This past week OpenText announced a partnership with Google Cloud (GCP), that announcement lifted OpenText’s share price to his highest ever level. At first blush, the excitement seemed odd, as frankly, everyone has a partnership with Google, Amazon, and Microsoft. Working to unpack the real relevance of this deal for both OpenText & Google reveals an intriguing partnership strategy.
First, let us look at the announcement itself. The partnership means that GCP and OpenText will work together to deploy OpenText’s services, such as Content Server, InfoArchive & Documentum on GCP. These will be delivered via a containerized application architecture that enables both Cloud or hybrid configurations. None of that is surprising, but what did catch our attention is that both firms will offer customers a single SLA (service level agreement) and a single point of contact. On the surface at least this is the foundation for a deep partnership, rather than the paper partnerships we so often witness.
On the one hand, it is easy to see this as a David and Goliath situation, but GCP is an underserved, underfunded and understaffed, division of Google. That puts Google and OpenText on relatively even footing. As despite, or in part due to, the brand recognition of Google, GCP is lagging far behind Amazon AWS and Microsoft Azure in the enterprise cloud business. Google has trust issues to deal with alongside a historically lackluster approach in selling to, and in supporting, enterprises. There is no doubt that Google has some good enterprise products and services, but Google as a whole has never dedicated enough resources to building a sales team or to really understand the complexity of enterprise needs.
OpenText, on the other hand, initially tried to go it alone in the Cloud and build a competitive service to Azure and AWS. But over time OpenText made the pragmatic decision to partner with both Amazon and Microsoft. But now OpenText has gone further and made the strategic move to making Google their preferred cloud provider, and Google has reciprocated in making OpenText its preferred ECM provider. Googles enterprise cloud challenges represent OpenText’s opportunities. OpenText is entirely focused on the enterprise and has all the sales footprint, products, partners, and marketing to support it. Google doesn’t. There is also the fact that though AWS and Azure are leading the enterprise cloud race, not everyone is enamored by those two choices. For example, Amazon is seen as a competitor in retail and supply chain, thereby distancing themselves from those firms. Microsoft has its business applications from CRM to ERP to sell making other business application vendors (including OpenText) wary of partnering or seeming to support Microsoft efforts.
Ultimately this all puts OpenText on a more even footing with Google than they could ever achieve with Amazon or Microsoft. It potentially opens doors into new markets. Right now, it is just an announcement, but it is one that could bear fruit. Like all partnerships, it all comes down to commitment and execution on both sides, and only time will tell how much commitment there is to making this work. Even so, at first blush, this looks like one of the more intriguing cloud partnerships we have seen in the space and will watch with interest over the coming year.
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