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MEMO FROM THE FUTURE: OPEN TEXT

CEO Edition

STRATEGIC BOARD MEMO June 2030

TO: Board of Directors, Executive Committee

FROM: Mark Barrenechea, President & CEO

DATE: June 2030

SUBJECT: From ECM to Enterprise AI Data Platform

THE MOMENT

We stand at an extraordinary inflection. For 25 years, Open Text has been an Enterprise Content Management company. Good business. Profitable. Durable.

But in the past 18 months, we've discovered that our real value isn't content management. It's enterprise data intelligence.

Our ECM platform, which manages trillions of documents across enterprises, can now extract, classify, and analyze that data at scale using AI. And enterprises will pay us significantly more for this capability than they ever paid for pure content management.

This is a pivot from legacy software vendor to AI data platform company. And it's happening right now.

THE REALIZATION

In late 2028, I had a series of conversations with our largest enterprise customers (financial services, healthcare, manufacturing, government). The pattern was striking:

Customer: "We have 100 million documents in Open Text. We need to extract specific data from them. Can you do that?"

Us: "Yes, we can build a custom integration..."

Customer: "We need it to work at scale. Across different document types. With 95%+ accuracy. And we need it in 60 days."

This was a new class of customer problem. It wasn't about managing documents. It was about extracting intelligence from unstructured data.

By early 2029, we had built AI-powered data extraction into our platform. The response from customers was overwhelming. Financial services firms were offering to pay 3-5x our standard licensing fees for AI-enhanced document intelligence capabilities.

Healthcare systems were using it for compliance and risk identification. Government agencies were using it for regulatory document processing.

We stumbled onto something larger than our core business.

THE STRATEGY

Open Text is pivoting from a legacy ECM vendor to an Enterprise AI Data Intelligence platform.

This doesn't mean abandoning our ECM business. It means understanding that ECM is the foundation for a larger AI business.

Three-part strategy:

Part 1: Evolve ECM as the Foundation Layer

ECM will remain 50-60% of our revenue through 2035. But ECM's purpose is no longer "manage documents." It's "provide the secure, compliant foundation for enterprise data intelligence."

This shifts how we invest in and position ECM: - Focus on enterprise integration and compliance (SOC 2, HIPAA, regulatory frameworks) - Build ECM as the secure vault for unstructured data - Emphasize deep enterprise relationships and lock-in

Margins improve, growth stabilizes at flat-to-low-single-digit, but profitability remains high.

Part 2: Build AI Data Intelligence as the Growth Engine

AI Data Intelligence is growing 60%+ annually and has become $800M+ revenue in just 18 months.

We need to lean into this aggressively: - Hire 500+ AI/ML engineers and data scientists - Acquire specialized AI tools and integrate them into the platform - Build vertical-specific intelligence solutions (financial services document analysis, healthcare compliance, legal contract intelligence) - Price these services at a 3-5x premium over base ECM pricing

Target: AI Data Intelligence becomes $3-4B revenue by 2035.

Part 3: Strategic Partnerships and M&A

To accelerate AI Data Intelligence, we should: - Partner with leading foundation model providers (OpenAI, Anthropic, Google) to ensure we have access to best-in-class models - Acquire specialized AI data tools that complement our platform - Invest in vertical-specific solutions (build or acquire)

Budget: $500M-1B for strategic M&A over next three years.

THE FINANCIAL OPPORTUNITY

Today: $3.8B revenue (34% margins)

By 2035: - ECM revenue: $2-2.2B (low single-digit growth, 35% margins) - AI Data Intelligence: $3-4B (25% CAGR, 45% margins) - Security/IT Ops: $1B (modest growth, 30% margins) - Total revenue: $6-7.2B (10-12% CAGR) - Blended operating margin: 38-40%

This implies a company that: - Is worth $20-24B (using 8x revenue multiple for mixed growth/profitability profile) - Generates $2-3B annual free cash flow - Is credibly positioned as an AI platform company, not a legacy vendor

Current market cap: ~USD $13B. Implied upside: 50-85% if strategy executes.

ORGANIZATIONAL CHANGES

New business units:

  1. ECM & Data Foundation — traditional ECM, compliance, integration. Focus on profitability and enterprise relationships.

  2. AI Data Intelligence — growing 60%+ annually. New products, new go-to-market, new compensation structure (performance-based, equity-heavy to attract talent).

  3. Security & IT Operations — stable business, maintain current structure.

Hiring:

Compensation:

EXECUTION RISKS

Risk 1: AI data extraction becomes commoditized before we scale. This is the biggest risk. If AWS, Microsoft, or others build better data extraction, our advantage disappears.

Mitigation: Move fast. Build vertical-specific solutions that are harder to commoditize. Invest in M&A to acquire specialized capabilities.

Risk 2: Legacy ECM customers don't upgrade to AI-enhanced tiers. If adoption is slower than we project, revenue growth stalls.

Mitigation: Bundle AI features into ECM licenses. Create compelling ROI cases (e.g., "Extract data from 100M documents in 90 days, save $10M annually in manual processing").

Risk 3: We're overestimating TAM for AI data intelligence. Maybe the market is smaller than we think.

Mitigation: Focus on high-value verticals (financial services, healthcare, legal) where the pain is most acute and customers will pay premium pricing.

CLOSING THOUGHT

Open Text's strength has always been deep relationships with enterprises. We've been trusted with their most important data.

In the AI era, that trust becomes more valuable, not less. Enterprises need vendors they can trust to handle AI-powered data extraction, especially when that data includes financial, health, or legal information.

We're positioned uniquely to serve this need. And the TAM is 10-20x larger than our historical ECM market.

Let's execute on this transition and emerge as a top-tier AI data platform company.

Mark

Confidential — Board and Executive Committee Only