Documentum & The Private Option

I want a private equity fund to buy Documentum from EMC and give it a real shot at regaining its former glory.

#26698 Smart Cow Playing Dead To Avoid Going To The Butcher Shop Clipart by DJArtNoted rumor-monger  Brilliant Leap speculates about Documentum in a world without EMC. Tongues were already wagging at EMC World about the SAP-EMC partnership leading to something a little more intimate. It has enough of the smell of truth to make an irresistible rumor.

As rumors go, I still prefer the Microsoft angle because of the obscene anatomy kissing that IIG is still doing.  Truth is it’s just to easy to dispel: Why buy the cow when you get the milk for free? I doubt Microsoft will be stamping shrink-wrapped boxes of SharePoint with Documentum Inside! anytime soon, but I’d bet they have an infinite number of code monkeys banging away to make their own document management Hamlet. Once they do, it’s bye-bye Documentum! Then all those monkeys will get down to business and start flinging feces IIG’s way.

Part of Documentum’s doom was being a software company bought by a hardware company; however, it won’t be saved if another software company buys it next. Such companies (SAP included) would buy Documentum to augment their flagship product, not eclipse it.  With no Fairy Godmother rescue from being passed around from one wicked step-mother to the next, this story’s ending will be more Le Boheme than Cinderella. Or worse, a more-jackal-than-wolf company that hasn’t innovated for decades might gobble it up to suck the last trickle of marrow from its cracked bones.  *cough* computer associates *cough*

I am no Wall Street cheerleader, especially after my time in Big Finance, but the closest thing to a Fairy Godmother out there is a technology-oriented private equity fund. Such a fund buys troubled companies to turn them around and sell them for a profit. Unlike most of Wall Street, they take the long view of years rather than a quarter or the milliseconds around a stock’s uptick.

Their methods can be harsh, but their goal unlike any step-mother’s would be to make Documentum the best product and most profitable (and saleable) brand it can be.  There may still be an ounce of brand left to save. By going private, the recuperating Documentum wouldn’t be burdened with public company regulation or the tyranny of speculative stockholders. It’s an imperfect cure for the age of gratuitous IPOs and acquisitions fueled more by irrational exuberance than smart business.

We have a test case with AOL selling Bebo to Criterion Capital Partners, LLC instead of just shutting it down. Taking Valdes’s animal shelter metaphor a little further, I’m sure Criterion will euthanize Bebo and reap their own “meaningful tax deduction” if the old dog can’t learn new tricks. Sometimes I think I’d rather see that happen to Documentum than sit through the EMC’s little opera until the consumption takes it.

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