Some pretty good earnings, eh?

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Nov 5, 2008

The last of the major ECM vendors to report earnings this quarter has done so… Canadian software developer Open Text beat the street on Monday, reporting 11% YoY growth in revenue and 88% YoY growth in net income. Anecdotally, it’s hard to keep calling these guys “Canadian” when they have offices on almost every continent and annual revenue approaching $1B.

Open Text also announced the close of its Captaris acquisition and roadmap, which has important implications for the covergence of ECM solutions and OEM hardware. (InfoTrends’ report on the acquisition is available to Office group clients as well as through the Pub store here.)

So how did we fare this quarter? Results were mixed among the largest vendors. In the “Web experience” space, we saw Interwoven having a lot of success and Vignette, despite a strong portfolio, delivering a more sobering report. On the document-centric side, we have strong reports from Open Text and IBM and less stellar results/forecasts from EMC and Oracle. (Of course, many of these vendors have offered shareholders double-digit revenue growth expectations for years, so the bar was set pretty high).

Unfortunately, the consistent aspect of all these reports was somber– be prepared for a weaker 2009. On each of these calls or reports, chief executives stressed the difficult economic times. Some lowered their forecasts. Many have started consolidating headcount. But c’est la vie in a scare market. Now it’s time to start talking about opportunity — the Web (2.0) is becoming a platform, a community, and even more deeply integrated with our business and personal lives than we ever imagined.  Companies are looking at enterprise solutions for driving even more intelligence and automation into their processes (and for driving more costs out). As vendors and analysts, our hardest job in the near-term will be educating the market to these benefits and opportunities.

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