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Open Text and License Revenue

I am amazed at how (at least in public) old time “Documentum” people continue to be dismissive of Open Text. I’ve written here before that it seemed that OT’s acquisition strategy and close ties to Microsoft seemed at odds with a takeover bid but In case you haven’t noticed, Open Text is making money. A lot of it. With a market cap approaching 1.9 billion and license revenue up, they are trending much better than Documentum and it is  just too much cash to ignore.

Thanks to Kas Thomas of CMSWatch for deciphering the quarterly numbers. While EMC is reporting $185 million in revenue from CMA in Q1 2008, OpenText reported $178.8 million for the same period. The shrinking license revenue gap is even more dramatic with OpenText reporting an increase of 20% YOY to $51.5 million as compared to EMC/Documentum reporting $58.6 million on at 15% drop. Granted, this is just one quarter but a few of my freinds in the business need to start paying attention. Oddly – these are the same people that don’t take SharePoint seriously either. Maybe I need smarter friends.

OT’s partnerships, in particular their SAP Resell and Microsoft strategy (as described in their 2007 annual report) appear to be paying off while EMC looks for new channels in OEM and VAR markets. Documentum is already fading fast as a brand within EMC and elsewhere. EMC will need to respond directly to the Open Text challenge which isn’t easy since SharePoint has everyones attention. If this challenge isn’t addressed,  Documentum risks a long lonely decline deep in the cavernous EMC catalog.

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