A “tsunami” of new technology is coming along with a new wave of capital from commodity industries. The ultimate winners will be the ones that can capture the talent and information needed to leverage it, according to OpenText CEO and CTO, Mark Barrenechea.
His evidence of the value of business data is the fundamental shift already underway in automotive and financial industries.
- Sign up for Which-50’s Irregular Insights newsletter
- Nominate today for the Which-50 Digital Experience Awards. Simple. Fast. Easy.
During the enterprise information management (EIM) company’s inaugural Asian user conference in Singapore, Barrenechea argued economies had begun a shift from commodities to information, in unison with the rise of digital technology, with “cognitive technology” like AI and machine learning likely to increase the pace of change.
Barrenechea told delegates they must now adopt a disruptive mindset and move beyond process automation and consider how information can also improve business decisions.
“In this tsunami wave [of technology] we have to think like disruptors. It’s not good enough just to automate. It’s not good enough to just improve a process. We need to think like a disruptor.”
OpenText, Canada’s largest software company, offers EIM services to enterprises, essentially collecting, digitising and connecting data to feed a host of business applications, including several of its own apps. The company’s vision now, Barrenechea says, is to help its customers navigate the changes in capital and technology.
He says organisations must now focus on harnessing information as well as the 65 million Gen Z workers entering the workforce in the next five years, adding he expects OpenText to spend over $2 billion on product development over the same time.
“There is a tsunami of new technologies right on the horizon in front of us,” Barrenechea said of innovations like 5G, AI, cloud and 3D printing, going on to argue the future battleground won’t be commodities, capital or ideas, with much of that supply shifting away from traditional resource industries.
“But we are going to fight for information and we are going to fight for talent.”
Automotive and financial disruption well underway
The OpenText chief said information is now the world’s most valuable resource and included several examples of its disruptive potential.
Barrenechea’s first example was a major German automotive company, which he did not name but said was a “top three auto company in the world”. He said in his conversations with company executives they had revealed they no longer view their traditional automotive counterparts as the company’s biggest competitor. Instead its top three threats are now Apple, Uber and Tesla, according to Barrenechea.
Apple now controls the customer experience within cars, through iOS devices and Apple CarPlay. Uber is offering a genuine and appealing alternative to car ownership. Meanwhile Tesla is disrupting supply chains and tapping into consumers’ desire to lesson their carbon footprints. Each is disrupting the automotive industry from well outside traditional verticals.
In response, according to Barrenechea, the incumbent is fundamentally changing their business model with its most viable future as an insurance company.
Barrenechea says the unnamed company now wants to leverage the data generated when a vehicle is driven, using it to inform insurance risk assessment.
“They ultimately want to be an insurance company. Because if you can understand the risk [and] you can underwrite the risk then you’ll be the world’s best insurance company.”
Trading tear down
In the early 2000s around 95 per cent of US stock trades were made by human traders, according to Barrenechea. He says by 2025 the amount will be 2 per cent.
“We’ve lost. It is the machine [that has won]. You will not be able to compete in the capital market in the next three to five years.”
Financial companies are now building their own infrastructure in order to drive down the time it takes to make trades to one one millionth of a second, according to Barrenechea. It means human’s value in financial trades is now essentially restricted to long term decisions, he said.
“That’s digital. That’s disruption. Humans have lost this market.”
The ultimate winners in financial trading and more broadly, Barrenechea says, will be the organisations that think like an “information disruptor” and either drive the disruption or anticipate it.