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Burntsand the Latest Acquisition by Open Text

Yesterday Open Text announced that it was acquiring Burntsand for $11M CAD.  Considering Burntsand has reported a profit only once in the past nine years (in 2007), this is another “interesting play” for Open Text.  But does it really mean anything. 

Burntsand is one of those Systems Integrators that you hear about in this space every so often.  They would make a big noise and then nothing for a while.  But they were always consistent on focus.  Their move into content management started in 2000 with the acquisition of Altro Solutions (at an Internet bubble price of $14.8M) and there was a large focus change to Content Management and specifically Documentum.  But over time they’ve gotten quieter and quieter, with just a blip on the radar every so often.  And then out of the blue, they announced closing a large services deal with Documentum

But these days Burntsand has been focusing a lot on Microsoft.  Of the 32 job opening on their site 9 are for SharePoint skills.  It’s obvious that they have been building a talent pool.  Their Gold Partner status and SharePoint Deployment Planning Service shows the commitment to Microsoft  Add to this that they focus on integrating Documentum and SharePoint and they have a good SharePoint strategy.  Or should I say “had”.

But I’m still left to wonder why acquire them.  Then I notice something odd.  Of their six previous acquisitions half have been Canadian companies; Hummingbird, Nstein Technologies, and Vizible Corporation.  And most of those acquisitions have been awkward;  a competitor, a technology early in the hype cycle, now a non-profit consulting company with no focus on their products.   I can’t imagine why both being Canadian companies would matter but it does seem odd coincidence.

It will be an interesting road ahead.  Since there was no strategic relationship between Burntsand and Open Text before, this means that it may be some time before they can be used to deliver Open Text projects.  (And this doesn’t look at the number of Open Text platforms.)  Then of course there is the relationship with EMC and Microsoft.  I believe that both are at risk.  I really don’t see either relationship remaining that strategic. 

In the end Open Text has acquired a consulting firm that has content management skills, just not dept in any of their seven platforms.  The interesting fact about consulting companies;  If you don’t have products, the value of the organization is in a group of people with specific skills that know how, and are willing, to work together.  Every night a consulting company’s assets go home, every morning you hope they come back.

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