The original PC Direct neon sign

I’ve been going to a few reunions lately – maybe it’s my age. First came the school reunions, which were notable for their lack of participants; then came a couple of business reunions which were a totally different story and a lot more fun.

Last Saturday night I dropped in to La Zeppa in Auckland to catch up with about 50 of my former colleagues from PC Direct. The reunion was instigated and organised by a number of the former staff, including Jennifer Stott, Eduard Johansen, Trevor Fowler and Cheryl Tinholt.

PC Direct is a New Zealand success story that started with its founders Maurice Bryham and Sharon Hunter in 1989 and grew to dominate the local personal computer market for most of the 1990′s, with a team of up to 120 staff. At times its share of the New Zealand PC market was larger than the global players such as IBM, Compaq and HP. Over 100,000 PC Direct computers were built and sold in to a market population of only 4 million people. Not bad market penetration!

Accordingly, PC Direct was known as the “Mouse that Roared”.

A well attended company reunion is the reflection of a great company and a great culture. Everyone was proud of being a part of it. PC Direct’s culture was electric. Its staff were young, motivated, enthusiastic and talented. We all worked hard and had fun. The business was winning on all fronts, including the marketplace, the industry awards and the minds of the computer-buying New Zealand public.

The people of PC Direct are now spread throughout the New Zealand IT industry and beyond (around the world in fact). I think many of us learnt a lot from that very positive experience. I certainly did.

I’m now looking forward to the 25th PC Direct anniversary reunion in a couple of years time (2014). I expect even more of the old team will attend that.

Today Datasquirt completed the sale of its assets and undertakings to LiveOps Inc of California USA. The employees of Datasquirt are now employees of LiveOps, Datasquirt’s products are now LiveOps’ products and Datasquirt customers are now LiveOps’ customers.

To me this marks the successful conclusion of a ten year journey with Datasquirt that started back in 2001. There have certainly been many interesting and challenging adventures that have involved a wide range of different people along the way.

Datasquirt was initially an experimental business that built business solutions around SMS Text messaging (which was all new and exciting at the time). We were ‘experimental’ in that we built various different types of bespoke messaging solutions for different types of businesses. After a while we started to see a pattern of what were common requirements for most of these business, so we developed a product called CONTACT that covered the common requirements, yet could be flexible and adapt to the specific needs of the various businesses that we targeted.

In 2008 we floated Datasquirt on the Australian Securities Exchange (ASX), just before the global market meltdown. With the proceeds of the Initial Public Offering (IPO) we set up sales offices in Australia, Germany, USA and the UK.

In early 2011 we partnered with a leading Cloud Contact Centre Provider ‘LiveOps’ as a distributor of Datasquirt’s products – primarily focused on the North American market. Later in the year we and they realised that our non-voice product set and their voice product set (both Cloud Based Solutions for Contact Centres) belonged together, so hence acquisition discussions began.

I wish LiveOps and the Datasquirt team well going forward and will watch their progress and successes with much interest over the coming years. I think they will make a formidable combination and they will have an extremely compelling Cloud-based offering for Contact Centres.

The first resolution approved the sale of the business to LiveOps for US $12.5M cash and the second resolution approved Datasquirt buying back 83.33% of its shares from Shareholders at NZ $0.499 per share (one share purchased for every 1.2 owned).

The sale transaction still remains conditional on a number of technical issues, but I’m confident that it will take place before the end of this year.

I believe this will be a great result for Datasquirt, LiveOps, their respective customers and the New Zealand IT industry, for the following reasons;

• The sale brings together two world-class, complementary contact centre technology providers who share a common passion and purpose.
• It means customers will be able to access all the communication channels they need to run a modern call centre – sms, email, fax, web chat, social media and voice – from one expert provider, LiveOps, via the ease of the cloud.
• All of Datasquirt’s staff are being retained and will continue operating from their current locations in Auckland NZ and the United Kingdom.
• The retention of Datasquirt’s development team in Auckland will undoubtedly lead to further investment and jobs within the local IT industry.
• Datasquirt’s shareholders get the option of a return of their capital at a very fair price.

Congratulations to Wokingham Borough Council for winning #1 in “Service Over Email”, at callcentre.co.uk‘s Call Centre Focus Awards, held in London recently.

Wokingham Borough Council’s contact centre uses Datasquirt‘s CONTACT cloud-based messaging console for managing and processing their email communications.

Chairman’s Address to Shareholders
Datasquirt Limited
Annual General Meeting
30 September 2011

FY11 has been a hard-working and productive year for Datasquirt, which has seen us increasingly selected as a best-of-breed provider by clients and channel partners internationally. We were delighted to achieve a profitable result for the last quarter of the year, and take the loss from ordinary activities for the year down to $NZ 599,000; a 51% improvement on the previous year’s loss of $NZ 1,233,000.

Our Cloud-based solution “CONTACT” is giving Corporate Contact Centres around the world the ability to communicate easily in real-time with their customers through increasingly popular channels, such as SMS, Web Chat, Email, Twitter and Fax.

Datasquirt is well positioned from a technology standpoint and is capitalizing on some major growth drivers in the marketplace, including;
• The growing preference for Cloud Computing and Software as a Service
• Rapid Smart Phone adoption
• The increasing use of Social Media by businesses
• The growing demand for faster, more immediate business communication.

