OpenText Buys Cordys

Post by
Scott Francis

OpenText - the "We Buy Houses" of BPM - has added another BPM suite to the portfolio of BPM real estate it already occupies.? I thought maybe they were done, after the last acquisition.? Or the one before that.? But they're back at the table to buy Cordys:

WATERLOO, Ontario, Aug. 16, 2013 /PRNewswire/ -- OpenText(TM) (NASDAQ: OTEX, TSX: OTC), a global leader in Enterprise Information Management (EIM), today announced that it has acquired BPM market leader Cordys. The addition of Cordys affords OpenText customers the most comprehensive set of EIM and BPM software from a single vendor. Customers leveraging the benefits of their software today include: Siemens, Mercer, Pacific Blue Cross and Tata Steel. Cordys is based in Putten, The Netherlands.

I think perhaps in this case, "most comprehensive" means "most different BPM software packages."? It appears from the outside that OpenText is doing a roll-up of weaker BPM players.? History suggests this isn't a terrible strategy, as OpenText was able to execute a similar strategy in the content management space previously.

Interestingly, I saw a pretty good pre-sales demo from Cordys, to a customer, about a year ago.? I thought they did a great job of putting the best face on their product suite, and also did a great job of reflecting the customer's process back to them.? I was pleasantly surprised by the demonstration.? So was the customer.? But it looks like the weight of investment dollars not earning a return was too much for Cordys to remain independent.

Neil Ward-Dutton was the first analysis I read on the subject:

Despite some smart ideas and pretty big marketing splashes, Cordys never made as much of a dent as it could have. It?s continued to grow a customer base, albeit slowly, but as an equity funded company I suspect it struggled against the weight of expectations. In 2007 it took $80m of funding from Argonaut Private Equity; I?m guessing with a $33m sale price it was a question of Argonaut cutting its losses.

He also gives some good background on OpenText's previous acquisitions, including acquiring some non-BPM technology to help with their platform and cloud solutions.

I'm now resolved to not be surprised if OpenText buys anyone else in the BPM space.? If they're acquiring for technology, there are some interesting targets, but if they're targeting for customers, there are probably a different set of targets.


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