The curious case of OpenText's Alfresco support program!

Should Hyland executives thank OpenText for acknowledgement that their decision to acquire Alfresco was good, since even OpenText thinks that they can shore-up their declining revenues by offering support to Alfresco customer base :)

OpenText announced on October 5 that Alfresco Content Services (the Enterprise Edition) and Community Edition users can now engage OpenText for support needs. The announcement comes a month after Hyland Software announced that it entered definitive agreement to acquire Alfresco and the transaction is expected to close in the fourth quarter of 2020.

This is a curious case of rivalry among technology companies (albeit a bit funny!). With the series of acquisitions in content management solutions space and specially after gulping Documentum, OpenText is the leading player in Content Services Platform market. Though not making much noises, Hyland on the other hand has been growing steadily and has so far focused on acquiring Content Management solutions providers, like OneContent and Streamline Health, primarily focusing on Healthcare domain. Decision to acquire Alfresco by Hyland, comes as a surprise, as Hyland's strategy, so far, has not been to enter into open source segment.

So why did Hyland decide to acquire Alfresco and why is OpenText so 'keen' to offer support to Alfresco customers? Let's examine the former to start with. Alfresco was invested by the private equity firm Thomas H. Lee just over 2 years back in early 2018. Thomas H. Lee invested in Alfresco possibly sensing the growth potential of the company as it was the only 'Open Source' ECM provider to be included in 'Gartner Magic Quadrant for ECM' (which is obsolete now and called Content Service Platform) as Challenger (in 2016 report) and some push could have jacked it up to the Leader's corner. That could have given a good chance to Thomas H. Lee to launch a much-awaited IPO for Alfresco and monetize the investment. But none of this happened and Thomas H. Lee ran out of patience in less than three years, looking for buyers.

Hyland on the other hand has to grow beyond its comfort zone in healthcare domain and diversify, if it wants to topple OpenText. Alfresco was a good choice, given its footholds in financial services, insurance and public sector domains and its recent acquisition of TSG, a professional services provider with experience in cross-platform migration, including OpenText to Alfresco. Though the open source nature of Alfresco doesn't fit well with Hyland's current business strategy, but that might change, look at the way once closed-source company, Microsoft is betting big on open source.

But why did OpenText jump into the game and 'offered' to provide support to Alfresco enterprise and community customers, while the Hyland transaction is yet to be completed. Sour grapes, clever marketing campaign or a serious offer?

Let's examine the OpenText support 'offer'. In my opinion, if the Alfresco Community customers could afford or willing to pay the kind of support fee charged by OpenText, they will never be on a Community platform :), so it's not hard to guess as how many Alfresco community customers will be 'excited' with the OpenText 'offer'.

Alfresco Content Services (or Enterprise) customers, who have been paying annual subscription cost to Alfresco, wouldn't rush to double their cost and engage OpenText, who so far has no track record in supporting Alfresco and doesn't even have access to enterprise source code. Most Alfresco Content Services customers are also well aware that if they foresee any risk, they have a path to migrate from Alfresco Enterprise to Community using in-house expertise or by engaging Alfresco community professional services providers. So what is the USP of OpenText here?

From the OpenText press release, it seems evident that the goal behind the OpenText 'offer' is to create uncertainty in the mind of Alfresco customers, since it's changing ownership and present OpenText Cloud as an alternate.

“With OpenText Support for Alfresco, Alfresco customers now have access to world-class support and a compelling upgrade path to OpenText Cloud Editions,” said James McGourlay, Executive Vice President, Customer Operations at OpenText. “With the uncertainty caused by the planned acquisition of Alfresco by Hyland, OpenText can provide peace of mind to both open source and enterprise customers through industry-leading support from the experienced technical analysts and developers at OpenText.

So that's the plan behind the support 'offer' and OpenText's messaging to put a team of Alfresco engineers in place to offer Alfresco support, contribute in community and even potentially investing in creating and maintaining a 'private fork' of Alfresco. The question however is, how many content engines OpenText wants and can maintain and sell? Its Documentum customer base already seem to be worried about the future and not many have adopted OpenText yet.

On a lighter note, being the potential owner of Alfresco, Hyland must be very happy with OpenText's Alfresco campaign, it gives much needed limelight to Alfresco. Hyland's executives must thank OpenText for acknowledging the market presence of Alfresco, which is so compelling that OpenText had to setup an entirely new business unit to address the Alfresco market and even start contributing in Alfresco community. They might ask OpenText - Is your business not doing well, that you are looking to shore up your revenues by offering services around our product :)

Disclaimer: I represent Crest Infosolutions, the largest partner of Alfresco in APAC region.