Thoughts on OTEX + VIGN

Open Text discussed its acquisition of Vignette on its earnings call this afternoon.  The stated rationale is:

  • Add last remaining major ECM play to Open Text’s portfolio.
  • Access to Vignette’s customer base, improve service and support (i.e., try to stabilize maintenance revenue).
  • Cross-sell opportunities.

My thoughts:

  • None of the above is particularly compelling.
  • 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).

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#1 Yuval Ararat on 05.08.09 at 12:51 am

I agree it was a bargin but i am not sure about the technology reasons you didn’t buy into.
It seems that The current WCM and the WCM from vignette are different and complimenting in many cases.
Time will tell the future of vignette any way.

#2 J. Boye » Blog Archive » Open Text buys Vignette - What it means to customers on 05.22.09 at 3:36 am

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