Five changes in the market that underpin the value of Datagate

May 18, 2016

I get asked why I stood down from my role as CEO of Enprise Group and diverted my focus and investment to Datagate, which at the time, was the newest and smallest of Enprise’s businesses.

I did this because I recognised the very strong demand for Datagate by companies that sell IT, Telco and/or Utility services, driven by five big changes that are happening right now in the marketplace, as listed below;

  1. The rapid rise of Cloud computing is leading IT Companies of all sizes to shift their business models towards selling services (instead of selling hardware). Subscription service revenue instead of product sales revenue. For IT Companies, this has progressed through selling data circuits, Internet connects and on to SIP / VOIP Telephony. Datagate makes this type of subscription billing easy.
  2. Computers and Phones have become one and the same. Businesses of all sizes are deciding that one supplier is preferable to provide their IT and Telecommunications services, because the technologies have merged. A relationship with fewer service suppliers is easier and less expensive to manage, whereas having more suppliers is more complex and costly to manage. Datagate enables resellers to aggregate multiple service types such as Telco and IT services in their billing and portal services.
  3. Power companies are starting to sell broadband successfully. At the reseller level, we are starting to see an emerging pattern of convergence between electricity and telephony (at least at the broadband level at this stage). Telephony & IT resellers are interested in selling electricity to their customer bases – essentially it’s just another on-line service to add to data services. Electricity companies are interested in selling broadband and other Telco products. Datagate provides billing and portal services that can combine different services types, such as Telco and electricity.
  4. Billing of telephony and electricity is complex. A product like Datagate is needed to make this billing easy. Furthermore, it’s even more complex when you try to mix different service types. Standard accounting and billing systems cannot handle this complexity efficiently. A specialised product, such as Datagate is required.
  5. Further to billing, customers’ service expectations are increasing. They expect immediate on-line access to their bills and reports analysing their consumption of services. The large established electricity and telco vendors all offer on-line analytical portals and so have already set the market expectation. Resellers of these services therefore need to offer similar on-line portals. This requirement becomes more complex when the reseller is selling a combination of services, such as electricity and telephony. Datagate is built to handle this requirement.

Datagate exists to help IT, Telco & Utility resellers capitalize on the opportunities that these changes in the market are driving.

We are experiencing fast uptake of Datagate by resellers in the New Zealand market and we plan to take Datagate to overseas markets, where the same market changes are happening, in the very near future!


The World as a Service

April 6, 2016

The “as-a-service” approach to business is gaining more and more traction across many industry sectors. Consumers are developing a preference for subscribing to services as opposed to buying things.

The Internet, Cloud Computing and mobile apps have been high-profile influencers on people’s buying patterns, which have promoted an “as-a-service” mentality. XaaS (anything as a service) is regarded as a new “disruptive” approach to satisfying consumer demand, even though the subscription business model itself has been alive and kicking for centuries in industries such as newspapers, magazines, telephony, insurance and leasing, to name a few.

XaaS_globe

We are now seeing professional service businesses that traditionally charged by the hour start to charge by fixed subscription instead. This is shown to greatly improve productivity and effectiveness in delivering value to customers. Customers are more inclined to engage and use their subscribed services, rather than hold back to avoid hourly charges. Questions and arguments about billing are significantly reduced. The subscribed model invokes an on-going partnership instead of a series of one-off transactions or interactions.

I.T. businesses that used to sell servers and other hardware items have moved to selling on-line subscriptions to hosting services and have extended their businesses to sell subscribed telephony and data services. They have learned that subscribed business is regular predictable business that they can rely on, so long as they look after their customers. Subscribed business is the best kind of business for the customer and the supplier!

At Datagate, our specialty is enabling service re-sellers to efficiently process, report and bill measurable subscription services, such as telephony, data circuits, hosting, Cloud & mobile apps, electricity, water, gas etc. All of these billing models include a combination of monthly fixed and variable billing. The variable component of the bill is normally derived from a data feed from the supplier of the service that details the service consumption quantities.

I find it interesting that we are encountering many new “as-a-service” businesses that fit Datagate’s fixed and variable subscription model. Some of these are “traditional” as-a-service businesses and others are revolutionary and disruptive approaches to markets formerly served by product or time sales.

At the coal face we see the shift to an “as-a-service” world is very real.

  • SaaS – Software as a Service
  • TaaS – Telephony as a Service
  • IaaS – Infrastructure as a Service
  • PaaS – Platform as a Service
  • MaaS – Monitoring as a Service
  • DBaaS – Database as a Service
  • XaaS – Anything as a Service

“Internet of Things” (IoT) offers exciting business opportunities

March 14, 2016

Lora_logo

As part of my work with Datagate Innovation, I enjoy helping our clients investigate and monetize new billing opportunities.

Datagate provides a comprehensive Cloud platform for billing recurring charges, plus variable charges for measured consumption of services – and it’s amazing how many on-line businesses and new business opportunities tend to fit this model.

