John Shackleton, CEO of Open Text, could be forgiven for viewing the rampant consolidation in the enterprise content management market with a degree of trepidation. His elevation to CEO at the company came on the back of the problematic acquisition of German software maker Ixos in 2004, which cemented Open Text status as an ECM player. Instead, having snatched rival Hummingbird from the jaws of circling private equity investors late last year, Shackleton welcomes market-wide consolidation: it has cleared the way for his company to be the one specialist left standing in ECM, he says, as all the other significant ‘pure play’ vendors have been subsumed into some of the industry’s largest software concerns.
Now Shackleton has to ensure that Open Text’s integration of Hummingbird does not become a major distraction. His intense focus on operational performance should increase the chances that that goes smoothly, and he has sought to reassure customers that his particular roll-up of ECM companies will be to their benefit. Hummingbird has a “fantastic” front end – thanks in part to its own acquisition of Red Dot, he argues; meanwhile, Open Text can provide a feature-rich back end. “That puts us in a pretty unique position,” says Shackleton.
“Companies don't want to be reliant on just one vendor.”
John Shackleton, Open Text
The one thing that links Open Text’s chief rivals, namely IBM, EMC and Oracle, is that while they have all bought their way into the ECM market, none of them are focused on it, he adds. That is of particular importance when it comes to compliance, as Open Text has tools to help its customers meet their responsibilities – across multiple applications platforms. “In today’s regulatory climate, not many CEOs would want to risk being just 98% compliant,” quips Shackleton.
He suggests that his heavyweight rivals are also likely to bundle ECM software with other technologies. “We’re not in the business of trying to sell you more storage,” he says, in none-too-subtle dig at rival EMC.
In terms of its key strengths, Open Text integration with Microsoft SharePoint, Oracle’s database technology and enterprise resource planning modules, and the business applications of SAP give Open Text the sort of functionality that many major customers are demanding. But that alignment also highlights the difficulties the company faces going forward.
Microsoft’s plans for SharePoint may see it gradually mimic some of Open Text’s functionality, notes IT advisory group Gartner, although in the short term Microsoft is unlikely to offer a compelling alternative.
However, it is the relationship with Oracle that is “riskiest”, Gartner notes. With Oracle having recently acquired ECM vendor Stellent, it can offer a full spectrum of content management technologies of its own, and customers may substitute Open Text’s software with the Oracle products.
Shackleton remains sanguine. While customers may be keen to rationalise their supplier set, he says, “they don’t want to be totally reliant on one.” The raft of stringent corporate governance rules now imposed on business has sharpened executives’ focus on managing the information cascading through their enterprise, he adds, increasing the likelihood that ECM will remain one of the highly valued technologies.