ERGOTECgroup™

Home
·Services

Telemanagement
Applications Industry 2002-04 Market Report

Telemanagement Industry News

Events

Past newsletters
Subscribe

Consultants
·Daniel Stusser
·Grant Jacobson

International

About Us

October 29, 2003

In an industry with 125 private vendors, financial news from the 7 public firms focused on telemanagement takes on an extra importance as guides for investors and managers.

But before I get to these, please note that we have just posted 43 new industry news items for your review at ERGOTECgroup.com

Industry Financial Results Are Mixed But Improving

In their most recent periods, the seven public firms with a core focus on telemanagement together offer some encouraging news, including:

+ ACE*COMM – Revenues up 38% over previous quarter, losses cut by 84%
+ Avotus – Sales up 9%, operations are back in the black
+ CTI Group – Revenues about equal with same period last year, up $50,000
+ Direct Insite -- Revenues up 4.4%, burn rate reduced to diminish loss
– ION Networks – Sales drop 9% from same period last year, losses shrunk
– Mer Telemanagement/ MTS Integratrak – Revenues drop 12%; business in Europe up 30%, in US down 28%
+ Veramark – Sales up 7% over previous quarter; loss drops by 75% -- but there’s more news coming on November 6

Two well-known telemanagement pure-play firms stopped reporting their results. Filing SEC Form 15 in January 2003 were At Comm (@comm) and Telesoft, both citing Rule 12g-4(a)(1)(i), which, as we understand it, essentially takes the company private while keeping their outside shareholders along for the insiders’ ride but without the obligation to file public reports.

Seven additional public firms have telemanagement lines of business, but their financial reports offer no visibility. In general, only a small fraction these firms’ revenues come from telemanagement. These include: Cintech, Harris (who exited, see below), MIND CTI, TSL division of PRGX, Telemate (division of Verso) Teltronics, and Xeta. Interestingly, most of these firms went public on the basis of their historical telemanagement business, then used the IPO proceeds to expand into larger or faster-growing markets.

One Private Firm Offers a Guide Light

Among private companies, few of whom ever refer to their financial results, ProfitLine made the Inc. 500 list again for 2003, its third consecutive year, with 2002 revenues of $6.9 million according to the print edition, which hit newsstands two weeks ago. Revenues in 2001, which put them in the last year’s Inc.500 list, were $5.7 million.

Other 2003 Inc. 500 telemanagement applications vendors? None. The only other instance I recall was when IntegraTRAK, now part of Mer Telemanagement, made the list around 1996. Do you remember any others, ever?

Money Continues to Flow into Telemanagement

The emerging invoice management application – formerly a professional service – has attracted more than $50 million in capital in the past year, but is still poorly understood by most prospective customers today.

Invoice Insight banks $5 Million – The invoice-management pure-play gained marketing fuel with its August 18 second round, which came from the same source as its $1.5 million first round – and at a higher price per share, according to the company.

Symphony Services Attracts $20 Million -- The company that acquired mid-market phone bill auditor Teletron as well as Telco Research announced its first outside money. This is the single largest investment in this industry since the Boom Days of 2000 when QuantumShift, in its previous life as a CLEC-that-looked-like-a-telemanagement-vendor grabbed $58 million.

Evident -- Remember Apogee Networks? The company that provides sophisticated cost allocation for IT resources changed its name in July to Evident Software, Inc., just in time to receive $6.8 million in additional venture capital, change their business focus from cost allocation to “IT business analytics” to “identify hidden IT waste.” Sounds sort of like invoice management: don’t pay for what you don’t get or use.

Another One Bytes The Dust:

Harris Corporation is the latest of the mega-conglomerates that stuck a toe into the telemanagement business and left it there as it departed. Nearly exactly a year after their August 2002 introduction of their Genre system for large enterprises, the company quietly discontinued marketing it.

Good thing we didn’t expect much from them or we’d have to revise the numbers in our new market research report, Telemanagement Industry Markets 2002-04, available immediately. Harris is profiled on page 7.64 … but the other 335 pages are still immensely useful, we’ve been told.

Questions about this industry? E-mail me or call 360 357-1000.

-- Dan Stusser

P.S. Now you can go to one place to catch up on news at www.ErgotecGroup.com! Our humble but updated web site consolidates news about telemanagement applications – and is becoming the industry portal. At least we’re trying to make it that. Please send your comments and suggestions.

-------------------------------------------------------------------------------------------------------
If you received this letter from a colleague, you can get your own by clicking here: http://www.ergotecgroup.com/Subscribe.html

-------------------------------------------------------------------------------------------------------
If you’d rather I didn’t send this letter to you every few weeks, please hit me back a reply with “Please Remove” or some other friendly message, and maybe even tell me why!