One of the most interesting subjects I’ve investigated recently (that fits the Datagate billing model), is the level of maturity and viability that “Internet of Things” technology is currently reaching. New cost-effective, low-power consumption devices are now being produced that can run for up to ten years on a built-in battery and be used to remotely measure and report on all sorts of things. These devices connect to a standardized LoRa radio network which will soon be widely available in New Zealand and around the world.

LoRa networks are cost-effective, low-bandwidth and can reach areas that traditional cellphone networks can not. The LoRa networks are in-turn connected to the Internet and enable Internet applications to access low-cost measurement devices in remote locations.

To my mind, the technology and the levels of standardization are reaching the point where new viable high-growth business models are now within reach.

Business and consumer applications for IoT devices and applications seem limitless, especially in areas where remote monitoring and reporting is required. These include applications for security, agriculture, automobiles, medicine, military – to name a few. Official estimates for future take-up of IoT are astronomical. 50 billion IoT devices on-line by 2020…

This is definitely a fertile space for application-developer entrepreneurs – …and Datagate‘s billing model.


Flying Kiwis invest in Datagate

February 6, 2016

FKA logo

This month I am very pleased to welcome the Flying Kiwi Angels as new investors in Datagate.

The Flying Kiwis have invested $242,000 of new capital in to the business. In addition, they bring a wealth of business experience and valuable industry contacts for Datagate.

This investment brings Datagate near to completion of our current investment round where we sought to raise $1.5M of new capital in order to expand and accelerate sales of Datagate’s Cloud Billing & Customer Service Portal. The Flying Kiwis’ investment brings us to a total of $1.46M raised in this round.

The Datagate shareholder-base now includes NZAX-listed Enprise Group, the Ice Angels, NZVIF and the Flying Kiwis, among others.


Datagate welcomes new investors and a new director

December 5, 2015

Datagate

Today I am very pleased to announce that Datagate Innovation Limited has signed up two new shareholders, Ice Angels Nominees Ltd and NZVIF Investments Ltd, as well as gaining a highly-respected non-executive director, Malcolm MacDonald.

The new shareholders have invested a total of $569,000 of new capital into Datagate, bringing the total capital raised in Datagate’s current investment round up to $1,219,429 so far.

The investors were led by Malcolm MacDonald, a successful IT entrepreneur, having been a founder of BankLink, a major New Zealand based accounting software success story, that was sold to MYOB in 2013 for $139M.

Malcolm joins the current Datagate board, consisting of Dr. Jens Neiser (representing NZAX-listed Enprise Group Ltd) and myself. I am extremely pleased to be working with Malcolm and Jens as fellow directors, who are both very knowledgeable, experienced and successful individuals in their own right.

I am also delighted to have the Ice Angels and NZVIF join Datagate as investors. The Ice Angels’ members have already been very helpful to Datagate and myself with strategic advice and valuable introductions.

Datagage is expecting to be able to announce further new investors within this round, in the very near future.

NZAX:ENS Enprise Group’s market announcement


Enprise moves to a tighter focus

November 7, 2015

This has been a momentous week for Enprise Group, with the sale of Enprise Software (our SAP-aligned software development business) and getting shareholder approval to allow new investors to invest directly in to Datagate (formerly a 100% subsidiary of Enprise Group).

These changes bring about a much stronger and sharper focus to each of the current and former Enprise Group businesses.

Enprise Solutions is the only business remaining 100% within Enprise Group and it is tightly focused on selling and supporting MYOB Enterprise software solutions to mid sized businesses in New Zealand and Australia. It has nearly 1,000 customers in total across both countries and is the clear market leader in New Zealand. Enprise Solutions is a strong, growing and profitable business that gives excellent support to its customers.

Enprise Software is now part of ProjectLine, a very successful North American SAP partner that is dedicated to sales and support of SAP Business One. That puts Enprise Software into a home much more aligned with it’s core business, which is Enprise Job for SAP Business One.

Datagate Innovation is now the master of its own destiny, with its own board of directors and its own shareholder base (including Enprise Group). My own personal focus is on working with the Datagate team to make this business a winner on a global scale. Datagate is all about monetising on-line services, the Cloud, billing and customer portals – an excellent focus for building value!


Datagate gains new shareholders, new board and increased independence

November 7, 2015

Datagate Innovation Ltd

On Wednesday this week, Enprise Group held a public meeting of shareholders to approve resolutions to allow Datagate Innovation Ltd to issue up to 2.5M new $1 shares to new shareholders and to allow me (as a director of Enprise Group) to buy shares in Datagate at a pre-money valuation of $1.5M. This allows investors to invest directly in to Datagate and for Datagate to become its own more-independent vehicle.

As soon as these resolutions were passed I wasted no time in buying Datagate shares, along with two other investors. More investors will follow in buying Datagate shares in due course, bringing even more new capital in to the business.

This has changed Datagate’s shareholder composition from being 100% owned by Enprise Group to being partly owned by Enprise Group and partly owned by other shareholders (including myself). As of today, Enprise Group owns approximately 70% and other shareholders approximately 30% of Datagate. This will of course change further as other shareholders come on board.

Datagate’s board of directors currently consists of Dr. Jens Neiser as chairman (representing Enprise Group) and myself. Other directors will be added in due course.


