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Examining the OpenText-Documentum purchase six months later

OpenText's CMO is confident Documentum can thrive in its new home, and further integration, innovation and AI functionality are coming to the platform.

Six months after purchasing Dell EMC's enterprise content products, including Documentum, content management company...

OpenText Corp. is promising future innovation and integration. Features such as AI functionality figure into keeping Documentum customers in the fold during the transition.

The OpenText-Documentum purchase sent waves through the enterprise content management (ECM) industry when the $1.62 billion deal was announced last September and finalized in January. Questions were voiced about the future of Documentum and whether customers would need to migrate to OpenText products, but OpenText executives have been adamant that both products will continue to exist and receive innovation, including integration into OpenText's upcoming artificial intelligence (AI) offering, Magellan.

Adam Howatson, chief marketing officer at OpenText, based in Waterloo, Ont., explained, "That's part of the benefit we're articulating to customers is not only the active investment on the platform you're currently invested in, but also the integration with the broader OpenText product portfolio -- from customer experience products or business network offering and our discovery and analytics solutions, including OpenText Magellan, our new AI platform that we will be unveiling on July 11."

Howatson added that Magellan is expected to help uncover insights from both numerical data and unstructured content, and it will be accessible in repositories such as Documentum or InfoArchive, a document archiving platform OpenText received in the Dell EMC enterprise content division acquisition.

Following a similar acquisition path?

To some industry analysts, the path OpenText is taking with Documentum sounds similar to the company's previous acquisitions.

Tony Byrne, founder, Real Story GroupTony Byrne

"I've been watching this process with OpenText for more than a decade, and I think, in 2009, I called them 'The Roadmap Company,'" said Tony Byrne, founder of Real Story Group, a research and advisory firm in Olney, Md. "Every time [OpenText] acquires a company, they always have this story around innovation and synergy and a roadmap. It's a very nice story for the customer and perhaps OpenText believes it, but it very rarely executes on it."

But as long as Documentum customers continue to receive support and are not surprised by change or forced migration, Byrne predicted customers will stay around -- at least for now.

"You have customers doing highly complicated business processes that don't evolve that much," he said. "There's reasonable confidence that customers will continue to get support at OpenText. I don't hear about any stampede for the exit; however, among savvier licensees, they see this as a terminal event for the software. It's in a retirement home and, at some point, will move to hospice -- there won't be any renaissance of Documentum here. Savvy customers are thinking that, some years down the road, they'll have to review their choices."

OpenText's strategic rationale

While Howatson said the OpenText-Documentum deal was mostly about acquiring Documentum's stable customer base, other factors helped drive the acquisition, including the foray into industries and markets that OpenText lacked.

"The strategic rationale behind the acquisition was to get us penetration into verticals where we didn't have that critical mass -- pharmaceuticals and life sciences, U.S. public sector and energy, and engineering," Howatson said. "Documentum brought to us specific solutions in the platform for those industries. It helps extend toward completing our vision for EIM [enterprise information management] and giving us the underpinnings for a native cloud-based SaaS [software-as-a-service] platform."

Adam Howatson, CMO, OpenTextAdam Howatson

Even if the OpenText-Documentum acquisition opens up more markets and industries for OpenText, the company offers competing products that are now under the same roof: OpenText Content Suite and Documentum Content Server.

Despite the similar names, Howatson said he sees the two ECM products as coexisting with different focuses, but admitted there are "some overlapping capabilities on the products."

A future reason to migrate?

"I do see distinct positioning for both of them," Howatson said. "Documentum is positioned around financial services, energy, engineering and the public sector. Content Suite has ideal positioning and capabilities for ecosystem integrations like extended ECM for SAP, Microsoft and Oracle."

Because Content Suite is one of OpenText's flagship products, Byrne said, this is one area where OpenText might push for migration in coming years.

"I want to give OpenText the opportunity to innovate here, but I'd be very skeptical," Byrne said. "I wouldn't be surprised if the Documentum customers over the next couple of years get knocks on their doors about migrating."

More news regarding the future of OpenText-Documentum will be unveiled in the middle of July at Enterprise World, OpenText's user conference.

Next Steps

Questions arise from OpenText purchase of Documentum

The fate of Documentum after Dell's purchase of EMC

Documentum gets upgrades ahead of OpenText buy

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What do you see as the future of Documentum with OpenText as steward?
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Having been involved in a number of high-profile acquisitions over the past several decades, I notice a faint aroma of the "let's buy something" imperative that so often infects such transactions. The results usually don't live up to whatever the executive PowerPoint presentations put forth, and in too many cases, they turn out to be negative--although rarely talked about if the acquirer can avoid it. It seems to me that we are waiting for market innovation to offer really new ways of doing things, and market consolidation among current players will probably not further that process.
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