Earlier this month Canadian Enterprise Content Management-vendor Open Text announced their intention to acquire the ailing Texas-based Web CMS vendor Vignette. As one of the granddaddies of Web CMS, Vignette peaked during the .com years and did make a few acquisitions. Despite aggressive and creative marketing including a recent re-positioning as a Web Experience Management vendor (somewhat similar to the successful repositioning of FatWire), Vignette has failed to become profitable for years and have seen revenue shrink continuously. A pending acquisition has been rumoured for a while.
Here’s what the news means to customers:
- Even more overlapping offerings from Open Text. When Open Text acquired Hummingbird back in 2006 it also added good old German Web CMS-vendor RedDot to the Open Text family spaghetti. Now Open Text has two significant, but entirely overlapping, products in the Web CMS marketplace and prospective customers should take a thorough look at the updated product roadmap before signing a contract. Existing customers might see their Web CMS ride into the sunset and should prepare themselves accordingly. Open Text already has numerous other overlapping offerings in other markets from other acquisitions.
- Despite many different and overlapping offerings, Open Text does not have an enterprise portal. Customers of Vignette Portal might be a bit more relaxed, although the acquisition impact on the product future is still uncertain.
- A poor track record of integrating acquired technologies. Existing customers are expected not to cancel their maintenance contracts, so that the acquisition will make financial sense for Open Text and do not expect Open Text to invest heavily in future releases of the Vignette products. RedDot is .NET-based while Vignette is Java-based. Will Open Text really keep both?
- Still plenty of choice and no CMS consolidation. Even though this is the 3rd acquisition in the marketplace in 2009 (Oracle bought Sun and Autonomy bought Interwoven), the number of significant products remain very high and unchanged.
- It will become harder to obtain support. Expect Vignette system integrators to focus on other technologies and vendors until Open Text sorts out the mess and with its existing reputation for patchy support, Open Text has its hands full. Generally Open Text has fewer services firms as partners than most other vendors and has so far been less keen on building a partner channel. To make matters worse Open Text has been very poor at establishing a user community and Vignette has cancelled its popular annual customer conference.
A series of questions remain unanswered. Interestingly, as of today many customers have still not heard anything from Vignette or Open Text. Vignette recently distributed an e-mail announcing a that their planned Analyst Day was postponed until further notice. The e-mail ended like this:
Please feel free to contact me directly if you have any questions (that do not relate to the acquisition)
Seth Gottlieb, open source CMS expert, has my favourite quote about the acquisition:
Open Text: Where declining technology goes to die
If any strategic thinking was behind this acquisition, I suspect it was based around shareholder value. I can't find any value for customers. Can you?
Photo credit Jon Marks. See his analysis and detailed look at the depressing numbers in his posting on Will Vignette Give Open Text Food Poisoning?
If you are interested in other perspectives, here's more detailed coverage and speculation from several industry analysts: