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Vignette Goes After Offline Content

Content management portal and collaboration software provider Vignette got the first quarter of 2004 off to a fast start Thursday, announcing that it will buy Tower Technology for $125 million.

The purchase fills an important gap in the Austin, Texas, company's portfolio by adding a records and document management software. Vignette needs a more robust enterprise content management (ECM) offering to compete with Interwoven, , OpenText , FileNet and EMC .

Vignette spokesman Jim Hahn said the company will incorporate Tower's three product sets -- Tower IDM (digital imaging for unstructured content), Tower Seraph (government compliance software) and Tower WebCapture (online content imaging) -- into its product line, though a specific timeline hasn't been formulated yet.

While Vignette has a Web content management suite through its V7 Content Services, it has always been missing a best-of-breed document and records content management solution, which is important for customers in the government sector, said Shruti Yadav, an analyst at Nucleus Research.

"If people are going out looking for just a portal technology, then certainly Vignette has a very strong offering," Yadav toldinternetnews.com. "But (not) if companies are trying to consolidate their assets on one unified architecture."

Forrester Research analyst Connie Moore agreed that bringing all these pieces together is all-important for Vignette.

"What we're facing in the long run is a total shakeout of the enterprise content management market," Moore said. "We're going from the separate discrete market where the players would play in just one sandbox and specialize in Web content, or document imaging or records management -- they can't do that anymore."

"As IT has become much more centralized, the CIOs and the senior system architects are looking at (ECM) and saying 'we need more infrastructure and we need decisions not being made at the departmental level, we need to pick a single vendor that can handle all the different content types,' " she added.

Vendors with end-to-end ECM aspirations have been listening. The largest acquisition in the ECM space happened in October, when storage specialists EMC announced the acquisition of Documentum for $1.7 billion.

Another was the Interwoven acquisition of iManage for $171 million, which created a more robust ECM platform.

Moore said Vignette had to keep up. In December, the company filled out another piece of its ECM strategy with the acquisition of Intraspect for $20 million, a collaboration software and services outfit to use within the ECM platform.

"If they wouldn't have made (today's) purchase, they would have been marginalized, and I think they were already beginning to experience that," she said.

The Tower acquisition still requires shareholder approval. A closing date has not been set.