I must admit that I was among those who thought that Yahoo would cave in, and sell out, to Microsoft. Having predicted a deal for some time, it’s human nature that I would want this pair to go ahead and combine. Now it looks like Yahoo will rebuff the world’s largest software company – at least for now, anyway.
Another prediction that I have been making for some months (OK, years) is that Open Text would sell out, with SAP quite likely to be the buyer. It hasn’t happened yet and, as another strong Open Text financial quarter goes by, you could argue that it’s becoming less likely to happen.
Let me say that even an eventual vindication of my forecasting powers is not enough for me to wish Open Text to join the rush to consolidate, and admit that there are good reasons for it to stay neutral. Some buyers will prefer a Switzerland of ECM that will not automatically try to push its own database, applications or other stack components.
Another reason is focus: Open Text has broadened its reach with deals of its own (Ixos, Hummingbird et al) but it is the one large-ish company that can still fit under the capacious umbrella branded ECM.
And, as long as Open Text stays away from the negotiating table, it can still market itself as a best-of-breed player in a sector dominated by one-stop-shops. A David surrounded by Goliaths, for the romantically minded.
That said, I still don’t buy the argument, well argued though it is in the is Big Men On Content blog, that Open Text is not attractive to a buyer because that would mean extensive duplication of assets. Modern business software deal-making, as evinced by Oracle’s capture of PeopleSoft, is largely about being able to monetise customer base rather than worrying about having too much code that was written to do the same stuff.
So I hope for the sake of competition in the ECM sector that Open Text stays solo, but I still think it more likely that a sale will come.
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