August 19th, 2011
Our response is a qualified “yes.” Clearly it was in HP’s strategic interest to grow its small but high-margin software division. The vendor has long been very successful with this division, but it has remained small over the years. As far back as the mid-90s, HP has had resell and OEM partnerships with successful, “Autonomy-like” vendors (including Interwoven, now a part of Autonomy, as well as Autonomy itself) in which HP sold its servers and the partners sold their software. The software partners came out farther ahead than HP.
On the flip side, HP would do well to offload its PC division, because – just the opposite of its software division – PC sales represent low-and-dwindling margins. In this regard, HP would be wise to follow in IBM’s footsteps (cf. Lenovo and Lexmark).
The real question in the value of this deal to HP is what HP intends to do with Autonomy’s software solutions. HP no doubt looks to Autonomy to improve profitability through higher margins, but the difference in the size of the margins between Autonomy software and Autonomy services varies greatly. The software margins are huge and very scalable (expansion of the product lines, and so on). Professional services margins are moderate and only linearly scalable. For this acquisition to produce at its potential, HP will need to focus more on the continued strategic evolution of Autonomy’s products over the long term, rather than on shorter-term, tactical, tangible software-integration revenues. Ars Logica would expect that HP has already considered these ideas in depth. For sure, HP has had the opportunity to scrutinize Autonomy’s technology through its IDOL-based 2007 OEM agreement with the vendor.
In sum, we see the acquisition as positive for HP if, and only if, it treats this as a long-term, software-evolution strategy. We would see the acquisition as neutral to slightly negative if HP ends up emphasizing the services part of the deal.
August 18th, 2011
Ars Logica was recently asked a few questions about the significance of the drop last Thursday in Open Text’s stock price. Here are the questions, followed by our responses:
Is Open Text in trouble after its stock tanked last week?
No. While it is true that Open Text missed its earnings number for Q4, the company, its products, and its strategy remain very sound. The company has been extremely aggressive in its acquisitions in 2011 — almost half a billion dollars since February — but these acquisitions have been opportunistic. They were not mistakes, even if they were partly to blame for what happened last week. It is unfortunate that volatility in market instills the kind of fear that caused last week’s dramatic drop in OTEX’s stock price, but cooler heads have already led to a rebound of more than half of last week’s dip (and what has really changed since then?). When people realize that Open Text hit its revenue number (or at least came within $500k of a $285.5 million goal), and that three key recent acquisitions put it in a market-leading spot for business process management and mobile ECM potential, events of the last week will appear as a temporary blip of little to no importance.
Is Open Text now a take-over target?
In our opinion, not any more than they were before last week. We believe that the soundness of the company’s product strategy make it a relatively safe bet compared to the rest of the technology market. We would like to see Open Text heed some of J. D. Rockefeller’s favorite advice: “Let the world wag.” We don’t believe that last week means much at all regarding Open Text.
Should Open Text customers be concerned?
No. At least not because of last week’s stock volatility. Some “experts” have speculated recently about the potential impact on customers of Open Text integrating so many acquired technologies. But a good deal of that speculation was a simple exercise of “what if” skills. Over the years, Open Text has consistently done a good job of technology integration. Until we have some evidence that they aren’t doing so currently, we’ll let their track record guide our expectation. No demonstrable cause for concern here.
August 2nd, 2011
Because Ars Logica specializes in helping clients choose or assemble content management products (CMS, DAM, CXM, portals), we often get asked how – and if – SharePoint should be integrated into an overall solution stack. Since no two customer implementations are ever identical, our advice is never exactly the same. But similar themes underpin most of our guidance on SharePoint usage. Were we forced to reduce 10 years of working with SharePoint to one sentence, we would say, “SharePoint is good at providing controlled access to shared resources, and it is bad at managing process.” Too often, clients try to use SharePoint not only to manage access to the collaborative aspects of content/project management, but also to handle the interactive process itself. And they fail 90 percent of the time. Let’s look at why. Read the full article on CMSWire.
