Open Text Could Bolster Channel With Gauss Acquisition

Open Text, best known for its document management, workflow and collaboration capabilities, has been lacking the kind of robust, full-featured Web content management application that the German company brings to the bargain.

"We did have a Web content piece, but it's not designed for the same type of end user. Gauss is designed for every dynamic Web site," said Mark Portu, vice president of collaborative technologies for Open Text, Waterloo, Ont.

The German company also has a group based in Irvine, Calif., that develops high-volume scanning software, another piece that Open Text lacked. Partners could turn to vendors such as Captiva and Kofax, however, to provide that part of the enterprise content management solution, said Eric Moore, vice president of Livelink solutions for PVA, a Burlington, N.C. solution provider.

Moore, however, said that he anticipates 35 percent to 45 percent of his current Livelink clients will be interested in using Gauss, once it is integrated into Livelink, for Web content management. "Open Text has made some forays into content management, but buying Gauss was a wise investment," he said.

The acquisition of Gauss also aligns with Open Text's plans to increase its sales through channel partners. Portu said Gauss currently derives about 50 percent of its revenue through indirect channels, while Open Text is 80 percent direct and 20 percent indirect.

"We would love to see something that is a little more balanced, and that is our goal," Portu said. "We've actually got a group up of people that are targeting those types of [solution provider] partners for us, and we've never had that before."

He said he could not comment on how Open Text plans to work with the Gauss channel until after the deal closes, perhaps within 30 to 45 days, pending approval of shareholders and regulatory agencies.

Earlier this month, Open Text reported that sales were up 28 percent from the prior-year period to $53.1 million for the fiscal fourth quarter ended June 30. Earnings rose 29 percent to $9.4 million over the same period.

The acquisition, one of three the company has made over the past year, is in a line with an on-going wave of acquisitions with the content technologies area, driven largely by a desire on the part of companies to expand their platforms.

On Monday, Stellent, Eden Prairie, Minn., announced an acquisition of Ancept, an IBM partner that developed a digital asset management solution used by film studios and other high-end applications. Stellent said it planned to integrate the Ancept Media Server into its line, as well as continue to market Ancept's solution based on the IBM platform. That acquisition involved $2 million in cash, 100,000 shares of stock and an earn-out provision.