Even though he’s an American, the most surprising thing that OpenText CEO Mark Barrenechea said last week wasn’t that he prides himself for having “a Canadian soul” after spending the past eight years in the firm’s Waterloo, Ont.-based headquarters. It’s that he’s not tapping into the deep and in-demand brain trust Canada has to offer in artificial intelligence.
At a Q&A session with press, Barrenechea shared that he puts Canadian flags in every OpenText office, and vowed that as long as he was CEO, OpenText would remain a Canadian company. When I asked what OpenText was doing to develop its brain trust in the area of AI, however, Barrenchea didn’t hedge his answer. OpenText doesn’t have PhDs on staff, nor does it have academics partnerships in the area.
“We’re a bit more in the applied world,” he said. “I’m not bashful here. I think there’s a lot more that we could do and should do.”
Magellan is OpenText’s fledgeling AI platform that faces tough competition in the enterprise software world. Namely, from IBM Corp.’s Watson, a piece of algorithmic intellectual property that’s become a household name thanks to defeating the best human competitors on Jeopardy. Yet OpenText has focused so far on how Magellan can enhance its enterprise information management products rather than how it could be truly disruptive. It’s hard to say how successful Magellan is since its launch about one year ago, because OpenText doesn’t share the number of clients using it.
Canada’s AI talent, most notably in Toronto and Montreal, has drawn the largest technology brands from Silicon Valley to invest here. University of Toronto computer science professor Geoffrey Hinton, the inventor of the “neural nets” approach to AI, is an engineering fellow at Google and involved in a new AI lab there. IBM entrenched itself in Montreal’s AI ecosystem in April 2017, establishing a new AI lab with the University of Montreal that is run by Yoshua Bengio, the Canada Research Chair in Statistical Learning Algorithms. Microsoft Corp. is also active in Montreal, announcing in January that it plans to expand its AI lab there to as many as 75 technical experts over the next two years. Microsoft also acquired Montreal-based AI startup Maluuba in January 2017. (Barrenechea may want to take note of that approach, as he’s indicated OpenText will continue making acquisitions as a growth strategy.)
The list goes on, and this is one pattern you don’t need machine learning to identify for you. The world’s leading technology firms see Canada’s largest cities as AI hotspots. Silicon Valley is swooping in to reap the rewards of that ecosystem.
But OpenText doesn’t necessarily need to reach deep into its wallet to connect itself to local AI talent. In my conversations with company executives about OpenText’s new cloud strategy, they impressed upon me how the pivot to selling software in the cloud required a culture shift. That new culture involves thinking like a startup. Perhaps they should now extend that approach to their AI strategy.
They could do so by stealing a page out of the book of Nudge.ai, a Toronto-based software startup that uses AI to help sales professionals forge and maintain business relationships. In addition to having an Oxford PhD-holding chief data scientist on staff in Zoe Katsimitsoulia, it seeks to take advantage of the broader community outside of its office walls.
“Taking advantage of being in Ontario, whether it’s the Vector Institute, the universities, or the vibrant startup landscape, in order to have a pulse on what’s next is almost a requirement of business success going forward,” says Steve Woods, chief technology officer at Nudge.ai.
By bringing in an outside perspective, OpenText might see how an AI-fueled business model might hold even more potential in the future than its current plan of crunching more unstructured data in EIM products. While the staff at OpenText views AI in the context of how it’s always solved its customer’s problems in the past, a ‘startup approach’ throws that out the window and starts with a clean slate.
“Many times the assumptions that legacy companies make about the market are so ingrained that they don’t even notice themselves making them, and thus struggle to see where those assumptions are leading them astray,” Woods says.
It’s nice that Barrenechea celebrates OpenText’s Canadian heritage with flag-waving patriotism. But his company’s strategy stands to gain more from putting Canadian talent into its AI platform than it does from putting flags in its offices.