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Blogs > MWD Advisors

OpenText buys Cordys: third time lucky?
Neil Ward-Dutton By: Neil Ward-Dutton, Research Director, MWD Advisors
Published: 16th August 2013
This work is licensed under a Creative Commons License
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Just my luck: I’m just trying to tidy my desk before heading out for two weeks’ holiday when I hear that OpenText has bought Cordys for approximately $33m. Damn their inconsiderate timing!

This isn’t the first time OpenText has acquired BPM technology: it snapped up both Global360 and Metastorm in 2011. Since that time, the company has been working on pulling together a story that weaves together the capabilities of both platforms. Making less of a stir, it also acquired the long-time partner behind its recent ‘Smart Process Apps’ play Assure, UK-based ICCM, just a couple of weeks back at the end of July 2013. The Assure proposition was starting to pull the OpenText story into a bit more focus—with the Metastorm-based Assure focused on what we call transactional work scenarios, supported through pre-built accelerators focused on particular corporate service domains; and the old Global360 stuff focused more on exploratory work scenarios through case management capabilities. The strategic value of ICCM’s contribution meant it made complete sense for OpenText to control the technology.

I should have known something was up: I’d been trying to get an update briefing from OpenText for over a year (we have a number of clients asking us for coverage of the OpenText offering, and the most recent analysis we have is of the Global360 offering pre-acquisition). Our planned briefing had already been rescheduled once, and then last week, at the very last minute, it was postponed again.

If any of you don’t know Cordys, it was a small, privately held and equity-backed Netherlands-based BPM and SOA technology platform player with a PaaS story. It was founded in 2001 by Jan Baan, fresh out of his ERP play.

Despite some smart ideas and pretty big marketing splashes, Cordys never made as much of a dent as it could have. It’s continued to grow a customer base, albeit slowly, but as an equity funded company I suspect it struggled against the weight of expectations. In 2007 it took $80m of funding from Argonaut Private Equity; I’m guessing with a $33m sale price it was a question of Argonaut cutting its losses.

As for OpenText, the company’s initial statements are focusing principally on Cordys’ capability to deliver process apps in the Cloud—something that complements OpenText’s existing on-premise platforms—rather than focusing on Cordys’ core BPM technology and case management capabilities, which more or less replicate what it already has from the Metastorm and Global360 acquisitions.

What does this all mean?

Cordys’ ability to deliver process apps in the Cloud is nice, and it could give OpenText’s partners something tasty to chew on as they—like all ISVs—wrestle with how to support customers wanting to rent, not buy. But OpenText had already started down the path of offering Cloud-based services (through the OpenText Cloud) and although these aren’t ‘cloud-native’ OpenText clearly has the resources to deliver the right kind of cloud experience for its customers. Also, looking at the Assure suite of process apps – these are also offered in the cloud where required. So does OpenText need Cordys to give it a cloud story? Not from where I’m standing; no, not really.

Perhaps it’s Cordys’ customer base? There are certainly some tasty names in there.

I’m still not sure, though.

Your thoughts?

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