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OpenText To Acquire Distressed HP Engage Software Assets

By - Source: Toms IT Pro
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One of the original web content management (WCM) innovators has landed in Waterloo, Ontario.

OpenText announced the acquisition of customer experience management assets from HP Engage (HP Software). These include HP TeamSite, HP MediaBin, HP Qfiniti, HP Explore, HP Aurasma, and HP Optimost. This portfolio is comprised of a combination of former Interwoven Inc. products coupled with other tools purchased by Autonomy and Hewlett-Packard.

"Autonomy, then later HP, never invested in the hard work it was going to take to keep its customer experience portfolio of TeamSite, MediaBin, and Optimost relevant in a market being disputed by open source and the cloud," said Tom Wentworth, Chief Marketing Officer, RapidMiner. "TeamSite once held a dominant market position, but a series of poor decisions during the Autonomy era led to its demise."

This is inherently a bad sign for the "legacy" WCM market. The "big four" in the market, defined as Sitecore, Adobe, Acquia and Oracle, are losing ground to the newer, Java-based and open source tools from Hippo, Jahia and Magnolia. OpenText will undoubtedly go after the legacy enterprise TeamSite customer base, but merging the HP suite with existing OpenText intellectual property (notably Vignette) won't necessarily provide an improvement to OpenText's position in the market.

OpenText is communicating this deal as aligning with its five pillars: expanding EIM market leadership, expanding focus on cloud services, analytics, strengthening go-to-market, and improving financial performance. The HP assets will predominantly drive financial performance, where OpenText has essentially purchased two to three years of future support revenues at a discount. This transaction falls in line with other recent OpenText deals, which have been cut to increase cash-generating revenues by $65-75 million each year.

Interwoven's technology was already showing signs of age and lagging behind the market as far back as 2010. The key differentiation, beyond technology, lay in the intangibles around customer service, strong community support, channel partnership and long-term viability.

However, much of the differentiation eroded as the Interwoven WCM suite was sold to Autonomy in 2009, and later to HP Software. Now part of OpenText, most if not all of the differentiation will be eliminated through layoffs and attrition.

The acquisition cost of $170 million is a bargain, as this portfolio was generating greater than this amount when Autonomy acquired Interwoven in 2009.

More updates will be available upon close of the transaction in Q4, according to OpenText representatives.