So HP finally made a move into the world of ECM by acquiring Tower Software of Australia. On the surface it's an unusual match for HP, as many had expected them to buy one of the top tier players such as Interwoven, Vignette or even Open Text, but on closer consideration it's a move that makes sense. Revealingly, HP does not call this an "ECM" deal and focuses on the e-discovery and compliance benefits from Tower's addition, so it's possible HP has further moves to make if it wants to get serious about offering broader ECM services à la IBM.

Tower does have a long tradition in ECM (and has carved out a niche for themselves particularly in the Government sector globally), but primarily in Records Management-centric ECM. That's a focus that ties in nicely with HP's emphasis on archiving and storage-centric information management. Plus, Tower costs only a fraction of what other leading ECM firms would have set HP back. And of course HP has the footprint to manage an Australian-based division well. So those are the positives for HP. But what about Tower's existing customer base? Well in all likelihood there should be no major disruption, since HP does not have the ECM skills or competing technology in-house to disrupt this base, rather simply to continue to support it and help it to grow over time.

What is likely to change in the Tower offering is deeper integration with HP's Information Management archiving and storage offerings - and consolidation of the sales efforts in joint accounts. Tower will be absorbed into the Information Management division and the transaction should close in Q2. One slight change will be HP's focus on the Records Management (read Legal and Compliance) elements of Tower (where they are strongest) rather than the broader Tower ECM portfolio. Tower's deep integration with and architecture based upon Microsoft technologies -- and in particular their Gold Partner level status for SharePoint -- makes Tower a particularly appealing acquisition. But it does mean that areas Tower was hoping to grow may well get neglected in the short term, areas such as imaging, collaboration and traditional document management services.

HP has made it clear that they want to build a full Compliance and E-discovery solution, and that Tower will be integrated in with the HP Integrated Archive Platform along side e-mail archiving, ultimately as a single offering. But HP is still missing some elements, most notably a top notch search/discovery offering -- something that Tower cannot bring to the table -- so it's reasonable to expect more acquisitions in this area to come.

We cover Tower technology in-depth in our ECM Suites Report. We'll expand our coverage further as the the deal closes and HP begins the work of integrating both Tower's technology and their remaining staff into the HP machine. As acquisitions go this one is not particularly brutal or surprising; Tower was likely to get acquired by somebody, and HP was likely to acquire somebody.

But acquisitions of small firms by behemoths like HP cannot occur without some upheaval. Most likely for Tower's existing customers that upheaval will come in the form of dealing with HP sales and support staff who will in time want to be involved in the deals, whether they know anything about ECM or not. Things will settle but it will take time, and for now new buyers are urged to tread with caution.