OpenText was mum about the planned acquisition because the company is in a regulatory quiet period. While acquiring Micro Focus may look like a financial stretch on paper, the deal will pay for itself in just a few years through services renewals, according to Deep Analysis research. Cross-selling OpenText security, content management and ERP to Micro Focus customers will likely fuel growth.
“They’ll get the money back in four years just by doing nothing, so financially, it’s a very sound investment,” said Alan Pelz-Sharpe, founder of Deep Analysis. “It brings a lot of products with it. There is a big job to go through and rationalize them. But the truth is, if you’ve got 300 products, you’ve probably got some stars in there. Micro Focus was totally managed for years, so OpenText should be able to bring some order to that chaos.”