This year saw continued growth in sales through reseller partners internationally, culminating in Q4 with an agreement to supply a leading North American call centre provider with CONTACT under their own branding; a deal worth over US $1M, which will see Datasquirt’s software deployed across the United States and Canada. The global technology search that preceded this organization selecting CONTACT illustrates the quality and differentiation of the Datasquirt product offering.

In October 2010 Datasquirt became one of the first software providers in the world to offer a call centre specific platform for managing Twitter interactions with customers. Datasquirt clients such as Royal Mail Group and Wokingham Borough Council in the UK are now using CONTACT to manage Twitter-based service delivery in their call centres.

Only this month (September 2011), we were delighted to be voted first in the “Top 25 Contact Centre Technologies” by readers of a leading UK Contact Centre Magazine called “Call Centre Helper”. This affirms that our product offering is in tune with the needs of our target market.

The company expects sales from both current and new clients to continue to increase and we anticipate on-going growth in the strength of our reseller channel. We will maintain a continued programme of product enhancement to deliver further social media and reporting functionality in line with client demand.

The directors remain confident in the success of Datasquirt and wish to thank our customers, staff, shareholders, suppliers and partners for their on-going support.

Mark Loveys
Chairman, Datasquirt Limited

Readers of leading UK Call Centre Magazine “Call Centre Helper” have voted Datasquirt‘s Cloud based CONTACT Multi-Channel solution as #1 of the top 25 Call Centre Technologies.

CONTACT is cloud-based call centre software – for adding text messaging, email, web chat, Twitter and fax capability to contact centres.

This is a fantastic endorsement of Datasquirt’s offering by the Call Centre community and Datasquirt’s UK customers.

www.callcentrehelper.com

www.datasquirt.com

Enprise is very well placed to provide a seamless changeover for these MYOB Employer Services customers. We have an existing customer base of more than 700 businesses across Australasia and a well-established helpdesk operation, backed by a highly experienced consulting and product technical team.

Our plan for Australasia, is to provide superior support for over 1,000 signed up customers within the next 12 months. We have the systems and processes in place to achieve this.

After years of innovation to its cloud-based corporate messaging product CONTACT, developing its international distribution channels and building up its global base of customers, Datasquirt has reached the point where it is cash-flow positive and profitable.

The company has also signed a white-label distribution deal with a very large American business that will give it sales coverage throughout the USA and Canada.

Today the Sunday Star times has posted an article on Datasquirt’s recent announcements.

A further article was subsequently published in the NZ Herald.

I first saw the following graphic at an SAP presentation in Las Vegas a couple of years ago, which shows in simple terms just how big the American economy is. A friend of mine at SAP forwarded it to me recently after I mentioned it to him.

On the map, each state of America has a country of similar sized economy & population named on it. I noted that Maryland is marked as New Zealand. To check this, my own quick research found that Maryland’s economy and population is in fact a tad bigger than New Zealand’s.

Click on the map below for a larger view.

By the end of FY11 Datasquirt had eliminated cash burn as forecast and moved into profit for the fourth quarter. The company achieved this through growing revenue by 37%, excluding other revenue and foreign exchange gains and losses, making significant, strategic improvements in global distribution and by continuing to innovate, as well as through prudent cost management.

The adoption of Social Media channels as ‘business as usual’ for most corporations, the ongoing growth of SMS and web chat communication and the international interest in cloud-based technologies mean Datasquirt is well placed for FY12.

The company expects sales from both current and new clients to continue to increase. It also anticipates an ongoing growth in the strength of its reseller channel and has budgeted for an ongoing programme of product enhancement, to deliver further social media and reporting functionality in line with client demand.

September 2010 saw Datasquirt become one of the first companies in the world to offer corporations a call centre platform for managing their Twitter communications with customers. This created additional revenue streams from existing clients, such as Royal Mail Group (UK), as well as positioning Datasquirt as a future focussed provider and generating new business enquiries.

Demand from current clients during the 2011 financial year broadened from email and SMS to increased demand for the fax and web chat functionality in CONTACTTM, as well as social media. Corporate businesses increasingly recognise the commercial importance of integrated communications, while customer expectations for real-time replies and multi-channel communication are continually rising. Both these major trends are demand drivers for Datasquirt.

FY2011 saw continued growth in sales through reseller partners internationally, culminating in Q4 in the agreement to supply a leading North American call centre provider with CONTACTTM under their own branding; a deal worth over US$1million which will see Datasquirt’s software deployed across the US. The global technology search which preceded this organisation selecting CONTACT illustrates the quality and differentiation of the Datasquirt product set.

In a climate of ongoing economic uncertainty, corporate businesses are increasingly seeking pay-as-you go hosted (cloud-based) software solutions, such as CONTACT. They are increasingly driven by their customers to provide more sophisticated, integrated and real-time customer service, across multiple channels, and to be better than their competitors at responding to enquiries and complaints. In an environment where businesses want more efficiency, security and control, and are investing in products which offer a clear competitive advantage and good return on investment in the short to medium term,

Datasquirt is well placed for continued growth.

The Directors are very confident in the success of Datasquirt and will now be buying more shares.