Cantech Letter interviews John Shackleton of OpenText

John Shackleton and OpenText management ring the bell at the NASDAQ on January 24, 2011. The event marked the Waterloo company's fifteenth anniversary of going public.

John Shackleton and Open Text management ring the bell at the NASDAQ on January 24, 2011. The event marked the Waterloo company's fifteenth anniversary of going public.

Notice that the title of Chief Information Officer seems to be popping up more often now? Get use to it. Throughout the world more companies are looking to monetize their intellectual assets.

Many of them are turning to OpenText (TSX:OTC), the Waterloo based company that has become a worldwide leader in Enterprise Content management. Open Text grew out of a collaboration between the University of Waterloo and the New Oxford English Dictionary, the project was a collaboration with the Oxford University Press to computerize the OED. This engineers on this project realized that it required developing search technologies that could be used to quickly index and retrieve information. The search technology developed for this project, which incorporated full-text indexing and string-search technology, was recognized as being useful for other electronic applications. In 1991, at about the same time the Internet was emerging, the results of this project were commercialized by a private spin-off called OpenText Corporation.

As the Internet expanded in usage, OpenText grew as organizations found they needed to index and search their existing and growing stores of electronic information. In 1994, OpenText began hosting its OpenText 4 search engine on the World Wide Web, competing directly with the AltaVista Web search engine. In 1995, OpenText provided the search technology used by Yahoo! as part of its Web index. By Fiscal 2010 OpenText recorded more than (US) $900 million in revenue.

Enterprise Content Management is used to organize the mountains of data that large companies have and walk the regulatory and security issues associated with making this data available to employees and the general public whether through internal means or through the cloud. Recently, Cantech Letter’s Nick Waddell talked to OpenText President and CEO John Shackleton.

OpenText is widely regarded as a worldwide leader in Enterprise Content Management. For the lay person can you explain what Enterprise Content Management is and what role Open Text plays?

Enterprise Content Management or ECM describes a type of software increasingly being used in businesses globally which centrally, securely and safely manage all types of enterprise information, documents, vital records, Web content, video, images and email. ECM software let’s organizations manage rapidly growing volumes of content in a more organized way, and address compliance and legal issues, which are a continue concern for global organizations.

OpenText is a global leader in ECM and the largest independent solution provider in the industry with some 100 million customers in 114 countries. We also have what is probably the industry’s broadest solution suite in the OpenText ECM Suite. What is also unique about OpenText is our partnerships with Microsoft, Oracle and SAP, which have allowed us to build integrations with their solutions. This allows our ECM solutions to manage content in Outlook, SharePoint, Oracle or SAP.

The Gartner Group recently forecast that total software revenue in the ECM market will grow at a compound annual rate of 10.1% through 2014. What’s driving this growth?

A key driver for growth is simply the explosion in digital content, not just email and documents, but also rich media, web content, social media, plus the availability of all of this content over mobile devices. How you manage content and address compliance issues and manage productivity becomes more challenging without a strong ECM strategy and solution.

OpenText has grown a lot through acquisition, such as your recent acquisition of weComm. Aside from making financial sense what are your considerations before you fold in a company?

A company has to be a strategic fit for OpenText. This can come in a variety of ways: A company can bring key technology, such as weComm with mobility, or Metastorm with BPM. We may also look at acquisitions as opportunities to expand in key vertical or geographic markets. All of these factors can figure prominently in an acquisition decision. Another key factor might be whether a company we’re considering for acquisition also has a deep relationship with one of our major partners. That was the case with StreamServe and Metastorm – in addition to offering key complementary technologies, they had close relationships with SAP in the case of StreamServe and Microsoft in the case of Metastorm.

OpenText recently released social networking tools that have what the company calls “enterprise-strength security controls.” Do you see mobile security becoming a hot button issue in the near future?

It’s becoming a hot button issue now. Organizations are already looking at ways they can move more content and business applications to mobile devices to improve processes and productivity. Before they can invest in new mobile solutions, they need the confidence of knowing that these solutions will have the security to protect critical business information. This is becoming a huge opportunity for us and we have already been introducing solutions with the kind of security customers need as part of our OpenText Everywhere offering. Our recent acquisition of weComm greatly increase our ability to create mobile apps for customers, and also gives us a platform customers can use to create their own mobile apps they can use to reach their own customers or other stakeholders. It’s an exciting strategy for us.

About half of OpenText’s revenue comes from outside North America. This seems to have provided a buffer in troubled times. Do you see this revenue mix continuing or do you see a higher percentage of sales coming from outside North America?

This revenue mix has been fairly consistent. In our just announced FY Q3, more than 50 percent of revenues came from North America, 40 percent came from Europe and about 9 percent came from Asia. That’s again fairly close to past history. We’re seeing strength in the market for ECM globally so we don’t see factors at this stage that would bring any major changes in the near future.

What do you think the Waterloo area will look like in 20 years? Is the success of RIM and Open Text creating a Silicon Valley North?

I think in 20 years Waterloo will still be a place, though much larger, that is still growing tech companies. The Waterloo area has really been a dynamic area for growth for many years, driven by OpenText, RIM and many other technology companies that call Waterloo home. I think that’s owed to a combination of an entrepreneurial mind set, plus local universities, tech companies, and organizations such as Communitech, all focused on building Waterloo as a tech center, a Silicon Valley North.

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About Nick Waddell

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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