Ektron + EPiServer Merger – Implications for Customers

EPiServer and Ektron, two content management system (CMS) vendors acquired by Accel-KKR in December 2014, have merged today to form a single company. The combined company “will operate under the EPiServer name and continue to use the Ektron and EPiServer brands”.

For Ektron and EPiServer customers this spells a period of uncertainty. Until the two companies figure out the best way to combine their forces, the product development is destined to take a back seat.

We’ve seen similar mergers in the content management space in the past. In fact, CMS acquisitions are so common that more than one third of all major CMS players have obtained at least some of their content management offerings through acquisitions. Announcements following these acquisitions often promise synergies, innovation, and a generally brighter future. Unfortunately we know, from some particularly bitter examples, that these promises are based on assumptions, expectations, and predictions; and may have little to do with reality. (See this acquisition rationale by Serena Software – a company that acquired Serena Collage CMS in 2004 and then discontinued the product entirely in 2008.)

In cases where two or more overlapping software platforms are acquired, typically only one product continues to be actively developed by the parent company, and the other product – although supported – is neglected, and fades into irrelevance over time. This was the case with OpenText (RedDot, Vignette), Oracle (Stellent, FatWire), and SDL (Alterian, Tridion), to name just a few. Effectively, one product is used as the strategic technology choice, and the other company is acquired for its customer base. It’s not unreasonable to assume that the fate of Ektron and EPiServer will follow the same path.

Epiktron – a potential hybrid product, resulting from Ektron and EPiServer acquisition – seems highly unlikely. Both platforms are complex, yet not drastically different. The effort and timeline required to merge platforms would be unreasonable, and potential benefits – minimal. We’ve yet to see a CMS acquisition, where a successful combined product emerges as a result of the merger. Why? Because the time spent integrating two existing platforms is the time lost to addressing demands and requirements of the past, not the future. In a fast moving market, contemplating the past is a luxury that software vendors simply can’t afford.

One aspect of Ektron and EPiServer acquisition that can have implications with immediate impact is the apparent focus of the combined company on the Cloud. Adobe and Acquia have already proven that new business models, which emphasize support and maintenance as much, if not more, as the initial implementation, can be beneficial for both the vendor and the customer. If EPiServer follows suit, this shift could result in fundamental changes to contractual agreements with the customers.

This blogpost was first published on Digital Clarity Group website in 2015.