Who’s Buying What: Acquisitions in the CCM Vendor Market

David Stabel and Pat McGrew
Sep 26, 2016

Over the last decade the vendors in the Customer Communication Management (CCM) market have been actively participating in mergers and acquisitions on a global scale. The recent acquisitions done by OpenText, Accell-KKR, and Kofax (a Lexmark company), however, have brought some major changes to the CCM vendor landscape. Among others, these players find that the CCM market is attractive, in part because of its global market size today of around $1B and growing at an estimated 10% (CAGR ’14-’19). New business in this market is driven by opportunities within enterprises who increasingly become digital including their communications.

CCM vendors

Key Acquiring & Acquired CCM Vendors 2010-Present

Reasons to Buy

Acquiring companies pursue different strategic objectives. For example, the Sefas acquisition in 2010 by La Poste, as well as the Neopost acquisitions of GMC Software in 2012 and icon Systemhaus in 2016, aimed at providing these acquiring companies customer communications capabilities beyond the exchange of physical mail. In other cases, acquisitions are driven by the need to acquire specific technology and knowhow. OpenText acquired Actuate in 2015 for its data analytics and interactive communications capabilities (which Actuate acquired from buying Legodo in 2014).  And Kofax acquired AIA Software in 2015 to expand its process management portfolio, TotalAgility, with CCM capabilities.

OpenText in Buying Mode

Probably the most aggressive acquisitions in the CCM vendor space of this year were done by OpenText. As part of its global strategy to become the leader in Enterprise Information Management (EIM), OpenText budgeted $3B for acquisitions. OpenText use EIM to characterize all of their offerings and customer engagement is a fundamental component of it. Only a few months ago OpenText announced that they would buy the HP Engage assets, HP’s customer experience content management software and services, for $170M (see Infotrends’ blog on this acquisition here). The HP Engage line includes HP TeamSite, a web content management tool left over from the purchase of Interwoven (which was actually bought by Autonomy before Autonomy was sold to HP), HP MediaBin, a digital asset management solution, HP Qfiniti, a workforce optimization solution for enterprise contact center management, HP Explore, HP Aurasma, and HP Optimost.

Two months later, OpenText announced that they would acquire HP Exstream (together with HP Output Management, HP LiquidOffice, and HP TeleForm) for $315M, further expanding its global footprint in EIM and customer engagement in which CCM plays a critical role (see Infotrends’ blog on this acquisition here).

Only just very recently OpenText announced its next acquisition of DELL EMC’s Content Division (ECD) for $1.62B in cash. This acquisition will give OpenText, among others, also access to Document Sciences xPression, which is ECD’s CCM solution, and Documentum, their Enterprise Content Management (ECM) solution. OpenText now owns four major CCM technologies (assuming the acquisition of ECD will be approved):

  • StreamServe – acquired in 2010
  • Legodo – acquired as part of the Actuate acquisition in 2014
  • HP Exstream – acquired in Q3 2016
  • Document Sciences xPression – to be acquired in Q4 2016

Smart Communications Goes Solo

Another interesting industry announcement came from Thunderhead. It was interesting because it was twofold. First, Thunderhead announced that it had completed the spinoff of Smart Communications, its CCM business division, backed by private equity firm Accell-KKR. George Wright, former SVP Smart Communications, and his team will head up this new company. Second, with this spinoff, Thunderhead, led by CEO Glen Manchester, now focuses exclusively on the customer engagement market with its omnichannel customer engagement offering: ONE Engagement Hub. This is a strong commitment to a market where Thunderhead sees different dynamics and enterprise buyers than seen in the CCM market.

InfoTrends’ Opinion

As the CCM market is consolidating further, we see the vendors landscape changing while at the same time CCM offerings are getting more comprehensive. CCM is evolving as opportunities in the enterprise market are arising. Solution providers are pursuing different product strategies addressing enterprise communications needs ranging from offering holistic EIM solution to more focused solutions on customer engagement. CCM vendors are preparing themselves to become key players within this enterprise market by building upon CCM technology. To stay competitive, they need to make a choice which product strategy to pursue.

 

@davidstabel, Associate Director, Customer Engagement Technologies Service

@PatMcGrew, Director, Production Workflow Software Service

 

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