Why We Acquired Global 360

Yesterday, OpenText announced the acquisition of Global 360. As we are expanding our market reach into the business process management (BPM) market, Global 360 adds a complementary set of technologies to OpenText’s portfolio and strengthens the OpenText partnership with Microsoft. With the combination of Metastorm and Global 360, we are now the largest provider of BPM solutions for the Microsoft ecosystem. The BPM solutions complement our existing information governance and archiving solutions for SharePoint and Exchange. But what’s more important, Global 360 increases the critical mass of process management focus inside of OpenText.

The OpenText ECM Suite already included solutions for Transactional Content Management (TCM), which is a close cousin of BPM. OpenText has long provided offerings for scanning and imaging, our own optical character recognition (OCR) engine and fax server (RightFax). Many of the OpenText solutions offered in the SAP and Oracle ecosystems are based on TCM – Accounts Payable, Employee File Management or Travel Receipts Management, etc. And of course, OpenText provides the secure compliance infrastructure that many transactional solutions require.

Not long ago, OpenText acquired Metastorm which added BPM capabilities together with cloud-based process design, business process analysis (BPA) and enterprise architecture (EA) software. Now, Global 360 brings additional capabilities particularly around dynamic case management (DCM), cloud-based process discovery and process analytics and reporting.

The Global 360 acquisition is unique, though, as it allows OpenText to not only expand its offerings, but also reach a critical mass needed to establish itself as a serious contender in a new market. This is not a minor matter. Acquiring companies successfully is not easy, and for a billion dollar vendor like OpenText, acquiring a smaller company could easily result in “swallowing it up” without much tangible impact. One way to prevent this is to fold the acquired organization into an existing group that sponsored the acquisition in the first place.

That happens, for instance, when a company acquires a smaller vendor to accelerate its technology investment or to add services capacity. Such was the case with the recent OpenText acquisition of weComm. OpenText already had a mobility group that needed to address the challenge of cost-effectively supporting multiple mobile platforms. weComm addresses that problem and was naturally combined with the existing mobility group.

When a company branches out into an adjacent space, however, there may not be a group that would be a logical home for the acquired company. In fact, the acquired company is expected to become such group. By buying Metastorm in February 2011, OpenText made a move into the BPM market. According to the analysts, Metastorm is a leading player in BPM which represents a natural expansion opportunity for OpenText. After all, many BPM solutions depend on content.

And now, by combining Metastorm, Global 360 and the existing TCM solutions, OpenText has one of the broadest product portfolios and one of the largest and most experienced teams in the world of BPM. The acquisition not only puts us on the BPM map, it makes us one of the strongest players in terms of market share, number of customers, and market presence. And, the BPM products and people won’t go unnoticed within OpenText as the business process management DNA now represents a significant portion of the company.

That’s why we’ve acquired Global 360.

OpenText Acquires Metastorm

OpenText announced today the completion of the Metastorm acquisition. We do many acquisitions at OpenText but this particular acquisition is very interesting for a multitude of reasons. Metastorm is the leader in business process management (BPM) which is a discipline quite related to enterprise content management (ECM). In fact, enterprise content management has long included a process-centric category of solutions called transactional content management (TCM). Kyle McNabb and Connie Moore from Forrester were perhaps first to articulate this category in their groundbreaking 2005 report titled Transactional, Business, And Persuasive Content: A Better Way To Look At Enterprise Content.

Metastorm headquarters in Baltimore

The TCM solutions deal with optimization of business processes that involve content. In fact, at least half of all business processes involve content: a received fax, scanned paper, or submitted form. The Metastorm acquisition will allow OpenText to significantly raise the bar when it comes to managing content-related processes. I am not talking just about the technology but also about market presence, reputation, number of R&D engineers as well as expertise in sales and marketing.

Many business processes that customers optimize using Metastorm software do not involve content. This market is very interesting for OpenText as well. According to Gartner, the BPM market grew by 15% in 2009. Obviously, that represents a great growth opportunity for OpenText, no matter if the solutions are content-centric or process-centric. And Metastorm is a leader in BPM according to Gartner’s Magic Quadrant for Business Process Management Suites.

On top of that, Metastorm adds two other product areas to OpenText’s portfolio: business process analysis (BPA) and enterprise architecture (EA). Metastorm is a leader both areas - according to the respective Magic Quadrants. Just the fact that each of the areas has a Magic Quadrant suggests that these are separate, albeit very related, and substantial markets. And given that Metastorm is a leader in three different spaces makes it a very compelling addition to the OpenText portfolio.

A particularly interesting trend emerged in the last year or two - Case Management. Case management is a powerful way of organizing all the case-related documentation and process optimization capabilities involved in managing a case. A case can be anything from lawsuits to government grant proposals to insurance claims. And while OpenText already has had a case management offering for a couple of years, this is an area of focus today and it is likely that some of the BPM, BPA or EA capabilities from Metastorm will find their way into OpenText’s case management offering. Note: this is my take at the acquisition and not an official OpenText roadmap. Read the press release if you want the official information.

The press release discussed how Metastorm adds to OpenText’s portfolio in the Microsoft ecosystem. The ecosystem value proposition is a big part of OpenText’s strategy - the company partners with Microsoft, Oracle, and SAP and offers solutions for customers in all three of these ecosystems. And since Metastorm’s software is very friendly to the Microsoft stack and it does have existing integration with SharePoint, it is a natural fit. SharePoint is not used for process optimization today - Metastorm is a key partner of Microsoft for this purpose. This now becomes a natural addition to the portfolio of solutions we can offer to customers with significant investments in Microsoft technologies.

OpenText builds software and acquires companies to solve customer problems that relate to content. This is what we do and how we stay ahead of the curve. With all the assets and talent that Metastorm brings, this is a particularly exciting acquisition that opens up a whole new world of possibilities.