The HP Inc. software yard sale continued today with OpenText again as the buyer.
OpenText, a Waterloo, Ontario-based enterprise information management provider, agreed to acquire HP's Customer Communications Management (CCM) software assets for $315 million. This comes two months after OpenText bought Palo Alto, Calif.-based HP's CX assets for $170 million.
And the companies aren't done yet. In a statement today, OpenText and HP, Inc. officials said they will explore opportunities to "work together in the future to expand their software solutions to customers and serve a broad range of customer needs."
HP's Loss, OpenText's Gain
Last fall, HP — the once dominant IT and software company — 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.
OpenText, meanwhile, is collecting the falling pieces. It will get the assets associated with HP Exstream, HP Output Management, HP TeleForm and HP LiquidOffice for customer communications management, process automation and document delivery solutions.
OpenText officials said these solutions will complement OpenText StreamServe and OpenText MediaManager and two platforms OpenText acquired in April from HP —OpenText TeamSite and OpenText MediaBin. It boosts OpenText offerings with authoring, workflow and composition for multichannel document presentment and interactive communications, officials promised.
OpenText officials estimated the assets acquired today will generate between $110 million and $125 million in annualized revenues.
Asked what OpenText has done with the HP, Inc. assets it acquired in April, a spokesperson said the company will provide more of an update on the CXM assets at its Enterprise World in Nashville in July.
Super CX/CCM Vendor?
Alan Pelz-Sharpe, vice president and managing director of VOCalis for Digital Clarity Group in New York City, told CMSWire that OpenText now has the broadest true CX/CCM range of capabilities of any vendor, from hard copy to mobile and social.
"It was logical that OpenText would acquire all of the content-related software from HP after buying the web centric assets, formerly Interwoven," Pelz-Sharpe said. "The proof, though, will be in the pudding. In the past OpenText has managed many acquisitions as simply cash cows to be milked. They have the potential here to consolidate and innovate and separate themselves from the pack. It will take time and money but more importantly, it will take foresight and a change from OpenText's traditional strategy."
HP had been one of the leaders in CCM, with Exstream the jewel in the crown, Pelz-Sharpe added.
"The acquisition comes with a big and well-established customer base at a very reasonable cost," he said. "OpenText can run the new assets it acquired today semi-independently at a reasonable profit for years to come."
Indeed, if OpenText has a new taste for adventure — or risk — it could take these to a whole new level of profitability, a fully incorporated and integrated CCM and CX suite. That's a "play that would sit very nicely in the huge and broad digital transformation programs led by the big consultancies," noted Pelz-Sharpe.
Łukasz Szostak, vice president of North America for New York City's TBSCG USA, Inc., said he didn't think anyone saw HP selling off its CCM assets to OpenText in a follow-up transaction.
"In the last year before the OpenText acquisition, HP has been focused on integrating its CCM team with ex-Autonomy assets," he said. "Today’s announcement is good news for customers as well as partners of both companies, as it means that OpenText will be able to capitalize on the synergies between CCM, DAM and WCM assets that they acquired from HP."
Szostak, who wrote about the first OpenText-HP deal for CMSWire, said adding Exstream, a market-leading CCM platform and arguably the most successful product acquired from HP’s portfolio, will help OpenText compete with Adobe.
CX Wins, Losses
The CXM space has certainly seen its share of winners and losers in the past year. 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). The former sells data center products and enterprise services, while the latter sells the company's iconic PCs and printers to consumers.
SDL sold off some of its CXM assets as well. The Maidenhead, England-based language and content technology provider is selling off its social intelligence, campaign management and e-commerce optimization platforms.
Sitecore, another player in the CXM space, was acquired for $1 billion in April.