I’ve always found the battle between Interwoven and Vignette for sixth place in ECM interesting. It like a boxing match between two former heavy weight champs. Both talking a big game, like they were still in their prime, but still keeping quiet around the current champs. These two were the top dogs for a few years, just before the bubble burst. And after this week’s earnings announcement, Vignette’s eyes seem a little dazed. There’s even a great blow-by-blow report from CMS Watch.
How did Vignette get in this position?
Vignette was a solid content management. Their showcase story on their home page is the 2,253% ROI it brought NASA. How was it done? Web site consolidation. Vignette allowed NASA to remove hundreds of sites and replace them with one. But one-trick ponies are not enough these days.
Vignette never really developed a solid document management or digital asset management component to round out its ECM strategy. The way you manage elements of a web page is not the way you manage documents or video. And these days document management requires easy integration into other enterprise applications. Another bit of functionality missing from the portfolio. Some of the pieces are there, like records management from the Tower acquisition. But pieces are not enough when you need the whole story.
Vignette should be acquired
If you ask me what’s next for Vignette, I’d say they’re ripe to be acquired. Yes, be acquired not the acquirer. It’s obvious that a change is needed. And it’s the position they are in today that makes them interesting.
Their market cap at open today is $280M. Of this $170M is short term assets. This means that Vignette cost to an acquirer starts at $110M. That’s a relatively low investment to make for a major leap in WCM. But who?
Oracle? This is always the easy one. Everyone’s always looking at Larry to make another acquisition. The deal would be attractive, but Interwoven would make the better technology fit with its focus on the database. But I believe it to early to expect the Stellent acquisition has shown its full potential.
EMC, IBM, Microsoft, Open Text? I don’t think so. Each of these vendors already have traction in their own WCM lines. This acquisition would do nothing but cause disruptions as they look to integrate solutions.
Hyland and Vignette Merge
To me the real interesting combination would be Hyland and Vignette. By acquiring Vignette, Hyland would not only get the web content management component it is missing but it would also beef up it’s international presence. Acquiring Vignette would also be an interesting way for Hyland to go public, based on the deal being structured as a reverse takeover.
Why Hyland over Vignette? Isn’t it obvious? While Vignette’s been in a downward slope, Hyland’s been moving in a positive direction.
If I’m at Hyland, buying into the WCM market this way would be like spending $100 million to be an extra in the last scene of Solyent Green.(you know it’s people – right?) As a private company, they have done quite well building SMB and small govt document solutions that are much more valuable. They don’t need WCM to grow.
Assuming they need it, why take on the baggage when there are plenty of smaller fish with better products to acquire. I don’t know that I would spend that kind of money to be the guy everybody is replacing with open source tools that are really better in the first place.
Good points but what we technologist often forget is the difficulty of getting the right people. One of Hyland’s deficiencies is the lack of an international presence. Vignette already has this organization. The acquisition of this distribution channel, in addition to the technology, makes it a great deal.
Yes, they have got themselves to a solid situation but to catch up with any of the next level of vendors they need to do major things fast. I think with the right strategy Hyland could knock Open Text out of fourth position. If nothing else I’m not sure why Hyland hasn’t passed Interwoven and Vignette.
And Vignette’s technology is being replaced by “open source” as much as the next guy. There are no real numbers from any of the open source vendors as to how many replacement deals are happening. I’ll believe it when someone starts sharing those numbers. For now it’s great marketing.
They have a beautiful office building, not too far from downtown, that probably can be sub-let for some excellent money.
I just think that they are between a rock and a hard place. Any company with the money to buy their product will likely take the less risky approach to go with one of the big 4. Any company with whom money is an issue is probably going to go Open Source or continue with some home-grown system of some sort. If I were Vignette, I would be looking very hard to be bought out or buy my way into another related market (with what cash?).
Thinking of doing is having wake up as a person who is already being held prisoner by the “cult” they are headed to. The prisoner
wakes with little or no recollection of who they are or how they got there (hence no need for back story), but attempts to sneak out of his cell
(which someone has left a way out of), and ultimately can meet up with the PCs later, or simply be recaptured.