Key Insights with Todd Cione at OpenText World 2024

This is Techron tv. Hello everybody. We're back at OpenText World in beautiful Las Vegas, and we're talking to Todd here about, well, what's he hearing from customers on this stage today?

We heard from American Family Insurance and Bosch, and you talked to all these customers, and I'm wondering, are you starting to hear something from them that's different? Is the tenor the tone changing their thoughts about it? Kind of, you know, give us some insights into what the collective is saying.

Yeah, Thanks for, thanks for that question. There's certainly some patterns, uh, that I've seen in, in, you know, dozens and dozens of conversations this week and listening. And, uh, number one, cybersecurity continues to be top of mind for every customer.

Not only technical folks who are here, but business leaders, board members. It is mission critical across all lovers within an an enterprise and, uh, how they can deploy cybersecurity solutions that are effective and also help simplify, um, their environments. That's one.

I'd say number two, there's a ton of enthusiasm about innovation. Lots and lots of, uh, excitement about innovation. Titanium x release that we've talked about today and, uh, yesterday.

So much enthusiasm, um, certainly about artificial intelligence and what aviator can bring to them as well is the second. And then, look, I think number three, it's all about value. Uh, we're really excited about titanium X and what it means to the marketplace, but customers, they want to experience value to solve their problems.

And I think we had a lot of conversations this week about ways we can do that. We've seen some, uh, shall we say, interesting economic times in the recent past. And I wonder if we have turned the corner on that, if you're seeing a more appetite for investments in it across the board, or, and in some cases, maybe other vertical industries are more aggressive than others.

What do you see in there? Yeah, I think it certainly varies by industry. It varies by market segment and maybe geography as well.

You know, if you think about SMB market segment, there are certainly some headwinds in SMB, uh, in the United States, um, based on, uh, some macroeconomics, I think in the enterprise. However, in, you know, the global 10,000, there's such a need to, uh, manage environments efficiency efficiently and take advantage of innovation. Um, that's our sweet spot where we do super, super well.

Um, and like I said, aviator, uh, titanium x, those releases, I think, um, really bode well for us to be able to bring new value to customers. Mm-Hmm. Are you seeing people thinking about ripping and replacing legacy platforms?

Or are they trying to maybe move forward more gradually and kind of bring things in in a, in a, in a more iterative fashion? I mean, what is the sense of, um, the weight of the legacy? Yeah, I think, I think, you know, it's pretty safe to say, I think gone are the days of the multi-year, mega ERP implementations of decades ago.

And I think today, um, certainly CIOs, uh, business leaders, uh, take a more conservative approach to incremental, uh, investments to get value. And, uh, that's one of the things that we do so well at OpenText. You know, we have resources that are able to help build, um, uh, business value justifications to support incremental, um, investments that our customers are making.

And we're able to prove things out really, really quickly to customers, and that helps us, I think, differentiate. Are you finding the engagement is coming from the IT organization or does it come from the business unit these days, given the interest and the value of data that people are starting to appreciate, is the, or is it a committee now that you've gotta go sell both ends to? Yeah, that's a good question.

I think there's lots of data that highlight, uh, decision making within large enterprises is more distributed than ever. Mm-Hmm. 2 individuals to make a decision post COVID.

It's, uh, actually low double digits now, typically in a large enterprise decision process. So it is very distributed. Um, we work across both, uh, it, uh, leaders, procurement leaders, you know, when you get down to the end of a decision, but business leaders we're oftentimes, not always, oftentimes we're budgets sit, we, we work hard to, uh, bring value and bring alignment across those, those Functions.

How do you do that when any one of the 10 people can say no and scuttle the whole thing? So, um, how do you kinda keep everybody on the same page? Look, uh, I'd lead the worldwide sales organization, which essentially is our account management teams.

And at the end of the day, our job is to know our technology enough and to know our customers enough to be an effective bridge to bridge value, bridge value around our IT om products, bridge value around our content products, bridge value around our business networks products, uh, so that, again, we can quantify it, uh, into, in a meaningful way for our customers. And that way, um, you know, it's, it's not as if we're just selling something. We're actually partnering with that large enterprise to solve problems for them, and we demonstrate skin in the game, um, by spending a lot of time upfront, uh, working on value.

