Vignette is Losing at Musical Chairs

So I was just casually heading over to look at an older Big Men on Content post when I saw their latest.  It seems that Interwoven was purchased today by Autonomy.  Uh, WOW!  Okay, maybe a bit of an over-reaction, but with Vignette in a death spiral, what is next for them?

Before we get to Vignette, lets look at the news itself.

Interwoven and Autonomy

Alan Pelz-Sharpe over at CMS Watch covers this aspect very well in his first take.  My thoughts when I heard immediately the news was focused on Meridio and Interwoven living together.  As you may, or may not know, Meridio is probably the leading Records Management solution for SharePoint and they were acquired by Autonomy back in 2007.  I’ve talked to a few clients about implementing Records Management for SharePoint, and there are three basic options:

  • Use SharePoint’s RM Tookit: It is a toolkit and was released 8 months after SharePoint was DoD 5015.2 certified.  Enough said.
  • Use Meridio: A SharePoint focused tool.  The only concerns I ever had was using it for non-SharePoint data.  On the 19th they announced a working integration with SAP, so that alleviates some of that initial concern.
  • Use another ECM platform: Solid option, but more expensive than the others, at least from a license standpoint.

Now enter Interwoven into the Autonomy family.  What will Autonomy do?  Will they merge the products or just make them all work together?  The former is better, but Alan seems to doubt Autonomy’s ability, or desire, to take that approach.  The latter approach will start creating a large amount of chaos among their sales people.  I can already tell you that when I talked to them at this past fall’s AIIM seminar that Meridio wasn’t in the forefront of Autonomy’s brain.

This bears watching as it will impact the future of RM in the SharePoint world.

Has the Music Stopped?

My first thought is no.  HP is still out there.  After acquiring Tower Software, HP could use Vignette for WCM.  Vignette’s technology isn’t bad (though stagnating), but they have been just all over the place on their marketing message.  The question is whether or not they want to enter the WCM space or are content with basic ECM and RM.  They could just implement the CMIS standard for their back-end and let WCM vendors leverage their repository.

The other possibility is, of course, Open Text.  They like to buy everything.  They already have RedDot, but that doesn’t mean anything with Open Text.  They haven’t really brought RedDot tightly into the fold, so maybe they would be willing.

Vignette is losing market value at a fair clip.  They are under $200 million in market cap and I’m sure that they would be an easy pickup for either Open Text or HP at far below Interwoven’s $775 million.  It is entirely possible that neither will take a flier on Vignette and either some unidentified suitor will step up or Vignette will be left out in the cold.

If someone is going to buy Vignette, I would expect it to happen in the next few months.  After that, I’m not sure what will be left.  There may not be enough brain power left at Vignette at this point to make them worth buying.  Time will tell.

Grab the popcorn and let’s watch the show.

9 thoughts on “Vignette is Losing at Musical Chairs”

  1. Marko Sillanpää says:

    The Vignette viewpoint is interesting. For me HP really didn’t stand out as a formal suitor. My thinking has always been, and as time goes on solidifies, that Vignettes will be acquired by a company like the old Computer Associates. If one looks at CA ten years ago, they liked to acquire software with a healthy maintenance stream and capitalize on it.

    In the 9 months ending September 2008, Vignette had over $105m in services dollars vs. $27m in software. While it’s hard to tell what’s support dollars and what’s consulting dollars the ratio of $3.88, for services to sales, is interesting. In 2007 that number was $2.65. That means their making more of services than off sales. Meanwhile the costs of services has remained flat.

    Then again, maybe that is Open Text. If one looks at all of the platforms they have acquired in the last few years, none have been integrated into a single architecture. With five separate platforms maybe that is their approach and in that case Vignette falls easily into the stable of content management platforms offered by Open Text.

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  2. Thanks Marko. I’m leaning more towards Open Text than HP, but I’m not ruling them out yet. The question is whether or not they want to expand their CM offerings. If yes, the Vignette is a target.

    I hadn’t considered CA. That makes some sense, but it seems like that would just be a death sentence for Vignette in the space. The stockholders may like the move, but as a client, not sure that I would. I’ve never been impressed by their stuff a few years after they took it over.

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  3. Marko Sillanpää says:

    I think you missed my point around the “old CA”. It seems today’s CA has been moving towards IT Management specifically. But I do think if one looks at the lack of acquisitions consolidation at Open Text, one needs to wonder if Open Text is becoming the “CA” of the content management world.

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  4. Thanks for the clarification Marko. Interesting thought on Open Text. I only wonder how long they can keep absorbing ECM companies before they start causing themselves more harm than good.

    Right now I know that if Open Text acquired my vendor that I would be worried about my systems future.

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  5. Hi There.
    In my three years as a vignette employee the rumor mills have swirled about who may or not be suitors and why.
    I wanted to address two points you make.

    The first point about our technology being “stagnant”, we had two releases of our VCM product last year and another planned in 2009. We have also launched a social media suite to deliver online experiences to actively engage visitors with things like ratings, comments and online communities. We will continue to bring solutions to market that integrate content & rich media with social computing.

    The second point I wanted to address was “There may not be enough brain power left”. Like many companies in this market we had a reduction in workforce. With that said, we have superb talent across all functional areas of our business. There is plenty of brain power and no shortage of ideas.

    On another note. This was my first visit to your blog and found some excellent insights on the market. I look forward to learning more.

    Thanks,
    Dirk Shaw
    Twitter @vignettecorp

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  7. japa says:

    VIGN’s market cap is now less than cash at ~ 135 million. Good amount of Maintenance Revenue coming in along with some license revenue.

    Seems a no brainer to be bought out. HP is at top of my list simply to compete with EMC, IBM, etc. ORCL, Open Text may be other possibilities.

    VIGN’s ex-CEO is now the Software VP at HP.

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    • Great insight on Vignette, especially on ex-CEO connection. I would think that Open Text is out now as RedDot has been “merged” into the fold. That implies to me that they are committed to that solution.

      Then again, OT does like to buy people.

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