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OpenText’s CEO on content material AI, cloud technique and hybrid work

OpenText’s growth-by-acquisition technique will seemingly take an enormous leap ahead when the deliberate $6 billion acquisition of British software program firm Micro Focus closes early subsequent yr. To offer a way of the relative scale of the acquisition, OpenText’s annual income for fiscal 2021 was $3.5 billion; Micro Focus’ was $2.9 billion.

We sat down with OpenText CEO Mark Barrenechea to debate the Micro Focus acquisition, the way it suits into the OpenText portfolio, the evolution of AI in enterprise content material administration, and the way buzzword applied sciences such because the metaverse and digital actuality match into the corporate’s plans.

You are in a quiet interval now for the Micro Focus acquisition, which looks as if — for OpenText — a really giant deal. What are you able to say about it?

Mark Barrenechea: Once we acquired GXS [in January 2014], on a relative scale, they added about 30% to our income. Micro Focus will add into the low 40s. So, it is not an enormous step up [in revenue]. It is a enterprise we all know effectively — enterprise software program. It is renewals, the identical patrons.

Micro Focus is an organization we all know effectively, that we have tracked over many, a few years, and we’re in comparable markets. They name it IM&G [information management and governance]; we name it content material. They’re in safety; we’re in safety. They’ve essential established applied sciences in mainframe — mainframe automation and connectivity; we’ve got essential established applied sciences like EDI [electronic data interchange].

Micro Focus has a extremely accountable tradition, much like ours. They are going to profit from our cloud. We have made important investments that they have not — we have realized the way to go to market in a public cloud, they usually’re simply getting began. I take a look at our journey during the last 5 years to creating cloud our largest enterprise. We might help them do the identical.

When Magellan content material AI got here out 4 years in the past, you advised us it will be larger than IBM Watson. What’s the state of Magellan?

Barrenechea: Undecided I mentioned that [laughing]. I mentioned we will go after them. We would wish to beat them.

We spent [the pandemic years] going deeper with Magellan. We’re not seeking to ship a general-purpose instrument for all use circumstances of AI. We need to ship an AI machine studying instrument and platform that unlocks our worth — versus fixing any drawback for something, wherever, on a regular basis, . We’re attempting to unlock the worth of your funding in OpenText by way of Magellan.

We hung out integrating it. Magellan now talks to Content material Cloud, it talks to Expertise Cloud, it talks to Enterprise Community Cloud. It is aware of the information fashions, the temporal side of the information that we have to have from the transactional system. We have chosen algorithms and new libraries; we have began to combine third-party instruments. The know-how has superior considerably. It is strategic for us. It is nonetheless early days, however we have made important progress.

Are cryptocurrencies and the metaverse in your radar, and are prospects asking OpenText to help them?

Barrenechea: I might say the ‘verse — let’s not name it the metaverse, I do not know what time period it can go by but — is unquestionably on our radar. What is going to enterprise appear like within the subsequent 5, six, seven years? We’ve got a cosmetics firm we’re working with, a world model that has standardized on our Expertise Cloud for digital belongings. However now they’re bringing in crowdsourced belongings. They’re bringing AI-generated pictures. We’ll see the place that goes — as a part of the ‘verse, having a digital twin, having a VR expertise.

Crypto isn’t our factor. However the ‘verse will certainly be extra entrance and middle. It can undoubtedly affect our world.

All the pieces we do, we relate it to info.

Mark BarrenecheaCEO, OpenText

We used to view OpenText as a content material administration firm, after which an enterprise info administration firm. What are you now — a safety firm? A middleware firm?

Barrenechea: The data firm. All the pieces we do, we relate it to info. We have a large spectrum of merchandise, and we are able to ship a large set of outcomes. Even with our final acquisition, Micro Focus, we nonetheless assume we are the info firm, whether or not it’s on the content material facet, expertise facet, or safety and trusted info.

Microsoft, Oracle, Adobe and Salesforce are all popping out with vertical clouds for healthcare, manufacturing, and many others. OpenText has stayed away from that, although you do now and again launch integrations or instruments for verticals similar to oil and fuel prospects. Clarify that method.

Barrenechea: We do a variety of work in vitality, and in oil and fuel, the place a variety of info intersects with course of and governance. We see ourselves immediately as a horizontal platform, and we have caught to that. We will configure for industries, and we’ve got trade modules for authorized, tech, pharmaceutical high quality administration [and others]however we maintain attempting to make it as extensively horizontal as doable.

We simply assume that is a greater technique for us proper now, versus turning into 12 various things.

Firstly of the pandemic, you mentioned OpenText was going to divest from half its actual property as a result of your workers proved you might perform effectively as an organization working remotely.

Barrenechea: Appropriate. And we did.

How did that work out?

Barrenechea: It was a heck of a time, wasn’t it? And it is nonetheless a heck of a time.

In [the early days of the pandemic], we have been proactive, partaking with our workers. We felt that we’d by no means come again to 100% of the actual property, so we made that early response and mentioned that we will get rid of half of our places of work. We made the choice that we will spend money on service facilities of excellence and have a head workplace in each nation.

We by no means misplaced sight that we’ll all the time be finest collectively. We do not consider in being 100% distant, and we do not consider in being 100% collectively. We expect workers do need to management their time and area. However we’re innovators, so we have to be collectively. I might wish to say we now give workers 40% flexibility with their time. We’re saying you have to be within the workplace two or three days per week.

Did that actual property divestiture create extra liquidity for acquisitions?

Barrenechea: No. We nonetheless need proximity to our expertise. I am not seeking to go from 15,000 workers immediately to 25,000. I am not seeking to work from 25,000 locations. Proximity is essential. So, it hasn’t opened up totally different acquisitions, but it surely’s opened up expertise for us as soon as we determined that we’re not tethered to this one place. We’re tethered to a 100-kilometer radius [from our offices].

Would you fly on an airplane, for those who knew that plane was designed by 10,000 engineers in 10,000 totally different locations they usually by no means got here collectively? In all probability not. And it is the identical for software program. We’ve got to be collectively to be the very best innovators.

What can OpenText customers sit up for within the roadmap? What’s popping out that you could speak about?

Barrenechea: All the pieces. Titanium in 23.2 [next year’s second-quarter release]. We put a variety of assume time, a variety of R&D, a variety of preparation attending to Titanium, and this is why it is essential: Our public cloud shall be at purposeful parity [to the private cloud offerings], and prospects will really have the selection of the place to position a workload in our purposeful domains. That is a degree of freedom… in order that’s the place we’re centered. That, and getting Magellan engaged on high of it.

OpenText prospects have been transitioning to the cloud for years, similar to Oracle, SAP and Microsoft prospects. Do you assume there shall be a second the place all people’s 100% on the cloud?

Barrenechea: No. Will the cloud be the most important platform? And it’s. Will there be a time limit when the mainframe by no means exists? I do not assume in my lifetime that both off-cloud or personal cloud will go away. There’s an excessive amount of worth in it — the worth of management, the worth of safety, the worth of defending all of your mojo, your integrations, which far outweighs attending to a SaaS platform. I do not see off-cloud or personal cloud going away anytime quickly.

Editor’s be aware: This Q&A was edited for readability and brevity.

Don Fluckinger covers enterprise content material administration, CRM, advertising and marketing automation, e-commerce, customer support and enabling applied sciences for TechTarget Editorial.

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