Notes, comments and other observations from the CrossKeys AGM
FY 1999 Objectives
Expand product portfolio
Increase channels to market
Improve customer diversification
Grow revenue and earnings
CrossKeys Resolve has been the major sales driver.
Channels to market
Existing
Dec/Compaq- now using Altus product line (with little success) moving to resolve product mix (I did not get the impression that the company had this channel as one of their key future channels, jmo)
Siemens- although the loss of the work with the 36190 hurt the company it sounds like CrossKeys has a good relationship that can be built on.
Newbridge- the mainstay of the company to date and expectations for future business will increase proportionately with the growth of Newbridge itself.
-Nortel Ian McLaren seemed to be positive with this relationship and offered potential prospects of expansion in the future.
EDS- (they bought out SHL where Mr. McLaren came from) again another positive spin on this relationship. Ian told the AGM that EDS (in his opinion) has its main focus on the consulting end of the business and any product business that can generate more consulting business (aka CrossKeys) will be promoted widely.
Logica- good long term prospect
Marconi- BT deal, great, good positioning deal for CKY now and in future, talk of value up to $5 million, imo the greater value lies in its impact on other carriers now and in future.
OTHER CHANNELS to increase in # to 10 by year end. Ian McLaren does not flinch when going after big game, he has focus and is driven, nice to see.
Expanding Customer Relationships
22 new clients
180 total clients to date
None more than 7% of the companies business
Direct relationship growing. IM told the AGM that this is a large opportunity for growth.
FY99 Lessons Learned
Project business risky...lumpy high risk business (36190)
Multi-vendor product key ... CKY offers a richer product line
In-house sales capabilities important...CKY needs a much stronger sales staff and are moving to address the issue now. They are in the middle of hiring a VP of sales for US.
Depth of channel partners critical. CrossKeys is in talks with every major equipment vendor. Nice to note that Ian during his talk said that a number of equipment vendors are initiating the contact, this is a change from the past.
Time to market crucial. CKY needs to more, faster. Thus the increase in staffing. The company is focusing on high margin
solutions like resolve NI business.
Business Outlook
Focus on product sales
Nortel, EDS agreement important
Invest and build. Buy companies in areas that CKY does not directly currently address and improve offering CKY currently has, increase in staffing...
Our goal - Industry Leadership. When Ian stated this he was as serious as can be, this is his goal not just optics for the AGM.
Fueling the momentum
Performance products.
Market Opportunity
Message Ian McLaren is getting from everywhere "demand by end users is HUGE.
Enterprise demands on Telcos
Deregulation
Complexity of networks...many telcos are using several vendors for their equipment and in most cases CKY can work with all vendor equipment this give CKY a huge edge over it rivals.
Pace of change...
Explosion in network traffic.
Market size for performance management spending by service providers
1999 $733 m
2002 $1.247 b and some studies suggest the number could be as high as 3 billion in the same time period, demand is so strong.
sonet
wireless
optical
ip
fr
atm
tdm
NNC ASND Cisco Alcatel Nortel Fujitzu
Newbridge, CrossKeys main client has been in the tdm, atm fr and ip technology space.
As CKY grows their product line the vendor list will grow as well. This offers the company huge growth potential for the future.
FY 2000 Strategy
Increease addressable market, see above
multi technology
multi platform
multi vendor
Project based to Product driven
Expand channels to market
More direct relationships
Leverage installed customer base
IM...Please current client list is 180 however need to leverage this to increase business (more sales staff)
...in discussions with every major equipment vendor
BT win shows the market scalability with platforms from Newbridge, Siemens, Cisco.
Note: Ian McLaren again stated "at least 10 channels by year end" notice the at least comment.
What to watch for..
Products
Altus going forward under evaluation..narrowing focus
Resolve 3.1 more functionality coming
CrossControl for nortel. More versions of the product
Port to HP
SNMP ... protocol stack lost of demand for this
ADSL ... huge opportunity wide open
CrossKeys Resolve 4.0
Research
To get ahead of wave and choose best products to market... my translation more research and watch out for acquisitions.
Watch for...
Partners and Channels
10 additional relationships FY00
Other SI's TEM's ISV's and platform vendors
EDS has 10,000 people selling to telecom industry
O.S.I multi pre-integrated new product to market place
Watch for...
Sales and Marketing
Large sales wins...over next several months
Sales executive US market place a VP to be hired
Expanced direct sales force mainly in US and Europe
User Group... as the company start to mature
Watch for...
Corporate Developments
M&A actively looking. (my comment... last year around same time I was told the same thing. Difference this year is the intensity of interest on CrossKeys part. Look for this to occur)
Key management hires... S&M hires and more key hires to come in the near future.
~120 employees
Share buyback... Ian McLaren stated several times he thinks the share price is cheap. my 2 cents I agree with IM...
Sales skew improvement...broadband channels and much more predictable.
CrossKeys is in a fragmented market and this offers opportunities for a company, McLaren thinks CKY to step up and be the dominant player in this area.
BT had strong competition and one competitor was BT itself.
This is not unusual many telcos think they can do the job themselves. CrossKeys feels they can offer a much better solution at a better price point.
All in all a positive meeting, I will add to my position.
Regards
Glenn
P.S. Sorry about the tardiness, lots of things on the go... |