June 22nd, 2011
I was asked today for my perspective on Oracle’s announcement of its intent to acquire FatWire. This was what I said:
“It’s not surprising that FatWire was acquired, but until mid-to-late March of this year, quite a few folks (including me) thought that EMC would be the acquirer (click here for an overview of the ‘EMC Documentum WEM by FatWire Family’). Instead, EMC and SDL Tridion teamed up on a Web Engagement Management story, which infuriated FatWire. The reason for the infuriation on FatWire’s part was that EMC and FatWire had just recently teamed up in a reselling agreement whereby EMC would promote/resell FatWire as its primary WCM solution. FatWire was NOT expecting the EMC-SDL announcement.
“Oracle’s decision to buy FatWire, however, does not necessarily mean that they are really serious about WCM or WEM. In the past, Oracle has acquired decent WCM products (Stellent, e.g.), and they’ve really only ever used it to sell more Fusion Middleware, which is far more lucrative in large-enterprise sales than WCM. The market is different now, however, from what it was several years ago. The ascendancy of mobile computing, advancements in personalization technologies, the omnipresence of the cloud, and the rising importance of online social networks now really give the cross-platform/channel concept of ‘engagement’ some traction. There really is something to be done here besides marketing spin. But for the next six months at least, marketing spin is exactly what I expect from Oracle as it tries (if it really does try) to ‘Fuse’ FatWire’s applications into its own stack. Oracle could really assemble FatWire + ATG + Fusion + [one or two other apps] into something big. Only time will tell, but the odds of Oracle doing something real with the WCM/WEM story are better now they ever were before.”
I was asked today for my perspective on Oracle’s announcement of its intent to acquire FatWire. This was what I said:
“It’s not surprising that FatWire was acquired, but until mid-to-late March of this year, quite a few folks (including me) thought that EMC would be the acquirer. Instead, EMC and SDL Tridion teamed up on a “Web Engagement Management” story, which infuriated FatWire. The reason for the infuriation on FatWire’s part was that EMC and FatWire had just recently teamed up in a reselling agreement whereby EMC would promote/resell FatWire as its primary WCM solution. FatWire was NOT expecting the EMC/SDL announcement. Oracle’s decision to buy FatWire, however, does not necessarily mean that they are really serious about WCM or WEM. In the past, Oracle has acquired decent WCM products (Stellent, e.g.), and they’ve really only ever used it to sell more Fusion middleware, which is far more lucrative in large-enterprise sales than WCM. The market is different now, however, from what it was several years ago. The ascendancy of mobile computing, advancements in personalization technologies, the omnipresence of the cloud, and the rising importance of online social networks now really give the cross-platform/channel concept of “engagement” some traction. There really is something to be done here besides marketing spin. For the next six months at least, I only expect marketing spin from Oracle as it tries (if it really does try) to “Fuse” FatWire’s applications into its own stack. But Oracle could really assemble FatWire + ATG + Fusion + [one or two other apps] into something big. Only time will tell, but the odds of Oracle doing something real with the WCM/WEM story are better now they ever were before.”
April 29th, 2011
On Monday, May 2, Tony White will co-present the keynote at the CMS Expo and moderate the CMS Founders panel. Join Ars Logica — along with the founders of Drupal, Umbraco, SilverStripe, DotNetNuke, and Joomla – for a lively discussion of what’s hot in the CMS market.
October 18th, 2010
In an October 15 New York Times article entitled, “Forrester Downgrades US IT Spending Forecast,” three Forrester analysts estimate that U.S. IT spending will grow at a rate of 8.1%, down from an earlier Forrester estimate of 9.9%. Software sales are predicted to grow at 9.1%.
Based on multiple dozens of conversations over the last six months both with clients planning Web Content Management (WCM) purchases and vendors assessing their sales pipelines, Ars Logica expects 2011 spending in the WCM market to grow by at least 15% for licenses, and 20% for services. The reasons for ramped-up spending include optimization of corporate Websites for Web Engagement Management (WEM), alignment of multi/cross-channel marketing campaigns, implementation of more powerful analytics applications, significant growth in eCommerce initiatives, and replacement of aging CMS platforms. The discrepancy between spending on licenses and services stems in large part from the growing popularity of open source CMS’s, which have lower license-to-services cost ratios.
