It is three months on from OpenText’s acquisition of Micro Focus. For current Micro Focus customers, this transition may feel like a significant shift, which it is. Many people I speak to are unaware of the change and what it will mean to the tools they rely on and the future of these tools.
While change often brings uncertainty, change also has the potential for positive implications.
So with all this in mind, who better to shed light on this than OpenText’s CEO, Mark Barrenechea, from his recent interview with The Register.
OpenText Value Micro Focus as a Going Concern
Mark was keen to point out that, despite the significant outlay, OpenText struck a real bargain with the Micro Focus acquisition.
In Mark’s words, “We love the entire portfolio, and we see this as an extension of information management” this was OpenText’s core business prior to the Micro Focus takeover. He continued, “The $5.8 billion that we spent was roughly 2.2 times revenue, and that is one of our lowest multiples of any acquisition.”
He added, “From the perspective of an acquisition of this scale, that’s about less than 10 percent of our total expenditure in the company. It’s sort of the low end, actually. We did that because we’re investing in returning Micro Focus to organic growth, where we’re taking the expenses out that are in redundant roles.”
A Powerful Synergy of Strengths
OpenText and Micro Focus have long been recognised as powerhouses in the tech industry.
OpenText, a leader in Enterprise Information Management (EIM), has made a name for itself by helping businesses manage and leverage their data effectively. Micro Focus, in contrast, has excelled in providing superior solutions that focus on agility, modernisation, and digital transformation, Application Management, IT Operations, CyberRes, Vertica and many more.
Unifying these two companies creates a powerful force in the industry, one capable of competing with the real giants, including IBM.
Mark explained how, “IBM is pretty fragmented across the business network [technology], content and other things. We’re going to compete at this suite level. If you’re looking for an integrated set of enterprise processes on a global basis, and you want information at the centre of what you’re doing, then it’s us.”
Continued Involvement in the UK
Since the acquisition was announced, there had been speculation UK operations would be dramatically scaled down.
However, Mark promised that UK offices, including Newbury and Thames Valley Park, would remain open. Mark also stated, “we do some great engineering in the UK, especially in application modernisation and connectivity. We also do our global API development work here, our mid-market, Business Network work and we have a great relationship with the University of Cambridge for algorithms,”
Cloud and SaaS Innovation
Here at Calleo, we long advocated SaaS and cloud-based technologies. It provides so many benefits (zero maintenance, always up to date, scalability, flexibility etc.) with very few if any, drawbacks.
Mark highlighted that OpenText is keen to push cloud and SaaS offerings. He said, “We’re going to accelerate their roadmap into private cloud and into public SaaS.” As you can imagine, this was music to our ears.
Furthermore, At the recent OpenText World event, OpenText showed data integration across Salesforce, SAP, and Google Workspaces.
Conclusion: Hugely Positive Signs for Micro Focus Customers
The OpenText-Micro Focus takeover represents an opportunity for current Micro Focus customers, and we’re excited to watch things develop.
Micro Focus customers should share that enthusiasm. It creates a combined business with revenue of $6bn that will be investing $1bn in R&D. The synergy of these two tech giants and heightened innovation bodes well for future solutions that will help you grow your business while simplifying and consolidating your tech stack.
While change can be challenging, this one looks like it will see increased investment in the tools, which will benefit customers.
