iLOOKABOUT is about to benefit from a significant software service being rolled out to the insurance industry in Ontario. The solution is called iClarify and will be available to about 700 broker offices in the province by the end of June. The deployment comes on the heals of a successful 30-day pilot where 37 broker offices generated approximately 40,000 queries over that timeframe. We believe that iLOOKABOUT should generate somewhere between $1.00 and $4.00 per query as the solution goes live. Ontario alone should have as step function impact on both revenue and earnings starting this quarter (which is fiscal Q3). Its solution partner SCM announced that both Quebec and British Columbia launched pilots for June. Investors could infer that, if the BC and PQ pilots show similar metrics to Ontario, then there is a good possibility that these provinces will be soon rolled out.
Notwithstanding, the revenue and earnings impact of the iClarify project to iLOOKABOUT is not currently priced into the stock. Please see my initiating report on behalf of MPartners published earlier this month.
I do not own shares of ILA.
6/21/10
MPartners RES Small Cap Tech Sector - June 15
See the slide show of Small Cap Tech Sector performance as of June 15th.
5/4/10
Mpartners RES Canadian Small Cap Tech Index - April
Published for institutional investors earlier today. The bottom line is that small cap technology stocks have demonstrated 12.5% better YTD returns than the main index. Even with solid returns so far this year, the Small Cap Tech Index is still trading at an earnings discount to the main index, inferring that there remains future upside. During April, approximately $92M in capital was raised, with OTC making two acquisitions. OTC bought Nstein for approximately $32 M, and then followed up later in the month with an acquisition of Burntsand for approximately $12M.
Various sources continue to call for a secular bull market for the technology sector due to a current IT replacement cycle, and the emergence of the mobile web which could be up to five times the size of the fixed line internet measured in terms of users.
Various sources continue to call for a secular bull market for the technology sector due to a current IT replacement cycle, and the emergence of the mobile web which could be up to five times the size of the fixed line internet measured in terms of users.
Commentary on BNN regarding RKN, BWC and SVC
On Friday April 30th, at 3:15, I was guest on BNN discussing three mobile ecosystem companies that I initiated official coverage on with Mpartners.
The investment concept is this: mobile operators worldwide are experiencing a data capacity and congestion crisis that is expected to get exponentially worse over the coming five years as web enabled smartphones proliferate the market. Even with significant network capacity upgrades, operators will continue to run up against capacity challenges and quality of service issues. Network optimization solutions will be required to help more efficiently manage how data is used in order to offset the expenses associated with network upgrades. With smartphones using 40 times more data than a typical feature phone, 10 million web enabled smartphones use as much data capacity as 390 million feature phones. According to Cisco, mobile data capacity requirements are forecasted to grow at a parabolic CAGR of 108% over the next four years. At the same time, subscriber ARPU is forecasted to grow at a CAGR of only 10%. As a result, mobile operators will struggle to grow profitably as they support popular smart phone devices like iPhone and Android platforms.
Investors can benefit from this problem by participating in the upside potential of the three software-oriented mobile infrastructure stocks that I mention in the clip. Often complimentary, sometimes competitive, each company plays at a different level within the stack from billing (RKN) to policy (BWC) to network awareness (SVC). Here is the link.
http://watch.bnn.ca/trading-day/april-2010/trading-day-april-30-2010/#clip296311
To return to RES Free Thinking, please click on the back button of the browser window in which the clip plays.
The investment concept is this: mobile operators worldwide are experiencing a data capacity and congestion crisis that is expected to get exponentially worse over the coming five years as web enabled smartphones proliferate the market. Even with significant network capacity upgrades, operators will continue to run up against capacity challenges and quality of service issues. Network optimization solutions will be required to help more efficiently manage how data is used in order to offset the expenses associated with network upgrades. With smartphones using 40 times more data than a typical feature phone, 10 million web enabled smartphones use as much data capacity as 390 million feature phones. According to Cisco, mobile data capacity requirements are forecasted to grow at a parabolic CAGR of 108% over the next four years. At the same time, subscriber ARPU is forecasted to grow at a CAGR of only 10%. As a result, mobile operators will struggle to grow profitably as they support popular smart phone devices like iPhone and Android platforms.
Investors can benefit from this problem by participating in the upside potential of the three software-oriented mobile infrastructure stocks that I mention in the clip. Often complimentary, sometimes competitive, each company plays at a different level within the stack from billing (RKN) to policy (BWC) to network awareness (SVC). Here is the link.
http://watch.bnn.ca/trading-day/april-2010/trading-day-april-30-2010/#clip296311
To return to RES Free Thinking, please click on the back button of the browser window in which the clip plays.
4/16/10
Why Investors Should Look at TSX/V Small Cap Tech
Here is a slideshare presentation of a research piece that I wrote for MPartners earlier this week.
3/10/10
Cisco's Cr-3 Router - Streaming Media Players Drool
Cisco's CR-3 322 Terabyte carrier-grade router is three times faster that its predecessor CR-1 router. Not certain if this is a "change the Internet forever" product. However, it may be a tipping point for rich media providers if it is well adopted by carriers. Considering that carriers are constantly scrambling to keep up with capacity demand, its probably a very good possibility that sales of this $90,000 router will be brisk.
John Chambers hyberbolic messaging around the capabilities of the router focused on the benefits to rich media (in particular video), which has been clogging pipe for years. The scenario painted is massively available rich media streamed from the cloud. Basically, consumers and business everywhere will be able to access rich, high quality media streamed to any device at any time from the cloud with DRM protection on content.
