What does the OpenText acquisition of GXS mean for the industry?
The following are my personal observations regarding the GXS acquisition by OpenText. First, these have been calls, too many to return today, many from colleagues in product advocacy. I will return as many calls as possible.
I have always thought that OpenText has been on the right track since their acquisition of Hummingbird. In the late 1990’s EDM market, Opentext was somewhat the laggard, compared to Hummingbird and certain other document management and knowledge discovery products. Such was that heady era, with tremendous energy misspent on XML databases and such. OpenText navigated the morass admirably, and kept an eye on capital mobilization, thereby becoming the unquestioned leader in Enterprise Data management and knowledge discovery.
A good example, one of many acquisitions by OpenText was Nstein software, a stroke of genius which brought Opentext into the forefront of text mining, knowledge analysis, and conceptual text element and entity scoring. Bravo. I had delivered a white paper to France Telecom in 2007 on the text mining sector, and Nstein was one of the recommended vendors that had visited France Telecom’s R&D Lab to present their Text Analysis Toolkit SDK. OpenText, unlike France Telecom, had the expertise and cohesive vision to subsume text analysis into their market facing line. Very few analysts watching the EIM sector comprehend that executing this strategy takes an amazing constancy of vision.
With the buyout of EasyLink, OpenText purchased a dual technology property with a workmanlike infrastructure. EasyLink had the virtue of being an ex-AT&T property that enjoyed having adequate resources to operate and compete effectively. With the EasyLink’s capture of ICC, the company was able to absorb a highly contemporary and functional EDI communications architecture. EasyLink, as one of the last ‘branded’ legacy VANs, is considered an operation that basically works. The company also has electronic fax and unified voice services, which is very popular with SME’s through the large enterprise.
Analysts with sharp recall see that OpenText’s acquisition of Rightfax, again, shows a portfolio strategy that just makes sense.
One of my sources disclosed that OpenText was researching the possibility of “componentized EDI Communications”, or EDI Comms as encapsulated services, reduced to a standardized, end-to-end protocol, like email, which is quite different from how today’s VANs handle EDI messaging. We shall see. I can say that my contacts in EDI network operations have stated that Easylink operations and internetwork relations have not been degraded since the OpenText acquisition.
If we look well past the structural finance issues dogging GXS , which OpenText is perfectly able to address, the most vexing issue remains GXS induced interference in the transit of EDI messages between the Marquee Hubs residing on GXS VANs, and their trading partners, who are often SPS Commerce subscribers. In other networked markets, these anticompetitive acts would result in a tariff violation, a common carrier enforcement penalty, and be regarded by most as an egregious breach of trust.
The question thereby becomes, will OpenText allow such unfettered abuses to continue? I am 100% sure that Opentext CEO, Mark J. Barrenechea, would more likely take a pro market position, and establish the new GXS as a good network citizen within the global mesh of interconnected commerce networks.