Hummingbird in limbo as it mulls takeover bids

Consolidation is making life confusing for buyers of enterprise content management (ECM) tools

The future of Hummingbird is still unclear after the firm last week said it was willing to consider a bid from fellow enterprise content management (ECM) business Open Text.

In late June, Hummingbird agreed to be sold to holding firm Symphony Technology Group but that offer was trumped early this month by Open Text, though there is no guarantee that Open Text’s higher offer will succeed.

In a statement, Hummingbird said Open Text would need to pay “substantially more” than its written offer and agree to a fast due-diligence process to compensate for the increased risk of the proposed deal.

Adding Hummingbird to its portfolio would boost Open Text as a challenger to rivals FileNet and EMC’s Documentum subsidiary. “Size and global reach are critical to success in ECM,” said John Shackleton, Open Text chief executive.

However, Sue Clarke of analyst firm Butler Group said there was “little strategic benefit for either company” and suggested that the proposal was a survival effort in a market that is rapidly consolidating.

“Both vendors are of a size where they are vulnerable to takeover,” Clarke wrote in a research note. “[Open Text and Hummingbird] are clearly not of the same size as [rivals] such as IBM and EMC. With [Oracle and] Microsoft also entering the fray, it will become increasingly difficult for vendors such as Open Text and Hummingbird to survive on their own.”

Separately, IBM released entry-level search and content integration software – WebSphere Information Integrator Content Starter Edition and WebSphere Information Integrator OmniFind Starter Edition – with connectors to popular ECM and customer relationship management (CRM) packages.