Canadian software program big OpenText final week introduced its intention to buy Micro Focus in a deal valued at roughly $6 billion.
To provide an concept of the dimensions of the mixed firm, the assertion asserting the acquisition listed the mixed firm’s completely addressable market to be $170 billion. Of that, Micro Focus’s most up-to-date annual income was $2.7 billion, whereas OpenText’s income was roughly $3.5 billion.
The distinction between income and addressable market presents an concept of why the businesses see the potential for development to return out of the mixture.
Progress by Acquisition
Each Micro Focus and OpenText have spent latest years rising by acquisition. Micro Focus added SIEM/SOAR vendor ArcSight into its fold, together with NetIQ, Fortify, Voltage, and different merchandise, due to its 2017 spinout-merger with Hewlett Packard Enterprise’s software program division. OpenText has added a resilience firm like Carbonite to a portfolio that features quite a lot of thread detection, investigation, and response (TDIR) services and products, in addition to insider menace mitigation, and an array of forensics merchandise.
So, what does the mixture imply for patrons and potential clients? For one factor, it dramatically will increase the probability that any given midsize or giant enterprise is already a buyer of the brand new firm. OpenText lists greater than 120,000 clients in 110 international locations around the globe, whereas Micro Focus claims income in 180 totally different international locations. Collectively, the businesses have outstanding penetration within the giant enterprise phase internationally.
The cybersecurity market, and the broader IT trade, has seen firm methods circulation between a concentrate on single, “better of breed” options and a push towards multisolution conglomerates. OpenText and Micro Focus are clearly practitioners of the latter. For purchasers that look to their resolution suppliers for broad safety suites, the mixture ought to make OpenText a extra compelling potential supplier by means of a significantly broader set of options. The mix could also be much more compelling for patrons attempting to make choices concerning safety for hybrid- or multicloud architectures.
And whereas they’ve obtained little credit score for it within the market, each organizations have quietly been fostering notable improvements. Micro Focus earlier this 12 months launched its Galaxy menace analysis platform, the most recent initiative in a multiyear effort to place ArcSight on the middle of a differentiated, cutting-edge safety operations middle (SOC) platform. In the meantime, OpenText has constructed its personal safety administration platform with Safety Cloud, positioning the providing as an end-to-end cloud safety resolution for the big, distributed enterprise.
Additive Strengths
It is essential to keep in mind that for each OpenText and Micro Focus, safety is only one focus space amid a broad set of general enterprise choices. Whereas the safety choices of the 2 corporations will definitely complement each other, essentially the most vital company advantages often is the additive strengths the product and repair options ship. Micro Focus, for instance, has vital product choices within the COBOL area, suggesting that operating purposes in hybrid mainframe-cloud architectures might be simpler with the mixed merchandise from the 2 organizations.
OpenText started life as a university-based undertaking to carry the world’s most complete dictionary to word-nerds across the globe. It has, for the reason that mid-Nineteen Nineties, grown by acquisitions of ever-greater dimension and scope. Whereas the Micro Focus buy is OpenText’s largest deal but, there is not any motive for patrons or traders to imagine it’s the final.
