Open Text snags Nstein

Open Text announced this week they were purchasing fellow Canadian digital asset management (DAM) and text mining vendor NStein for $34 million. This comes on the heels of last week's announcement that Open Text was deepening its relationship with SAP around DAM.

What's curious, as Tony Byrne from The Real Story (formerly CMS Watch) pointed out, however is that Open Text already owns two DAM solutions, Artesia and its recently purchased eMotion. Byrne wonders if the company is going for the "Power of Three" as in having three DAM solutions is better than one.

Open Text has a habit of buying solutions it doesn't really seem to need for reasons that are hard to understand. Analyst Seth Gottlieb wrote on Twitter about the purchase: "Does that mean they are done euthanizing their last few acquisitions?" Gottlieb clearly has little patience for the Open Text buy-sell cycle adding, "Open Text is in the business of buying and then bleeding software products to death." Gottlieb says that this is the software customer's worst nightmare.

But NStein does offer some pretty nifty semantic technology, which helps generate semantic metadata for FT.com's Newsift site. Perhaps Open Text has its eye on this technology and the digital asset management is just an after-thought. Open Text President and Chief Executive Officer John Shackleton seemed to like the fact that both companies were Canadian and would give them a stronger presence in Quebec.

"This is a good fit for two strong Canadian companies," said Shackleton. "With Nstein, we have an opportunity to continue to grow as Canada's largest software company, expanding Open Text's presence in Quebec. Nstein will also add complementary technology and expertise that enhances our ECM solutions portfolio."

Whether it enhances the portfolio or not is certainly open to argument, but with NStein, Open Text has some valuable tools and technologies and it will be interesting to see what they end up doing with these pieces moving forward.

For more information:
- see the Open Text press release

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