aren't yet available, IBM is now most likely ahead of EMC, as well as pure-play vendors such as Open Text(OTEX) and Vignette(VIGN).

It's worth noting that those two smaller companies aren't all that small -- both have market caps that exceed $1 billion -- and IDC expected the content management market to reach $3.7 billion in 2006.

EMC, which is still digesting its acquisition of RSA Security, isn't likely to make a billion-dollar acquisition in the near future. Could IBM? The company certainly has the cash, and its software arm, now IBM's most profitable unit, has been snapping up a dozen or so companies a year.