Open Text acquires Information Dimensions

Open Text (Waterloo, Ontario) has acquired Information Dimensions (IDI, Dublin, OH) from Gores Technology Group (Los Angeles) for approximately $10 million. The combined company extends Open Text's worldwide installed base to 2.5 million users in 3,400 corporations.

"Basically, this creates the 1,000 pound gorilla of the industry," said Tom Jenkins, CEO of Open Text.

According to Jenkins, Open Text is excited about the acquisition for three reasons: It gives Open Text critical mass in the knowledge management/document management market, it adds useful technology including IDI's BASIS document management platform and browser-based integrated library system Techlib, and it increases Open Text's international presence.

The combined company has 570 employees, products in 12 languages and 82 VARS in 31 countries.

Bill Forquer, president of Information Dimensions, said, "The combination of Information Dimensions' strengths in enterprise knowledge library technology with Livelink's leadership in knowledge management offer customers the most comprehensive and robust enterprise knowledge management solution on the market. The integration of these two products provides a natural migration path for BASIS users."

"This is a significant milestone for the document management industry," said Ian Campbell, director of collaborative and intranet computing, International Data Corporation. (Framingham, MA). "Our most recent study on enterprise document management shows that this acquisition brings together the market share leader in user installed base with the growth leader in new users. This is a powerful combination."

Bill Zoellick, Cap Ventures guru, isn't so sure that this acquisition tells us anything new about Open Text's direction. "It looks like a purely tactical move to me ­ one that makes good, short term financial sense." But it's not a strategic move, he adds, despite Ian Campbell's assertion that the acquisition represents a significant milestone for the document management industry. "Nope, I don't think so."

The acquisition is a smart move, Zoellick notes, given the fact that the market is now leaving the early adopter phase and is now addressing mainstream buyers. Previous Cap Ventures research pointed to the need for companies to grow market share, or "be pushed to the edges" of the marketplace. From this perspective, Zoellick notes that the acquisition "is a smart thing." Without digging too deeply into its coffers, Open Text "has placed itself in the top tier of document management vendors" in terms of annual revenues.

The acquisition is "a good deal, a financially advantageous deal, and a deal done with an eye firmly on market realities," said Zoellick. "Open Text needs more size." But he believes that the deal is at most a "shoring up" of Open Text's document management position. "Open Text's advantage, to date, has come from playing the Web card. Their line of future advantage should continue to follow the Web where it leads them." According to Cap Ventures' research, Zoellick believes the deal for IDI "doesn't lead to document management. The big growth is elsewhere. Maybe the next acquisition will tell us more."