Open Text v Interwoven

These days in UK legal the facts speak for themselves: Interwoven on numbers has won the sales battle of the DM/ECM and Geoff Hornsby is officially a David Beckham “golden balls” style superstar. Even the president of Interwoven happily talks of his success.

In an article I wrote some time ago for Citytech, Interwoven was winning the race for having been consistent in supporting legal, which can not be underestimated: good vendor relationships matter, as does consultancy and solid sales support.

So, why the heck should we get involved with some more vendor DM/ECM hustle as OpenText (formerly Hummingbird) insist on tempting us with their slick software ways and interesting interfaces away from Interwoven? Well if you haven’t realised already, everything changes. Staff come and go, branding and websites look like dogs dinners after a couple of years and more and more organisations are in buyout mode: your boss today, may not be your boss tomorrow (so no point sucking up to them too much).

In our modern day, which will undoubtedly look prehistoric in years to come, we must understand that software isn’t an heirloom to be handed down over generations. It’s a temporary state that provides excellence and good effort at that slot in time. The minute something new is developed like email replacing the phone call and fax replacing the telex, its time to march forward and listen to new stories. Making the most of your software and current purchases is fine but there is a point where you just have to say “telex go to that landfill site and create a hole in the ozone layer (or recycle thyself).”

Whether you are looking at a DM/ECM purchase or not and many of you at the top end won’t be for a couple of years with so many new Interwoven sales on the books, there is an undisputed growth in the desire to have this type of software. Interwoven sales stats showed a 25% increase in a recent quarter of completely fresh deals. Never been seen in legal before and not gravitated. That means that IT Directors are spending, if not at the top end then moving down a bit to mass-market, mid tier and smaller firms.

So there is lots of business sloshing around and some of you do need to know which way to turn. I’m afraid the answer is not easy.

Current management thinking, says that organisations will have to shape up to face the future. Considering both OpenText and Interwoven, each have positioned themselves well. Interwoven is the leaner, meaner, marketing machine, able to react on a dime and provide what you want. OpenText are going for 100% market share which is said to be a sure-fire way to win by ensuring you grab all customers before anyone else can.

Speaking to Open Text they hypnotise you with sensible explanations. Its hard not to buy into the philosophy. Their reason for buying Hummingbird was simple they say. “It brought two markets to us: government and legal. We realised the nuances in each vertical market were important and knew it was essential to have the particular expertise within. Acquiring this information, allows us to translate products into useable software.”

They also says that the fit was perfect in that Hummingbird did well with Canada, Australia and UK government and Open Text did well with the US government. It seems for some time the Hummingbird customer share had been coveted in the Open Text camp.

The approach is pragmatic. “Its going to take time to get our house in order but that is what we are concentrating on first. Our responsibility now is to current customers and to make sure they are happy and are behind the direction we are taking. After that, when our install base is behind us, then we will be targeting new customers aggressively. We have world class support and developers to maintain market share and a 95% client retention rate.” Said a now former staff member.

I asked what they thought made a successful software company. He said it was a combination of things: Opportunity; being ready for opportunity; relentless focus on a market; extraordinary development and support staff and focused management.

Of the merger the commentator said. “This merger will give customers real benefits as we go deeper into R&D. We are significantly larger now which will give us enormous leverage.”

Interwoven of course, do not agree.

Max Carnecchia is President at Interwoven and no-one can dispute that his eye for a hire and staff motivation must be top tier. With a background in electrical engineering he has spent the last five or so years on the customer side of the business. It is obvious he is a gifted man manager: you don’t get rocketing sales with unhappy and de-motivated staff.

He is resolute in saying that “the customer drives everything.” He is closely in touch with his workforce and knows that their Gear Up conference doubled in size this year and that Geoff Hornsby, their sales supremo, is on a roll. I quiz Max Carnecchia about his average day and he says confidently that he spends “25% planning and 75% working with teams and keeping lines of communication open.”

The next big thing for Interwoven in this space is the “corporate legal department.” As in-house counsel wise up to technology, Interwoven see an easy extension of their expertise into the notoriously ill equipped in house counsel territory. Ben Kiker is set to help this push, he sits as Senior Vice President controlling the marketing function. (Neil Araujo, founder of iManager which was bought out by Interwoven, is in his team). They also have their Universal Search functionality, which they are confident is going to sweep the board with Oscar style success.

His background encompasses a mortgage call centre and then substantial time in the CRM space. He takes his job very seriously and believes Interwoven have one of the strongest brands in legal.

So Interwoven v Open Text? As you can see, I am not giving you much help, in fact firmly sitting on the fence. Interwoven say “look at our proven track record with legal”; Open Text say “We own Hummingbird and now Open Text in this space, things are going to get much more interesting.”

