It's over, isn't it?

Every time a software company gets acquired the relevant community starts spinning. Employees fear for their jobs, customers are concerned about their projects, analysts write another paper and of course the competition has a field day. The recent acquisition of Vignette by Open Text has been no different. Of course Open Text needs to reduce head count since Vignette has been reporting losses since before the term WCM was even invented. Everybody that followed Tom Jenkins and John Shackleton over the years knows that burning cash is not an option. But before you bitch about it: 2.2 billion in market cap suggest they doing something right...

When we talk about the products the situation seems complicated. But unlike many "experts" believe, the actual product is not really the issue. If customers would buy software from a startup with a handful of developers, why would they be concerned if a billion dollar company maintains a handful of those developers to keep the product alive? Do you know of any customer of Gauss or Obtree that was forced to migrate to RedDot? Face it: every player is going to get acquired at some time and keeping a product alive keeps the maintenance revenue consistent.

Don't get me wrong, just maintaining a product is always easier (and cheaper) than to innovate. But we also need to admit that the WCM market hasn’t innovated for a long time. What actually happens is that as the products mature and become more stable they work better within the orchestra of tools we need to run a business. But real innovation is not happening. And just to be perfectly clear, social media doesn't count. The fundamentals have been invented 15 years ago and it doesn't count as innovation just because we call it "social" instead of "collaboration" adding some AJAX and better usability. In the auto industry they call that a facelift. Ask your vendor about the top 3 minds behind their social media product and I am sure you'll find 2 of 3 being a collaboration or communication veteran.

But there is something with this deal, which is different. It's the last big one! Believe it or not, there are no more fighters for the greater good in that market; no more idealists that are on a mission. Over are the days when Vignette and Interwoven outsmarted each other to charge a million $ for a website, over are the days of RedDot kicking both their asses :-) Do you even remember Stellent? What is left is a long list of small or smaller companies. Believe me, many are decent businesses run by good managers but still: it is time to exit my friends.

Vendors have two options. Focus on a niche market and sell later or sell the business now. I am happy to discuss my logic behind that but if you follow me for a moment, that leaves two options for customers - either buy from a big player and get an 80/20 solution or buy from a smaller, more focused player and deal with them being acquired sooner or later. Both options come with pain and your decision depends on how mature you think WCM truly is.

So is it over?