Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2016-06-01 20:00:00Format, images and links may no longer function correctly. 

OpenText is a traditional enterprise document management technology company that has struggled to bring practical analytics and automated categorization functionality to the corporate market. The acquisition of Recommind for $163M is very similar to Microsoft’s acquisition of Equivio back in 2014, but for a much lower revenue multiple. Recommind stopped releasing their revenue numbers when they brought CEO Steve King on board to refocus on cloud based SaaS services instead of direct enterprise sales. Given that OpenText is only predicting $70-80M in Recommind driven revenue in 2017, I am guessing that Recommind’s investors only recouped a 2x multiple. That is practically a fire sale level in Silicon Valley terms and reminds me of Symantec’s acquisition of Clearwell. The article mentions several recent departures of high visibility execs from Recommind preceding the acquisition, which is usually a bad sign. My blog last September reviewed Recommind’s revenue history and plateau. My main concern for customers with active matters hosted with Recommind in the Cloud is whether OpenText will continue to support the SaaS model. I will be watching their 2017 GTM materials carefully and you will undoubtedly get my unvarnished opinion.


Greg Buckles wants your feedback, questions or project inquiries at Greg@eDJGroupInc.com. Contact him directly for a ‘Good Karma’ call. His active research topics include analytics, SMB eDiscovery, mobile device discovery, the discovery impact of the cloud, Microsoft’s Office 365/2013 eDiscovery Center and multi-matter discovery. Recent consulting engagements include managing preservation during enterprise migrations, legacy tape eliminations, retention enablement and many more.

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