OpenText CEO: Micro Focus purchase is an enteprise portfolio play

Interview It’s almost three years since Micro Focus recorded a $1bn plus loss, owing to COVID-19 disruption and the fall-out from the $8.8bn acquisition of HP Software program in 2017. None of this stopped content material administration and enterprise integration vendor OpenText from paying $6 billion for the corporate in August 2022.

Micro Focus COVID-19 prices: Carry the one, decimal 9 locations to the correct… hmm. Holy cow, it is a $1bn+ loss


Chatting with The Register throughout Canadian software program firm’s OpenText World convention final week, CEO Mark Barrenechea was upbeat.

“That they had a really large portfolio of cybersecurity, IT operations administration, developer help and improvement operations, superior expertise with Idol and Vertica, and their heritage with COBOL and mainframe expertise. We love your entire portfolio and we see this as an extension of data administration. The $5.8 billion that we spent was roughly 2.2 occasions income, and that’s considered one of our lowest multiples of any acquisition,” he mentioned.

It is true that with the worth tag got here a smorgasbord of applied sciences which Micro Focus has acquired the UK firm’s 47-year historical past. Based in 1976, Micro Focus had grow to be one of many nation’s main tech companies, specializing initially in bringing COBOL to non-mainframe environments. It floated on the London Inventory Change in 2005, spreading its tentacles into enterprise software program administration and software integration.

In 2009, Micro Focus acquired Borland, a developer of software lifecycle administration instruments, whereas in 2014, the corporate purchased The Attachmate Group for $2.3 billion in shares. The latter transfer introduced Novell, the once-dominant community working system vendor and Linux distro hawker SUSE. In 2017, it introduced plans to merge with Hewlett Packard Enterprise’s a lot bigger software program enterprise.

Bringing the 2 companies collectively will enable the mixed firm to compete with IBM, no less than in addressing the enterprise software program administration and integration wants of the ten,000 largest corporations on this planet, in keeping with Barrenechea.

“Regardless of its controversial woes, IBM continues to be a really massive firm,” Barrenechea mentioned. “IBM is fairly fragmented throughout the enterprise community [technology], content material and different issues. We’ll compete at this suite stage. For those who’re searching for an built-in set of enterprise processes on a worldwide foundation, and also you need info on the centre of what you are doing, then it is us.”

The merger doesn’t come with out a specific amount of ache although. In February, OpenText confirmed the acquisition’s official closure with plans to shed 8 % of the mixed workforce, equating to circa 2,000 individuals.

“From the angle of an acquisitions of this scale, that is about lower than 10 % of our whole expenditure within the firm. It is kind of the low finish, really. We did that as a result of we’re investing in returning Micro Focus to natural development, the place we’re taking the bills out which are in redundant roles,” Barrenechea mentioned.

OpenText’s buy of Micro Focus would observe a long-held philosophy to “combine, quickly innovate and make investments” in focused corporations, he mentioned. This meant creating one crew of every of the engineering, gross sales, and advertising organisations, for instance.

Nonetheless, UK workplaces would keep open, he promised. These embrace Newbury and Thames Valley Park. “Along with that, we do some nice engineering within the UK, particularly in software modernization and connectivity. We additionally do our world API improvement work right here, our mid market, Enterprise Community work and we’ve got an ideal relationship with the College of Cambridge for algorithms,” he mentioned.

At OpenText World, the corporate demo’d knowledge integration throughout Salesforce, SAP and Google Workspaces. “We’ll speed up their roadmap into non-public cloud and into public SaaS,”

He highlighted Micro Focus applied sciences, together with Vertica, Voltage, and NetIQ, which might assist the mission.

A stand-out product Barrenechea wished to convey to the fore in the course of the interview was IT operations administration — in competitors with workflow specialist ServiceNow.

Within the context of multi-cloud environments, it may assist IT organisations handle, safe, simplify their portfolio, he mentioned.