Spotlight : What piqued my interest now?
July 2024
Disclaimer: The information contained within this website and article is not financial advice and reflects my opinion in a strictly personal capacity. I am an engineer by training and profession; I do not possess formal qualifications in finance or investment. I may hold positions in the stocks mentioned and hence probably biased. This website and article aren’t written to give you advice. I am just using it as my online journal to share knowledge and insights and to get feedback - I can’t guarantee the complete accuracy of all content so don’t rely on it. Please conduct your own research or consult a professional financial advisor - I am not the one.
A few weeks ago, I wrote an article called “Spotlight: What Caught My Eye” to share interesting things I discovered. With so much happening all the time, sifting through the noise can be challenging. So, I decided to create a new "Spotlight Series" to note down the intriguing tidbits I encounter, especially those hinting at trends for the companies I follow.
On my website, you'll find dedicated sections such as:
Individual Company Sections: Each company I’ve written about has its section.
Fundas Section: For anything related to my take on fundamental building blocks.
Reflection Section: My reflections on various things.
However, I needed a place for insights/news/gossip/rumors/sleuthing etc that don't fit into a specific company's section but are still noteworthy. That’s where the "Spotlight Series" comes in, bundled into the Spotlight section on this website.
What to Expect?
In the "Spotlight" section, you’ll find a variety of content related to various listed companies, including news, blog posts, social media updates, product announcements, and more. These pieces might impact some of the listed companies I'm interested in.
So Let’s delve into this month’s spotlight
Prophecy International (ASX: PRO)
Prophecy International, an ASX-listed company, offers two powerful software modules: Emite and Snare.
Snare's Latest Update
Snare has recently launched a new version featuring an updated user interface. This update enhances its ability to collect event logs from various cloud providers, including Microsoft 365, Azure Cloud, and AWS.
Expanding Market Potential
Both Emite and Snare are significantly broadening their Total Addressable Market (TAM). Initially, Emite was limited to integrating with Genesys and Amazon Connect contact center software. However, with their new integration Platform as a Service (iPaaS), they can now connect with multiple sources. For instance, Service Australia has chosen NICE contact center software to replace their legacy Genesys system, and Emite will continue to be used with NICE CXOne contact center.
One challenge for Prophecy is that Emite and Snare might seem like unrelated software products with no clear strategy. However, both are data analytics tools: Emite focuses on contact center data, while Snare focuses on security data. Looking ahead, there's potential for Emite and Snare to merge into a single analytics and data visualization platform. This combined platform could offer customers the flexibility to choose licenses based on the specific data they want to capture, providing a comprehensive analytics dashboard for various parts of their business. (I'm just thinking out loud here—not sure if the company has such a strategy or if it's even possible.)
Audinate (ASX:AD8)
Audinate recently launched new products at InfoComm: “Dante Ready” and “Dante Director.”
Last year, Audinate raised $70 million as part of their strategic plan, outlined in this article. The launch of these two new products demonstrates that Audinate is effectively executing its strategy.
While Audinate's share price has recently come under pressure due to the CFO's resignation, there's no indication of any underlying issues. The CFO has given ample notice and will stay on until the full-year reporting, ensuring a smooth transition. However, with such high valuations, even minor issues can impact the stock price significantly.
I plan to write a deep dive about Audinate soon. Despite the recent drop, the current valuation still seems high by conventional methods.
Xero (ASX:XRO)
Xero announced that their generative AI-powered smart business companion, Just Ask Xero (JAX), will be available in beta in August. It aims to help clients run their businesses more efficiently. e.g generating an invoice or editing a quote ( You should just ask JAX to generate an invoice or edit the quote by either sending an email or WhatsApp message - I think)
Watch out for wasted AI Investments (NYSE: MCD, NASDAQ: MSFT, ASX:BKG)
Many companies are currently pouring money into AI (as can be seen in XERO news above), driven by a fear of missing out (FOMO). However, not all AI investments will pay off, and some end up being costly mistakes.
For example, McDonald's recently abandoned its AI initiative for drive-thru orders.
Similarly, Microsoft shelved its underwater data center project, a venture it had started back in 2013, resulting in significant wasted investment.
While large companies like McDonald's and Microsoft can absorb these R&D failures, smaller companies need to be more cautious. High-tech innovations can backfire, as seen with Booktopia's recently.
Dropsuite (ASX : DSE)
The recent Unisuper saga highlights the critical need for a backup solution with an additional service provider.
UniSuper and Google Cloud issued a joint apology for the disruption caused by an unprecedented misconfiguration that deleted UniSuper’s Private Cloud subscription. Despite having geographic duplication and backups with another provider, the restoration required extensive effort and collaboration to recover the core systems.
For more details about the Unisuper case, click here.
Siteminder (ASX :SDR)
SiteMinder has announced a series of partnerships:
With Cloudbeds: Strategic Hospitality Alliance
With Trip.com: Tapping into the Chinese Travel Market
With Groupon: Enhanced Collaboration
Additionally, SiteMinder recently launched its mobile app. Read more about it here.
It appears the company is executing its plan effectively. I am now awaiting the 4Q results to see if SiteMinder has truly reached its inflection point.
Hipages (ASX: HPG)
Hipages is primarily recognized for its lead management marketplace, similar to Airtasker and Service Seeking. However, over the past couple of years, it has been developing and expanding its job management application, Tradiecore, which offers services akin to ServiceM8 and Invoice2go.
By combining these offerings, Hipages aims to transition into a full-fledged SaaS platform and has undertaken a brand overhaul. It's something to watch out for.
Megaport (ASX:MP1)
CEO Interview on Global WANaaS: Watch here
New Terraform Provider: Read more
Enhancing Connectivity in Adelaide: Learn more
Megaport Reach success? :
Last year, Megaport launched the Megaport Reach program to accelerate its deployment into data centers. According to LinkedIn updates, the program is progressing very well.
RPM Global (ASX:RUL)
RPM Global is expanding its presence in Latin America through strategic partnerships.
It also appears to be expanding its advisory team, as evidenced by five new roles recently filled according to LinkedIn posts. This suggests that advisory orders might be increasing. In an economic downturn, these expenses will need to be supported by the software margins.
Telstra (ASX: TLS)
How is Telstra addressing investors' profitability concerns?
Reducing costs: Telstra is cutting up to 2,800 jobs as part of its enterprise business reset. Read more about it here.
Increasing revenue: Telstra is also boosting its revenue by raising prices. Learn more here.
While these moves might temporarily improve profitability, they are not sustainable long-term strategies.
Telstra isn't innovating, introducing new services, or gaining more market share. Instead, it's simply cutting staff and charging customers more, which risks making both employees and customers unhappy.
The ripple effects will likely impact positively to smaller telco companies in Australia in the coming years.
That's all for this spotlight article. Thanks for reading! If you’ve found something interesting or have any thoughts to share, please leave a comment below.
Your feedback is always appreciated.
Like this spotlight articles.
Good stuff mate, love this series. Very interesting updates and there’s a lot of crossover between the companies we’re interested in clearly. The thing I can’t really reconcile with however is how Siteminder is the leading channel management software for hotels yet it still isn’t producing material profits without having to continue reinvesting and engaging in feature wars with competitors. Compare this to the major OTAs who are immensely profitable. WDYT?