First Open Text announced a strategy to integrate RedDot. And today they've surfaced with both integration plans for the newly acquired Hummingbird (~ US$ 489 mil.) which previously acquired RedDot and significant layoffs. Neither move is surprising, though it does seem a mouthful.The company is reporting that it will organize its product and solutions expertise into groups focused on key vertical segments, including legal, financial services, energy, pharmaceuticals, retail, manufacturing, and media and entertainment. So far, so good.
RedDot Solutions will be maintained as part of the Company's Web Content Management strategy, as previously reported. And, the Hummingbird Connectivity unit will continue to operate as a distinct brand. Good.
So how do these moves equal "integrated?" Maybe "consolidated" would be a better word, since the company also reports that it is reducing worldwide employment by approximately 15 percent, of a combined workforce of 3,500 people. Open Text is also reducing facilities by closing and/or consolidating offices.
Ok, so bottom line -- what do we get from the consolidation of three successful CMS companies? A company that can address vertical markets. Great. But customers already could get that advantage by selecting between the original companies. To be fair, Open Text can now deliver solutions that bridge content across multiple enterprise systems, helping customers across many industries manage their toughest business and compliance challenges, and all from a "one-stop" location.
It's also certain that the layoffs will bring more butter to the bottom line for Open Text. And, if there's to be any more integration advantages for customers, they remain to be seen and could be a ways off yet, given the way these sorts of shake-ups tend to transpire.
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