Why Co-Founder Thinks Documentum Is Doomed Under OpenText

Documentum Co-Founder Publishes Reaction to Last Week’s Deal

Newton, who with partner John Powell founded open-source ECM provider Alfresco in 2005, published a response to the acquisition in his company’s corporate blog. Here are some key points of that essay:

“It is rather poignant to see the ultimate fate of Documentum, the company that Howard Shao and I started over 25 years ago.  … I don’t think this is the outcome that anyone in Documentum hoped for when it was acquired by EMC in 2003. I didn’t think it would happen, because it is a really big pill for OpenText to swallow and they had to raise quite a lot of debt to do it. It’s not a big surprise, but it is sad.

“I left Documentum a couple of years before the acquisition by EMC, but I was still very aware of what was going on inside the company after that. I think the intention then was the same that OpenText is trying to do with this new acquisition: to become the largest player in the Enterprise Content Management space or as OpenText has tried to re-label it, the Information Management space. The market shares of the two companies seemingly would make it larger than IBM, and OpenText continues on its traditional growth path of becoming the Computer Associates of the content space.

“Over the past decade or so, OpenText has not grown organically but through acquiring smaller ECM vendors that have lost their way. They have done the same in the Business Process Management space as well. … The pattern is generally the same: Acquire companies that have overlapping product sets with customers that can move to the core OpenText technology, but give assurances to those customers that their products will be invested in. Just it doesn’t quite work out that way. Like a CA, the product lines wither away.

“Documentum during that same time evolved in a very different way. Under the leadership of Dave DeWalt who took over in 2001, Documentum acquired complementary adjacent technologies to upsell to their customers. Even after the acquisition by EMC, Documentum seemed to have a degree of autonomy (no pun intended) in working within a larger hardware business. That changed when the EMC hardware side took control, DeWalt left and it’s been a slow decline ever since.

‘Brave Attempt’ at Project Horizon

“There was a brave attempt to revitalize the brand through Project Horizon, now named Documentum LEAP. That, however, took years to see the light of day. Even so, it is an entirely new product that have very little connection to Documentum other than being a content platform. When Dell took over EMC, no project was going to save Documentum, and it fell on the auction block. Too little, too late.

“The outcome looks inevitable. Like so many OpenText acquisitions, there will be disingenuous assurances of investment. One has to believe that OpenText’s management thinks that they have the better of the two products between OpenText and Documentum.

“Just look who took over whom and who has the bigger market share. This will lead to OpenText to try and force customers onto that platform or just let the Documentum customer base attrite and collect maintenance in the process. Even worse, those Documentum customers will find a suboptimal product for their needs in OpenText when they find out how the innards of OpenText works–a very different model and a not terribly fast repository engine. Just ask any Documentum salesperson or senior executive who is fighting it day in and day out.

“It is just a sad outcome for those of us who built Documentum all those years ago. Although I sold off my stock a long time ago, because I knew nothing about the hardware business of EMC, doesn’t mean I don’t care. Even though just about every single person I ever knew in Documentum is gone, doesn’t mean I don’t care. It has been fun competing with what was once a competitive company. Now it is just time to help pick up the pieces.”

OpenText’s Response

eWEEK connected with Barrenechea to obtain his take on Newton’s blog piece. It was a simple, to-the-point discussion.

“I’m reminded of a scene out of [the AMC television show] ‘Madmen,’ ” Barrenechea told eWEEK. “Draper is in an elevator, and one of his employees is criticizing him—really criticizing him—for his pitch that day, because in the presentation, Draper left out the other salesman’s alternative idea. Draper looks over and says, ‘They bought it, didn’t they?’ And the ad executive says: ‘I feel really bad for you.’

“Draper looks back at him and says: ‘I don’t think about you at all.’

“I don’t even think about them,” Barrenechea said with a laugh.

eWEEK Senior Editor Jeff Burt contributed to this story.

Originally published on eWeek