Last week’s Open Text and Vignette news gave us all a great deal to think about but now that this long awaited shoe has finally dropped we are left to wonder – who is left? Vignette had been on the ropes for so long it was only a matter of time but are any of the remaining players of any size attractive acquisition targets.
And Then There Were Three
If you look at the Gartner Magic Quadrant from last year there were only four likely targets outside of the ‘Niche’ category. Vignette, Interwoven and Day were all listed as Visionary. Hyland (OnBase) was in the Challenger category and only Open Text was listed among the Leaders. (IBM, Microsoft, EMC and Oracle)
Revisiting this makes it even more evident that the Vignette/OT thing did nothing to improve the OT position in any area other than its install base for maintenance revenue. There are no technology wins here. The Autonomy/Interwoven deal however does enhance both positions and you can expect the new parent’s relative strength and deep pockets to help the Interwoven suite (under the Autonomy name of course) possibly join the leaders next year. Much the same occurred when Oracle acquired Stellent, filling in enough bubbles in the feature matrix to get them a promotion.
So for the remaining three (OT, Day and Hyland) who is next? After pondering this a while the obvious front runner to me for the next big splash in the ECM acquisition pool is NOT Open Text. We have speculated on that many times for quite a while. The simple reason is that the lawyers are too busy. There are too many unresolved deals in the pipeline and too much internal instability from the other acquisitions.
When it does happen (and it will one day) the obvious buyer for OT is still SAP. This idea though is based soley on the importance and relative strength of their old IXOS position and their continued partnering relationship. The varied menu that OT has been dining from will probably not sit well on the decidely conservative stomach of SAP. SAP is a company that is more disciplined than most when it comes to selecting who and what to integrate with much less buy. They are not likely to be too enamored with the overlapping catalog the Canadian company has collected over the years.
I don’t recall a move SAP has made in the last ten years that was not explicitly directed at focusing their technology on business scenarios as opposed to enterprise technologies that have a face of their own like ECM. Does that mean that when cash gets tight, OT starts to splice the pie up and serve the parts back out? Who knows but it is something to consider given that platform consolidation seems not to be the priority it once was.
One Down – Two to Go
So if OT remains a bridesmaid for a while – will there be other moves? The other two (Hyland and Day) are both interesting and attractive in their own rights but they have issues. In at least once case subsequent moves (or obstacles) may indeed have more to do with culture than some other techno/economic synergies the M&A people start the spout.
Open Text crows a lot about being the largest independent ECM vendor. This in my opinion says nothing about a company’s ability to execute when, as in this case, they a publicly traded company. The “real” independent ECM vendor of note is Hyland. While controlling interest is now held by a private equity firm, it is still managed by the family of the founders. I work for a big public company and am very happy but I have a great deal of admiration for a “family business.”
By all measures (that we can see at least) they do a good job. At some point though the right thing to do for the company may be acquisition – but the decision will be just as much about their passion for the business as the balance on the books. With the depressed value of most companies today I would say that passion can carry though until times (and the offer) are better. That being said – I doubt they will be next.
And then there was one
Apart from OT, Day is probably the strongest from a pure technology standpoint. At least in reputation, their very active participation in driving numerous standards initiatives over the years has made them well thought of in certain circles. Unfortunately that hasn’t necessarily translated into stellar financial performance.
The real question is – who needs them? The short answer – probably nobody. They make themselves relevant by injecting themselves into the conversation with really good ideas but at the end of the day (no pun intended), despite the thought leadership it is hard to think of the product as more than just another WCMS. But this doesn’t mean they won’t have a buyer.
Who’ll buy them? – you guessed it – Open Text.
Let’s look at it from another angle….who might be the acquirers? Taking OT out of the equation, because that is just cheating, let’s think on this…
Hyland has an offering that is growing stronger. They are adding SaaS and certified Records Management. Could they look to add WCM or DAM to their portfolio? The issue is that many potential targets are Java based and OnBase is decidedly not.
I think that we might see some consolidation in the WCM ranks as the players look to fill the perceived void by Vignette and Interwoven. Being a large WCM provided can be beneficial if you stay on target and keep the technology sound.
Shot maybe SpringCM will buy a WCM vendor. That actually makes some sense as well.
I think my point is that anything can happen, and that is even without considering OT in the equation.
Sure – anything can happnen. That’s like the question to the developer “can you make it do this?” – to which I always answer – “if you have the money”
As much as I like Hyland the company – I fear for their longer term prospects – as I do for any Windows oriented product in this space. They are all just marking time until Redmond adds whatever it is that they do and then bundles it in the CAL.
They could definitely look to add more capability and should if they want to survive. Not sure it will be through acquisition and their traditional markets (finance and healthcare) are less concerned about these capabilities. I think one to watch in the pure MS space is KnowledgeLake though the same caveat applies.
SpringCM -hmm – will have to ponder that a while and look at the $ to form an opinion. My first reaction is that they are less likely to acquire than to leverage and brand open source – which is their heritage in the first place.
I’m not going to make any friend with this statement but here goes anyway. Not every vendor on the Gartner’s Magic Quadrant for Enterprise Content Management is an ENTERPRISE content management platform.
I kept a customer out of that trap a few years back doing an enterprise platform selection. One of the vendors came in and said that they could do feature 1 and 2. With my background I was able to ask while knowing the answer, “with which product?” See 1 could only be done by platform A and 2 could only be done by platform B. I then asked, “Does feature 1 integrate to B or feature 2 integrate to A?” The answer again was no and there was no plans to integrate either.
Just like with everything else today, it’s about filling in the bubbles. So it surprises me that an analyst firm would let this happen. Open Text and Microsoft need to be listed as SEVERAL different product while IBM and Oracle listed for their two. Either that or maybe develop the “Magic Cube” which looks at all the disciplines under ECM.
Marko, solid thoughts. Helping a client with a vendor selection and the intersection, or lack thereof, of email archiving and RM is fun.
I did think of another vendor, Kofax. They are still independent. I could see them being acquired by many of the major players, though not EMC.
had not already bought Captaris I would say they don’t need another imaging product – but then this is OT we are talking about.
no – not EMC – IBM or HP are definite maybe’s