Irina Guseva: Random Thoughts on CMS, WCM, ECM and Other Acronyms

With the M&A activity in the content management space not dwindling down despite the economic crisis, it’s only natural to see the ECM and WCM talent move around. At times, that happens in a fashion resembling the game called “A Cold Wind Blows.”

Recently, Web CMS vendor Ektron announced Tom Wentworth joined them as VP of business development. Wentworth comes from the Enterprise CMS player Interwoven, where he was evangelizing various web solutions that fall under the Autonomy Interwoven ECM suite roof for the past 2 some years. Before that, he worked for over 6 years in Interwoven sales engineering roles.

In the new role, Wentworth will report to Ektron’s founder and CEO Bill Rogers, who is counting on Wentworth’s “experience in driving corporate strategy and revenue.” For Wentworth, working for a much smaller vendor should be a welcome change in scenery.

We’ve a slew of Interwoven employees leave for other CMS companies before, so this announcement doesn’t come as a surprise. Yet it spurs many questions.

Are things that bad at Interwoven that even the most passionate evangelists are looking for the exit sign? Is it the Autonomy acquisition fallout and the inability to effectively use the acquired talent? Is it because of Autonomy’s reportedly far from nurturing corporate culture and the “fear-and-intimidation style of upper management”? Are we about to see Interwoven navigate the CMS waters a la Titanic?

Expect to hear more from Ektron soon. The recently leaked version 8 should get its official entrance to the CMS arena soon.

Cross- published on CMSWire.

Autonomy reported its financial results for the first quarter of 2009. According to the company, these (unaudited) numbers represent the highest Q1 revenues and profits in Autonomy’s history.

One of Q1 2009 highlights is, of course, the completed acquisition of Interwoven with “integration ahead of plan,”  cash flowing in (as well as out), and somewhat more clarity on where this is all going.

More on CMSWire: Where Does Interwoven Fit in Autonomy’s Q1 Results?

That was quick. Only two days after finalizing the earlier announced acquisition intent (and while the planned Interwoven Q1 2009 layoffs are supposedly underway), Autonomy announced the first post-acquisition product release. The company’s WCM product Interwoven Teamsite in its new 6.7.2 version is now running on Autonomy’s IDOL platform.

(a little) More detail on what IDOL brings to the table is on CMSWire: First Post-Acquisition Release: IDOLized Interwoven TeamSite

The word on the twittersphere has it that the release hit the WCM streets a bit prematurely and a lot more integration work between the products could’ve been done. Coulda, shoulda, woulda… But the £561M investement apparently cannot wait.

Even web content management in Autonomy’s hands is revolving more and more around search and (surely, soon to come) legal compliance.

Everything is moving according to the plan. Autonomy announced its decision to buy Interwoven early this year, and the deal has been signed earlier today (not without minor hurdles).

As at today, Bloomberg consensus analysts estimate Autonomy’s revenues at $119.9 million with adjusted EPS of $0.14. Updated consensus analysts’ estimates for the period, including Interwoven’s contribution under Autonomy’s ownership in Q1 2009, are revenues of $125-$128 million and EPS of $0.14 to $0.15. More financial results to be announced mid- to late April 2009.

It’s a Done Deal, What’s Next?

Well, most likely there will be organizational changes, including those known as “overhead costs optimization.” The initial plan was to terminate about 70 positions in the company. It’s close to the end of Q1 and, as promised, Interwoven will (if it hasn’t already) start letting people go. The desired savings of approximately $8.0 million to $10.0 million annually have to come from somewhere.

However, as in case with recent Vignette layoffs, who will be working on new Interwoven product management initiatives if the brains are gone fishing?

How Much Longer for Interwoven in the Content Management Space?

There’s still not much clarity on how IWOV’s product line will be married with Meridio, IDOL and other Autonomy technologies. Seen some seemingly internal PPT’s floating around the Internet, but won’t comment on that. Would rather prefer a vendor briefing invite.

Best bet would be to preserve Interwoven’s WCM and ECM focus, but this would be up to Mr. Lynch, of course. BTW, did you see the new Interwoven+Autonomy logo? It explains everything.

Any hints in what Lynch said today?

“… With this acquisition we will redefine how global 2000 corporations interact with the web and how leading law firms and government regulators will discover, analyze and manage information and interactions.”

Let’s just say Open Text may see more competition in the near future on the “law firms+government regulators+ discover” front.

WCM/ECM Chronicles

One brand name after another, the good ole web and enterprise content management markets are getting thinner and thinner (Isn’t there some sort of a technological Rogaine for that? ) with long-timers disappearing/morphing in some form or another.

RedDot – gone, swallowed by Open Text. Day Software’s Communiqué – abbreviated to CQ. Percussion Rhythmyx – rebranded to CM System. Interwoven – ummm, as of now, overpowered by Autonomy in (at least) the logospehere business and being called Autonomy Interwoven.

Following last week’s announcement about Interwoven being acquired by Autonomy, the CMS world is still shocked by the news and seems to be in the perpetual pondering mode about Interwoven’s future. I am no exception.

Where Autonomy’s Money is Coming From

As the UK’s Guardian reports, Autonomy really lucked out with good timing on the Interwoven acquisition. The day before the acquisition was announced, Autonomy raised £222m to help fund the $775m acquisition of Interwoven. Traders said the placing was covered around five times and took 60 minutes to complete. Autonomy’s shares closed up 39p at £10.72 that day.

