Post Consolidation : The Hollowing Perspectives

We are seeing a lot of consolidation amongst the vendors operating in the ECM space- Hummingbird+Opentext, Filenet+IBM etc following the successful Documentum +EMC combination. It is an interesting thing to see how the smallest of the combined entity looks to the future. IBM announced Filenet acquisition post Opentext buying out Hummingbird. Open Text is now left to compete with some of the largest consolidated players in the market, including IBM, Oracle, and EMC. Open Text’s CEO John Shackleton shares that compliance across all industries and geographies as the driver for ECM adoption. For compliance, it’s about every industry from Sarbanes Oxley but also things like Basel II, the financial services industry, and OSHA [Occupational Safety and Health Administration] standards in the manufacturing industry. Emphasizing the collaborative abilities of Open Text, John adds, the ability to store unstructured information, to find that information but also tie it to structured information, its ability to get control over things like email and instant messaging, Word documents, contracts, etc., and tie that to any transaction that might be going on in any kind of company are amongst its key strengths.

Q: Is there any other trend or event that will happen in the future to drive more growth?
A: The key drivers are legal issues in Europe, MiFID [Markets in Financial Instruments Directive] compliance around brokerage houses that will drive a lot of business, but the other piece will be more and more IM, voicemail, email. Most CIOs have to scramble to be able to control these things, and the mass of information is overwhelming to anybody.

Q: What about newer technologies like blogs and wikis? Will they also drive growth for content management software?
A: I think they will be legal documents, so you’ve got to be careful about what is in there and how long it is retained and will proliferate in the market.

At the end of reading the interview, I sort of felt that John was missing on a few things. While his targets seem to be number centric, his dismissal of competitor’s newfound strength post acquisitions and underemphasis of blogs & wikis( for a company/product touting management of unstructured content as its core strength) looks downright bizarre. His view that Hummingbird integration is complete stumped me. While an organizational integration might have been completed(I do know that lot of Hummingbird salesforce was allowed to leave), product fusion and future roadmap are all faraway targets. I would have loved to see him talk how the new organization would build on the individual organization's strengths and address opportunities such as those covered herein. Sometimes an outside-in approach towards assessing competitive strengths may help and I think OpenText needs a strong dose of that & NOW. I am keenly watching the post acquisition/consolidation of enterprise software players and find that a clear message on post consolidation benefits increasingly appears to be missing and where present less convincing. I have seen a platform company buying a portal sofware company and selling two portal software, a business application software company with an existing CRM offering buying a CRM company,Ditto with search engine( should I say eDiscovery! to make it look more sophisticated) acquisitions. In general, the consolidation and repositioning or lack of it of enterprise software players should make customers beware of the future roadmap and perspectives of the vendors.