CrossKeys finds major U.S. reseller of its software
By JILL VARDY
Technology Reporter The Financial Post
OTTAWA CrossKeys Systems Corp. said yesterday it has found a new partner to fill the space left on its dance card when Compaq Computer Corp. took
over Digital Equipment Corp. last spring.
That takeover cut - at least temporarily -- the revenue CrossKeys used to receive from Digital, one of CrossKeys' biggest software resellers.
But a new deal with Ascend Communications Inc. should help bridge the gap, CrossKeys executives say.
The alliance will see CrossKeys and Ascend, one of the largest U.S. manufacturers of telecommunications equipment, work together on complementary software
for telecommunications services and network management.
CrossKeys' software helps phone companies and other network operators monitor how their networks are functioning. That helps avoid network failures and
allows phone companies to live up to performance contracts made with their largest customers.
Chief financial officer Steven Spooner said CrossKeys is still negotiating all the details of its commercial arrangement with Ascend. But he added Ascend has the
potential to become a major reseller for CrossKeys.
Such alliances as this are key to CrossKeys' strategy "to have our software work with multiple vendors' equipment and have those vendors out there bringing our
product to market," he said.
The deal was announced just before CrossKeys' annual meeting of shareholders in Ottawa yesterday.
Having a partner like Ascend gives CrossKeys an instant recognition boost in the huge U.S. market for telecommunications equipment and software. Ascend will
join the ranks of Newbridge Networks Corp., Seimens AG and Digital as CrossKeys' biggest resellers.
CrossKeys sells almost all its software through major partners. During the third quarter of last year, 11% of CrossKeys revenue came through Digital. By the first
quarter, that dwindled to 6%.
Despite the drop in Digital resales, CrossKeys reported net income of $1.9 million in the first quarter ended Aug. 2, up from $835,000 in the first quarter of fiscal
1998. The profit jump came as a result of $12.1 million in revenueduring the first quarter 43% more than during the first quarter last year.
But CrossKeys' stock (CKY/TSE) continues to lag expectations.
John Selwyn, Crosskeys' CEO, acknowledged the stock's poor performance at the annual meeting, the first Crosskeys has held as a public company. He said
Crosskeys' revenue has been better than even he expected. |