Enprise Software sold to ProjectLine, Canada

November 5, 2015

Derin_Elliot_1

This morning Enprise Group announced the conditional sale of its SAP software business, Enprise Software to Canadian SAP partner, ProjectLine.

I see this as a very positive move that will benefit the customers and partners of Enprise Software, whilst enabling Enprise Group to consolidate its focus on its two remaining businesses, Enprise Solutions and Datagate Innovation.

ProjectLine has been a very active reseller of Enprise Software products in the Canadian market and their team has a high level of expertise in Enprise products as well as the North American SAP Business One market. Their branches across Canada put them in the right time zones to give superior support to Enprise Software partners and customers right across North America and beyond. All current Enprise Software staff members will be retained within the business and Enprise Software Inc. will be a separate entity within the ProjectLine group.

Most of Enprise Software’s partners and customers reside in North America, so will be better off by having more localised support. All of Enprise Software’s partners and customers will benefit from the bigger team now backing the Enprise products.

Derin Hildebrandt (pictured) and his team at ProjectLine are high quality professionals, with a lot of experience in the SAP Business One market. They have an excellent reputation and I’m certain that Enprise Software and its team, partners and customers are in good hands. I wish them all the best!

Elliot and Derin
Elliot Cooper and Derin Hildebrandt
Derin Hildebrandt and Mark Loveys
Derin Hildebrandt and Mark Loveys
Derin and Cathy
Cathy Masters and Derin Hildebrandt

The Convergence of IT, Telecommunications and Electricity

October 14, 2015

Converge02

This is a time of great opportunity and also great risk of disruption, for businesses working in the fields of IT services, Telephony and Electricity.  Each of these three industries on their own are under increasing margin-pressure, because each industry can be seen to lack a great deal of differentiation.  All can now be classified as on-line infrastructure services. Phones are computers, computers can be phones – all require a network and electricity to operate.  Increasingly, all must work together to provide a working platform for the common customer.

The needs of the market, the customers, will ultimately drive the outcome of who wins and who loses.  The market favours those who are efficient, those that have the best understanding of the customer’s needs, those who adapt, those who offer the best service, those who are easiest and least costly to deal with.

Increasingly we are seeing the rise of businesses who offer combined IT and telephony services. These are now intertwined services, where phones and computers share the same networks, Internet connections and infrastructure,  They are now very much one and the same.  The technology of both has converged.  Furthermore, the sales process and the customer relationship are now the same. It no longer makes sense for the customer to source telephony and IT from different suppliers.

Now add the supply of electricity to the mix of IT and Telephony.  It’s a logical addition – another on-line service. It can leverage the same sales process and the same customer relationship as IT and Telephony. Companies that provide all three of these services to their customers, can offer a better, more complete offering, while at the same time getting maximum return on their sales and on-going relationship effort.

This convergence of on-line services, is the reason why I’m so convinced that my new company Datagate is on the right path.  Datagate is a white-label, Cloud-based billing engine and customer service portal for companies that sell services including Telephony, Electricity, Hosting, IT services and other utility services.  Datagate produces a single unified bill for the end customer that includes all subscribed services and lets them review and analyse their bills and consumption of services in their own private on-line portal.

Datagate is rapidly building a base of on-line service re-sellers, covering IT, Telephony, Electricity and other services, enabling these businesses to pick and choose the services they want to sell and allow them to create their own bundles and pricing plans.

Convergence is a great creator of business opportunities …and also a great disruptor.

 

 

 


Utilise adds electricity value with Datagate

September 21, 2015

Utilise Logo

Utilise is an innovative New Zealand Electricity company that was formed by a group of progressive energy and utility specialists, to deliver sharper electricity pricing for New Zealand businesses.

Utilise customers receive optimised pricing plans developed around their business’s electricity consumption, through the day, the week and the season.

The “Utilise edge” combines the use of smart meter technology and proprietary pricing software with billing and spend analysis delivered to customers through the Datagate customer portal. The use of innovative software solutions, such as Datagate, enables Utilise to offer high quality service whilst keeping costs in check.

SimonYoung

Executive Director, Simon Young says “Being a new entrant to the Electricity Market, Utilise’s strategy is to leverage the latest innovation and technology to give us competitive advantage and more attractive pricing. Datagate integrates with our internal systems, processes bills to our specifications and gives our customers the on-line capability to pay their bills and analyse their electricity costs”.

“In addition to our on-line presence at www.utilise.co.nz, we are in the early stages of developing a reseller channel of businesses that will sell other services, such as telecommunications and other on-line subscriptions. These are businesses that have existing sales processes that could easily be extended to bundling electricity with their other offerings. Datagate is key to our strategy, given that Datagate is designed to enable multiple services including electricity, gas and telecommunications to be combined on a single bill”.

From Datagate’s perspective, I regard Utilise as a strategically important customer, as they are our first Utility provider and they are keen to advance a strategy of selling electricity and gas through a channel of telco resellers, which is of course completely in line with Datagate’s strategy. By helping Utilise execute their strategy, Datagate will be proving its value to the global utility and telco industries.


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