OpenText Buys Dell-EMC’s ECD Division: The Market Continues to Consolidate Despite a Growing Global Market

Open Text agreed last Monday to acquire Dell EMC’s Enterprise Content Division (ECD) for $1.62 billion. The move comes 11 months to the day after Dell purchased EMC — the biggest tech deal in history — and just days after that deal was approved. OpenText will absorb “the software, associated services, and employees of ECD,” including the Documentum, LEAP, and InfoArchive product families, according to the company’s press release.

The proceeds from the sale will help Dell pay down some of the debt it accrued with the purchase of EMC, as well as free up resources for Dell EMC to focus on its core businesses. But more importantly, at least for the imaging industry, is that the move transforms Open Text into one of the premier players in the EIM (Enterprise Information Management) arena.  

The agreement comes three months after OpenText agreed to purchase HP, Inc.’s Customer Communication Management (CCM) assets including HP Exstream, HP Output Management, HP Teleform, and HP LiquidOffice — a deal that aimed to enhance OpenText’s Customer Experience Management Software Suite. In similar fashion, the latest move positions OpenText to bolster its Enterprise Information Management portfolio, specifically in Enterprise Content Management and Information Lifecycle Management. “We are at the beginning of a digital revolution where extreme connectivity, automation, and computing are converging,” said Mark J. Barrenecha, OpenText CEO and CTO. “The acquisition further strengthens OpenText as a leader in Enterprise Information Management, enabling customers to capture their Digital future and transform into information-based businesses.”

According to a company statement, OpenText will inherit all Documentum customers — somewhere north of 5,600 in total — including some whales in the global pharmaceutical, banking, insurance, oil and gas, and utility industries. The move also helps OpenText get a grip on emerging markets in Africa and Asia. According to a recent CompTIA research report, “the global managed services market will grow from $107B in 2014 to $193B by 2019, at a Compound Annual Growth Rate (CAGR) of 12.5 percent” with the Asia-Pacific (APAC) projected to be a high-growth market. Documentum is a huge asset that OpenText can leverage to get in on the bottom floor of the growing MCS markets abroad. The move also gives the company strong footing in the healthcare, financial, insurance, oil, and utilities vertical markets. 

Our Take

Juxtaposed, EMC offers a more extensive ECM portfolio with its Documentum line and and aims at much bigger game in the marketplace. Currently, OpenText offers a good portfolio for the SMB marketplace that seeks modular solutions using flexible licensing schemes — such as the Software as a Service (SaaS) and “a la carte” models — and flexible deployment options in the cloud or on-premise. One shortcoming, however, is that there is less room to grow with an OpenText deployment, and especially when compared to Documentum. With Documentum in their stable, OpenText can offer scalability to their smaller, future-thinking customers, while also boasting a line of products that can serve the largest of enterprises. 

Similar things can be said about the capture technology OpenText acquires from Dell EMC. Captiva, EMC’s enterprise capture platform, is more architecturally sound for larger operations, especially where distributed capture operations are necessary, such as businesses with multiple offices spread across different geographic areas. OpenText’s current capture portfolio, while ideal for single-location customers, would not suffice for the larger customer base they appear to be hunting.

The addition of LEAP and InfoArchive will enable OpenText to offer a slew of managed services — LEAP enables IT personnel to develop customized applications for searching, viewing, capturing, sharing, and collaborating on documents. LEAP is highly adaptable, so it can fit in with virtually any existing IT investment through REST, CMIS, or other standard data architectures and service layers. InfoArchive is a secure, regulatory compliant document archiving solution. Paired with Documentum, a business could achieve end-to-end document lifecycle management.  

Now the company has the complete picture: a portfolio that can accommodate small, growing businesses that desire scalability, SMB businesses that only want to buy what they need, and large, global enterprises with thousands of users and millions of documents across a broad range of vertical markets. OpenText can now market themselves as an end-to-end document solutions provider.    

OpenText is instantly attractive to dealers, and particularly those who want to enter the managed content services arena. The company offers a portfolio of products that can be useful to a wide range of customers and back it up with a wealthy knowledge base. And it’s not just ECM-centric managed services that service providers can offer. With the aforementioned purchases of HP’s CCM products, plus a host of acquisitions over the years to bolster their ECM and related portfolios, service providers can woo customers with holistic solutions and flexible deployment options.

is president and senior analyst for BPO Media, which publishes The Imaging Channel and Workflow magazines. As a market analyst and industry consultant, Ames has worked for prominent consulting firms including KPMG and has more than 15 years experience in the imaging industry covering technology and business sectors. Ames has lived and worked in the United States, Southeast Asia and Europe and enjoys being a part of a global industry and community.