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OpenText users get their Aviator enterprise content AI platform
OpenText: More homegrown AI tools, fewer acquisitions.
OpenText emerged from a regime change earlier this year and has charted its course for the next 18 months, which includes ambitious plans for an updated, AI-forward identity, products and growth.
Last August, the company fired longtime CEO Mark Barrenechea and replaced him with insider James McGourlay as interim. The change comes with a major overhaul of the company's acquisition strategy, which has been its primary growth driver. Instead, the company will focus on strategic acquisitions when they make sense for OpenText's core technologies, said Savinay Berry, executive vice president, chief product officer and chief technology officer at OpenText.
Not only will OpenText apply more exacting standards in the companies it acquires, but it also plans to divest itself of some of the acquisitions made during Barrenechea's tenure that the new leadership deems "non-core." The first to go was eDocs, sold to NetDocuments for $163 million last August, with more selloffs planned.
Savinay Berry
OpenText has likely recouped its acquisition costs for many of the companies it has acquired over the years through licensing, maintenance and professional services contracts, said Alan Pelz-Sharpe, founder of Deep Analysis, an independent research firm. While some of the products and applications OpenText plans to sell might be older, buyers will likely line up because there's still value contained within most.
"All of those legacy products have a customer base," Pelz-Sharpe said. "Somebody who's got a more modern, better-equipped sales force, more equipped marketing, and a bigger customer base can take on [those products], wrap them up, upsell and cross-sell."
In the run-up to the change in CEOs, the company reported a 10% year-over-year decline in revenue for its fiscal year, which ended in August. Some observers, including Pelz-Sharpe, suggest that OpenText's 2022 acquisition of Micro Focus's extensive software catalog -- and the $6 billion financing thereof -- marked the start of Barrenechea's downfall.
Under Barrenechea's leadership in 2024, the company initiated a three-year austerity plan, resulting in 1,200 layoffs to date.
OpenText recast as an AI company
OpenText hopes to reinvent itself as an AI-first company, a movement that Berry said began several quarters ago. The company previewed several new products in development for customers at its OpenText World conference this week in Nashville.
First is OpenText AI Data Platform, a zero-copy data layer for the enterprise content stored across OpenText applications. It also serves as an orchestration layer for AI agents of multiple vendors at a time when other tech rivals might not be cooperating to make agents play well together, Berry said.
"Openness is a core principle, which means that every agent that's out there will integrate," Berry said. "We know our customers are going to need that because they're operating all these different solutions."
Also to come is OpenText Aviator Studio, a no-code AI agent builder with data governance guardrails, a prompt library and tools for controlling multi-agent workflows. Moreover, planned for release is OpenText Data Compliance, which assesses a customer's AI readiness and enables data redaction, controls for personally identifiable information and encryption tools.
Perhaps the "killer app" of the products OpenText is previewing, Pelz-Sharpe said, is Knowledge Discovery, which ingests unstructured data, metatags it with AI, and builds knowledge graphs around it. That is the automation OpenText customers likely need the most, and it will make a lot of currently unusable enterprise data visible and accessible for AI tools and workflows.
"What does AI need, I wonder?" Pelz-Sharpe said. "Exactly that stuff. So, they have an opportunity, they really do."
Don Fluckinger is a senior news writer for Informa TechTarget. He covers customer experience, digital experience management and end-user computing. Got a tip? Email him.
