Dear OpenText, Dear Veeva & Dear ECM Customers,

Since I'm spending the vast majority of my awaken hours helping customer with their IT solutions for their critical pharmaceutical business processes, I'm a natural keen follower of how the market for eDMS (electronic document management systems) and ECM (enterprise content management systems) develops.

At NNIT, I head our Life Science Solutions division, and we provide technical consulting and implementation services for the Life Sciences industries across eDMS/ECM/eTMF/eQMS, GxP Integrations, MDM, IDMP, RIM and Clinical Data Warehouses (CDW)/Integrated Clinical Environments (ICE) and Laboratory Information Management Systems (LIMS). ECM and GxP systems is a large part of our knowledge DNA. In essence, we are NNIT's technical project delivery organization for our customers in Life Sciences.

The purpose of this blog post is to provide some of my own perspectives on the recent OpenText acquisition of EMC Enterprise Content Division (ECD) and my hopes for the future for the Life Sciences world of ECM solutions.

Thoughts on OpenText's acquisition of DellEMC's ECD

The 20 year ECM market consolidation finally makes sense!

The somewhat odd home of Documentum during the last 13 years, first with EMC and later (although shortly) with DellEMC, now makes a whole lot more sense with OpenText. You can argue why OpenText did not acquire Documentum in the first place, since EMC paid ~$1.6 Billion for Documentum in 2003 and OpenText is estimated to pay ~$1.6 Billion for EMC ECD in 2016. Considering the cumulative inflation (~30%) of the US dollar, it sounds like a bargain as the value should have been in the $2.1 Billion ball park range (in current US dollars), when excluding all other factors for valuation. Factors, I estimate to be positive, as significant additions have been made to the former Documentum and then EMC IIG/ECD product portfolio over the years, so one could argue for an even higher valuation today. Documentum has faced significant challenges from IBM FileNet, Microsoft SharePoint (NextDocs), and others within the ECM space, during the years, and has managed to maintain market leadership throughout the years. At least in life sciences. OpenText has indeed acquired and re-branded so much other stuff, so (I guess) the same will be the case for the products, that they have acquired from DellEMC. Anyhow, with regards to valuation, I guess they felt better about the timing (and price) now. The market is always right, when it comes to price, and new and more challenging competitors have arrived on the ECM scene. Anyway, Documentum (and the rest of the portfolio) is now back home with an ECM company.

What is yet to be seen is if OpenText also is an ECM Solutions company for the Life Sciences industry.

Disruption and Innovation

Nothing has been that bad, that it has not been good for something (or someone) else. It has given the world of Life Sciences an ECM Cloud SaaS option in Veeva Vault. An ECM platform that has been engineered from the ground up (or from the cloud down), and caught up on capabilities and functionality really quickly. That is not only on the platform level, but especially also on the solution and compliance levels and is leading in some solution areas (e.g. eTMF).

Disruption tends to happen when stagnation, lack of innovation and longer periods of uncertainty persists. I guess, one can easily say, that it has given Documentum (now OpenText) the relatively firm task of; "innovate or die". Perhaps overly dramatic for the ECM market as a whole, but within the areas of particular importance to Life Sciences (Quality, Regulatory and Clinical) the consolidation of solutions is happening fast. Room will definitely continue to exist in the market for players like Amplexor and Generis (etc.) who both (primarily still) base their solutions on Documentum, and who are providing very powerful and attractive solutions to the marked also.

My (personal) take is, that CSC (FirstDoc) is probably the ones most challenged by the consolidation as their ability to innovate and has been relatively modest during the same period. The customers are moving their solutions elsewhere (i.e. away from FirstDoc). Sometimes to systems technology stacks including Documentum and sometimes not. Those who are not actively moving yet, are running projects to assess where to move to - eventually. If they haven't started the assessments yet, I'm sure they will very soon.

Innovation has definitely happened inside the city limits of Pleasanton over the past 13 years or so (or more), but mostly outside of Documentum, and mostly inside of Veeva during recent years. It is happening so fast and the market likes it. Both the stock market and those who are in the market to acquire new ECM/eDMS solutions. Just look at the relative development in valuation of the two companies (even considering subtracting significant value for Veeva's market dominating CRM business for Life Sciences). Well, relatively modest innovation around Documentum has happened with D2 and the Life Science Solutions Suite (and some other stuff), and more so with LEAP, which, I think, actually is the most real innovation of all from EMC. I hope OpenText will do even better.

Veeva has definitely set the standard, speed and high bar for ECM innovation for Life Sciences, even though many other solutions are great solutions too. Veeva is even taking their innovative quest beyond classic eDMS/ECM, e.g with Vault RIM and Vault Clinical. My guess is that a safety/pharmacovigilance solution will eventually follow and only Veeva knows where Vault will go from there.

To Cloud or nor to Cloud ? That is the question..

The relative monolithic nature (core problem) of Documentum still exist. In my opinion, this is due to it's lack of a multi-tenant architecture. Multi-tenancy is not an "architectural nirvana", as such, but it certainly improves the "pooling of demand", allowing for every tenant to run the same solution functionality, but allow for own configurations on top, and to provision new functionality for all tenants fast and all at once, while still allowing the customers own configurations to persist. This also resolves the continuous and never ending validation (IQ, OQ and PQ) efforts that customers have had to perform on infrastructure, platform and business applications. All very often upgraded individually or often not all at once.

On Veeva's solutions, customers are often overwhelmed with the cadence of which Veeva releases new functionality, that they eventually need to decide on what to activate and delta validate, as opposed to previously being overwhelmed by the massive effort of re-validating the entire system. A system that they just upgraded, and which only provided very little new functionality. Often generating projects costs far exceeding the benefits of the new business functionalities gained.

