Document mismanagement

When Open Text made its $68.5 million bid for Accelio on Monday, the first thing I wondered was in what format the offer was documented, and how it was sent to Accelio. How do two document management experts correspond with one another?

If Accelio chief executive Kevin Francis’ reaction is any indication, it must have arrived on a piece of toilet paper.

“Open Text has initiated an unprovoked attack on Accelio and its shareholders,” he blasted during a late-day conference call on Tuesday, promising to “lead an aggressive defense” of the company.

Well, here they go again. Open Text, one of the few software companies which has managed to avoid the worst of the IT downturn, apparently never learned its lesson after failing to bring off an acquisition of PC Docs in 1999. At the time, both companies were on the rise, PC Docs having bought Fulcrum Technologies just around the same time Open Text bought Information Dimensions Inc. When Open Text made its offer, the repercussions followed the same pattern we saw this week with Accelio. First there was a sort of stunned silence on the part of the acquisition target, then anger. At the time, PC Docs chairman Benjamin Swirsky said Open Text was making an attack to “debilitate a competitor’s forward progress,” which sounds a lot like the sort of language Francis is using now. Analysts told our reporters that both companies would be better to wait until they had the time to properly digest their previous acquisitions before starting on an even bigger merger. In the end, PC Docs ended up as a subsidiary of Hummingbird Communications, another player in the knowledge management space.

Open Text’s management team, particularly CEO Tom Jenkins, has established a good reputation in the industry for running a business that keeps customers coming back for more. Licence revenue from its installed base, for example, went up to 65 per cent of the company’s sales in the fourth quarter. That was a 35 per cent jump from the previous quarter. At its most recent annual general meeting last week, Open Text admitted that the economic slump has finally started to affect its larger sales, but the long-term outlook for the collaborative application market indicates its future will be bright.

Accelio, on the other hand, is slogging it out in the more difficult sector of electronic forms. As I mentioned in an earlier editorial, it is among the firms who are recasting themselves in the “business process management” mold to suggest a more comprehensive solution than merely turning printed documents into electronic ones. Like Open Text, Accelio went through a restructuring this year that has eliminated a few management positions but took the further step of rebranding itself. The company was once known as JetForm, and as everyone knows, there is no reason to abandon an old name if it’s working. What’s interesting is that if you look on the Open Text Web site’s Product section, you’ll find an advertising blurb which promises that Open Text will help “accelerate the pace of innovation throughout your organization,” as in the base words that make up the Accelio name: accelerate and innovation. In this way, at least, the two companies seem to think alike.

Francis has said the timing of the bid — the week before Christmas — unfairly puts pressure on shareholders to make a decision. Since Open Text refuses to comment on the matter, I have no choice but to agree. That doesn’t mean an e-forms vendor wouldn’t be a great fit with a company that excels in managing those documents in enterprise environments.

There is little doubt that Open Text will eventually grow into one of the leading players in this industry, but it is creating a lot of antipathy along the way. Its best bet is to give shareholders and customers a chance to ask questions and properly assess the merits of the deal. For a collaborative applications company, it still has a lot to learn about becoming a team player.

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Jim Love, Chief Content Officer, IT World Canada

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Shane Schick
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