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Tower Falls To HP

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Another hardware vendor has charged into the ECM space with HP announcing the acquisition of Tower Software. I’ll comment more on this later today but Alan Pelz-Sharpe over at CMSWatch has already published his take on the event.

A couple of quick points…
My first thought – bless Open Text’s heart – always a bridesmaid … But then again with a $1.6 bln market cap, do they care?

Second thought – Is Dell shopping too?

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4 Responses »

  1. So you beat me to it. I was going to say “No Joke, HP Buys Tower”.

    As I commented last week, HP has yet to have a successful software acquisition. If there was ever any further proof needed, this was it. So what did HP get?

    HP said they only got Tower for their eDiscovery but isn’t that like saying you read that certain men’s magazine for the articles. First off, yes Tower has a successful records management (RM) product, but a non-integrated RM was the way of the past. When TrueArch and Tarian got bought that changed the game, RM became closely tied to EDMS. Even Tower saw this and built its own EDMS to deal with the market change. As an EDMS platform, Tower has not been so successful. For HP to be an independent RM, they need to work with other EDMS vendors and no one these days is playing that nicely with each other as they all have their own RM features.

    No, HP will still be pushing Tower EDMS, the 10th leading product in the market. Anyone remember the 10th man to step on the moon or the 10th President of the United States? HP passed up OpenText, Interwoven, Vignette, Hyland and Day all with a much more rounded out solution. HP just made a half-baked attempt at entering the enterprise software market.

  2. Your characterization of the deal as a “half-baked” attempt assumes that their goals are the same as what yours would be. Tower has a very strong position in the Federal space. Passing on Vignette and Interwoven makes sense because those two can’t seem to get past WCMS. Web content management doesn’t serve driving large storage sales the way archive and records management does.

    As I’ve said before, Open Text has too many pieces in the portfolio to be a candidate for a tactical acquisition. Hyland would have been a good choice but again – Tower’s Federal RM and eDiscovery will drive hardware sales better than pure play ECM. Besides, for what they paid for it, they could still by one of the others.

    I think it’s a good choice for them.

  3. Well my goals would be a return on investment as I presume shareholders for HP would expect.

    The problem is that records management is no longer a standalone application. Wouldn’t you agree? Tower Records Management does not work with Open Text, SharePoint, Content Manager, FileNet nor Documentum. Odds are that none of those vendors will make it easy for them to do so as they have their own products.

    The only place this makes sense is in the mid-market where companies are not looking to deploy full sized ECM solutions. The problem I see is this is exactly where Microsoft SharePoint is playing.

    The real point is that in a acquisition partner Tower found the wrong one. To be valued only as an RM play really diminishes who they are. Unfortunately I think Tower found themselves without a chair when the music stopped.

  4. OK – it’s not a mature response but “duh..of course they want ROI”

    Now that we’re past that why don’t we talk about the real issue. Whether or not it is a reasonable approach to enter the ECM market one piece at a time. At the risk of being cruel and insensitive – it doesn’t matter anymore whether Tower sees HP as a good partner or not. This is not a “partnership” , merger or any other euphemism you choose. It’s a buyout, a takeover, an acquisition. The shareholders that matter most now are HP shareholders. Does it fit the buyer’s strategy is the question.

    As to records management – I don’t know that I agree with the idea that RM should be a CM application at all, but I’ll save that argument for a different post.

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