Open Text Corp Conference Call discuss the Strategic Update Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Richard Tse - Cormark Securities - Analyst : Yes, thanks, and Mark, welcome back here. I just wanted to ask a couple questions. Can you give some specific examples on what you need to, I guess, specifically do to make this transition to the cloud successful for you?

Question: Richard Tse - Cormark Securities - Analyst : Yes, but just some specific examples on that, please?

Question: Richard Tse - Cormark Securities - Analyst : Does that change the way that you sell, and does it have to result in the retraining of your sales force? What are you doing on that side to address the change in the models here?

Question: Richard Tse - Cormark Securities - Analyst : And to be clear, does that mean your existing reps sell both professional as well as subscription? Or do (multiple speakers)?

Question: Richard Tse - Cormark Securities - Analyst : Okay. Great, and one last one here. Can you give us an update on acquisition environment? And that's it. Thanks.

Question: Richard Tse - Cormark Securities - Analyst : Great. Thanks, Mark.

Question: Thanos Moschopoulos - BMO Capital Markets - Analyst : Hi, good afternoon, and welcome back, Mark. I was wondering if you could maybe provide us with a bit more comfort, in terms of how much of the shortfall relative to expectations this quarter, is coming from the cloud transition, versus weakness in the demand environments? I don't know if you can speak qualitatively to that, or maybe provide us with some metrics when you report your final numbers?

Question: Thanos Moschopoulos - BMO Capital Markets - Analyst : And so, just to clarify. I guess, your commentary is, the global selling environment is challenging, but clearly, that is not the main issue here?

Question: Thanos Moschopoulos - BMO Capital Markets - Analyst : Okay. And just one more related question on foreign exchange. What would those numbers look like if we were compared to the Q3 exchange rates?

Question: Thanos Moschopoulos - BMO Capital Markets - Analyst : Okay. Maybe just a final one for me. As far as the restructuring, are there any specific product areas or product segments, that you are deemphasizing as part of this? Or from a product perspective, will you go to the market with the same portfolio?

Question: Thanos Moschopoulos - BMO Capital Markets - Analyst : That's helpful. Thanks, Mark. I'll pass the line.

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Thanks. Good to have you back, Mark. Just on the comments around the -- you guys kept guidance in terms of the model for 2015. I am trying to figure out, obviously how much impact there is from the transition to the cloud on license revenue in this coming quarter. Is there any way to give us some guideposts to that? You, traditionally, June quarter has been seasonally a strong quarter for you guys. Obviously, the range here sounds like it is going to be either flattish to slightly up quarter, based on this guidance.

Question: Eyal Ofir - Dundee Capital Markets - Analyst : So you mean on -- are you talking -- what do you mean $5 million to $10 million? So talking sequentially or annually (multiple speakers)?

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Yes --?

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Got you. Okay, perfect. So that gives me a little better picture. And now, in terms of going forward, you just talked about M&A in one of the last questions. In the interim, if you are going to be focusing on the cloud, you said that some of these -- you expect over time some of the valuations are going to come down. In the interim, are you still looking at other types of transactions that may not necessarily be purely cloud-related?

Question: Eyal Ofir - Dundee Capital Markets - Analyst : So you're still looking at some similar companies (multiple speakers).

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Okay. So companies would still have the -- like this traditional perpetual plus the maintenance line, maintenance revenue you would still be looking at that, those types of companies?

Question: Eyal Ofir - Dundee Capital Markets - Analyst :

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Okay. And just, sorry now, going back to the license question again, and I will pass the line. If we're looking into 2016, the $5 million to $10 million that you talked about in-quarter, should that expand going forward when we are modeling this out? Or how should we think about it, looking into 2016? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 20, 2015 / 9:00PM, OTEX.TO - Open Text Corp Conference Call discuss the Strategic Update

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Okay. And then just, Mark, one last thing. When you actually report clouds, will you be starting to segregate cloud, like GXS versus more of these SaaS type or term license models revenue from the cloud line, or are you going to keep it all lumped into one?

Question: Eyal Ofir - Dundee Capital Markets - Analyst : Okay, great. I think that would be helpful. So I will pass the line, thank you.

Question: Paul Steep - Scotia Capital - Analyst : Great, thanks. Mark, welcome back. Glad to hear you're well. I guess, on the cloud transition, is it fair to think of this as more than a multi-year transition? And what I mean by that is, the pressure on license, when do you think the business reaches the crossover point? Is it sort of just abates in 2017, or it's a multi-year phenomenon we are maybe go through?

Question: Paul Steep - Scotia Capital - Analyst : I guess, just to follow on that, if we think about client's reactions to what you put forth, clearly something has gone on in the last two quarters here, where we started to see more of that revenue, telling us the salesforce is agnostic, and obviously it's hitting the numbers. Have clients in the pipeline more significantly shifted to the cloud side? Is that what we are to take away, and think that the license line hits, maybe a steeper slope on the downside?

Question: Paul Steep - Scotia Capital - Analyst : Okay, and I will wrap it up with one last one. If that's the case, then if we think about the progression of the business here, is there an impact on margin profile, and also maybe the level of investment CapEx, if you are moving to more of a managed service model that we likely sort of transition through in 2016 and maybe into 2017, as those margins tick down as you undertake more services for clients? Thanks. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 20, 2015 / 9:00PM, OTEX.TO - Open Text Corp Conference Call discuss the Strategic Update

Question: Paul Steep - Scotia Capital - Analyst : Thank you.