Open Text Corp.
(OTEX-Q, OTEX-T) US$39.62 | C$52.26
OpenText World 2020: Building Up Cloud Capabilities
Event
OpenText is holding its annual user conference this week.
Impact: NEUTRAL
Adding more cloud capabilities. OpenText released Cloud Edition 20.4, which added more capabilities to its cloud offering. CEO Mark Barrenechea noted that OpenText is targeting to eventually deliver all its products as a service. The strengthening of OpenText's cloud solutions should help it to grow its recurring revenue mix from the 78% it achieved in the LTM. This will be increasingly important in the current environment, given that we are seeing an acceleration of companies migrating to the cloud, as evidenced by SAP's commentary yesterday.
Improving partner and developer support. OpenText also launched its Developer Cloud, which is expected to help developers create custom solutions on OpenText's platform. Developer Cloud launches with 32 services and will continue to add more. If successful, we believe that the solution can increase defensibility, since customers and partners will have proprietary IP tied into the platform. The company also highlighted its deep integration with a broad group of partners. For example, the company demonstrated its ability to integrate with Microsoft Teams to automate the lifecycle of the information generated within Teams (create, archive, retire, etc. the information). OpenText also highlighted its ability to integrate with Office 365 and highlighted that O365 is good for content creation and had basic document management, but required OpenText for more advanced information management capabilities. We believe that integration with a broad group of enterprise solutions simplifies the integration process and may remove the need for other intermediary solutions.
We will look for additional updates at the company's investor day on November 12.