<<But what is the direction that management is taking Open Text ?>>
The first question is easy:
"Open Text Corporation is a leading provider of intranet application software, tools and services that enable organizations to leverage the global reach and openness of Internet technologies within a powerful, collaborative environment for communicating, managing and working together. Specifically, Open Text's solutions are used by Global 2000 companies to find and manage information and documents, empower teams and drive critical business processes. Open Text: 'putting the Web to work.'"
This is absolutly the market to be in for the forseeable future. Any successful enterprise company is racing to implement these kinds of technologies to gain a competitive advantage.
<<First question is how they position the product. It seems to me that they are trying to cover all the issues related to document management and for all sizes of companies.>>
They are truely focusing on the large enterprise companies where Intranet/Internet technology carries the most benefit. They are emphasizing document management initially, but as their product develops, I predict that workflow will become the major driving force for sales. Currently you cannot create workflows via their web client which is a drawback. This capability will be included in the next release which will double the value of the workflow package. They are building in several APIs (Application Programming Interface) that will allow companies to tie their existing applications and data into Livelink, thus allowing the workflow engine to be the carrier of all company data. Cost savings from this technology will be measured in millions of dollars to large companies. Finally, they are building a strong consulting arm that customizes Livelink to meet customer needs. This area is the fastest growing in the company and will generate huge amounts of continuing revenue as the installed base grows. It is very similar to a car dealership making most of its revenue through servicing the car once they sell it.
<<The second question is that if they are going to speed up the rate of making partnerships and signing up channels to cut into vertical markets.>>
I think the precedent has been set. If they are going to speed up the rate is beyond me. I believe that Bill Sterlin and Keith Soley, having been involved with large technology companies before, know the correct formula to grow a company with this much potential. Each has more than 25 years of senior operating management experience in high-technology industries.
Thanks for your input on calculating valuation. My take is there is going to be competition. These markets are in their infancy and will soon be multi-billion dollar markets. Open Text has established themselves as the leader in Intranet based technology, which is completely different than Documentum and others who use client-server based technology. Client-server technology is being abandoned for Intranet technology and the competition is trying to snowball their customers with announcements, but no products. AT&T Wireless threw away several hundred thousand dollars of Documentum software because Livelink was so much more powerful. That is a statement in itself. Documentum and others are being "devalued" for a reason while Open Text continues to be valued as a search engine company. I think the market is in error using these companies to derive a value for Open Text. |