Whatever happens, both sides agree that relationships are everything. Both are very keen to say that its all about the customer and seem prepared to bend over backwards to deliver software that suits you exactly.

Its clear, Interwoven are sitting pretty. They already have deals in most of the key UK legal firms and now extending their client base into corporate legal consolidates this.

Open Text are battling with a merger; making staff redundant and putting themselves up against Interwoven who are a proven, slick machine running at full speed. At best that looks a difficult place to be.

So what does do OpenText think about this stiff competition? “I’d be surprised if Interwoven were still around in a few years time.” They said.□

The low down

Open Text is easily twice the financial size of Interwoven. It opened its doors for business in 1991. For the quarter ended September 30, 2006, Opentext expects to report revenue between $99 million and $101 million. The Hummingbird. transaction was valued at approximately US$489 million. Nine of the top 10 global law firms and 65 percent of AmLaw 100 firms now own these products (Hummingbird and Opentext). After acquiring Hummingbird they have a workforce of 3,500 people but plan to reduce this with a 15% head-count redundancy programme.

Interwoven has achieved their success in one decade. Interwoven revenues for 2005 totaled $175 million. Interwoven customers include 9 of the top 10 global companies and 64 of the top 100 US law firms. They started the company in 1995.

Chewing the ECM gum

Strangely there is still some confusion about the two competing DM/ECM companies in legal. Trying to get direct comparison’s on the two (or in fact others) isn’t always easy.

Buying software is a worrying experience. No-one wants to make a mistake, so confidence is something that software companies need to build, like governments campaigning for your vote. There are expensive teams of people ensuring you get lots of good news, have the right spin and people standing up to be counted (testimonials/case studies).

Interwoven say: look at our market share and look at our recent success in legal. They also say: Why have large UK law firms like Simmons & Simmons dropped Open Text in favour of Interwoven?

Open Text say: concentrate on the products - they will stand the test of time. Open Text has a 95% customer retention rate and positions itself against meatier players like IBM/ Filenet.

I say: The spin here is really about UK legal and Geoff Hornsby (Interwoven sales) who is definitely basking in the ECM sunshine. However all software needs replacing at some stage. Both companies will have to deliver consistent products or the balance can shift either way. As Cathy Wallach, President at EncoreTech said in a Citytech interview: “the use of each software goes in waves of popularity.” Over time like stockmarkets, blips iron out.

OpenText say

“More on more applications will merge and be built on top of each other. The main players will be IBM/Filenet, EMC/ Documentum and we are the third and already have 50% market share.”

OpenText pitch

John Shackleton is President and CEO of Open Text. He joined in 1998 and has a background that encompasses Oracle and Sybase and also on the management team of the first ever DM company Viewstar.

Hot shot clients on board already: “The merger of Hummingbird and Open Text has resulted in a leading independent ECM vendor that is one of the top three vendors in this rapidly consolidating market,” said Sue Hall, CTO, Baker & McKenzie and co-chair of Open Text Legal CIO Advisory Board. “This brings exciting possibilities for legal customers both in terms of products and services. I am looking forward to working with Open Text management to help deliver solutions that meet the needs of the legal market.”

Open Text statistics: Open Text supports approximately 46,000 customers and millions of users in 114 countries and 12 languages. For the quarter ended September 30, 2006, Open Text expect to report revenue between $99-101 million.

Interwovens thoughts

Neil Araujo who runs Interwoven’s, VP of Legal Services Marketing says he sees Opentext as “a Swiss army knife, with multiple blades, tin openers and cork screws. You need it if you are going camping but perhaps not if just cooking a meal.” Of the best campaign he has ever run in legal he says “switch to Interwoven” was the most effective. Of other marketers he praises ‘Apple’ and Denton Wilde Sapte. He says “people just love Apple” and “Denton Wilde Sapte really got their message across – if you want this type of law, ring us.” He sees their success in clearly identifying what they are about. Neil wrote the first few versions of the software. He says that the forward motion for Interwoven is to make the IT experience for lawyers/attorneys much simpler.

He believes that customers don’t like being sold to and that you really only want to see them when your need arises and not before. He thinks that all vendors in this space have functionality, performance and stability but that Interwoven are better at performance and stability.

He confirms the biggest change their industry ever saw was brought about by the email.

