FileNet buys content management software maker for $10M

Software developer FileNet Corp. Tuesday said it is spending US$10 million to acquire eGrail Inc., in a move intended to add to its product portfolio a document management system able to compete against those from rival vendors such as Interwoven Inc. and Documentum Inc.

FileNet gains both eGrail's Enterprise Content Server technology and "substantially all" of its staff, including a 40-person development team, said Martyn Christian, FileNet's senior vice president of corporate marketing.

FileNet plans to integrate the eGrail Enterprise Content Server into both its flagship Panagon line of content infrastructure management software and its newly created Brightspire portfolio of commerce tools. The company will also continue selling eGrail's software as a stand-alone tool, Christian said.

FileNet is buying eGrail to speed its time to market with a document management system. The company has not previously worked with eGrail; it selected the vendor after evaluating several other developers of similar products.

"We think it's a growth market, and we didn't want to wait ten to 12 months in building our own software," Christian said.

FileNet will "probably" keep the eGrail Enterprise Content Server's price where it is, he said. The system now costs around US$100,000 to $125,000 for a typical installation.

EGrail's current customer base consists primarily of small to medium-size businesses, Christian said. FileNet hopes to sell the software to a broader array of large enterprises, including the financial services firms and government agencies that are in its own target market.

FileNet will also take over development of the next release of eGrail's Enterprise Content Server, on track for a release near the end of 2002. The forthcoming version will be a pure J2EE (Java 2 Enterprise Edition) tool that is "much more deployable for enterprise customers," Christian said.

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