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Copyright © 1995-2009 Open Text Inc. All rights reserved.
yorktech.ca
Tom JenkinsExecutive Chairman and Chief Strategy Officer
Open Text Corporation
Capitalize on the Future
Digital Media
May 13, 2009
Open Text Corporation
Tom JenkinsExecutive Chairman and Chief Strategy Officer
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 1
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Agenda
Open Text Overview
Internet Phases
Conclusion
Questions
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“A good hockey player plays where the puck is. A great hockey players plays where the puck is going to be" - The Great One
Digital Media
yorktech.caCopyright © Open Text Corporation. All rights reserved. Slide 4
Agenda
Open Text Update
The Evolution of the Internet Web 1.0 Web 2.0 Web 3.0
The Future of ECM
yorktech.caCopyright © Open Text Corporation. All rights reserved. Slide 5
Agenda
Open Text Update
The Evolution of the Internet Web 1.0 Web 2.0 Web 3.0
The Future of ECM
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Crisis? What Crisis?
Open Text continues to
perform well in the recession
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 6
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Open Text Financial Performance
Slide 7
40% Compound Average
Growth Rate over past decade - $1 Billion this
year
Source: Annual Reports & Press Releases, Open Text Corporation, 2008
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 7
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Large Customer Community
50 million
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 8Slide 8
Strongest Dedicated ECM Community in
the World
Copyright © 1995-2008 Open Text Inc. All rights reserved. Copyright © 1995 - 2009 Open Text Corporation. All rights
reserved.
Slide 8
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Millions use Open Text software in Canada
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Investing $1 Billion into Innovation
Slide 11
$1 Billion for ECM Research
2,000 Developers on average over the next five years
Inventing the Future of ECM
Open Text ranked 27th in R&D spending in Canada last year, up from 37th in one year
Open Text grew R&D spending by 26%, third fastest growth in Canada last year
At current rate of spend and growth, Open Text will rank in the top 20 in corporate R&D spending this year in Canada
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Open Text’s commitment to Ontario
University of Waterloo - Stratford• Open Text has committed $10 million over 5 years
to the University of Waterloo for the creation of the Stratford Institute which will:• Building a skills base in Digital Media• Multi-discipline curriculum focused on
Technology, Business and Creativity• Tom Jenkins and Ken Coates, Dean of Arts
are the founders of the Stratford Campus• $60 Million
Canadian Digital Media Network (CDMN)
• Federal Centre of Excellence for Canada in Digital Media
• Open Text is one of the Strategic Partners of the CDMN and committed $10 million to the project
• Tom Jenkins is the Chair of the CDMN. • $200 Million
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Open Text’s commitment to Canada The Canada Project
• Project will “digitize everything in Canada” ensuring all history and culture is properly recorded, protected, accurate, and available for all Canadian citizens.
• Open Text working closely with the Canadian Federal Government & University of Waterloo to define and implement a national digital media strategy while pioneering unique innovation for Canada.
• Tom Jenkins is co-lead with Ian Wilson, the national librarian of Canada.
• $1 Billion (when approved)
Canada 3.0 Conference.
A national dialogue on the future of digital media amongst all levels of government, academia and the private sector for policy discussions and formulation
Assess national capacity in digital media in Canada today and develop collaborative strategies
Keynotes include Ministers from MRI, MEDT, Colleges, Industry Canada, Heritage, CEO of RIM, Corus, Christie, Presidents of OCAD, Ryerson, Carleton, UW, CIO of Govt of Canada and Govt of Ontario
700 participants Tom Jenkins is Chair of the Conference $50 Million
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How Did Open Text Get Here?
History
Strategy Decisions
Managing Growth
Operations Decisions
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The Original “Google”
Jerry Yang CEO of Yahoo and Tom Jenkins CEO of Open Text launch in 1995
Open Text provided the web search for MSN, MCI, Yahoo, IBM, etc.
Open Text Index was one of the most used web pages in early 90s.
Open Text moved into corporate search
Today it is a billion dollar company with 4,000 employees
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Open Text History – A Canadian Story
Started in Waterloo, Canada 1991
Put Oxford Dictionary online in 1991
1st Internet search engine in 1994
1st Yahoo search engine in 1995
1st Java based workflow in 1996
1st ECM Netscape product in 1997
Acquired Hummingbird in 2006
Largest ECM Vendor in 2007
Exceed $1 Billion in 2009
yorktech.caCopyright © 1995 - 2009 Open Text Corporation. All rights
reserved.
Strategic Decision Points
Market Consolidation
Internet Decisions
DotCom Boom/Bust
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The boy rode on the donkey and the old man walked. As they went along, they passed some people who remarked, "it was a shame the old man was walking and the boy was riding". The man and boy thought maybe the critics were right so they changed positions. Later, they passed some people that remarked, "What a shame, he makes that little boy walk." They decided they both would walk! Soon they passed some more people who thought they were stupid to walk when they had a decent donkey to ride. So they both rode the donkey!
Now they passed some people that shamed them by saying "how awful to put such a load on a poor donkey". The boy and man said they were probably right so they decided to carry the donkey. As they crossed a bridge, they lost their grip on the animal and he fell into the river and drowned.
Management Lesson
Management Lesson:
If you try to please everyone, you will eventually lose your ass.
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1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*
Hyper Growth at Open Text
50%
70% Compounded over 12 years(6,000% from startup)
yorktech.caCopyright © 1995 - 2009 Open Text Corporation. All rights
reserved.
