Document management vendor officially enters federal market

Documentum Inc., a leading vendor of software for managing large repositories of electronic documents, formally entered the federal market last week.

Based in Pleasanton, Calif., Documentum's offerings include the Enterprise Document Management System, which is designed to allow organizations to manage changes to electronic files as they move through a business process. EDMS includes a central repository as well as tools for managing Web pages and designing custom management applications.

"We've seen a couple of things happen that give us a signal that the timing is right,'' said Larry Warnock, Documentum's vice president for corporate marketing, in an interview

Feb. 23, following the company's announcement. He said federal agencies understand the purpose of document management technology and have built the network infrastructure they need to use these tools.

"We're positioning [ourselves] for the most compelling and difficult problems that typically need to scale to very large size'' in terms of numbers of users, numbers of data objects and numbers of documents, Warnock said. "This is our 'coming-out party' going into the federal market.''

The firm has captured $1.5 million in orders from federal agencies, most within the past four months, and decided to open a Washington, D.C., office in December. Hadley Reynolds, director of research with Delphi Consulting Group., Boston, said that without a federal presence, Documentum "left a very major market open to their competition,'' and its decision to pursue federal business suggests the company "feels they have a very strong position in the commercial market.

"They are a very careful company when it comes to their investment profile, and my sense is they realized early on that the federal government is a fairly large investment for a small software company,'' Reynolds said. A survey published by Delphi in January concluded the 5-year-old company, which earned $75.6 million in revenue in 1997, had the largest market share among vendors of high-end document management software.

Documentum will now compete head to head with PC Docs, which Reynolds said is the dominant document management software vendor in the federal market for large-scale deployments. PC Docs' major customers include the General Accounting Office, the Immigration and Naturalization Service and the Drug Enforcement Administration. Documentum's customers include the Food and Drug Administration, the Energy Department and the Navy's Bureau of Medicine.

"Documentum's strategy has been to focus and attack specific vertical markets and conquer them and move forward,'' said David Yockelson, vice president and director of The Meta Group. "You could look at this as [Documentum] continuing on the strategy and trying to further [its] penetration into other vertical markets.''

Warnock said Documentum plans to sell directly to agencies and to work with integrators. The firm is pursuing business with the House of Representatives, which is developing an application to track legislation as it is written, and with the FBI, which is looking into a system for disseminating information to the public about its cases.

Document management software is used to organize and control access to an organization's electronic files. Common features of many document management systems include the ability to group together files relating to the same topic, to track different versions of a document that is reviewed by many people and to specify the rights that different users have to read or change a file.