Is IBM Vulnerable to OpenText?

July 21, 2016

I read “Hey, IBM, OpenText Is Coming for You.” The write up reports that the poobah of OpenText said that its new Magellan system is “a next generation analytics platform.” Getting from Yet another OpenText system (YOTS) to the nemesis of IBM is quite a leap.

But here’s the statement, once again from the OpenText poobah, that caught my attention:

But even more interesting than the product itself, is the bullish way in which OpenText is calling out IBM Watson. “We are going to position it directly against Watson. We’re not going to shy away from that at all,” Mark said. “We think there’s a whole class of problems that enterprises want to solve themselves and what they need is an affordable platform, one that’s open and programmable to them and accessible to them and that’s going to be Magellan. So we’re going to position ourselves and stay focused directly against Watson.”

The write up explains that OpenText Magellan is better, faster, and cheaper. I have heard that before I think. But the details are interesting.

Magellan’s software is open., Its hardware is open. Its IP is owned by the licensee. Its deployment options are “run anywhere.” It is extensible by the licensee. Its ecosystem is open. Its cost is a mere one dollar sign.

And what do you think about IBM Watson? Well, its software is closed. Its hardware is closed. Its IP ownership is not the licensee’s. Watson is extensible only by IBM Global Services. IBM’s ecosystem is closed. Best of the points, IBM’s cost is six dollar signs.

OpenText is a $2 billion a year outfit. The hapless IBM is, despite its being lost in revenue space, is about $90 billion a year.

My view is that OpenText is swinging for the marketing and conceptual fences. IBM is trying to find the secret notebook that unlocks revenues.

I would point out that Fancy Dan software designed to help executives make better decisions is plentiful. Many vendors covet this niche. There is excitement ahead. Both OpenText and IBM may find that talk about smart software flows more rapidly than sustainable revenue and healthy profits. Keep in mind the high cost of technological debt. That’s one dot point which IBM and OpenText share a common point of weakness.

Stephen E Arnold, July 21, 2106

Written by Stephen E. Arnold · Filed Under AI, Analytics, Enterprise, News

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.