Analyst & Industry Round Up of the Open Text & Vignette Wedding

Following is a snapshot of analyst reactions to the news of Open Text and Vignette: Thanks to Joely Urton for the legwork on this entry!

Guy Creese calls it like it is: Burton Group, Open Text Is Putting Vignette Out of Its Misery by Buying It
* "In the dot.com era, Vignette was unstoppable. . . . I remember spending a day at Vignette at the height of its growth and being shown the multiple fussball tables for developers, the many flavors of microwave popcorn, and the conference rooms full of Aeron chairs. At that point, I knew Vignette was heading for a fall, and told them so. Incredulous, they basically told me I had no grip on reality. Two years later, when the dot.com bust came along, it turned out I was right and they were wrong."

*"Vignette has never really recovered from those days. Competitors began offering somewhat similar web content management systems for a lot less money, and the portal business became a lot less trendy as well. So Vignette has survived, but it was only a matter of time before the company got bought. Now we know who the buyer is."Kas Thomas notes the following: CMS Watch, Open Text Buys Vignette: Investment or Impulse?

* "Nothing about Open Text's spending sprees makes a great deal of sense. Open Text has made many acquisitions over the years, and (by and large) the various acquired pieces have resisted assimilation into a coherently integrated whole. Will Vignette be different? Probably not."

* "On business fundamentals, Vignette is a troubling case. Merely rationalizing administrative employees isn't going to make the Vignette line profitable again or reverse dwindling license revenues. And the Open Text purchase isn't likely to send a "buy" signal to potential customers who still have Vignette on their short lists."

Stephen Powers: Forrester, Can Open Text Turn the Page On Vignette's Recent History?

* Open Text already has a very good WCM from a previous acquisition of RedDot. They will have some rationalization to do on which one to move forward with or how to position RedDot vs. Vignette's WCM offering.

* On paper, there's some interesting integration opportunities such as with Open Text's digital asset management product and Vignett's video analysis and delivery offering (from it's Vidavee acquisition.) But Open Text has not proven that they can integrate well or quickly.

Kathleen Reidy: The451Group, Thoughts on OTEX + VIGN

* "Open Text loves a bargain and apparently this one was too good to pass up. Backing Vignette's cash and short-term investments out of the deal, Open Text only paid 1x Vignette's trailing twelve-month revenue."

* "Open Text will maintain Vignette much as it has Hummingbird - keep the products mostly separate, try to hold onto the maintenance stream, cut Vignette's costs."

* "I don't buy into product or technology-based reasons for Open Text wanting to own Vignette. There's tons of overlap."

* "There will undoubtedly be some Vignette vs. RedDot struggles at Open Text over which is the WCM line of choice. Interesting since WCM is only a sideline for Open Text in the big ECM picture anyway."

* "A bargain can still bring headaches and there will be WCM competitors lining up to benefit from uncertainty (not that many WCM players seem to spend much competitive energies worrying about Vignette these days)."

Toby Bell provides the most sanguine view: Gartner, Win 'Em, Wring 'Em, and Wean 'Em

* Toby believes that Open Text is only interested in Vignette's enterprise seat-holders while acknowleding that Vignette has had challenges holding onto its install base. In fact, only the tried and true core audience remain w/ Vignette. If staying true to Open Text's formula for acquisitions, then very likely Vignette's enterprise install base will be cross-sold & up-sold Open Text breadth of capabilities into a more interesting "ECM future."

*"With yesterday's announcement of its intention to acquire Vignette, Open Text has reminded us that standards and practices in typical software M&A don't always have to apply. You don't have to intend to leverage the actual technology or brand or channel or partner ecosystem. You just need to leverage seatholders."

*"Open Text seems to have wisely waited until the falloff of potentially more fickle customers and prospects had been completed. . .VIGN's value to Open Text is not the technology, it's the seats. The very plushy ones of large enterprises with global potential to look at one of its own (now) incumbent suppliers to provision other user needs. And, Open Text has options for those enterprises in spades."

*"Now it remains to be seen if - having won and wrung value from many other vendors' customers - it can wean them off last year's (or even last decade's) models and move them toward an interesting ECM future."


Lastly, Alan Pelz-Sharpe chimes in that this may be good for Open Text shareholders but not for customers: CMS Watch, Why Open Text bought Vignette -- the real story

* "I don't like the deal or the strategy at all. Here's why.....In the corporate realm (as every other) there is only so much love to go around. And when when you have a portfolio of overlapping products something has to give. You can either try to somehow glue all these new technology codebases and offerings together with all your existing products -- or you leave them alone to run as standalone solutions. Gluing them together is just not feasible on this scale, it cannot be done regardless of what the marketing from Open Text might like you to believe. All you can really do is to slash costs where possible, leave the technology pieces alone as much as possible, and milk the product and customer base as cash cows. That is a great thing from a shareholder's perspective, since the maintenance streams alone from some of these products will bring home the bacon for another decade at least. If you're a user or buyer of that particular technology piece though, that sucks."

There is other great (for subscription) analysis from Jim Murphy of AMR
and Gartner's official opinion. There are lots of others as well. But what do YOU think?

Comments:

dammit!!! Oracle could have bought Vignette, and then they'd have an even half dozen portals!!! Personally, I think Open Text is only after Vignette's customer base. If they put together some good migration software to get folks off that beast, everybody wins.

Posted by bex on May 14, 2009 at 02:27 AM CDT #

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