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Adobe Buys Day Software

Observers believe Day’s been positioning itself so Adobe would buy it

Swiss-based web content management (WCM) house Day Software Holding AG got bought Wednesday by Adobe for roughly $240 million (255 million Swiss francs).

Adobe is now going to tender for its outstanding stock offering $131.53 a share cash (139 Swiss francs), a 59% premium compared to its performance the last 60 days.

Observers believe Day's been positioning itself so Adobe would buy it.

Adobe currently embeds Alfresco's open source enterprise content management repository in its LiveCycle product and in its Acrobat.com service under an OEM arrangement but Day and Alfresco don't seem to tangle in the marketplace.

Alfresco provides developers with tools to build web sites; Day offers big corporations a pre-built application that sorta does the same thing. So Alfresco right now is muttering "welcome aboard" and presumably wondering, like everybody else, if Adobe can rise to big-scale selling of software that goes for $500,000 a pop.

By its own account Alfresco focuses on CMIS, developers, content services platform for building rich content services for web sites and an open source distribution model while Day, which has also come out in support of CMIS, chases marketing departments and marketing applications with a traditional enterprise sales model that Day figures fits with Adobe's new customer engagement model and its acquisition of Omniture.

Adobe had nothing to say about its relationship with Alfresco. It also said nothing about Day's open source contributions.

Adobe expects to funnel its Flash, Flex, AIR, LiveCycle and PDF widgetry through Day's customer base to leverage more interactive application and document capabilities.

The Day acquisition is supposed to strengthen Adobe's enterprise software portfolio, offering users better integration between their global web presence and their business applications.

Abode says it plans to use Day to enable customers to create, manage, distribute and monetize content. Day's also got digital asset management and social collaboration widgetry.

The acquisition is supposed to be about Adobe's vision of the web as the hub of customer interaction.

Once the deal closes by the end of November, Day will be part of Adobe's Digital Enterprise Solutions Business Unit. Day CEO Erik Hansen will report to the unit's GM Rob Tarkoff.

Adobe said it doesn't expect the acquisition to have any material impact on its non-GAAP earnings for fiscal year 2010 and that it will be accretive to non-GAAP earnings in fiscal 2011.

In response to the news Alfresco CEO John Powell said that "Day's acquisition is a further consolidation of the proprietary software market which has seen the disappearance of proprietary WCM as a standalone market with a logical progression to marketing applications under pressure from open source."

He's thinking of Vignette and RedDot, which went to Open Text, Stellent, which went to Oracle; Interwoven, which went to Autonomy; Tridion's going to SDL and Mediasurface to Alterian.

He also said, "This is probably the end of the road for JCR/JSR-170 with CMIS ascendant. Alfresco's strategy of CMIS, content services platform and ecosystem of content-rich applications is complementary to the consolidation of standalone WCM to marketing and customer engagement applications. This announcement demonstrates the value of content services - an area we expect to grow in coming years."

Separately, Day, which has maybe a couple hundred customers, just reported earnings of 3.7 million francs ($3.5 million) for the first half on revenues of 25.1 million francs ($23.7 million).

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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