Interwoven movers & shakers

Max Carnecchia
President

Ben Kiker
Senior Vice President

Neil Araujo
VP Legal Services Marketing

Major event to meet heads of accountancy and law firms plus global banks, London May 8th 2008

Citytech a market leading legal tech publication has a sister publication called Citywealth that runs events that have become legendary for attracting ‘stellar’ audiences and for providing Five star comfort and entertainment for important accountants, lawyers and attorneys, wealth managers, private bankers, consultants and advisors and rich list guests. A mix of sophistication with cultural themes, Citywealth events encourage attendees to linger, something that no other publishing and events company serving the industry has managed on such a scale. This year numbers are set to exceed the four hundred mark and guests will be some of the biggest glocal names in the world - UBS, Merrill Lynch, Credit Suisse and Citigroup who are the major purchasers of technology in the world and referrers of billionaire clients and for those seeking affluent individuals (like lifetyle companies), attendees are very wealthy individuals themselves (c£1-5million). The Citywealth Top 100 lists are now in an advanced stage, with those listed for 2008, shortly to be notified that their slot is assured. Many have left the list this year, new entrants have arrived. The nail biting tension begins, culminating in our flagship event “The Zoo Do.” Tickets are limited, please book now to secure your spot.

See our events on the website http://www.citywealthmag.com/

Contact ljarvis at j-p-c.tv for sponsorship information which starts at £7,995 + vat to invite select guests on a table of ten and includes advertising by web and in the programme on the night. Overall sponsorship is £50,000 + vat and includes a two minute speaking slot.

The search gold rush

John Tredennick a Denver, Colorado, US based tech entrepreneur spent twenty years of his working life as a trial lawyer at Holland & Hart.

Doing a UK visit at the moment, he is keen to look at Europe because his current clients, who are corporates involved with mergers and acquisitions performing extensive due diligence, are increasingly asking for an EU data centre, as their business sprawls across the world. This is something that will resonate with most UK law firms, who tell any US lit’ vendor who steps on UK shores “we need data held here, not in the USA.”

John, who founded the business in 2000, is seeing a marked increase in due-diligence-style search requests from corporates who are keen to understand any liabilities, particularly environmental, in an age where this is of increasing concern to governments and the public and legally he says “could end up ripping a company apart.” He is also getting frequent requests for merger and acquisition, due diligence reports and ‘second request’ reviews which allow the US government to do a deeper drill down should a ‘first request’ not satisfy them.

But his order books weren’t always so bountiful. Receiving backing to the tune of $1million in 2000 and with a staff of six, his board asked for a review of the company and the future of search from experts. The feedback was terrifying. “Shut it down, there is no money in that business.” John says it was a pretty difficult time. “Search wasn’t a big deal then. I had $200,000 left in the bank, wages to pay and the future looked pretty bleak.” Fortunately his backers weren’t pushing for closure, so he knuckled down and time brought some big contracts to the company, but he says with a shrug of his shoulders and a frank smile. “I can’t say I knew it was definitely going to happen.”

Now an author of note with books, magazines and articles under his belt, John says Catalyst has picked up fifty sites with ease following their partnership with Fast who offer hosted, search software which he says uses multiple servers for searches with anything up to five hundred terms. He tells us why they are better than others. “Old search engines were built in the seventies, then in ‘98 Google landed with new architecture. Fast, who are Norwegian, were born ten years ago and similarly built their business with new ideas and architecture.” He adds an example of their power. “The Library of Congress had five exabytes in 2004 but Fast scanned ten exabytes that year alone.”

John, who is a great story teller, says Catalyst has fifty staff in Denver and eighteen in Bangalore who he confirms have a strong bond with the US office. He thinks the edge his company has over others is the speed and language capability which spans eighty different types. “We’re getting more and more foreign documents to review, including Korean recently which meant reviewing character styles.” He says. “In the past vendors used to grab a dictionary, scan the lot, then work from there and most software can still only do one language search each time and can’t recognise differences in character spacing. We can do twenty queries a second compared to twenty minutes with one search elsewhere. Fast do bigger stuff than Google: they handle 32G compared to 1G worth of data.” He adds that Autonomy is the closest rival but thinks Fast are better for straight, rather than conceptual search.

As Catalyst have come to the UK with a solid business stream from US companies expanding onto European shores, battling increasing US regulatory burdens and ongoing data rises, it looks as though John and his near seventy strong international team, can now sit back with some satisfaction, benefiting from being one of the few who strike gold in the multi language, high speed “search gold rush.”

www.catalystsecure.com

Trilantic litigation support talk about eMailThread

eMailThread – Reduce the volume of eMails to be Reviewed

eMailThread, unlike other technologies, uses the content of emails to determine the thread which allows the legal review team to focus review efforts on the last email in the thread. By analysing the content, you can be sure that the “inclusive” email contains the information from all the previous layers in the thread negating the need to review the other mails.

www.trilantic.co.uk