Note: To support questions from enterprise buyers and private investors that are looking at Telecom Expense Management and the greater Communications Lifecycle Management world, Blue Hill is starting a monthly review of the key announcements made in this space from companies including, but not limited to: 2-markets, 4telecomhelp, ACCOUNTabill, Advantix, AMI Strategies, Anatole, Asentinel, Avotus, Calero, Cass Information Systems (NASDAQ: CASS), Cimpl (formerly Etelesolv), Comview, EZwim, GSGTelco, IBM Global Services (NYSE: IBM), ICOMM, MDSL, mindWireless, MOBI, Mobichord, Mobile Solutions Services, MobilSense, MTS (NASDAQ: MTSL), Nebula, NetPlus, Network Control, One Source Communications, Softeligent, Tangoe (NASDAQ: TNGO), Telesoft, TNX, Valicom, vCom, Visage, and Vodafone Global Enterprise (NASDAQ: VOD).
Communications Lifecycle Management news items that have gotten Blue Hill’s attention in February 2017 include announcements from Calero, Cass, MTS, and vCom.
On February 13, Calero announced that its portfolio of VeraSMART wireline and wireless call accounting software will be sold through the Avaya DevConnect Select Product Program. VeraSMART allows users to combine, simplify, and share landline, cellular, and telecom data through dashboards and reports, and analyze voice, mobile, and unified communications (UC) data through Calero’s Insight Analytics solution. Avaya is a global provider of business communications software, systems, and services, including unified communications products.
Through the DevConnect Select Product Program, Avaya customers can integrate Calero’s call accounting, analytics, and reporting solutions with Avaya’s communications software and services to seamlessly combine and allocate wireless, wireline, and UC data, and generate reports and analysis on this data.
Blue Hill notes that the integration between Avaya and Calero is consistent with the trend we have observed for TEM vendors to increasingly integrate additional forms of enterprise communication, such as UC, into their management portfolios. Calero’s analytics and reporting capabilities will provide value to Avaya customers beyond simply expense management, and Avaya will provide Calero with new sales opportunities to both Avaya customers and through Avaya’s partner channel.
Cass Information Systems
On February 2, Cass Information Systems reported its fourth quarter and full year 2016 earnings, securing 2016 as the all-time highest earning year for the company. Strong fourth quarter performance contributed to the result, with Cass reporting fourth quarter earnings per share of $.57, up 8% from the same period in 2015. Net income for fiscal year 2016 was $24.3 million, up nearly 6% from 2015.
Much of this growth was attributed to Cass’ Facility Expense business, which includes its Energy, Telecom, and Waste divisions. Facility Expense saw a 1.6% YOY increase in Facility Expense dollar volume for the period, to $11.9 billion. In contrast, Cass’ Transportation dollar volume dropped 7.2% YOY to $22.8 billion.
For fourth quarter 2016 alone, Cass’ Facility Expense dollar volume increased 7.2% from the same quarter in 2015. The company attributed fourth quarter growth in its Facility Expense business to new customer wins, including several large accounts that migrated to Cass from competitors.
While Cass does not directly break out its Facility Expense revenues by division, Blue Hill notes that the growth in its Facility Expense vertical suggests that Cass’ Telecom business is experiencing strong performance and continuing growth. Cass’ record-breaking earnings are impressive, especially coming at a time when smaller, niche players continue to enter the TEM market, and market leadership positions are shifting. Considering the changing market dynamics in TEM, Blue Hill notes that Cass’ new Facility Expense account wins from competitors may have been in Telecom.
On February 6, MTS announced that its CEO, Orey Gilliam, has decided to leave the company effective April 30, 2017. Alon Mualem, MTS’ current CFO, will take over for Gilliam on an interim basis, effective immediately, while MTS searches for a replacement CEO. Gilliam served with the company for roughly 8 months, joining MTS on June 1, 2016. Prior to joining MTS, Gilliam served as CEO of ICQ, later bought by AOL, and became head of AOL’s Messaging business including both ICQ and AIM product lines.
Blue Hill previously covered the announcement, in which we speculated that Gilliam’s background in mobile- and internet-based startups may indicate that he was particularly interested in MTS’ video advertising business, which has become a core part of the company’s earnings since MTS acquired Vexigo Ltd. in April 2015. As of September 2016, video advertising accounted for nearly 50% of MTS’s revenue, but as the space becomes more competitive – particularly with entrants such as Snapchat whose core business is in video media – MTS may place a lesser priority on this vertical going forward, and conflicting prioritizations may have contributed to Gilliam’s departure, Blue Hill notes.
On February 1, vCom announced that it has achieved a customer satisfaction rating of 99%, breaking its previous records. vCom also reported that its customers have rated vCom as “meeting or exceeding their needs” for the tenth year in a row.
As more TEM vendors enter the mid-market, Blue Hill notes that a focus on providing strong customer satisfaction and support can serve as a key differentiator for vendors and can lead to additional mid-market deals.
Last December, Blue Hill published our Mid-Market TEM Vendor Landscape for 2016, in which we profiled vCom as a notable TEM player actively pursuing deals in the mid-market. As part of the profile, Blue Hill spoke with an active client of vCom’s who validated vCom’s long-term customer relationships as a key differentiator for the company. In particular, the client noted a “domino effect” in which vCom’s fair treatment of its employees translated to strong customer relationships.