April 5th, 2010
Last Thursday, CMSWire published the results of a poll asking organizations with plans to implement SharePoint 2010 what they intended to use it for. I’m happy to convey that only 4% of the 1,575 respondents indicated any intent to use it for WCM. To those 4%, I say emphatically, “DON’T!” Take a few other pieces of advice about SharePoint in the context of the full article by clicking here.
March 26th, 2010
For all of you potential CMS buyers out there, CMSWire will next week begin publishing my new column, “Caveat Emptor: Let the CMS Buyer Beware.” I’ll try to help you steer clear of a smorgasbord of pitfalls that have snagged others in the past. Topics will include:
- Improper product implementation
- Deceptive vendor marketing and sales tactics
- Flawed Web strategies
- Market hype
- Vendor advisories
- Any other subject that warrants the attention of CMS buyers
Meet me next week on the pages of CMSWire. Until then, have a good weekend. And as always, feel free to contact me anytime (www.arslogica.com/contact).
March 22nd, 2010
Yesterday I came across an interesting “Microsoft Confidential” document (now public because it was entered into evidence during litigation) that states, “Analysts sell out — that’s their business model… But they are very concerned that they never look like they are selling out, so that makes them very prickly to work with.” The document goes on to recommend “bribing hiring them to produce ’studies’ that ‘prove’ that your technology is superior to the enemy’s, and that it is gaining momentum faster.” (On the middle of Page 48 of the PDF at http://bit.ly/cVdsxk)
In my experience, this is in fact the dynamic between vendors and many analysts, but as the document above suggests, the nature of the relationship can never be openly discussed. For the end-user readers of this blog, I have a few questions: (1) Do you think that most analyst firms are more likely to cover vendors if those vendors buy services from them? (2) What does it mean when a vendor is allowed to give an unmoderated keynote presentation at an analyst firm’s conferences? (3) Should you trust an analyst report with “Sponsored by [Insert Vendor Name]” on the cover page? Do you really think that a software vendor would pay $20,000 for an analyst firm to produce a report that exposes its products’ weaknesses? (4) How can you choose an analyst/consultant and avoid the problems entailed in Questions 1-3?
I’m going to keep this blog entry short. Clearly I have no other opinions on the subject (ahem). I just wanted to throw some food for thought out there for those of you considering WCM purchases.
March 19th, 2010
Welcome to the Ars Logica blog! I’m Tony White, founder of Ars Logica. Many of you have known me since the ’90s, when I was the primary analyst covering Web content management (WCM) at Giga Information Group (now part of Forrester Research). Some of you remember me from my days at Interwoven, where I was “Content Commando.” Still others will recognize me as Senior Analyst at the Yankee Group or Lead Analyst at the Gilbane Group. Those of you who probably know and like me best, however, are clients I’ve helped assess WCM needs and choose suitable software.
That is my real interest – helping the buyers of WCM software understand their requirements and giving them a means of selecting the right products.
Back in 1999, I produced some of the first Vendor Scorecards for Giga, covering vendors such as Vignette, Interwoven, ATG, and others. This piqued my interest in developing the definitive (or as close as I could come) set of features, functions, strengths, and weaknesses all of the significant WCM products on the market. After crossing back over from “the dark side” (working for a vendor), I began that project and have continued it ever since.
Last August, I ceased running the WCM Practice at the Gilbane Group to establish a no-holds-barred, let-the-chips-fall-where-they-may, completely vendor-neutral advisory and consulting firm. In my thirteen or fourteen years in the industry, I have yet to see a truly vendor-neutral analyst firm (Giga was the closest). Being human, I may fall short as well, but it will not be for lack of trying. And it will certainly not be because I:
- Produce vendor-sponsored research
- Listen to a sales force pressuring me to take briefings from vendors offering to buy “services”
- Know only a few vendors’ products
If I ever seem biased, it will be simply because my understanding of the facts requires bias.
