Summary of Interview
[from toomuchtech on Raging Bull]
Note that the items placed in quotes are direct quotes. Interview starts:
They started by talking about SmartServ’s strategy of supplying content to drive transactions at some length.
MSFT owns the desktop around the world. Most people use Outlook to check their e-mail, etc. MSFT is offering the Mobile Information 2001 Server (MIS) to both Telcos and Enterprise customers. MIS will be introduced within 6 months. More on that at the big CTIA show next week.
SmartServ’s challenges are to bring the best services and content and to route a customer’s trade to a broker of their choice. Example of SmartServ product-DTNIQ with over 8,000 users supplying over 4 billion quotes per day.
SmartServ routing Bank of New York Web-based trades and doing hosting for its correspondent banks.
When you are in the transaction business, securities transactions are the ultimate transaction because that is where the money is. World moving to m-commerce. For example. Some items have a finite life. For example a ticket to tonight’s basketball game. If SmartServ knew you were interested in basketball and knew you current location was in the New York City area and you were interested in teams playing there tonight and could let you know through your wireless device that there were tickets available, they could sell you a ticket by billing to SmartServ’s electronic wallet. That is an example of where the kind of m-commerce they are focusing on. In this example SmartServ would partner with suppliers that offered tickets.
SmartServ uses a B-to-B marketing model, so they stay focused on marketing to the large brokerages and the large banks and telcos around the world. Because of this model, SmartServ can do its marketing efficiently. “And right now we are in the, we are right now in the process of signing those brokerage firms up as well as some of the telcos and then we will host those on the data centers we are building with Hewlett Packard around the world.”
Last June they announced the build out of data centers with HP that will have the ability to host wireless transaction and then route the transactions almost on any continent. First data center opened up last month in NYC, next data center will open in Seattle or London and Zurich will follow closely after that. Then they are looking to build out Asia and other places as well around the world. The data centers have the ability to process a stock trade or other m-commerce transaction not only where that data center is located, but also has the ability to route a trade to another data center. For example, if You’re walking down a street in Tokyo and you want to do a NASDAQ trade you could pick up your WAP or Internet browser equipped phone and get a real time NASDAQ quote and put your trade in right through that data center in Tokyo. SmartServ is also introducing a new concept called “Follow Me” which will allow you to always have available to you the real time market information which you need no matter where you are in the world. It will also give you the ability to get local information in the language you which to receive it in. For example, if you were to land in Paris you would still be able to get your NASDAQ real time watch list, but also you would be able to get local French information in English on your wireless device. This is important because it allows the customer to always keep abreast of their portfolio and the m-commerce transactions they wish to stay abreast upon.
Sam was asked about his telco partners because of the complexity of the service SmartServ is offering. He responded SmartServ is in discussions with several telcos around the world today and SmartServ will be talking more and more about those once they are able to announce where they are on the actual contract and launching of service.
Revenue-SmartServ will receive funds on a per transaction basis. “Let me give you an example of the revenue model that we proved with Bank of New York where we charged them about $75,000 for writing the transaction, we charge a couple thousand dollars a month for hosting the transaction and then we charge them $2 per trade for every trade that moves through our platform. That’s a model we will carry forward to out other customers as well.” Sam was asked whether once SmartServ achieves certain economies of scale that those kinds of price margins will erode over time? Sam replied, “You know it’s funny you say that because here in the United States everyone talks about eroding margins, but overseas the margins are actually increasing and it’s not unusual to charge much higher prices in both Europe and Asia for processing e and m-commerce transactions as well as trades. So we are focused, you know because of that our real growth over the next couple of years we see occurring in both in Europe, where we just opened an office in Zurich and will have one in London open shortly, and also Asia which is a booming market for the wireless business where we plan to be in a very significant way.”
Gave Sam’s background. Talked about how big the wireless market is going to be with people wanting the information come to them rather than you go to it. That’s’ the change that’s about to occur. The ability to do a transaction where you are, not where you have to go to make the transaction occur.
Sam was asked about how many partners like Microsoft does SmartServ have. Sam said those were the types of thing they like to talk about because SmartServ’s alliance partners are simply the best. MSFT since 1998 when SmartServ was selected to be with them on the Windows CE tour. SmartServ has Hewlett Packard, which infused $20M of vendor financing into the company for the build out of the data centers worldwide and also for sales and marketing support worldwide. SmartServ has Nokia who they have been involved with since 1998 and in fact developed the first interactive WAP application with for the 7110 phone back in late 1998, early 1999 which Nokia was so pleased with that they used to demo their products at the Comdex show last Fall in Las Vegas. SmartServ has Motorola with which they have had a relationship with for the last year and is working with them towards building their wireless portal together. So they have four very strong alliance partners that SmartServ is and they plan to, moving forward, market very aggressively through.
Sam was asked when you talk about deploying this type of network solution is it incumbent to have almost all the wireless carriers on board? He replied “Oh no, no, not at all. As a matter of fact one of the, one of the things that the SmartServ platforms will feature is the ability to interface with any customer carrying any device using any kind of protocols. So you can always access the SmartServ platform, as long as you have a Web-browser equipped phone, you can always get to the SmartServ URL.”
Talked at some length about the partnership with HP. Said they can control all those data centers from one “knock?” in Stamford CN using HP’s open view software so they don’t have to have intensive staff all over the world.
Talked about customers. Said they have the 8,000 using IQ, Sam wasn’t sure how many banks Bank of New York has on line now and SmartServ will be adding wireless customers as they move into the fourth quarter and the first quarter of next year.
When asked about banks, Sam said in Europe and Asia they are absolutely demanding services in the wireless market and because of that SmartServ is really focusing their efforts in Europe and Asia. SmartServ’s solution is seen as an excellent one for banks, because all banks have to do is put in one backend connection to SmartServ and then the banks can then address their customers whether they are on a fixed line telephone, whether the want to get their content and do transaction though an ISP over the Internet or over ten to fifteen wireless devices on the wireless side. So by coming into SmartServ, they can now have their customers access their banking content as well as conduct a transaction in a very robust, secure and scaleable way by using the SmartServ platform not only on the continent where they are but around the world.
Sam was asked whether they had opportunities in Asia equivalent to the Bank of New York. He replied, “Oh, absolutely we do, as a matter of fact we are dying to move on our Asian opportunities right now as a matter of fact, but we have to be careful to take one step at a time, you know, make sure that everything is absolutely working flawlessly as we’re sure it is now. And then expand in a very logical and careful way. You don’t want to ever bite off more than you can chew and you don’t ever want to have technology that does not work for some odd reason.”
Interview ended. |
