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

Enterprise CMS provider Open Text announced unaudited financial results for Q4 and FY2009.

Despite the current economic climate, OTEX reports achieving bottom line target, although net income for fiscal year 2009, and license revenue and operating cash flow in the fourth quarter have dipped.

Conversations on Vignette’s fate and product integration strategies are ongoing.

Acquisitions always seem to be part of any conversation around Open Text. During Q4, the company acquired digital media, 3D applications makers Vizible for an undisclosed sum to expand its portfolio of digital media applications. There are no details yet as to what Open Text plans to really do with the eye candy that Vizible is.

Finalized in July of this year, the acquisition of Web CMS vendor Vignette and its positioning in Open Text is starting to look less nebulous.

John Shackleton, president and CEO of Open Text, said, “We are pleased with how the acquisition is progressing and to date the integration is tracking to plan.” While also adding “I am disappointed that we were slightly off on our Q4 revenue targets, mainly due to the WCM delays where customers were waiting to see our new WCM strategy with the announcement of the Vignette acquisition.”

Vignette’s prior (not very promising) financial behavior and miscellaneous struggles are playing a role in Open Text’s balance sheet.

According to Open Text’s CFO Paul McFeeters, “As part of acquisition accounting, we will fair value the acquired deferred revenue for customer support contracts…  However, I expect the range of this adjustment to be between US$ 6 million and US $ 8 million for the first year of operations. While we will not break out the financial effect of the acquired Vignette business, I will remind you that they were operating at a breakeven margin. We expect this acquisition to be neutral to the operations in Q2, accretive in Q3, and on our operating model by the end of this fiscal year.”

In addition to that, Open Text plans to cut Vignette’s worldwide workforce (layoffs wouldn’t be for the first time) and “continue to rationalize facilities in both Open Text and Vignette. ” Open Text and Vignette restructuring charge will be approximately US$ 32 million to US$ 40 million. How many jobs is that?

It would be reasonable to expect that Vignette and former RedDot (now, Open Text Web Solutions) will be merging in some way or another. With  Vignette, most likely, taking the upper hand. The detailed roadmap and product integration strategies should be announced in October at the North American Content World Conference in Orlando, FL.

More on OTEX numbers on CMSWire

Open Text said it’s a done deal. The planned acquisition of all of the issued and outstanding shares of Vignette (worth approximately US$ 321 million) has been completed late yesterday following a shareholders’ meeting where the voting and approval took place.

While Vignette is busy nostalgizing, Open Text says it’s working on the strategic aspects of what may come next. Let’s not forget that Open Text already has a WCM-centric group called Open Text Web Solutions. Offering an even broader range of (quite similar) products is going to take some brain activity. Then again, this would not be the first quilting exercise for Open Text.

In the meantime, there’s still some Vignette cash to recognize on OTEX’s balance sheet.

According to the “big brother,” support will continue for Vignette’s products and (the relatively quickly decreasing) installed base (bringing in the licensing revenue). The same applies to existing Web Solutions products and customers. No comment has been made in regards to new(er) Vignette products.

There is a talk about a “combined product,” but no details on what it will be, except for providing a supersized meal of a “full set of feature options, from… fast-to-deploy web publishing application, to… enterprise-class e-business platform for large-scale deployments.”

Vignette’s social media, DAM and personalized content seem to be some of the most palatable notes in this content management connoisseur combo. Open Text also expressed intent to potentially leverage some of Vignette’s components in its ECM Suite.

More details on the product strategy and the product roadmap are not likely to be announced earlier than October, when Open Text’s annual conference — Content World 2009 – will take place.

Restructuring is expected. We should know more about the range of that initiative around the end of August.

Originally posted on CMSWire: Vignette Stockholders Said Yes to Open Text Acquisition

Following a round of layoffs at the dusk of last year, Vignette has announced 2008 fiscal year and Q4 2008 financial results. Total 2008 revenue has dropped 11.6% over 2007. Vignette’s Q4 2008 total revenue was US$ 37.2 million, a decrease of 29.4% from Q4 2007. As we’ve mentioned before, Vignette is going through some rough patches and keeps steadily losing revenue.