Speaking of value and innovation, you, we talked about ai, I think we went from last year, this kind of, uh, irrational exuberance around ai, and then people did all these, uh, proof of concepts, and now I think they're realizing they can't afford to do all the things that they wanna do. So maybe they're picking two or three things to focus on. I mean, are you starting to see more of folks trying to figure out how to move AI into some sort of production environment that returns a value on the investment?

It certainly is, is mixed in the marketplace. Uh, another, maybe a site, another study that I read, McKinsey actually highlighted that, uh, the percentage of proof of concepts leveraging AI that move into production is significantly higher when an organization has a center of expertise working across the enterprise to bring value with ai. And, and we see that happen.

One of the exciting things, uh, that we can do that really differentiates us in the marketplace is aviator, you know, is integrated into our technology. We manage so much data for our customers. Those two things together allows us to spin up proof of concepts, but very quickly move into production because we can demonstrate and quantify value.

So, uh, that, that's something that we're working on, uh, quite, quite intensely. How has the selling motion changed? And I'm asking because, you know, the days when you could cold call people or pretty much over, nobody picks up their phone unless they already know the number on the other side of it, right?

So, um, how does a sales team engage somebody or kind of get them to kinda wanna hear the story Today? Um, all of us, whether you're consumer or you're an enterprise buyer, we have at least 50% of the information we need at our fingertips online to make a buying decision. Uh, so when a sales team engages, oftentimes, you know, the buyer's way more informed than in years past, way, way more informed.

So it's up to us to build relationships that are based on trust. You know, we have some very long lasting customer relationships that have to be built on trust that comes from value. And then we have to pro proactively and provocatively bring a point of view on how ai, uh, can add value to a business, how looking at, you know, a problem in a different way, uh, can add value.

So we think a lot about productivity and being provocative, um, uh, in our sales force. Um, and, and, uh, that, that's a big way that we engage. I think it's maybe not much of a secret, but you do have competitors.

So when you do win, what is it that, you know, people kinda look for in OpenText that kind of resonates with them? Yeah, There's a, there's a couple common patterns that we see when we win, um, and, and we like our chances to win. Uh, number one is, you know, oftentimes it's product capability.

Um, we have to be able to deliver a product that aligns to what the customer needs. But number two, um, almost just as important, it is, uh, a resource, a sales resource that understands the technology enough, as I referenced and understands the customer enough to be able to bridge value and to align those product capabilities to solve a business problem or to capture an uncaptured opportunity. So that's number two.

And then I'd say number three is, look, we meet customers where they're at and how they want to consume our technology. Whether that means they, they have a workload or they're in a heavily regulated industry, uh, that they need to keep, uh, a workload on premise, or if they wanna move it to the cloud, more often than not in hybrid multi-cloud environments, we're, we're pretty differentiated in those flexible, uh, capabilities. So those three things I think help us win.

Has the relationship between the sales team and the customer fundamentally changed? Right? It used to be somewhat adversarial in some regards.

Is that becoming more of a collaboration? Well, look, I think the, the best, most mutually productive relationship between, you know, a buyer and a seller, uh, you know, a vendor and a customer are those that are built on trust. Trust is built on value.

And so we think about relationship over transaction. Um, look, we deliver thousands of transactions every quarter. We're a publicly traded company that has growth expectations.

So we will deliver a lot of transactions to meet the needs of our shareholders and our stakeholders, um, but never at the expense of a relationship with a customer. And, uh, we want to think, and we do think about these relationships in the long term based on value. How do you, um, work with your partners, right?

You have a lot of technology partners and they have sales teams too, and Hmm, I think nothing a customer likes lus is when, you know, two salespeople who are working on the same deal meet for the first time on site with them. So how do you align those sales forces? Yeah, uh, OpenText certainly has a robust partner ecosystem.