The most obvious immediate beneficiary of this evolving content model is Netflix (NFLX), which would immediately benefit from a streamlined distirbution model for rented movies. Clearly, large media conglomerates that create and manage content would also benefit, as would content originators like sports leagues, musicians, and entertainers. So too would the surrounding ecoystems.
There are several Canadian technology companies that could immediately benefit from the network capacity gains offered by the CR-3 router. These three come to mind:
Intertainment (INT:TSXV) is a micro-cap media company that appears to have caught lightning in bottle with its Itibiti desktop streaming media widget. With NBC as an anchor customer, and with Microsoft choosing it as a reference Silverlight 4.0 deployment, Intertainment is building an influential client fan base for its always on widget. Using the widget, NBC streams content continuously to users while disintermediating the browser. By disintermediating the browser, fans can get entertained in fewer steps, and there is less chance that NBC has to pay Google for the privilege. A big win for NBC, and a big win for Microsoft's media business.
Neulion (NLN:TSX) is a small -cap media company and successor to JumpTV that operates online rich media sports programming for hundreds of NCAA schools, NHL, NFL, and MLS sports leagues. improved capacity for streaming media creates substantial opportunities for live data mashups, playlists, highlights, and rich easy-to-access inventoy of game footage and data. Increased capacity delivers more accessibility and more packaging, which delivers more revenue.
Fluid Music (FMN:TSX) is a small-cap media company that has amassed a low-cost royalty song portfolio. It utilizes multiple distribution and packaging methodologies to generate profits from the millions of songs in the catalog including: background music, packaged lifestyle music and consumer digital downloads via Puretracks. Actually, most of Fluid Music's $90 m in annualized revenue is generated from a small percentage of the total catalog. Although the music industry is on the forefront of streaming media, increased network capacity enables DRM compliant distribution, swapping, and packaging opportunities that were previously not possible. The bottom line for this company is that, by utilizing the cloud, it can generate more profit from the song catalog by providing better, more interesting access to more songs in the catalog.
There are probably dozens more Canadian companies that will directly benefit from increased network capacity, these are three publicly traded companies that come to mind immediately.
With respect to "changing the Internet forever" - there is no "forever" when it comes to the Internet. Grey hairs can remember 1999 when Napster bogged down the Internet as millions of people swapped millions of MP3s. At one point in time, carriers complained that Napster P2P file sharing represented 80% of traffic. Fast forward to 2007 when Bit Torrent P2P media file sharing caused similar capacity issues. The bottom line is that people will find ways to use up data capacity and carriers will always be scrambling for capacity. Wait until consumers begin swapping 3D movie files!
Disclosure: I do not own shares of any stocks mentioned above.
John Chambers hyberbolic messaging around the capabilities of the router focused on the benefits to rich media (in particular video), which has been clogging pipe for years. The scenario painted is massively available rich media streamed from the cloud. Basically, consumers and business everywhere will be able to access rich, high quality media streamed to any device at any time from the cloud with DRM protection on content.
The most obvious immediate beneficiary of this evolving content model is Netflix (NFLX), which would immediately benefit from a streamlined distirbution model for rented movies. Clearly, large media conglomerates that create and manage content would also benefit, as would content originators like sports leagues, musicians, and entertainers. So too would the surrounding ecoystems.
There are several Canadian technology companies that could immediately benefit from the network capacity gains offered by the CR-3 router. These three come to mind:
Intertainment (INT:TSXV) is a micro-cap media company that appears to have caught lightning in bottle with its Itibiti desktop streaming media widget. With NBC as an anchor customer, and with Microsoft choosing it as a reference Silverlight 4.0 deployment, Intertainment is building an influential client fan base for its always on widget. Using the widget, NBC streams content continuously to users while disintermediating the browser. By disintermediating the browser, fans can get entertained in fewer steps, and there is less chance that NBC has to pay Google for the privilege. A big win for NBC, and a big win for Microsoft's media business.
Neulion (NLN:TSX) is a small -cap media company and successor to JumpTV that operates online rich media sports programming for hundreds of NCAA schools, NHL, NFL, and MLS sports leagues. improved capacity for streaming media creates substantial opportunities for live data mashups, playlists, highlights, and rich easy-to-access inventoy of game footage and data. Increased capacity delivers more accessibility and more packaging, which delivers more revenue.
Fluid Music (FMN:TSX) is a small-cap media company that has amassed a low-cost royalty song portfolio. It utilizes multiple distribution and packaging methodologies to generate profits from the millions of songs in the catalog including: background music, packaged lifestyle music and consumer digital downloads via Puretracks. Actually, most of Fluid Music's $90 m in annualized revenue is generated from a small percentage of the total catalog. Although the music industry is on the forefront of streaming media, increased network capacity enables DRM compliant distribution, swapping, and packaging opportunities that were previously not possible. The bottom line for this company is that, by utilizing the cloud, it can generate more profit from the song catalog by providing better, more interesting access to more songs in the catalog.
There are probably dozens more Canadian companies that will directly benefit from increased network capacity, these are three publicly traded companies that come to mind immediately.
With respect to "changing the Internet forever" - there is no "forever" when it comes to the Internet. Grey hairs can remember 1999 when Napster bogged down the Internet as millions of people swapped millions of MP3s. At one point in time, carriers complained that Napster P2P file sharing represented 80% of traffic. Fast forward to 2007 when Bit Torrent P2P media file sharing caused similar capacity issues. The bottom line is that people will find ways to use up data capacity and carriers will always be scrambling for capacity. Wait until consumers begin swapping 3D movie files!
Disclosure: I do not own shares of any stocks mentioned above.
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