The story of two software companies and the firm that brought them together.

· Industry Going-ons

We can only speculate as to why Hyland, who’s majority is held by the private equity firm Thoma Bravo, took bold action to acquire Alfresco back in October 2020 for the speculated cost of $700M.  Of course, with Alfresco being held by a private equity firm Thomas H. Lee Co., and failing to achieve an IPO we could surmise to say it was simply time to offload but what is Hyland’s interest in Alfresco? Both companies have nearly equal respect in the content management arena with both Gartner and Forrest giving them recognition as leaders in their technology. Over time, as I watched the process unfold, I did notice a few interesting moves both companies have made which leads me to believe, it’s not only the Alfresco customers that should be asking “what now?”.

Immediately prior to selling to Hyland, Alfresco purchased one of their main VARs, Technical Services Group (TSG) located in Chicago. TSG is considered a leader solution and service provider who built much of their business developing out the Alfresco product for many industries. This acquisition brought 45 talented developers, living in the midwest, straight to the Alfresco platform strengthening their position as an ECM leader with both Forrester and Gartner. Alfresco made the purchase of pernexas, who brings with them their expertise in SAP integration with a full line of application connectors. Hyland, on the other hand, in a surprise move, furloughed nearly 150 employees from their Westlake location in January 2021 with a large portion of those positions being software developers and testing engineers. The word is that they are moving overseas with development.

Let’s also recognize that Hyland customers have been mainly utilizing their on-premise solution. The push for cloud-based applications is a serious one and Alfresco aggressively brings that service, especially in highly regulated industries like government, medical and insurance to the table. “Hyland’s own modernization efforts and delivery of a next-gen, cloud-native platform — Hyland Experience Platform (HXP) — has lagged compared with other established ECM providers,” wrote Forrester analyst Cheryl McKinnon. Perhaps this move is also to give the OnBase UI a refresh, creating a smarter, more intuitive solution.

While we may think that this acquisition may not cause disruption to the end users, specifically OnBase end users, it’s my opinion was Alfresco was brought in to push the Hyland platform to the next level since it was having difficulties getting over the legacy hump on its own and all the while, this helps regulate the escalating costs that we’ve been experiencing in the Alfresco licensing.

Before closing, let’s take a hot minute to talk about our behind-the-scenes player and Hyland's most staunch supporter. Thoma Bravo, which, up until now, has been extremely patient in cashing out, given that they acquired 58 percent of Hyland in 2007. Since that time, they’ve helped back Hyland’s acquisition of 18 companies, including four in 2020 without much complaint. The acquisitions fall in line with Thoma Bravo’s buy-and-build strategy, and, at some point, the Chicago private equity firm will want to either bring Hyland through an IPO or sell it. With much going on, all we can do is continue to follow the funding and see where this will lead the end users of both the Hyland and Alfresco applications.

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