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OpenText CEO on Content AI, Cloud Strategy and Hybrid Working

OpenText’s growth-by-acquisition strategy is likely to take a leap forward when the planned $6 billion acquisition of British software company Micro Focus closes early next year. To give an idea of ​​the relative size of the acquisition, OpenText’s annual revenue for fiscal year 2021 was $3.5 billion; Micro Focus’ was $2.9 billion.

We sat down with OpenText CEO Mark Barrenechea to discuss the Micro Focus Acquirehow it fits into the OpenText portfolio, the evolution of AI in enterprise content management, and how trending technologies such as metaverse and virtual reality fit into company plans .

You are now in a quiet period for the acquisition of Micro Focus, which seems to be – for OpenText – a very big deal. What can you say?

Mark Barrenechea: When we acquired GXS [in January 2014], on a relative scale, they added about 30% to our revenue. Micro Focus will add in the low 40s. So it’s not a huge step forward [in revenue]. It’s a company we know well: enterprise software. These are renewals, the same buyers.

Micro Focus is a company that we know well, that we have followed for many, many years, and we are in similar markets. They call it IM&G [information management and governance]; we call it content. They are safe; we are safe. They have important established technologies in the mainframe — mainframe automation and connectivity; we have important established technologies like EDI [electronic data interchange].

Micro Focus has a highly responsible culture, similar to ours. They will benefit from our cloud. We’ve made significant investments that they haven’t — we’ve learned how to get to market in a public cloud, and they’re just getting started. I look at our journey over the past five years to make cloud our biggest business. We can help them do the same.

When Magellan Content AI came out four years ago, you told us it would be bigger than IBM Watson. What is the state of Magellan?

Barrenechea: I’m not sure I said that. [laughing]. I said we were going to sue them. We would like to beat them.

we spent [the pandemic years] go further with Magellan. We do not seek to provide a general purpose tool for all AI use cases. We want to provide an AI machine learning tool and platform that unlocks our value, rather than solving any problem for anything, anywhere, anytime, all at once. We try to unlock the value of your investment in OpenText through Magellan.

We spent time integrating it. Magellan is now talking to Content Cloud, he is talking to Experience Cloud, he is talking to Business Network Cloud. He knows the data patterns, the temporal aspect of the data that we need to have from the transactional system. We have selected algorithms and new libraries; we started integrating third-party tools. Technology has advanced considerably. It is strategic for us. It’s still early days, but we’ve made significant progress.

Cryptocurrencies and metaverse on your radar, and are customers asking OpenText to support them?

Barrenechea: I would say the “verse – let’s not call it the metaverse, I don’t know what term it will use yet – is definitely on our radar. What will business look like in the next five, six, seven years? We work with a cosmetics company, a global brand that has standardized on our Experience Cloud for digital assets. But now they are bringing crowdsourced assets. They bring AI-generated images. We’ll see where that leads – as part of the “verse”, having a digital twin, having a VR experience.

Crypto is not our thing. But the verse will definitely be more prominent. It will certainly influence our world.

Everything we do, we relate to information.

Marc BarrenecheaCEO, Open Text

We used to think of OpenText as a content management company and then an enterprise information management company. What are you now – a security company? A middleware company?

Barrenechea: The information society. Everything we do, we relate to information. We have a wide range of products and we can deliver a wide range of results. Even with our latest acquisition, Micro Focus, we still believe we are the information society, whether it’s content, experience, or security and trusted information.

Microsoft, Oracle, Adobe, and Salesforce all offer vertical clouds for healthcare, manufacturing, and more. OpenText has stayed away from that, even though you occasionally release integrations or tools for verticals like oil and gas customers. Explain this approach.

Barrenechea: We do a lot of work in energy, oil and gas, where a lot of information cuts across processes and governance. We see ourselves today as a horizontal platform, and we stick to that. We can configure for industries, and we have industrial modules for legal, technological and pharmaceutical quality management [and others]but we keep trying to make it as broadly horizontal as possible.

We just think that’s a better strategy for us right now than becoming 12 different things.

At the start of the pandemic, you said OpenText was going to divest half of its real estate because your employees proved you could perform well as a remote business.

Barrenechea: Correct. And we did.

How did it work?

Barrenechea: It was a hell of a time, wasn’t it? And it’s still a hell of a time.

In [the early days of the pandemic], we have been proactive, engaging our employees. We thought we would never go back to 100% real estate, so we reacted quickly and announced that we were going to cut half of our offices. We have decided to invest in service centers of excellence and to have a head office in each country.

We have never lost sight of the fact that we will always be better together. We don’t believe in being 100% apart, and we don’t believe in being 100% together. We believe employees want control of their time and space. But we are innovators, so we have to be together. I would like to say that we now give employees 40% flexibility with their time. We say you need to be in the office two or three days a week.

Has this real estate divestment created more cash for acquisitions?

Barrenechea: No. We always want proximity to our talents. I’m not looking to go from 15,000 employees today to 25,000. I’m not looking to work from 25,000 places. Proximity is important. So it didn’t open up different acquisitions, but it opened up talent for us once we decided we weren’t tied to that place. We are attached to a radius of 100 kilometers [from our offices].

Would you fly in an airplane, if you knew that the airplane was designed by 10,000 engineers in 10,000 different places and they never got together? Probably not. And it’s the same with software. We must be together to be the best innovators.

What can OpenText users expect in the roadmap? What comes out that you can talk about?

Barrenechea: Everything. Titanium in 23.2 [next year’s second-quarter release]. We put a lot of thought, a lot of R&D, a lot of preparation to get to Titanium, and here’s why it’s important: Our public cloud will be at functional parity [to the private cloud offerings], and customers will truly have the choice of placing a workload in our functional areas. It’s a point of freedom…so that’s where we focus. That, and getting Magellan to work on it.

OpenText customers have been transitioning to the cloud for years, as have Oracle, SAP, and Microsoft customers. Do you think there will be a time when everyone is 100% on the cloud?

Barrenechea: No. Will the cloud be the biggest platform? Yes. Will there be a time when the mainframe never exists? I don’t think in my lifetime, off-cloud cloud or private cloud will go away. There’s too much value in there – the value of control, the value of security, the value of protecting all your mojo, your integrations, which far outweighs a SaaS platform. I don’t see non-cloud or private cloud going away anytime soon.

Editor’s note: This Q&A has been edited for clarity and brevity.

Don Fluckinger covers enterprise content management, CRM, marketing automation, e-commerce, customer service and enabling technologies for TechTarget Editorial.

#OpenText #CEO #Content #Cloud #Strategy #Hybrid #Working #crypto strategy

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