OpenText's Pillr Buy Show Acquisitions Still in its Strategy

OpenText’s move to buy Pillr, a Managed Detection and Response platform from Novacoast, highlights how it is continuing its strategy of acquisitions

OpenText Corporation has announced the acquisition of Pillr, a Managed Detection and Response platform from Novacoast, in a sign that its acquisition strategy is not slowing down. 

This move highlights OpenText’s commitment to its plan of acquiring assets and businesses within its core markets to ‘unlock their value’ using the OpenText Business System. 

The Pillr technology, a cloud-native, multi-tenant MDR platform designed for Managed Service Providers (MSPs), brings robust Managed Detection and Response and powerful threat-hunting capabilities to OpenText's portfolio. 

"We are pleased to welcome Pillr customers and employees to OpenText," said Mark J. Barrenechea, OpenText's CEO and CTO. 

"Cyber threats continue to rise fast and are growing more sophisticated. Organisations need advanced Managed Detection and Response solutions to prevent attackers from gaining the foothold needed to launch an attack. The combination of Pillr's platform with our existing Threat Detection offerings strengthens OpenText's position in the cybersecurity market and reinforces our commitment to our SMB partners and customers."

About OpenText

OpenText, founded in 1991 and headquartered in Waterloo, Canada, is the country’s  fourth-largest software company and a recognised global leader in enterprise information management software. 

The company develops applications to manage content and unstructured data for large organisations, government agencies, and professional service firms, addressing information management requirements, regulatory compliance, and mobile and online experience management.

This recent acquisition highlights how acquisitions are not an isolated event for OpenText but rather part of a long-standing strategy of growth through strategic acquisitions. Over the past decade, the company has been actively acquiring new companies yearly, including notable acquisitions such as Micro Focus for US$5.8 billion in 2023, Guidance Software for US$240 million in 2017, and Dell EMC's enterprise content management division for US$1.6 billion in 2016.

While acquisitions can be a powerful growth strategy, they are not without risks. Research from the Harvard Business Review suggests that 70-90% of acquisitions fail to create value for the acquiring company. However, OpenText seems to view acquisitions as integral to its approach, constantly seeking to expand its capabilities and market reach through strategic purchases.

As Mark Barrenechea emphasised, the Pillr acquisition is a direct response to the rapidly evolving cybersecurity landscape, where skill gaps, talent shortages, and alert fatigue create significant challenges for organisations. 

By integrating Pillr's technology, OpenText aims to strengthen its position in the cybersecurity market and provide customers with enhanced protection against the ever-increasing sophistication of cyber threats.

Examining Acquisitions

Acquisitions, although they can bring skills or technologies from two companies together, are not a sure thing for growth.

A Harvest Business Review report showed that 70%–90% of acquisitions are abysmal failures, with Microsoft writing off 96% of the value of the handset business it had acquired from Nokia in 2014 for US$7.9 billion. 

Yet, for Open Text, acquisitions are seemingly seen as crucial for its strategy., OpenText's consistent pursuit of this strategy suggests a deep-rooted belief in its ability to identify and integrate complementary technologies effectively. 

As the company continues to navigate the dynamic cybersecurity landscape, its acquisition of Pillr represents a strategic move to bolster its offerings and meet the growing demand for advanced threat detection and response solutions.


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