Recommind Follows BRS, IDI Basis, Fulcrum, and Nstein
July 19, 2016
OpenText is, by golly, one of the outfits which “owns” more search and retrieval technology than any other firm I can name. I read “OpenText Lives Up to Promise, Acquires Recommind.” The write up points out:
Just a week after it announced it was selling off $600 million worth of senior debt notes to fund future acquisitions, OpenText dropped $163 million to acquire Recommind, an e-discovery and information analytics provider.
The write up explains that Recommind “could generate between $70 and $80 million of annualized revenues.” This is a hefty sum for a system which has in my mind been dumped into the Autonomy-type search system pigeon hole. (If anyone is interested, I have a profile of Recommind technology. Write benkent2020 at yahoo dot com for details.) Frankly I was surprised at the modest size of the deal. What would Recommind have been worth if it had added Big Data, advanced analytics, and artificial intelligence to its system? On the other hand, maybe Recommind did exactly that.
Several observations:
- Search and content processing systems incur significant technological debt. This means that the software system has be fed regular injections of real cash to work, keep customers happy, and keep pace with the competition
- A vendor with multiple systems has to figure out exactly what system to pitch to a potential customer. This is often difficult if the prospect asks such questions as, “What is Nstein’s capability in terms of Recommind’s functions?” Or, “What search system is included with RedDot and what other options are available to install today and use tomorrow?”
- Portfolio search and content processing vendors are rare birds in today’s corporate jungle. IBM is similar, and its financial performance suggests that having numerous search and content processing arrows in its quiver does not seem to hit the financial bull’s eye.
OpenText, in my view, is a company which may have to make very hard decisions about what technology debt to retire. The interest on that debt could, if left unmanaged, could lead to financial headaches.
Stephen E Arnold, July 19, 2016
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