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Posted by Stephen Powers on May 6, 2009
ECM vendor Open Text announced this morning that it intends to acquire Vignette, provider of Web and transactional content management technologies. In some circles, the acquisition of Vignette has been a foregone conclusion for many months now. Vignette has been an established player for years, with an impressive customer base. But the company’s missteps (a major WCM upgrade that stranded longtime customers, questionable expansions into non-core areas, inconsistent customer service and contact) have left them weakened in a market where they should have been able to take advantage of the lack of size and/or stability of some of its competitors. As a result, Vignette’s license revenues have declined in a hot content management market, and the brand has been devalued despite its strong technology.
On the surface, this move appears to be a more understandable fit than Autonomy’s acquisition of longtime Vignette competitor Interwoven earlier this year. While Open Text’s current WCM product of choice (the former RedDot) has proven solid, particularly when compared to those of other ECM vendors, it doesn’t have the same demonstrated track record at the enterprise level as Vignette does. Vignette’s WCM technology – which the company re-architected a few years back – is more advanced. In addition, Vignette also has made good progress with its transactional management capabilities, courtesy of its Tower Technology acquisition, particularly in the medical and insurance verticals. Open Text could apply the LiveLink federation model to Vignette's transactional products and further extend its capabilities.
With Vignette in its stable, Open Text now has a stronger online technology foundation to build upon. And some interesting possibilities exist for integration – such as with Open Text’s digital asset management (DAM) product, and Vignette’s video analysis and delivery offering (from its Vidavee acquision). Of course, while this looks good on paper, execution in rationalizing the expanded portfolio will obviously be key to success. To Open Text’s credit, it has recently stepped up efforts to standardize and integrate its various offerings.
The other interesting question raised by this announcement: what to do about the Vignette brand? The press release states that Vignette will be run as a wholly-owned subsidiary. But will Open Text continue to invest in what some argue is a damaged brand? Or will they eventually go through a rebranding, as they did with their other ECM acquisitions, and retire the purple logo? Time will tell.
What does this mean for IKM professionals? For those using Vignette’s products, there is the comfort of knowing that Vignette has been acquired by a company that understands the content management business. In the short term, expect business as usual. And beware of fear-mongering by Vignette’s competitors. But Open Text will likely have to make some choices about which products to move forward with, and which to eventually sunset. In particular, for those using Open Text's current WCM, the question will be whether Open Text decides to position the former RedDot solution as a midmarket WCM, or consigns it to the Legacy Heap of WCMs Past (remember Gauss? IXOS? Obtree?). Be sure to keep a close eye on the news out of Open Text's Waterloo headquarters in the coming days and weeks.
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