Uh, and increasingly we're relying on partners to help us scale in, in, in different ways. And that ranges from, you know, in the cloud to cloud service providers, the large three cloud service providers, starting with Microsoft, Google, and also AWS super important relationships for us. We co-sell with them, working with our mutual customers.

Um, we certainly also work with, uh, a set of system integrators aligned with, um, OpenText professional services. Uh, and then in, uh, markets where we have less coverage, uh, and or specific sectors where we have less coverage. We work with channel partners as well, um, in emerging markets, um, Southeast Asia, Latin America, uh, and US public sector, we work with a lot of of partners as well.

Mm-Hmm. What do you wish that more customers knew about OpenText before you got there? I mean, what do you find yourself kind of saying over and over again?

Geez, I wish people already knew that. So we could get to the, to the value prop. So I'd say maybe two things.

Um, one is the breadth of what OpenText can provide to a large enterprise. We have, we have such a broad portfolio, and, uh, it's, it's, it's on us to be able to effectively articulate that to a customer. We've got great coverage in our Salesforce.

We have an opportunity, uh, to bring a more unified message across that portfolio to a customer. That's, that's a big one. We control that.

Secondly, is where we're going, uh, as a company in terms of our product roadmap and the innovation that we have as well. In my experience, enterprises, typically, they will make buying decisions based on what you have today, but wrapped with confidence because of where you're going. So it's really important for us to educate our customers and future customers on that product roadmap that is so innovative.

We, we announced so much new innovation this week at OpenText World as an example. It seems like companies are sharing more with customers these days in terms of those roadmaps. Can I even remember when the roadmap was kind of like, hell, very close to the vest, and now it feels like, um, we're sharing more?

Is that because the customer, for all intents and purposes, becomes almost an investor in the company, so they need to know where you're going? I, I think it, it's probably mindset mentality too. And, and when you move to the cloud, you know, the, the innovation cycle is fast.

Um, you know, Muhi and team are innovating, you know, and releasing new capabilities at a accelerated rate. Uh, so it's very important that we educate customers on that new innovation so they can consume it and then get value from it. Um, you know, they're very different than than, uh, days of yesterday.

Um, and just purely on, on-premise software. So as you look forward into 2025, you know, what's your crystal ball telling you about the market and what should we expect? I guess I'm asking you to set your quota.

A If I, if I could tell you what was gonna happen, the marketplace, I, I think I'd be in a, in a different job. But I would say, you know, there, the, the leading indicator patterns that we anticipate and, and, uh, the anecdotes that I hear from customers, including this week, you know, what I read, uh, from leaders in the marketplace, um, number one, cybersecurity is only accelerating in importance. We're investing so much in cybersecurity and anticipate that business unit being amongst, if not our biggest business unit in the next few years to come, it's gonna be integrated into everything we do, the way that we support and serve our customers.

That's number one. Number two, I think, as you've already referenced and we've talked about, um, AI is, uh, beginning to play itself out. You know, we'll see more and more and more steps of value, I think in 25 with acceleration, going into 26, getting workloads from proof of concept into production.

Uh, that's another one. Um, I think you'll see from OpenText even more value coming from partnerships. You know, the one plus one, uh, equals three types of partnerships.

Like SAP, you know, we've won their Pinnacle Award 19 times. So it's a long standing partnership, but in many ways, we're just getting started. This is gonna scale even more.

We're excited about the value that's gonna be coming to our joint customers, uh, from that partnership. So those are, those are three things that are top of mind. One of the things I do hear a lot about is customers wanna rationalize the number of vendors they deal with.

So does that play to your strength? We like that we have a breadth of, of offerings and solutions that are, you know, in many ways really difficult for others to compete with. And, um, the more that we can help customers, as I've already referenced, understand that breadth and understand how we can help them outside of maybe one category of products they're using from OpenText, uh, the more competitive we are, the more value we bring to that customer.

You know, the more, the more challenging we are to our competitors. All right, folks. You heard it here.

Hey, it's about the relationship, not the transaction. Thanks for coming by. Thank you.

Appreciate the time. All right. And we'll be back in a minute.