Hummingbird Ltd.

» see hummingbird.com as it lived, on the wayback machine

~ the last words ~

Exceed solved a problem that has mostly stopped existing. In the 1990s the computer doing the real work was frequently a UNIX machine in a room you did not sit in, and the computer on your desk ran Windows. Exceed turned the Windows machine into an X server, so a program running on the UNIX box could open its window on your screen and behave as though it had always been there. Hummingbird, in Toronto, sold that product, and an industry survey from 1993 put it at around a third of the market for PC X servers, ahead of everyone else.

The company had started in 1984 and went public twice, on the Toronto exchange in 1993 and on Nasdaq the year after. Then it did what connectivity companies did when the thing they connected began disappearing: it bought its way into another business. Over seven years Hummingbird bought a file-access company and a business intelligence firm, and then in 1999 the document management group PC DOCS for a reported $155 million. By its 2005 financial year more than seventy percent of revenue came from enterprise content management rather than from the product it was known for.

That year it reported $236.1 million of revenue against a loss of about $22 million, with more than fifteen hundred employees. In 2006 it was sold, after a bidding sequence that had two buyers in it, and the close came on 2 October 2006. Open Text paid $27.85 a share, around $489 million in total, and the shares came off both exchanges after business that day.

~ the record ~

~ the window into the other machine ~

The X Window System was built on an inversion that still confuses people on first contact: the server is the thing in front of you, and the application is the client. Your screen offers a service, and programs elsewhere on the network ask to use it. Exceed implemented that server for Windows, competently and expensively, and for a decade it was how an office full of PCs got at the engineering software without anyone buying a workstation per desk.

The decline was not a defeat by a rival product. Hardware got cheap and Linux arrived on the desktop, and remote access moved to the browser and later to protocols that shipped with the operating system. What had been a product became a feature, and the slow version of that transition is why Hummingbird had already spent years assembling a different company inside the old one.

~ the shopping years ~

PC DOCS was the purchase that redefined it. Document management for law firms and professional services is an unglamorous business with very long customer relationships, and buying into it converted Hummingbird from a connectivity vendor into a content management one. More deals followed through 2003 and the German web content firm RedDot in 2005.

It is what made the company a target. By 2006 Hummingbird was a mid-sized enterprise software roll-up with a profitable legacy product attached, which is precisely the shape that attracts a buyer looking to consolidate a sector, and Open Text was down the road in Waterloo doing exactly that.

~ the better offer ~

The sale was contested. Hummingbird had agreed terms with the private equity firm Symphony Technology Group in May 2006, and then Open Text came in over the top with a letter the board judged a superior proposal in June and a formal offer in July at $27.75 a share. The agreement was announced on 4 August, the price finished slightly higher at $27.85, and breaking the first deal cost a reported $11.7 million in termination fees. Open Text funded it with a $390 million term loan and cash from both companies.

Two weeks after closing, Open Text said the connectivity business would carry on as a distinct brand. It did not, in the end. Exceed became OpenText Exceed, the terminal emulation line was renamed the same way, and today the descendant product sells as Exceed TurboX with no mention of the company in the name. I never bought a seat of any of it. Software like this arrived through a site license at a university or an employer, priced per desk, and if your institution had not signed for it you simply never saw the thing.

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