Open Text acquires StreamServe. Why should SAP buy Open Text before Autonomy?

Open Text Corporation (NASDAQ:OTEX)  announced last Thursday that it has acquired StreamServe Inc., a leading provider of business communication solutions. The acquisition will add complementary document output and customer communication management software to the Open Text ECM Suite, while enhancing Open Text's SAP partnership and extending its reach in the Nordic market.

StreamServe was a European competitor out of Sweden to my old firm Document Sciences bought by EMC back in 2008.  It should not come as  a suprise to me that Open Text finally bought them as they have been a long-time SAP channel partner like Opne Text. The transaction is valued at approximately USD 71 million. StreamServe offers enterprise business communication solutions that help organizations process and deliver highly personalized documents in any paper or electronic format.

The company's powerful solutions enhance the customer interaction capabilities of the Open Text ECM Suite by enabling the automation of business processes for B2B and B2C markets, including financial services, the public sector, telecommunications and utilities. Designed to address the "last mile" of communication between an organization and its customers, StreamServe's solutions excel at improving and expanding business relationships. With StreamServe's software, companies can automatically create documents through rules-based dynamic assembly and present them to customers, partners, and suppliers, in multiple formats and through whichever channel they prefer.

StreamServe offers solutions that scale across a company's document-driven business processes. The company's solutions are designed for easy integration with ERP and supply-chain systems and applications, including SAP. Open Text and SAP have a 20-year partner relationship, and SAP resells a wide range of Open Text ECM solutions.

Like Open Text, StreamServe has an established reseller partnership with SAP making it a natural fit with Open Text's SAP partner strategy. "From both a technology and partnership standpoint, StreamServe is a complementary fit for Open Text," said John Shackleton, President and Chief Executive Officer of Open Text. "StreamServe brings innovative new technology to the ECM Suite, offering products that automate and personalize customer communication processes, while integrating this functionality with key Open Text ECM solutions."

StreamServe also expands Open Text's presence in the Northern European market. StreamServe has global operations, with a strong presence in Europe, particularly in Sweden, where the company was originally founded. Open Text, which has a long history of successfully supporting acquired products and services, will continue to support StreamServe's products and installed base. Open Text will also integrate StreamServe's technology with the Open Text ECM Suite. "As part of Open Text, we can offer our customers even greater value with an expanded solutions portfolio and the support of a much larger ECM company," said Dennis Ladd, President and Chief Executive Officer of StreamServe. "Together we remain committed to our customers, and we're excited about the opportunities and new solutions we'll be able to deliver as part of the Open Text team."

There has been increasing speculation that Autonomy has been pursuing Open Text to be the last standing takeover target in the niche but high-growth enterprise content management sector. Open Text similar to Stream Serve has been a 20-year reseller partner to SAP with tight back end integration and large installed client base. It would be a mistake for SAP to let Autonomy or any other predator to snap up about 1 billion dollar company that is also filling a critical gap in the SAP platform to better manage and disseminate structured and unstructured data. Besides Autonomy, I would also expect Oracle, Dell, HP and Microsoft to seriously look at Open Text.

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