The Economy Fosters Interesting Hook Ups: Open Text and Oracle
January 11, 2010
A happy quack to the article on Fierce Content Management with a title guaranteed to catch my attention: “Open Text Releases Oracle Application Compatibility Tools.” Open Text is a search and SGML indexing company that has morphed over the years. The company’s approach to growing revenues may have inspired Autonomy in the acquisition approach to revenue growth. The idea was that Open Text bought product lines and companies. With each purchase, Open Text grew larger. I have lost track of the company through my own lack of interest in roll ups, but at one time Open Text offered several search systems (BASIS, BRS/Search, Fulcrum, and the original SGML search features and probably others. In addition, Open Text had its own collaboration and content management system called LiveLink and then added the RedDot system to complement the firm’s purchase of Vignette. I try to steer clear of content management because organizations want software to generate gold from lead. Publishing companies have a tough time generating content, and in my experience, an engineering firm or a construction company expects software to create golden prose. The reality is that systems like BASIS for structured data search and report generation are complex beasties. Information Dimensions had trouble getting enough dough to invest in the BASIS system. A firm like Open Text appears to have no problems garnering sufficient money and technical talent to maintain no one search system but three or four. Furthermore Open Text must have enough cash left over to deal with the upgrades and bug fixes required by the RedDot and Vignette systems plus the other technology Open Text has acquired as it follow the roll up trail.
Oracle, on the other hand, is a database company that has systems that compete directly with Open Text’s. The Oracle database performs search, content management, and related tricks. In addition, Oracle created a Fusion product line that reduces the complexity of hooking a third party application into an Oracle system. In addition, Oracle has a school bus of acquisitions as well. These range from the text processing system from Triple Hop, its own search system which has a low, low profile these days, to the Siebel CRM products and the even more fascination Oracle Social CRM offerings. Database management systems have been the foundation of the Oracle revenue, and like Google, the company has not been able to diversify its revenues from one flagship product in my opinion. Oracle has tried with the nCube and now with the Sun Microsystems’ play.
The fact that these two outfits with similar growth strategies are teaming up is one indication of how the enterprise software market has changed. Today competitors hook up. Even more interesting is that in the story about the application compatibility tools this passage appears:
Rich Buchheim, Vice President of Oracle Solutions at Open Text, says the fact that Open Text works together with Oracle (which itself has a content management solution), is not contradictory at all, and that his company works with several major vendors in this fashion. “Enterprises today are inherently heterogeneous. Open Text provides better access to content from across the enterprise. As the largest independent provider of ECM, Open Text has the significant advantage of being able to provide tight integration with all the leading enterprise platforms including Oracle, SAP and Microsoft.”
That may be true but when the pie is getting smaller, corporate rivals are often reluctant to share available revenue. The notion of “lock in” and control of the customer are two primal drives in the enterprise software world. My view of this deal is that it is not much news. The Content Connector is now in version 3.0, so this is not a new product. Furthermore, the Fusion technology that Oracle pushed has suffered from staff adjustments, and there are a number of options available to make the sale more challenging.
With the world of enterprise software in flux, I wonder if both of these companies will be able to pump up their profits in 2010. I keep visualizing Oracle executives sharing the six inch mini cherry pie with Open Text and vice versa. Who will team up next? IBM and Microsoft, Apple and Google? Who knows. The economic environment is causing some interesting behavior.
Stephen E Arnold, January 10, 2010
Oyez, oyez, this is a freebie. I was not able to get anyone including my dog Tess to show interest in the machinations of two companies not known as fleet of foot. Ah, “fleet”. I must report this lack of payment to the US Coast Guard, happily housed in DHS, not the US Navy. Another interesting tie up.
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