By: Mark McGregor, Research Director, Bloor Research (Moved)
Published: 6th December 2011
Copyright Bloor Research © 2011
Following their recent acquisitions of Metastorm and Global 360, OpenText last week announced the formation of a new Business Process Solutions Group to market the acquired technologies.
To many observers the announcement left many questions unanswered, both for the customers of the two acquired companies, their partners, and the employees too.
It is always difficult to handle mergers and acquisitions when there is obvious overlap in both technology and client base, but perhaps the planned route for OpenText is smarter than we think.
Traditionally, we all expect to see a consolidated roadmap published and the gradual erosion of the culture of the minor party or acquired company. So it was that we all waited with baited breath for that roadmap. Alas, no such map has yet been forthcoming, which may mean that it will take some considerable time before any real consolidation occurs.
But is such a long consolidation such a bad thing? Well, in this case each company, Proforma, Metastorm and Global 360, has a solid base of customers who chose the offering based on the merits of each of those companies. Why would any of those customers potentially want to switch horses or lose functionality they have enjoyed? So providing continuity can be seen as a good thing for existing customers.
It is understood that the OpenText short to medium term plan is to instead ensure that, as new features and functionality are added, they are added across the product range, providing an evolutionary approach to consolidation. This brings with it many technical challenges, but also greater opportunity.
By focussing on adding to each product, OpenText will be able to ensure longer-term commitment from existing customers, with the obvious advantage of keeping the revenue streams working. It is always easier to make changes when you are making money.
So, instead of rushing toward technology integration the company instead appears to be more focussed on marketing and message consolidation.
It is no secret that I have always been a fan of the people-centric, persona-based approach taken by Global 360 and it appears that this concept may not just remain, but be extended. It is likely that we will see the concept of persona used in the new marketing messages so that instead of choosing product "A" or product "B" based on technical data-sheets you will be provided with guided advice based upon your role and needs. So the hope is that when the new web site and supporting collateral is released we will move to the less is more paradigm, focussed on roles, business problems and client needs.
It is still likely that there will be some areas where parts of products are dropped or merged - one example being whether the Global 360 AnalystView component will be dropped in favour of leveraging Provision's greater BPA capabilities.
When looking at technology consolidation it would be good to consider more than just the overlaps and features of Global 360, Proforma and Metastorm. OpenText have a host of other products and offerings in their armoury that could either be integrated into the Business Process area or leveraged for greater functional offerings for the market.
Some obvious examples that the Business Process Solutions group might leverage might be OpenText Social Workplace, enabling better integration of social capabilities into the current offerings, OpenText FirstClass, which could provide easy access to information for users and OpenText Business Integration Studio, which would provide much-needed adaptors into other operational systems such as SAP.
This last integration point is an important one. As ERP vendors fail to move quickly to address the agility needs of their customers, an increasing number of BPM projects are based around the idea of wrapping ERP with a more flexible, more usable application. So having the right connectors will be critical.
When looking at the bigger picture a question does arise: is the formation of the Business Process Solutions group just a response to a need to handle multiple process offerings or a sign of a new direction for OpenText as a whole? A quick look at their web site reveals that the company still has many other offerings where there is significant overlap. Perhaps we will soon see the formation of a Content Management Solutions group too.
If we understand correctly, the real focus for the OpenText Business Solutions group will be around the building, marketing and selling of pre-built solutions. Presumably built on the 80/20 principle that the solution you purchase will address 80% of your needs out of the box with additional customisation to fully meet your needs.
The approach is not new and appears to be gaining ground in the BPM sector, giving credence to the view that BPMS platforms are really just modern day development platforms and that clients are less interested in development and more interested in the applications generated by them.
Several vendors have stated their intention to move this way and it is known to be a proven model - just look at the success of Pegasystems, where the majority of revenue ahs come from application rather than platform sales. The challenge for OpenText, as with all vendors, is two fold. Do they have the industry domain experience to make them a reality and are they willing and able to grow their consulting business fast enough to support potential clients?
Solution selling requires a very different mindset from the traditional technology sale, as well as having a completely different dialog with buyers. It is not simply a matter of marketing. It requires a totally different culture. To date, this is something that few BPM vendors have been able to fully grasp.
There are parallels in other markets. Magic Software started out selling platforms for developing data-based applications with 4GLs before buying up partners who had built solutions on top of the platform and now is seen more as a solution provider than a platform provider.
It is very early days for the OpenText Business Solutions group and the jury will require a lot more evidence before being able to make a judgement on the success of the acquisitions. The prize for getting it right is huge and the potential for OpenText is enormous.
There is, however, one area that, in the opinion of this writer, requires particular attention. With the addition of the Provision product, OpenText gained a footprint into the Enterprise Architecture market. This is a market that does not play well with other parts of the OpenText offerings and, while a good story could emerge, it probably belongs outside the BPS group. The EA market is a tough one and while many talk of the linkage of EA and BPA, they do not sit easily together. Instead it might be that OpenText should consider a separate group to focus on Enterprise Architecture and the application of process automation to IT departments. Perhaps the right path will emerge via the persona concept.
Customers of Global 360 and Metastorm should be focussing on ensuring support for the next 2 years and looking at whether adding other parts of the OpenText stack over time could result in lower integration costs and reduced IT spend.
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