On the same day, Microsoft warned investors that profits and revenues would drop over the next two quarters and announced plans to cut up to 5,000 jobs.

Let’s just wait and see how Autonomy will invest this money, and what it will do with Interwoven.

Autonomy Only Wants Interwoven’s Legal and Compliance Parts

From what I can see right now, Autonomy is most interested in Interwoven’s legal, governance and compliance/document management products and not as much in its Web Content Management or Digital Asset Management (DAM) offerings.

Autonomy is most known for its enterprise search focus and IDOL technologies, and its interest in enterprise-level offerings from Interwoven (WorkSite product line) couldn’t make more sense. What doesn’t make much sense right now is how the overlap between Interwoven’s WorkSite and Autonomy’s records management product Meridio will be handled.

Does that mean Autonomy will perform some sort of an Interwoven-ectomy and shut off the “unnecessary” parts (along with the corresponding human resources attached to them)?

With Interwoven’s future in the Web Content Management market (with its TeamSite product line) seemingly in question, the matters are even worse considering the fact that it’s been years since the last major release of TeamSite. CMS Watch speculates that TeamSite 7.0 )originally promised for 2007) may never see light. It is crystal clear that Interwoven is moving at a turtle’s pace with its TeamSite updates. And now would be a good time to retire this product altogether.

Autonomy’s Founder Mike Lynch and His Point of View

Autonomy’s boss  Dr Michael Lynch OBE FREng wasn’t the last in line when buckets of ambition were distributed. Some Internet sources refer to him as an “arrogant but brilliant shit.” LOL, just the Irish man for the job

Lynch is one of those examples of an academician turned entrepreneur. According to the Sunday Times, he is worth around $500M. Some sources dub him Britain’s first software billionaire. When an exec finds himself “stunned” by a Molière play and can relate to Shakespeare and Blake, that’s a whole different dimension. I want to interview him.

Lynch says that this move should be seen as more of an extension of the firm’s shift towards serving the governance, risk and compliance market rather than an embrace of traditional enterprise content management (ECM).

Interwoven and Autonomy Marriage: Happily Ever After?

Autonomy was founded out of pioneering research at Cambridge University. Interwoven is HQ-ed in San Jose, California. A bit shivered by the cultural shock already, aren’t you? I was also told that apparently Autonomy has its own corporate culture ideals which may not be easily digested by its child companies. I am guessing this is not a reference to British fish&chips.

CMS Industry Reacts to Interwoven Acquisition

My CMSWire colleague Barb Mosher put together a good overview of Web CMS vendors’ reactions regarding the first big acquisition of 2009.  Many CMS vendors are, understandably, quite happy about -1 competitor to fight against and possible opportunities to expand their market shares. 

Some struggling CMS vendors could definitely use this break. Sad, however, to see how true the saying “Desperate times require desperate measures” becomes these days.

WSJ.com reports that Autonomy Corporation, a global infrastructure software company, agreed to acquire Interwoven — the Enterprise CMS vendor that is supposed to report its Q4 2008 financial results in several days (expecting total revenues of $69.5m to $70.0m). Most recently, Interwoven announced a round of layoffs.

Autonomy and Interwoven have entered into a definitive agreement today. The details are scarce at the moment. What is Interwoven worth? $775 million or $16.20 per share.

Acquisition Highlights:

• Under the terms of the Acquisition Agreement, it is proposed that Interwoven stockholders will receive $16.20 in cash for each outstanding Interwoven share, representing a premium of 36.8% to the closing share price of $11.84 on January 21, 2009
• Aggregate consideration of approximately $775 million (assuming exercise of all vested in-the-money Interwoven share options), funded by an underwritten placing of ordinary shares (the “Placing”), a new revolving credit facility from Barclays and a portion of Interwoven and Autonomy’s cash reserves.
• Post-closing Autonomy expects to have a cash balance of at least $75 million, assuming close in Q2′09
• All directors and selected executive officers of Interwoven and Autonomy have agreed to vote in favor of the acquisition
• The Acquisition is expected to complete in the second quarter of 2009
• Combined customer base of in excess of 20,000 (4,600 of them worldwide belong to Interwoven) will provide additional scale and significant cross-selling opportunities
• Opportunity to provide broader and more comprehensive offerings to customers
• Combining the two companies will accelerate the delivery of the next generation unstructured information management software
• The acquisition will strengthen Autonomy’s access to the worldwide legal and compliance industry through Interwoven’s significant sales force
• The acquisition exploits Autonomy’s skills and strong track record in integrating businesses
• Expect to achieve synergies of approximately $40 million per annum over the first year from completion
• Acquisition expected to be earnings enhancing in the first full quarter following completion; expected earnings accretion of approximately 20% in 2009 (assuming completion had happened on January 1, 2009)
• Significant brought forward tax losses will be assumed

“Interwoven and Autonomy are two high-performing companies that share the same vision improving the way organizations understand and interact with information,” said Joe Cowan, Interwoven’s CEO. “We believe customers will benefit from the combination of Autonomy’s industry-leading technology with Interwoven’s unmatched position in our target markets. We are extremely excited with the unique possibilities for future product direction that will arise through the integration with Autonomy’s IDOL technology.”

Certainly, a very interesting development in the Enterprise Content Management space. Who is next? Vignette? And, more importantly, more layoffs are on the way?