Any acquisition (and there have been quite a few of them lately) in the content management industry usually makes a splash. Today, it was Day's day to stir up the media, analysts, bloggers, twitterati and industry watchers; provoking pontifications around the announced US$ 240 mil. acquisition by Adobe.
Here’s the first look at what the industry was buzzing about and what some of the possible implications of the deal might be -- for Day, for Adobe, for the market.
Good Day, Good Half (Or the History Repeats Itself)
Ever since Day Software started going through major upper echelon organizational changes about two years ago, it became increasingly clear that the company being groomed for something, something larger, perhaps an acquisition.
On the product management side, we saw the birth of new products like Social Collaboration, and new activity around the existing CQ DAM and CQ5 Web CMS, after fairly significant periods of silence from Basel.
Today, yet again, Day reported revenues of 25.1 million Swiss francs (US$ 23.7 million) for H1 2010 -- a whopping 47% increase. Net income for the period was 3.7 million Swiss francs (US$ 3.5 million).
In conversation today, Day CTO David Nüscheler told us the acquisition has been regarded as validation of Day’s innovation, growth rates and financial performance. Additionally, the two companies are a great technical fit, with a shared belief in the same guiding principles, Nüscheler added.
Erik Larson, senior director of product management for Adobe, echoed the statement with "It doesn’t get much better than [Day’s] H1 numbers."
Open Source and Standards
There are some iconic figures on Day’s team in regards to the world of open source and standards. Day's leading lights have contributed heavily to HTTP, CMIS, REST and Apache Sling, Apache Jackrabbit and JSR-170, Apache Felix and OSGi, JCR 2.0 and JSR-283, The Apache Software Foundation, The Java Community Process – just to mention a few odds 'n ends.
Day’s Chief Scientist Roy Fielding, CTO David Nüscheler and many others on the team (the majority of R&D, in fact) are long-standing and frequent contributors to various Apache Software Foundation projects. Some initial reactions to the acquisition were positive, hoping for a boost of activity around Apache Jackrabbit, which is the foundation of Day’s Java Content Repository.
But understandably, others were concerned with the emphasis on Adobe’s proprietary technologies and whether Adobe will support Day’s commitment to open source. The spark was caused by Adobe’s press release that didn’t specifically point out this very important side of Day’s culture, causing concern in the open source and standards army of devotees.
Industry insider Seth Gottlieb expressed his initial disappointment about the acquisition:
While Adobe has contributed several technologies that lowered barriers to entry, I think the overall net impact has been negative. Yes, we have more content on the web thanks to Adobe, but much of that content is locked in Adobe’s PDF and Flash formats where it is less accessible...
Day’s Jukka Zitting reacted positively to the acquisition and its impact on Day’s involvement in open source and standards development. He is optimistic that innovation will continue as it was something that attracted Adobe to Day in the first place.
First and foremost I’m looking forward to continuing the open and standards-based development of our key technologies like Apache Jackrabbit and Apache Sling. There’s no way we’d be able to maintain the current level of innovation and productivity in these key parts of our product infrastructure without our symbiotic relationship with the open source community.
Tony White of analyst firm Ars Logica noted Adobe's relative lack of success with backend technologies saying:
Adobe's unrivaled prowess in front-end design has been matched over the years -- and in nearly equal measure -- by seeming ineptitude on the back end. While there have been a few joint successes in the company's history, they have come mostly from partnerships with infrastructure vendors such as BEA.
By contrast, Day Software has excelled first and foremost at the nitty-gritty, application-integration level. Much of the success of this acquisition depends on how the companies integrate themselves and their products, but the potential exists for a good match between the industry-leading front end and an exceptionally flexible back end.
In this spirit, we do feel cautious hope that Day's exceptional engineers and their culture of open source and standards will serve to improve Adobe as a whole. Potential exists for the Day culture and experience to go beyond the CQ5 and CRX worlds to, for example, influence Adobe projects like XMP.
Adobe was quick to clarify and re-iterate their intent to continue supporting Day in its open source and standards endeavors. When we spoke today with Adobe's Erik Larson, their Senior Director of Product Management, he said the company plans to continue investing in platforms to support any open source/standards principles that Day has pioneered.
The DAM Side of Things
In terms of DAM, the timing of the acquisition couldn’t be better. I was recently discussing some of the issues around DAM and WEM, putting a stake in the ground and saying that most organizations and DAM vendors are missing out on the potential WEM + DAM love.
And here we have heavy digital asset management needs coming from llustrator, Photoshop, Flash, PDF on Adobe’s side, and a flexible DAM solution on Day’s side. Day likes Adobe’s AIR, Flash, Flex and has been promoting not just mere storage of static Flash files in a content management system, but full direct access to a Content Repository.
DAM is critical to Web Engagement Management. The Day Software team is fully aware of this, and is being pro-active about it.
Omniture Web Analytics, CQ5 Web CMS and Web Engagement
As you know, Day is joining the Adobe family right after the monstrous Omniture acquisition.
