Businessmodel of OpenText

Customer Segments

OpenText has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at large companies, professional service firms, and government agencies.

Value Proposition

OpenText offers two primary value propositions: accessibility and brand/status.

The company creates accessibility by providing a wide variety of options. It has acquired over 40 companies since its founding. In the last five years alone it has purchased Easylink, ICCM, Cordys, GXS, Daegis, Information Graphics Corporation, Actuate Corporation, Recommind. This strategy has enabled it to diversify its portfolio and significantly expand its capabilities.

The company has established a strong brand due to its success. It is the largest software firm in Canada. It has 600,000 trading partners globally and generated $1.8 billion in revenues in 2016. It has 10,000 employees operating out of 120 offices worldwide.

It serves 20 million seats across 13,000 company deployments in 114 countries. Lastly, it has won a number of honors, including recognition as one of Canada’s Top 100 Employers in 2016 by Mediacorp Canada.

Channels

OpenText’s main channel is its direct sales team. The company promotes its offering through its website, social media pages, advertising, and participation in webinars, seminars, trade shows, and conferences.

Customer Relationships

OpenText’s customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:

Support Services - It offers general phone and e-mail support.

Training Services – It offers public classroom learning, on-site classes, and virtual classroom courses.

Consulting Services – It offers advisory services from consultants who analyze clients’ teams’ education and training needs and create the appropriate education plan.

Despite this orientation, there is a self-service component. The company’s website enables customers to complete eLearning courses, and provides answers to frequently asked questions. Also, there is a community element in the form of a peer forum where clients can interact.

Key Activities

OpenText’s business model entails designing and developing its Enterprise Information Management software and solutions for customers.

Key Partners

OpenText maintains the OpenText Global Partner Program, which features the following types of partnerships:

• Referral Program – The company invites firms to source new customer leads for license, subscription and professional services, and earn finder’s fees of 5% of 10% if the deals close.
• Reseller Program – The company works with firms to help them market and sell its products.
• Services Program – The company utilizes consulting firms and regional system integrators to help implement OpenText solutions for customers.
• Technology Program – The company works with vendors that integrate their software and/or hardware offerings  into its products and services, enhancing their value.
• Support Program – The company invites Customer Support Approved Partners to provide support directly to their customers. ### Key Resources

OpenText’s main resources are its human resources, who include the engineers and scientists that design and develop its software, the sales personnel that promote and sell it, the training/consulting staff members that provide instruction/advisory services, and the customer service staff members that provide support.

It also places a high priority on its intellectual property such as patents.

Cost Structure

OpenText has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is cost of revenues.

Other major drivers are in the areas of sales/marketing and research/development, both fixed expenses.

Revenue Streams

OpenText has four revenue streams:

• License Revenues – Revenues generated from fees charged for the licensing of software products to customers.
• Cloud Services and Subscriptions – Revenues generated from the sale of cloud services and subscriptions.
• Customer Support – Revenues generated from fees charged for customer support services, which include software upgrades and access to a knowledge base.
• Professional Service and Other – Revenues generated from fees charged for consulting and learning services, which address implementation, training, and integration of its licensed products into clients’ systems.