News Stay informed about the latest enterprise technology news and product updates.

Forensic security vendor Guidance Software latest OpenText acquisition

OpenText continues its buying spree with the acquisition of Guidance Software. The vendor has spent more than $2 billion since the start of 2016 on acquisitions.

Between finalizing the acquisition of Dell EMC's Enterprise Content Division and unveiling its AI platform, Magellan,...

it has been a busy year for information and content management company OpenText Corp.

But the Waterloo, Ontario-based company wasn't finished, having announced the acquisition of forensic security vendor Guidance Software Inc. for $222 million. The OpenText acquisition comes as the company finalizes its purchase of Covisint, a cloud computing firm, for $103 million.

The Guidance Software acquisition is intended to complement OpenText's Discovery software and services, according to a press release from the company. OpenText also hopes the acquisition "broadens OpenText information security capabilities" through Guidance Software's features, including digital investigation, forensic security and endpoint solutions.

Much like the purchase of Documentum through the Dell EMC acquisition, OpenText is betting on securing a rewarding maintenance stream and filling a gap in its portfolio, according to Tony Byrne, founder of Real Story Group, a content management consultancy in Olney, Md.

"OpenText's business model says we can get rid of redundancy in the back office and in R&D and apply our models and support this customer base more efficiently than the smaller company did," Byrne said. "Wall Street rewards them each time for that."

Beyond buying a loyal customer base, the OpenText acquisition of Guidance Software gives the company robust forensic and security capabilities it previously lacked.

"There are some specific things in both audit and forensic that OpenText wasn't able to do, and now they say they can," Byrne said. "This adds to the OpenText portfolio, but there's no real suite play where all these pieces get magically stitched together in the back end."

How does AI fit into these acquisitions?

OpenText is taking aim at IBM's Watson with its new AI platform, Magellan, which it unveiled at its annual user conference July 10 to 13. One area where AI could be most useful, according to industry analysts, is within the information security space. By combing through large amounts of data in real time and discovering discrepancies that would be difficult for humans to find, AI has the potential to thwart security threats before they begin.

"There are a couple new activities driving the use of AI, one being intelligent things and the other being intelligent security," said Michael Fauscette, chief research officer at G2 Crowd Inc. in Chicago.

It's unclear if OpenText will expand Magellan's capabilities to work on its most recent purchase, but based on CEO Mark Barrenechea's quote in a press release regarding the Covisint acquisition, AI is squarely on the mind of the latest OpenText acquisitions.

"The Covisint platform underscores our commitment to enabling our customers to be digital leaders and unlocking the value of their information through automation, analytics and artificial intelligence," Barrenechea said in the press release

'OpenText is like a shark'

When OpenText acquired Documentum through its Dell EMC purchase, it bought a customer base that was locked into a complex information archiving process that was typically bound by strict regulation or security concerns. It would be very difficult and costly for a Documentum customer to jump ship and leave the platform, according to Byrne, who said he sees similarities with Guidance Software's customer base.

"There's definitely a lot of lock-in," Byrne said. "It's a mature company, and similar in that respect [to Documentum] that it was unclear where Guidance Software was going to go next. Guidance Software had locked up some blue chip customers that were dependent on the tools, but there might not have been much growth or strategic options. When a vendor reaches that reflection point, it's ideal for OpenText to swoop in."

OpenText is like a shark -- it has to keep swimming and has to keep eating. Somedays it eats more than others.
Tony Byrnefounder, Real Story Group

OpenText, which declined to comment for this story, is expected to close on the Guidance Software deal in the third quarter of 2017. Including this purchase, OpenText will have spent more than $2 billion in the past two years. In addition to the recent purchases of Dell EMC, Covisint and Guidance Software, OpenText acquired various HP Inc. assets through two deals worth $485 million: e-discovery and information analytics firm Recommind Inc. for $163 million and cloud computing firm ANXeBusiness Corp. for $100 million.

"OpenText is like a shark -- it has to keep swimming and has to keep eating. Somedays it eats more than others," Byrne said. "The time to worry about OpenText is when they stop eating. Their business model relies on them continuing to eat and buy in perpetuity."

Next Steps

How the OpenText-Documentum deal affects customers

What to expect from the OpenText purchase of Recommind

Podcast: Pulling back the curtain on OpenText Magellan

Dig Deeper on Enterprise content management software platforms

PRO+

Content

Find more PRO+ content and other member only offers, here.

Join the conversation

1 comment

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

How do you think the purchase of Guidance Software will add to OpenText capabilities?
Cancel

-ADS BY GOOGLE

SearchBusinessAnalytics

SearchDataManagement

SearchERP

SearchOracle

SearchSAP

SearchSQLServer

Close