So Documentum finally has a new home. With the ink barely dry on Dell’s takeover of EMC, OpenText today announced its intention to acquire EMC’s Enterprise Content Division (ECD) for $1.62B. When the deal concludes (likely around the tail-end of 2016, or early 2017) OpenText will be the proud new owners of Documentum, InfoArchive and EMC’s new LEAP family of cloud-based applications.
Right from when the shape of the new Dell Technologies (with EMC) became apparent, it was obvious that the Enterprise Content Division (ECD) would be hard-pressed to maintain core business relevance – and therefore secure enough attention and R&D investment to move forwards. Documentum helped the ECD post around $600M revenue last year, but that’s down on 2014’s $640M. So even as a cash cow, it was starting to lose its appeal. The Documentum customer base has become increasingly lured away, with many investing in newer cloud-based and hybrid information management solutions from competitors that are better-suited to today’s digital transformation agendas.
EMC’s enterprise content people have been alive to this threat, of course; and last year announced ‘Project Horizon’ – a suite of lightweight SaaS apps designed to attend to a range of content-related use cases, and able to integrate with any content repository (although showing a natural affinity for Documentum). Fast-forward to May 2016 and Horizon morphed into EMC LEAP upon launch. However, with only a couple of its apps immediately available it was clear that what this new ECM angle for EMC required was ongoing investment (in R&D and marketing) and a belief from the top that it could play a part in the company’s success. And wasn’t going to get that at the new Dell Technologies.
So, what will OpenText – a company known for acquiring customer bases as much as technologies – do with its new acquisitions?
Even though it’s dwindling, there’s still revenue potential in Documentum. Not every Documentum customer can easily shift away from its investment – for some, Documentum is firmly enmeshed within complex layers of business application integration and customisation. For those companies, the cost of ripping and replacing is currently still too much to face – though this will not hold their investments in place forever.
OpenText’s own product strategy has finally started to gain a lot more coherence. This summer’s acquisition of Recommind brings opportunities in content intelligence (and credibility in key use case markets for such capabilities, such as legal eDiscovery). This followed on from the launch of OpenText Release 16 (on-premise and in the cloud) earlier in 2016, when the company brought its ECM, Business Process Management, Customer Experience and analytics suites much closer together – making it easier to deliver integrated Enterprise Information Management solutions with wider enterprise appeal, and also, finally, presenting a clear roadmap for its BPM customers in the wake of much earlier acquisitions of Global 360 and Metastorm, as well as showing a clear role for the Actuate acquisition.
However it’s worth noting that in our recent experience, EMC’s ECD technologies aren’t the only ones seen as ‘legacy’: OpenText’s portfolio has struggled to fight the same perception. So the SaaS apps of EMC LEAP have the potential to augment OpenText Cloud’s capabilities nicely. LEAP’s declared repository-agnosticism will simplify things, though more work will be required.
Documentum also provides OpenText’s sales team with an opportunity to at least present what an OpenText future could provide for disgruntled EMC customers keen to move on – though that vision needs to look like more than just ‘legacy ECM 2.0’ to see off the advances of the new generation of SaaS content management / collaboration from the likes of Box.
Documentum customers may not see much investment from OpenText to develop that particular product line much further (as we reported in May, customers haven’t exactly been beating a path to its door to demand new features and functions anyway); but at least they’ll a have new supplier in OpenText that understands ECM, that is keen to address modern enterprise software priorities and agendas, and that is in ‘listening mode’. We want to see a more fleshed-out LEAP suite playing a key role in the portfolio as things evolve; the way that OpenText addresses the concerns and priorities of ECD customers with migration paths will be a big test for it in the coming months.