Sale to OpenText scared us, Documentum customer admits

User feared acquisition growth strategy would come at the cost of innovation

OpenText's 2016 acquisition of its enterprise content management (ECM) rival Documentum made customers fear for the safety of their investments, one user has since admitted.

The Canadian software maker's $1.6 billion purchase of Documentum from Dell EMC, which closed in January last year, caused some controversy at the time. Documentum's co-founder slammed the deal, saying "it does nothing to advance innovation", and questioned OpenText's ability to integrate the product sets.

Customers of both firms faced "nothing but complexity in their future", Documentum co-founder John Newton, who left the firm in 2001, added.

It appears some high-profile customers shared his concerns at the time.

Talking on stage at OpenText Enterprise World 2018, Murtaza Masood, assistant director of Los Angeles County Department of Human Resources, admitted that as a Documentum user, his organisation went into the acquisition "with eyes wide open".

"The technologist in me saw the pure play software company acquiring one of the biggest content management modules out there and combining forces, so the technologist in me was very excited about the potential," Masood told OpenText executive VP of engineering and IT, Muhi Majzoub, on stage.

But as a Documentum user with goals to digitise personnel records and manage everything from legal cases to park maintenance records online, he added: "As a customer, where we were a bit concerned ... was our investment safe? With any meaningful change the concern becomes 'what about my existing assets, what about my existing information, is that protected, is that secure?"

Those concerns reflect OpenText's growth strategy, which CEO Mark Barrenechea confirmed earlier this week is still heavily driven by acquisitions of companies that can help the vendor broaden its product offerings.

"Acquisitions continue to be centre to our strategy," he told press in a Q&A. "We're a consolidator, I'm going to continue to buy businesses." He also said organic growth through deeper work with customers mainly happens in "down years" between big acquisitions.

However, Masood said that, in the 16 months since the sale of Documentum closed, his fears around the future of the software his department relies on have been allayed.

"We're really excited about the innovation that's happened, especially around information management and analytics," he said. The County of LA is also branching out into OpenText products like its AI platform Magellan, to react to events in real time and analyse citizens' views on the department's performance.

As for future acquisitions, Barrenechea now plans to focus on improving OpenText's security portfolio, adding to the identity access management software it acquired with Cognizant.

"Privacy, compliance, security - they're kind of a mashpot, where they're coming together as a topic," he said. "A well-managed content services environment, trusted trading partners and portal classification is all that more important with GDPR ... to share and collaborate with confidence on security."

Image: Shutterstock

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