It's the age of the customer — and HP is dumping its customer experience (CX) software.
Palo Alto, Calif.-based HP Inc. struck a deal today with Waterloo, Ontario-based OpenText to divest its CX assets for $170 million.
Splitting HP In Bits and Pieces
The story of what OpenText gains is less compelling than what HP loses.
It's another tale in what has become a growing saga for HP, the once dominant IT and software company that last fall announced plans to cut up to 30,000 employees as the company split into two businesses. Earlier last year, HP filed a $5.1 billion lawsuit related to its Autonomy acquisition.
First-quarter revenue for HP fell 12 percent to $12.2 billion from the same period last year. The second spin-off business, HP Enterprise, reported first quarter net revenue of $12.7 billion, up 4 percent from the prior year period.
For OpenText, this is like a digital experience yard sale. It acquires, along with HP employees, these software tools:
- HP TeamSite, a multichannel digital experience management platform for web content management
- HP MediaBin, a digital asset management solution
- HP Qfiniti, a workforce optimization solution
- HP Explore, customer behavior analytics
- HP Aurasma, an augmented reality program
- HP Optimost, web testing, targeting, personalization
Trimming Everything
That's certainly a big dump in an era where customer experience management software is all the rage, with market estimates routinely in the billions.
The move comes after HP last November — as promised in 2014 — split into two entities and trimmed between 25,000 and 30,000 positions mostly at HP Enterprise, the business and technology services unit. The other company is called HP Inc. (the one selling to OpenText today). The former sells data center products and enterprise services, while the latter sells the company's iconic PCs and printers to consumers.
One former Autonomy employee said that Autonomy and HP never truly tapped its customer experience portfolio enough to make a killing.
"Autonomy — then later HP -— never invested in the hard work it was going to take to keep its customer experience portfolio of TeamSite, MediaBin, and Optimost relevant in a market being disputed by open source and the cloud," said Tom Wentworth, CMO at Cambridge, Mass.-based RapidMiner and a former web solutions evangelist at Autonomy (2007 to 2009).
"TeamSite once held a dominant market position, but a series of poor decisions during the Autonomy era led to its demise. Staying ahead of innovative competitors requires more than just issuing press releases. But there are a number of large global enterprises still using TeamSite, and I'm sure the sales teams at Adobe, Sitecore, and Acquia are going to quickly capitalize on today's news."
Riding the 'Wave'
Kevin Cochrane is another practitioner whose experience directly and indirectly crosses with OpenText and HP. He was vice president of web content management for 10 years at Interwoven (1996 to 2006) and served as the chief marketing officer for OpenText from 2013 to 2014. Autonomy acquired Interwoven in 2007. HP acquired Autonomy in 2011.
"Back in 1997 and 1998, Vignette (Web CMS acquired from OpenText) was the early pioneer behind web content delivery before the first wave of digital marketing hit and businesses decided that e-business mattered, and that they needed to move their business to the web with first wave leader Interwoven," said Cochrane, now CMO at digital experience provider Jahia Solutions.
When businesses realized agility mattered — which Cochrane calls Wave 2 — it was time to build brand and drive demand, so OpenText acquired Vignette.
"Now, at the dawn of the Third Wave, when experience matters and CMOs and CIOs need digital agility now, buying a first wave leader makes strategic sense for OpenText," he told CMSWire.
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"At Jahia, we do believe the time is now, however, to think differently, to think beyond brand marketing on 'www', to think beyond demand marketing across customer acquisition experiences, and to think about personalized one-to-one relationships across the entire customer lifecycle to drive brand affinity, loyalty, advocacy and revenue."
Plan All Along?
The news to sell the CX software to OpenText confirms the new HP Inc. had the plan to divest all along, according to Tony Byrne, founder of the Real Story Group.
"It's clearer HP was prepping these tools for ready divestment," Byrne blogged today. "And today comes news that TeamSite, MediaBin, and Optimost have gone to rest at everyone's favorite graveyard for unloved content technologies: OpenText."
Byrne said old Interwoven customers went through a sale to a "pathologically destructive" Autonomy, then went through an "ugly and litigious acquisition" by HP, then "calved off into near oblivion with the HP printer group."
"And now, finally," Byrne added, "sold to erstwhile competitor OpenText, in a deal expected to close in Q4."
OpenText declined to respond to the charges made in Byrne's blog when asked by CMSWire this morning. In its press release this morning, OpenText officials said the acquisition is expected to enhance OpenText's multi-channel digital experience with software products in marketing optimization, mobile marketing and voice of the customer programs.
OpenText's new customer experience software business is expected to generate between $85 million and $95 million annually.
