In its first salvo in the information management space this year, OpenText has closed the deal to buy GXS for $1.065 billion. The acquisition will give OpenText cutting edge business-to-business cloud integration technology, which will compliment the investments OpenText has made in cloud computing in recent years.
Expanding EIM Base
According to the statement issued about the deal, GXS will remain intact and become a wholly owned subsidiary of OpenText. It also says OpenText’s information exchange portfolio will be integrated with GXS’s cloud-based B2B integration services.
OpenText didn’t go into the whys of the acquisition, but according to OpenText CEO Mark Barrenechea the move is a strategic one that will give it more headway in the enterprise information management space (EIM). It will also expand its customer base in the EIM space quite substantially.
We are committed to leading Enterprise Information Management with the market’s best products and cloud-based services. Our combined cloud will now manage over 16 billion transactions per year, approximately 600,000 trading partners and 40,000 customers,” Barrenechea said.
Integrating Disruptive Technologies
The purchase is a timely and considered one for OpenText, given the growing importance of technology integration in the enterprise.
This is particularly true for OpenText, which has been making a series of acquisitions in the space in recent years as it strives to become the EIM top dog.
Technologies on their own, or in isolation in the enterprise, are as bad as having no technology at all, particularly given the number of disruptive technologies that are out there and which OpenText has been investing in heavily.
In particular, new cloud and social technologies, along with mobile big data and now, the Internet of Things, have changed and will continue to change the way businesses do their business. In order to keep up with this and in order to align business strategies and technology, enterprises are relying heavily on the ability to integrate all these new technologies under a single coherent business technology plan.
With the GXS portfolio, they will be able to do this. The result is that not only will OpenText be in a position to ensure all of its own technologies are tightly integrated, but it will also be able to sell on these abilities to other enterprises that are trying to integrate their resources as well.
The GXS Portfolio
GXS’s portfolio of technology is currently being used (according to GXS) by over half a million people, enabling enterprises to integrate and manage business processes across global networks, as well as cutting out the inevitable problems around do-it-yourself business technology integration projects.
It also has an interesting e-commerce integration product in its GXS Managed Services portfolio that tackles the difficult problem of managing back-end technology and providing front-end, top grade customer experiences.
There are other products too, that cover all other aspects of e-commerce such as digitized accounts payable, e-invoking and e-payment technologies.
This is just the first acquisition announcement from OpenText this year -- the deal was originally agreed upon in November -- but there is bound to be more on the way. Open Text will also be announcing its latest quarterly results next week, which should give us some insight into how its other acquisitions are doing.
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