Channel Build Out
Tech
no
log
y L
ead
Time is everything!
Tech leads are fleeting
yorktech.caCopyright © 1995 - 2009 Open Text Corporation. All rights
reserved.
Hot Market: everyone jumps in!
Competitors everywhere!
What to do? Where to focus?
Where will the best chance for ROI?
How to win the race against time….
Keep your eye on the ball:
Key Decisions
Implementation Issues
Managing Hyper Growth
yorktech.caCopyright © 1995 - 2009 Open Text Corporation. All rights
reserved.
Building long term shareholder value is not
necessarily making a profit every quarter.....
Many large companies develop new products at huge
losses prior to recovering investments
Open Text had some $50 million in losses before it
made money
Transition to Profit is very Cultural and Painful
Time is your biggest enemy
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Hyper Growth – Management Team
What happened to that great Exec team?
A manager of 10 is not good with 100.
But…
You can’t manage 10 with a 100 manager!
The more successful mgt is…. the more they put themselves out of a job!
Prep them from day one….
Move over or leave the company.
Requires CONSTANT attention!
Most Important thing to watch of all growth factors
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19
93
19
97
20
01
Staff Growth
2004
3,000 staff
Single Office
Multi Office
Divisional
10 staff
100 staff
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A Key Decision - $500 MM bet
yorktech.caCopyright © 1995 - 2009 Open Text Corporation. All rights
reserved.
Mergers can assist organic growth but they cannot replace core technology
Get people,applications & customer base
Mergers create potential conflicts culture, strategy and implementation
Best M&A happens before the deal is signed!
Give the Target a worldwide mandateMUST be done by a small group that is not involved in day
to day operations
Mergers Facilitate & Complicate
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Management Lesson
A crow was sitting on a tree, doing nothing all day. A small rabbit saw the crow, and asked him, "Can I also sit like you and do nothing all day long?
The crow answered: "Sure, why not. So, the rabbit sat on the ground below the crow, and rested. All of a sudden, a fox appeared, jumped on the rabbit and ate it.
Management Lesson:
To be sitting and doing nothing, you must be sitting very, very high up.
yorktech.caCopyright © 1995 - 2009 Open Text Corporation. All rights
reserved.
Easy to be busy in a hyper growth business
Management must stay focused on the business
By definition, entrepreneur usually has the vision
Let others do the legal, financial and other work
Be ready to:
Make the Key Decision
Invest in infrastructure
Eye on the right ball!
yorktech.caCopyright © 1995 - 2009 Open Text Corporation. All rights
reserved.
Raise money! It reduces risk!
Boot strapping proves nothing!!
Building long term shareholder relationships is key: Tell them what is going on!
Investor types: momentum, long term & value
Analysts follow similar pattern
Find the match that suits you and your strategy
You CAN raise money in Canada from the right places at the right time
In fact, situation in Canada is BETTER than in the US right now!
Finance
yorktech.caCopyright © 1995 - 2009 Open Text Corporation. All rights
reserved.
1984: University Waterloo
1992: Venture Capital ($1 MM)
1995: Private placements ($10MM)
1996: NASDAQ IPO ($100MM)
1998: TSE cross list ($60MM)
2000: Placement ($150MM)
2001: Buyback ($200MM)
2002: Cash in Bank ($200 MM)
2003: Cash Flow ($60 MM per year)
2006: Finance acquisition ($400 MM)
OTEX Financing History
yorktech.caCopyright © Open Text Corporation. All rights reserved. Slide 31
Agenda
Open Text Update
The Evolution of the Internet Web 1.0 Web 2.0 Web 3.0
The Future of ECM
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How much content?
32 million books100,000 films2 million songs10 billion web pages1 million newspapers
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 32
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Newspapers and email dominate
*FY05 Company Estimates
Pet
abyt
es
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 33
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The Web is Evolving to Broadcast
From newspaper style publishing to multi-media broadcasting
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 34
Digital Media in the corporate world is known as “Enterprise Content Management” or ECM
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Social Media is the new content
Copyright © Open Text Corporation 2008 - 2009. All rights reserved.
Slide 35
Rich Media
Social NetworkSocial Media
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Social Media Drives Content & Bandwidth
*FY05 Company Estimates
The amount of
content required for
one web page written,
spoken and video
recorded
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 36
This will have a huge impact on the amount of content……
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Bandwidth Issues
2000 Email dominates (Microsoft) Web page viewing Dark Fiber – Net Neutrality
2009 Social networking dominates (Twitter) Fiber overload Wireless use rises
2011 Rich media dominates (Bit Torrent) Bandwidth becomes a major variable cost Managing content is a key factor for bandwidth management!
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 37
yorktech.caSlide 38
Phases of the Internet Evolution
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 38Copyright © 1995-2009 Open Text Inc. All rights reserved.
The Cloud
Web 1.0
Web 2.0
Web 3.0
Mobile
Desktop
yorktech.caCopyright © Open Text Corporation. All rights reserved. Slide 39
Agenda
Open Text Update
The Evolution of the Internet Web 1.0 Web 2.0 Web 3.0
The Future of ECM
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Competing Challenges for ECM
Competitive Pressure
Performance
Sarbanes Oxley
Increasing Regulatory
Scrutiny
Litigation
Shareholder Value
Growth & Profitability
Compliance vs.
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 40
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We wrote the Book on ECM
Available to everyone at this conference and online at www.opentext.com
Copyright © 1995 - 2009 Open Text Corporation. All rights reserved.
Slide 41
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Trusted Repository for Enterprise Content
