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What’s Next For Vignette?

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.

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