While there are no product integration details being disclosed at this time, it’s quite obvious that integration is at the heart of the deal. And that’s not entirely new ground for Day -- given that several of their customers are already using CQ5 in combination with Omniture as the web analytics engine. We’d imagine that this is low-hanging fruit for the two to churn out.
What we know from Adobe is that strategically, they’re looking at Day as a new software category for web experience management or customer experience management -- as a single platform to manage all interactions, across a variety of apps and business systems like CRM, ERP, etc. Day’s Web CMS CQ5 and their content repository CRX will form the basis of this product vision.
Adobe’s business vision, according to Larson, is to utilize the benefits of Day being a leader in the WEM market and a pioneer in developing the concept of next generation content management with focus on web experience.
Day’s Social Collaboration and CQ 5.3 Personalization, Segmentation and Targeting capabilities are a perfect bridge into the bright world of web engagement and customer engagement management.
That certain excitement in the WCM space, ever since Day’s CQ5 was released, has paid off. Adobe’s Larson validated this, saying if Adobe was to build something [in the same software segment of WCM+WEM+DAM], it would look like Day’s product.
Gilbane analyst and WEM expert, Ian Truscott, likens this deal to a wedding of Day and Omniture, where Adobe picks up the tab for the cake and fancy flower arrangements:
…and I’ve got to say if its web analytics you want and a great content engine you need – then on paper it’s difficult not to be excited by what the marriage of Omniture and Day can bring to this space.
And then JCR Vendors and Competition Chimes In
Magnolia International (news, site), another Basel-based Web CMS player with an affection for Java Content Repositories, has been in various forms a competitor and a collaborator of Day Software. Magnolia CTO Boris Kraft, as we've gathered, is ready to hire Day's Dave Nüscheler, should the Adobe relationship or the thoughts of a private island not work out as planned. But hey, given Dave's track record, we doubt Boris is the only one in the industry holding a door open.
Kraft’s reaction to the acquisition focused on how the event affects his own company:
Adobe buying Day further validates the JSR-170 standard, makes Magnolia's technology stack better known and more attractive for potential buyers. Interest in Magnolia will rise along.
Meanwhile, not failing to point out that should JCR go down in Adobe ashes, Magnolia customers won’t suffer much:
Good thing Magnolia is independent of the underlying repository implementation.
This approach we have seen before in some of the “rescue” missions initiated by WCM vendors. So, let’s move along.
Tristan Renaud, Vice President at Jahia, posted a reserved reaction to the acquisition:
… I am not the kind to say “congrats” during an acquisition but to the team in charge of the acquisition, of course. They have “accomplished the mission”… So yes, congrats to the management team of Day software, they have sold the company very much successfully.
One of the "challenges" Renaud sees is cultural differences and how a very much Swiss company can fit well into a rather different U.S. culture.
Bad day for Alfresco? Alfresco at the moment seems to be in a position of a rejected lover, given the historic OEM product relationship between Alfresco's Enterprise CMS and Adobe’s LiveCycle and Content Services offerings. Adobe hasn’t provide any useful commentary on Alfresco's fate at this point.
Alfresco's CEO John Powell reached out to us saying:
Day's focus on marketing applications/solutions and high-end enterprise sales complements Adobe's approach. This is probably the end of the road for JCR/JSR-170 with CMIS ascendant. Alfresco's strategy of CMIS, content services platform and ecosystem of content-rich applications is complementary to the consolidation of standalone WCM to marketing and customer engagement applications.
On his blog, Powell also added:
Adobe has used this platform as an important part of LiveCycle and Adobe’s Content Services and we are committed to providing Adobe with the best possible support and content services. This use case of Alfresco is very different from the use cases for marketing solutions in which Day is engaged and we rarely see each other in competitive sales engagements.
Speaking about the Enterprise CMS side of things White of Ars Logica noted that:
Tight integration of Adobe's and Day's products may put Adobe in an Enterprise CMS class of its own. I know of no other vendor offering both best-in-class front-end applications and back-end technologies. Though much depends on corporate and technological assimilation, this could be the beginning either of a long-lasting marriage or a two-year annulment.
In a light melange of mirth and chagrin, Jeff Potts, a member of the Alfresco community, displayed disappointment that it isn't Alfresco who gets to cook new content management soup with Adobe, but "a hottie from Switzerland."
Any Cold (ColdFusion) Casualties?
Best tweet of the day? This one:
ColdFusion and CRX, together at last
Every joke, they say, has some truth to it. Some in the industry would like to see Adobe ColdFusion go away forever. A politically correct move for Day would be to at least try and implement something with ColdFusion and Sling as the delivery layer on top of CRX. We've already seen other languages like PHP implemented on top of CRX.
When I asked Nüscheler about this, he did mention (OK, OK, after a quick giggle) that, to his knowledge, nobody has tried ColdFusion on top of CRX yet, and that it shouldn't be excluded from the realm of possibilities.