OpenText completes Documentum acquisition to become largest ECM vendor

Waterloo, Ont.-based OpenText Corp. has completed its acquisition of Dell EMC’s enterprise content division, also purchasing the Documentum brand for $1.62 billion USD in cash and stock, according to a press release on Monday.

The deal was first announced Sept. 12, 2016. With the closing of the acquisition, OpenText sees 5,600 customers, 2,000 employees, and 300 partners onboarded to its Enterprise Information Management platform.

“This acquisition provides exciting opportunities for current and future OpenText customers,” writes OpenText CEO Mark Barrenchea in a blog post. “Existing customers will benefit from a more functionally complete EIM platform while the [Dell EMC] ECD customer base will benefit from integration into OpenText technology.”

Aside from Documentum, OpenText also acquires the InfoArchive and LEAP product families in the acquisition. All of these brands will be integrated into OpenText, bringing the company’s total employee base to more than 10,000.

In reasons listed under a “strategic rationale” section of a presentation to shareholders made in September, OpenText says the new products will expand its portfolio of enterprise information management (EIM) products and services. Documentum brings deep industry solutions, it says, and there will be cross-selling opportunities between the OpenText portfolio to Documentum customers. The deal also increases OpenText’s geographic exposure and presence in developing markets.

Here’s a chart showing OpenText’s EIM portfolio including the brands that it has acquired over the last several years.

OpenText EIM portfolio
An OpenText chart shows all the brands now included under its EIM portfolio. Click image to see a larger version.

In its analysis of the deal from Sept. 16, US-based IT analyst firm Gartner Inc. says the deal makes OpenText the largest enterprise content management vendor in terms of market share and revenue. The deal was made just shortly after OpenText made a similar acquisition of HP’s software assets in this area.

“OpenText now has one of the most complex software portfolios of any content vendor, with many overlaps in core repository services, document capture, records management, workflow/BPM, case management and customer communications management applications,” Gartner states. A concern for the newly acquired division “is a potential slowdown in product development, and that projects and technology innovation may stall due to underfunding or redistributed funding. We expect to see limited investments into new and current ECD solutions.”

There are bright spots that Gartner points out as well. Dell EMC’s division has seen its archive offering and branded industry solutions for energy and engineering sectors, plus life sciences and healthcare on the rise. Also, EMC’s InfoArchive solution has seen growth over the last two years with enterprises interested in structured and unstructured unified archiving.

Gartner recommends no action as required in the short term for Dell EMC customers, since OpenText has a history of supporting acquired products. Though in the long term it’s possible some redundant products will see less development.

“If there is a window for negotiating, ask to be compensated for additional risk,” the analysts write.

 

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Jim Love, Chief Content Officer, IT World Canada

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Brian Jackson
Brian Jacksonhttp://www.itbusiness.ca/
Former editorial director of IT World Canada. Current research director at Info-Tech

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