More Consolidation in the ECM Space

Hi all

As predicted a year ago, more consolidation is happening at the lower end of the ECM marketplace with today's announcement that Opentext will buy Vignette for between $300-$310m US.

This is interesting for a number of reasons (especially here in the APAC region).

Opentext bought Hummingbird a number of years ago - since then, they seem to have invested very little in integration between the two platforms. Customers have said to me that they are waiting for an announcement about whether a product they invested heavily in buying and implementing will be around in the future which gives the impression that Opentext remain undecided. Now that they have made their move on Vignette - where does that leave them in the market?

1. They will obviously gain market share simply by the Vignette customer-base. This doesn't make them stronger or give them a better offering - it just means that they have more customers to service.

2. Their product offering will become broader. Again, this isn't a sign of increasing strength - it just means that Opentext now have more capability in the web and portal space (as long as their customer and propects only need a ring-fenced solution). Vignette, albeit a player in the web and portal marketplace, don't offer their users much outside of a delivery platform or information managed by THEIR back-end. Customers who wanted to deliver information from other back-ends through the Vignette portal are generally taken down the path of expensive and extensive customisation to achieve their goals - often going down the simpler path of duplicating their information into Vignette leading them to question which content is actually correct and relevant.

3. This will give the Opentext and Vignette customers more choice. Yes it will, which one of our many document management solutions would you like to buy? Taking document-management for example, there are at least 3 solutions that you can now buy from Vignette - all of which are different, and which one will Opentext continue to push to the market (or will all-3 be supported long-term?)

Locally in the APAC market, there will be some management challenges to deal with for the consolidated organisation. At a global management level, there will be 3 sets of managers competing for position.

It will certainly be interesting to watch how this all pans out for Opentext and what decisions they make regarding strategy, management and product.

Paul