Open Text (Otex – OpenText recently acquired a managed detection and response platform from Novacoast. The platform, called Pillr, is a cloud-based threat hunting tool for managed service providers (MSPs) and has adopted a multi-tenant cybersecurity services model, allowing OpenText to serve multiple tenants using a shared infrastructure.
Pillr specializes in providing proficient cyber security solutions 24/7 through its Security Operations Center (SOC) that leverages technical expertise under human responsibility. We use an on-premise SOC with the tools and processes to handle threat detection and mitigation.
This new acquisition will address skills gaps and shortages, reduce alert fatigue and strengthen OpenText's security offerings for customers. The integration of Pillr into OpenText products will also enable OTEX to enable API integration and more efficient product bundling for MSPs, further strengthening OpenText's foothold in the SMB space.
The Pillr platform can process vast amounts of data and process it with AI and automation. The platform can also be used to address potential risks through threat analysis and intelligence gathering. Additionally, Pillr combines human expertise because we believe that human intervention, expertise, and accountability are irreplaceable.
Growth through acquisitions
The addition of Pillr to OpenText's product portfolio strengthens the company's arsenal as the company expands its capabilities through acquisitions, having acquired several companies over the past two years.
In 2023, OpenText acquired Micro Focus for $5.8 billion, doubling its size and expanding into key areas such as security and automation. The acquisition of Micro Focus strengthened OpenText's international presence and talent pool.
The 2021 acquisition of Zix expanded OpenText's SMB&C portfolio, bringing annual revenue to nearly $700 million. The company also acquired Carbonite in 2019. OpenText is working with Carbonite to leverage Zix's cloud innovation and partnership with Microsoft for geographic expansion and strategic partnership to deliver comprehensive cyber resilience solutions.
This new acquisition combines Pillr's capabilities with OpenText's threat detection services, strengthening OpenText's position in the SMB cybersecurity market.
OpenText's expanding portfolio, customer base, acquisitions and partnerships are important positives. However, the global economic environment remains uncertain and we expect headwinds from prolonged inflationary conditions, persistently high interest rates and geopolitical tensions. These factors could affect enterprise spending on software and IT services and adversely affect OpenText's near-term growth prospects.
In addition, aggressive sales and marketing efforts and continued investments in research and development to enhance our product offerings and capabilities may reduce our profit margins.
Zacks Rank and Stocks to Consider
Currently, OpenText carries a Zacks Rank of 5 (Strong Sell). OTEX shares have fallen 24.6% over the past year.
Top-ranked stocks from the broader technology sector include: App Folio (Australia – Free Report) Arista Networks (Annette – Free report) and alphabet (Google – free report ) are currently sporting a Zacks Rank #1 (Strong Buy), respectively. You can see the complete list of today's Zacks #1 Rank stocks here.
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The Zacks Consensus Estimate for ANET's 2024 EPS has been revised upward by 43 cents in the past 30 days to $7.92. ANET shares have risen 94.5% in the past year.
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