Documens Boss

OpenText announced it has entered into an agreement and plan of merger to acquire Metastorm Inc. through a merger of Metastorm with a subsidiary of OpenText. The transaction is expected to close in OpenText's third quarter, ending March 31, and is subject to customary approvals and the consent of Metastorm's stockholders. MetaStorm’s document-centric workflow technology makes it a logical acquisition for Open Text, and both companies target document-heavy industries such as the legal sector.

Interestingly, Open Text CEO John Shackleton said the acquisition would help boost its ability to support mobile content management. “We see workflow being the glue that will allow people using their iPads or smarpthones to be able to access corporate data on the road,” he said.

"Metastorm will add complementary technology and expertise that enhances our ECM solutions portfolio," John added. "We look forward to welcoming its employees and customers to OpenText."

"Combined with OpenText, Metastorm will be able to provide a broader and deeper range of offerings to our customers, while leveraging the strength and stability that comes with being part of a larger global organization," said Robert Farrell, chairman and CEO of Metastorm.
 
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This announcement today by Open Text comes as no surprise; they continue to be the most acquisitive company in the ECM sector. Open Text continues to add companies and capabilities, but most importantly this announcement adds significant revenue and value to drive them to that elusive $1B goal. Open Text also recently announced financial results for what John Shackleton, CEO, described as “an excellent quarter”. Revenues were $267.5 million, up 8% for the same period of the previous year, while net income shot up 41% to $50.1 million.  

BPM is increasingly being seen as the backbone of the ECM and related technology sector  - the glue for managing the processing,collaboration and workflow of documents and data.  Metastorm was a pure play BPM software provider, embracing Enterprise and Business Architecture, Business Process Analysis, and Business Process Management from a pure play platform approach. Their strategy evolved around Business Transformation, driving process changes and improvements throughout an enterprise. In addition they bring expertise in overlapping vertical sectors, such as Education, Financial Services and Insurance, Government, Healthcare, and Manufacturing.  This acquisition is not only a good bolt- on to allow Open Text to further expand their ECM offering, but it allows them to be positioned as more of a major player in the BPM space, with access to increased market opportunities.

In addition, the acquisition of Metastorm by Open Text speaks volumes about the importance of BPM  and accompanying analytics, and we expect more core ECM companies to add robust BPM capabilities throughout 2011.  In time, we continue to see the BPM only companies being absorbed by broader solutions providers, as we have seen in the past starting most notably back in 2004 with the acquisition of Staffware (Tibco) , followed by Lombardi (IBM) and IDS Scheer (Software AG) in 2009;  Savvion (Progress Software) in 2010 and now Metastorm (Open Text) in 2011  

From a broader perspective, the ECM industry consolidation continues to move forward at a very rapid pace. Document Boss has predicted that M&A activity will continue in 2011, perhaps at an accelerated pace.  This acquisition continues to prove this out, and we will see many more to follow.   When we talk of industry consolidation we assume the total ECM market and vendor community is shrinking.  In fact, Document Boss research has shown that the opposite is true ; there are actual more global vendors in the ECM and related spaces now than ever before.

About OpenText
Open Text(TM) is the world's largest independent provider of Enterprise Content Management software. The company's solutions manage information for all types of business, compliance and industry requirements in large companies, government agencies and professional service firms. OpenText supports approximately 46,000 customers in 114 countries and 12 languages. For more information about OpenText, visit www.opentext.com.

About Metastorm
With a focus on enterprise visibility, resource optimization, efficiency and agility, Metastorm offers market-leading software for enterprise and business architecture (EA), business process analysis (BPA), and business process management (BPM). As an integrated product portfolio, Metastorm Enterprise allows organizations to improve business results by better aligning strategy with execution. By combining the power of these three disciplines onto a common platform, Metastorm is helping organizations worldwide focus on the right business improvements, instill stronger governance, and accelerate time to value. www.metastorm.com