For one thing, Vignette is still alive and kicking from the social media strategy perspective. The content management industry has been abuzz with speculations about Vignette’s possible acquisition for years. Something along the lines of what recently happened to Interwoven.

In the spirit of market consolidation, Vignette can be seen as a potential candidate to be swallowed by a Java-friendly software giant like Oracle. Alternatively, once the ECM rock star can just fade away… And there’s a new media strategist at VIGN to publicize the upcoming developments and news.

Although the industry is struggling, there are still some content management vendors that manage to attach the word “growth” to the word “revenue.” So, what exactly is happening to Vignette then? Where and why did it all turn sour?

Full article on CMSWire: Vignette Reports 29.4% Revenue Plunge

Last week, Vignette released preliminary Q4 2008 financial results. As in case with several previous quarters, things don’t seem to be looking too bright. There’s a drop from Q4 2007 in license revenue.

“The weak economy, foreign exchange fluctuations and the continued re-build of our go-to-market capabilities impacted our fourth-quarter results,” said Mike Aviles, president and CEO of Vignette.

Aviles also mentioned the reduction of “overall cost structure” by about 10% resulting in Vignette layoffs late last year.

With Vignette’s balance sheet remaining strong and the line of Enterprise Content Management products being quite usable for certain scenarios and recognized by analysts, why is this happening? And what will happen next to the big V? An acquisition by another vendor? A complete overhaul and restructure? The vendor may have survived the 2001 dot-com bubble bust, but will it survive this global economic crunch and its own transitional pains?

Continuing on the sad times for Vignette theme before it’s time to pop that Moet & Chandon and Veuve Clicquot (or whatever it is you’re popping) and welcome 2009

Interestingly (or quite predictably so) enough, Alfresco has been head-hunting for former and soon-to-be-former VIGN employees since April. Alfresco’s Matt Asay has been unashamedly recruiting current and former Vignette-rs to join his “open-source-grass-is greener” own employer, as well as Magnolia and Acquia.

All those talented and fab sales engineers and consultants have to go somewhere, right? Time to update your CV and send it over to what is now competition? Not that I agree with Asay that open source is the answer. Many truly commercial and proprietary Web CMS vendors are still staying afloat, too.  SaaS CMS is getting quite a lot of attention lately as well.

Unless, of course, Open Text continues its acquisition mania and grabs VIGN (but why, they already have the WCM-centric RedDot)…  Or any other ECM vendor… Anyone else needs a WCM addition to the product portfolio?

Not that I don’t feel bad for the Big V folks in fear of losing their jobs… What concerns me is that, as of late, I have been seeing more of moving-away-from-Vignette CMS implementations and sales vs. buying and migrating to Vignette ones. Even in tough economic times like these, it would be kinda sad to see VIGN disappear from the WCM landscape.

Vignette seems to find itself again in a downward spiral (and has been for quite some time now). After the not-so-exciting Q3 2008 results announced in October (with net loss of $4.3 million), December brought even more not-so-pleasant news. Right before Christmas, VIGN laid off an unconfirmed number of employees.

The Austin American – Statesman (Austin is location of Vignette’s HQ) reported that Vignette’s “spokeswoman Melanie Brenneman said less than 10 percent of the company’s employees were affected.” Out of the total number of Vignette employs — about 600 worldwide — this is still a considerable amount of people hearing “Merry Xmas. BTW, you’re fired!”

Interesting discussion led by (supposedly) former Vignette employees and onlookers is on Statesman’s site in the comments section.  One commenter said “They basically shut down the entire development team for imaging products.”

Vignette Media was one of the latest product releases from the big V. It was *so* media-attention worthy, I covered it twice. Later on, not quite a product but a PS bundle was also announced in a possible attempt to smooth out end-of-year financials – QuickStart. Still didn’t seem to make much difference.

No question, this economy is challenging for many Web Content Management vendors. Vignette: a WCM vendor in transition? Acquisition target (Open Text could grab it, but it already has a WCM wing in the form of RedDot)? Or…

TradingMarkets.com keeps going back and forth on recommending and then not recommending to buy VIGN stock.