OpenText Acquisition Puzzles Analysts

Analysts didn't have many good things to say about the recent announcement that ECM vendor OpenText will acquire Vignette, a maker of Web content management software, for $310 million.The purchase doesn't fill any significant holes in OpenText's product line; OpenText already has WCM software via RedDot, the result of an earlier acquisition.

Integration isn't likely either. "Vignette only adds another layer to-it in no way reconciles-Open Text's crazy quilt of technologies," writes CMSWatch analyst Kas Thomas in a blog post. He notes that OpenText's product lines are built around .Net. C++ and Java, while Vignette runs on J2EE.

At the 451 Group, Kathleen Reidy predicts internal conflict. "There will undoubtedly be some Vignette vs. RedDot struggles at Open Text over which is the WCM line of choice," she writes in a blog.

With OpenText and Vignette the last of the two major independent content management vendors (Autonomy completed its acquisition of Interwoven in March), the buy appears to be about bulking up against competitors such as EMC, IBM and Oracle.

OpenText certainly hopes to upsell to Vignette's customer base. "Vignette's customers represent some of the world's most powerful online brands and we are excited about the opportunity to expand the relationship with these customers and partners," said OpenText President and CEO John Shackleton in a press release announcing the acquisition.

But OpenText has to do more than hope. Vignette's first quarter revenues were down 24 percent from last year.