Being bought by IBM Corp. is “like I inherited a rich uncle,” says Lee Roberts, head of Big Blue’s Costa Mesa software unit.
In October, IBM paid $1.5 billion for FileNet Corp., where Roberts was chief executive for nearly a decade.
“IBM offered a 42% premium,it’s kind of hard to say no to that,” Roberts said.
FileNet, which makes software to manage files on corporate networks, is seeing a payoff. For starters, it now enjoys the perks of being part of a big company with a globally recognized name and money to do just about whatever it wants.
“The challenge that we had at FileNet is that I could see the opportunity but I never had enough to invest,” Roberts said. “We’ve been able to do things that I just didn’t have the money to do. The net effect of that is we create more jobs, we do a better job for our customers and we are more successful in executing strategy.”
More sales staff means big growth in new markets for FileNet, according to Roberts.
“As part of IBM, we are growing significantly faster then we were as a stand-alone business,” he said.
Less than a year after the ink has dried, FileNet is nearly integrated into IBM’s enterprise content management unit.
FileNet’s 300,000-square-foot campus in Costa Mesa now is the headquarters for the group, which also includes IBM’s search software unit.
The moved doubled the research and development and sales groups Roberts oversees.
He’s now in charge of about 3,000 workers all over the globe, up from about 1,700 a year ago at FileNet.
Roberts said his tasks haven’t changed much. He still spends most of his time on the road, meeting with customers.
The biggest change is in name only,he’s now general manager of IBM’s enterprise content management software group.
“Obviously, I’m not CEO any more,” Roberts said. “Dealing with Wall Street and the financial reporting aspects of the job,those are not things that I focus on as much as I did.”
Roberts now is the top IBM guy locally. He reports to Ambuj Goyal, general manager of IBM’s information management software group in Armonk, N.Y.
The transition to becoming “an IBM company” was smooth, Roberts said.
IBM assigned about 100 people to help FileNet integrate and train workers.
“IBM probably has one of the best track records for integrating acquisitions,” Roberts said. “There was almost no strife. To be honest with you, I was surprised.”
It helped that Roberts had put in nearly two decades at IBM before joining FileNet as president in 1997.
“The fact that I came from IBM probably helped,” he said. “The cultures of the two companies are similar in a lot of ways.”
Today, IBM and FileNet sell each other’s software to help companies store, organize and search information that doesn’t easily fit into a traditional database. That includes e-mails, video clips, blueprints and X-rays.
The unit including FileNet also helps businesses build custom software to ensure compliance with regulatory agencies.
By playing up the companies’ shared cultures, Roberts said he was able to help avoid “the obvious potential religious debates” among employees over which company’s software is better.
“One of the things that really impressed me about IBM is that they got to know us,” Roberts said. “They took some of our best practices and adopted them. That doesn’t happen very often.”
FileNet has a two-year plan to combine elements of each company’s software into one offering.
Roberts is focused on growing the enterprise content management group at a 20% clip, or about twice as fast as the market. He’s also looking to gain market share against rivals Microsoft Corp. and Oracle Corp.
IBM doesn’t break out sales for its software units. The software business as a whole made up about $18 billion in sales last year and 40% of IBM’s profits.
The company’s enterprise content management software has about 24% of the market, according to Roberts.
“Now we get to be the 800-pound gorilla in the marketplace,” he said.
The perks have trickled down to FileNet’s workers. For one, there are better benefits and more career choices with IBM.
Workers “can aspire to a whole set of different jobs that we didn’t have before,” Roberts said. “For the employees, it was a very positive move.”
One employee said each FileNet worker was handed a top-of-the-line IBM ThinkPad notebook computer “on day one.”
FileNet workers now also take part in IBM’s rewards programs, which offer cash, discounts and credits for IBM swag (including obligatory polo shirts, gym bags and coffee mugs and also iPod cases, golf balls and even wristwatches) for a job well done.
The perks have helped keep FileNet’s staff stable during the transition, Roberts said.
“Our attrition rate as part of IBM is lower than it was when we were a stand-alone company,” he said, “particularly in the first year, which is the most challenging and unsettling for people. That’s a real positive.”
FileNet is adding jobs slowly and IBM is ramping up its international staff in Asia and the Pacific, Roberts said.
He sits on IBM’s mergers and acquisitions team for software, a key spot to be in a rapidly consolidating sector.
“As we look at our market, we are definitely more aggressive in terms of M & A; than FileNet was alone,” Roberts said. “You’ll see us do a fair amount of incremental acquisitions.”
Roberts marvels at the idea that his career has come full circle.
“When I left IBM to come to FileNet, I probably didn’t have any expectation that I’d come back,” he said. “But, you’ve got to adapt.”
