Technology and market research analysts who track the enterprise content management (ECM), business process management (BPM), case management, and information governance spaces awakened to a huge surprise last week—Dell was making overtures to buy EMC and EMC was just fine with that outcome.  Really??!! This was a head snapping, attention grabbing news item if there ever was one. But which was it—the sweet dream that financial analysts were busy envisioning or the nightmare that ECM industry analysts were staring at for EMC’s customers?

I see a nightmare potentially unfolding for ECM customers and prospects– and, possibly, for employees specializing in ECM.  This deal has a déjà vu feeling that’s (on the surface) reminiscent of the Compaq/Hewlett Packard deal, even though the details and motivations are not at all the same as the Compaq fiasco. In reality, compelling reasons will drive this acquisition toward an overall strategic success. But the end results could be a bad deal or less than ideal outcome for some stakeholders, in that Dell may kill off or sell off portions of EMC’s ECM business. Why? This deal shrieks of a strategic focus on storage, storage and more storage, making it difficult to see how the ECM part of EMC can turn into a sweet dream for its customers, even with lots of clouds to rest on.

It’s not that there’s anything wrong with storage, storage, storage– or cloud, cloud, cloud. Afterall, this acquisition is a strategic shift from Dell’s waning relevance, as hardware sales deteriorate because of commoditization, to new life by moving the combined company to the cloud. Dell needed this deal because it hasn’t yet shifted to the cloud, while EMC has at least started to pivot. EMC brings Dell into the cloud and offers a B2B base for Dell to build upon. Dell brings to EMC a consumer customer base for a potential public cloud offering, To put B2C into perspective, about 15% of Dell’s revenue is from consumer sales. According to Michael Dell, “Our major focus in the IT marketplace is selling servers, storage products, network switches and services to corporate customers. A lot of the e-commerce engine revolves around that.”

But unlike the days when Documentum reigned supreme as a standalone ECM company, EMC’s dominant positioning in storage systems has made it easy for EMC’s ECM products to get lost in the shuffle of a much larger company. And that was before Dell came onto the scene.  After EMC bought Documentum and tried to blend storage and ECM software solutions and sales channels, it was challenging for EMC to maintain perceived and real ECM market leadership. The issue was not customer resistance to the EMC/Documentum combo but EMC’s storage-driven sales force couldn’t get its collective head around business applications and solutions selling. Plus, despite the company’s continued thought leadership in ECM, for years there’s been a slow but steady brain drain, as EMC’s ECM luminaries moved to other, more software-centric, solutions-focused companies.

Meanwhile, the ECM market changed and continues to change, becoming more business solution oriented.  Several years ago EMC took a wise course and decided to follow the emerging case management market (putting BPM and ECM together in a new platform). But to continue following that market to a successful conclusion, EMC/Dell would need deep skills in industry specific and horizontal business processes. These skills would need to span technical, marketing, and sales resources. While the company would not have to pursue all industries and all processes at the same time, it would need to attract a bevy of service providers to build an ever growing number of business processes on top of the case management platform, while also pursuing a handful of industries through direct sales.  It is hard to see Dell continuing to support a plethora of business applications and solutions in multiple industry sectors—which would be far afield of horizontally focused storage and subsystems.

If you are looking at the overarching deal, Dell + EMC is a sweet dream.  But if you are focused exclusively on ECM, BPM, case management, information governance, and unstructured content, it may be a long running nightmare for the ECM installed base as more details of the acquisition emerge.