The newly-merged Dell and EMC Corp. is already slimming down, agreeing to sell its enterprise content division to Canadian business software maker Open Text for $1.62 billion.
The division provides businesses with content management programs including Documentum, InfoArchive, and LEAP, generating about $599 million in revenue in 2015. OpenText, one of Canada’s largest software companies, helps enterprises to manage large volumes of content and lately has been acquiring related businesses to boost its customer base.
“We are at the beginning of the digital revolution where extreme connectivity, automation, and computing are converging,” OpenText CEO Mark J. Barrenechea said Monday in a news release. “This acquisition further strengthens OpenText as a leader in enterprise information management, enabling customers to capture their digital future and transform into information-based businesses.”
Dell announced last week it had completed its $60 billion merger with EMC, creating the world’s largest privately-held tech company. The sale of the enterprise content division allows it to shed a profitable, but noncore asset, as it focuses on such markets as servers and storage hardware.
“OpenText is sort of the natural acquirer for enterprise content management and related offerings where a vendor wants to change strategy and divest,” Melissa Webster, vice president for content and digital media technologies at IDC, told PCWorld.
The Canadian company posted $1.8 billion in revenue in fiscal 2016. It bought Recommind, a provider of e-discovery and information analytics tools, for an undisclosed amount in July and closed a $315 million deal for HP’s customer communications management assets in early August.
Charles King, principal analyst at Pund-IT, said the Dell-EMC products will give OpenText “a profitable business of some of the industry’s best enterprise content and document management solutions, along with satisfied, medium- to large-size company customers.”
According to Webster, LEAP, a public cloud content platform, may be the most “interesting piece” going forward. The product is “a next-generation content platform based on an extensive set of microservices,” she said. “It’s a much bigger vision than OpenText has had for public cloud.”