This challenge has been addressed, but never fixed in Documentum. Ever since Jeroen Van Rotterdam (then EMC IIG/ECD CTO) first ever made the notions of the "NGIS project" public, it has set expectations through out the ECM world. (NGIS: "A flexible, distributed information repository for private and public cloud environments"). Never public. Then came the notions of "Project Horizon", which too was somewhat of a "Safe Harbor Announcement". Fact of the matter is; it all never came. However, LEAP eventually did. LEAP is, in my opinion, something very real and somewhat of an innovation, but it is only solving half the problem, and half of a solutions is...well, half a solution. All while, the market never got the issue around the content server, the application platform fixed.

Assuming that customers are (or will be) demanding more integrated solutions, then the combination of Documentum, D2 and LEAP is somewhat complex compared to Veeva Vault. The combination of Documentum, D2 and LEAP, does allow you to avoid expensive content migrations, which is great, but it does not solve the problem provisioning of new business solutions - fast. May in LEAP, but all the business functionality remains in D2 still. LEAP also allows you to connect to other document repositories (i.e. "repository agnostic") where content may reside - because those places are still plenty almost everywhere. Again, since the business functionality is still in D2, and not yet in LEAP, the entire solution is still a somewhat of a combined solution, where all benefits of fast deployment are not present throughout.

Veeva has solved the problem of provisioning new business solutions fast, both when it come to platform and solutions, but there you need to migrate your content from wherever it resides and into Vault - in the cloud. That can be done, sure, but it is not optional (not that it is necessarily a bad thing).

Cloud is here to stay and is not something that will evaporate like morning dew, because it does definitely have some obvious advantages. Veeva has a head start, and the other needs to play catch-up in order to remain relevant. I am not saying that Cloud and SasS is right for everyone. Some companies will still continue to demand classic on-premise hosted solutions due to local legal precautions and security consideration of making sure that information and intellectual property is protected on premises. Veeva can do that too, but some customers have indeed concluded otherwise also. To those customers who insist to stay on-premise, private or hybrid cloud, EMC has made great advances towards reducing the TCO of Documentum with Documentum Platform 7.3 ("Bedrock") and D2 ("Goblin") with open source support and Docker installs. However, the problem at the core content server's monolithic nature still persist. For now.

The best way to predict the future is to create it

It is going to be exciting to see how OpenText will evolve and manage the legacy of Documentum. Both in the sense of it's 25 year historical legacy, but more importantly; it's technical and architectural legacy. The customers of Documentum has made significant investment in their solutions during the years and it will be an extremely difficult balance to walk, to both care for the past and at the same time build the future.

Further, it is going to be equally exciting to see how OpenText is going to evolve the industry solutions (i.e the D2 Life Science Solutions Suite) or if they will they will focus their efforts on integrating Documentum into the existing portfolio of products and focus on ECM infrastructure and not solutions.

• Which "Content Server" will prevail ?
• Will any LS customers (all of a sudden) prefer existing OpenText products over Documentum?
• How will the D2 Life Science Solution Suite evolve ?
• How will OpenText respond with Cloud offerings for Life Sciences ?
• How will System Integrators build Hybrid Cloud offerings for Life Sciences ? (e.g. NNIT, hint hint - notch notch..)

Sure, there is no such thing as a "perfect solution". All solutions have their pros and cons. Everyone will not demand integrated solutions, where you get most things from one provider, but rely more on a fragmented solution strategy. Some call that "best of breed" but I would argue that these different solutions are not bred equally well.

My predictions

My prediction is that OpenText will seek to move all business functionality of the Life Science Solution Suite into LEAP, beyond the somewhat modest use cases of LEAP (currently). Thus solving the issue of provisioning business solutions fast; i.e. apposed to those that are currently in the D2 Life Science Solutions Suite. LEAP will also provide a user experience, which is more up to Veeva's standard (because; yes!) they have defined it for ECM solutions for Life Sciences. Solution provider have been suffering from "UX-ADD" (i.e. "user experience attention deficit disorder") for way too long, which has been so out of sync with where the IT industry is heading, in general. I'm not saying that the UX of D2 is bad, but it is not as good as Veeva's UX.

I hope, OpenText will dedicate significant efforts and investments towards resolving the issues of fast provisioning of business solutions and sub-par user experience.

The ability to easily configure (no code!) solutions also remains a key point for these solutions, since solutions that cannot be implement and configured cast is not able to meet the speed of the business.

I my opinion, OpenText needs to resolve the multi-tenancy challenge of the Documentum content server too. The one that Documentum never resolved themselves. Therefore, OpenText has (only) acquired the technology, which is implemented at the majority of the Life Science customers - still. I really mean only, as you cannot buy customers, they are way too smart for that. Therefore, they need to innovate and evolve the acquired technologies significantly. Otherwise, and if they do not, it would be like a open invitation to Veeva annihilate Documentum in Life Science ECM just like they annihilated Siebel in Life Science CRM.

I hope no one is in the process of writing the eulogy of Documentum just yet, (I'm not), but something (Documentum) has to move.

Dear OpenText; please innovate in and around Documentum, D2 and LEAP for Life Sciences.

Dear Veeva; please continue to innovate and make everyone else do the same.

Dear Customers; please continue to enjoy the choices you have.

Indeed, some tough decisions are ahead. NNIT is here to help you, regardless.

If you have any comments of questions, please do not hesitate to reach out to me.

Kind Regards,

Morten Lindaa

Director - Life Science Solutions

NNIT

mlqy@nnit.com

+45 30793430