Intellect Design Arena PICK for 2015

This is definitely an interesting company to analyze. I see parallels being drawn with Accelya earlier in the thread. It has definitely interested me (but i am struggling to determine the right valuation for this company).

A few questions to folks who have analyzed the company ( i have had only a cursory look at the AR and Investor Presentation). Again please feel free to correct in case my points are flawed.

1. Whats the customer acquisition strategy – A product company unlike a traditional IT services company has one or maybe a couple of things to sell which it then tries to sell to multiple customers. This is unlike a IT services company where they focus on a few set of customers and try to sell a basked of services (Hence the importance of Account mining and cross sell/upsell in these companies).

Assuming this is true what is Intellects Sales strategy (Apart from mentioning that 50% odd revenue is coming from Americas/Europe). How are they investing in their Sales force. Do they have a strategy on partnering with IT services companies?

1. Customer Tail – Product companies either are heavily dependent on a few set of customers or end up having a long customer tail with minimal revenue contribution. Is there any visibility on this so far?

2. Digital and Design thinking are the buzzwords in the industry today – Every company is talking about it but very few are mastering it. (Omni channel as an example has been there for ages, however its only recently that companies have started bucketing it under ‘Digital’). Is this a differentiator for Intellect?

3. Product Replacement strategy – From a customers standpoint how do they go about integrating Intellect into their existing IT real estate without rocking the ship (given that Financial services industry has been a pioneer in IT spend and yet paradoxically has continued to use legacy systems (mainframes,AS400 etc). This is because the potential pitfalls of replacing age old stable systems is very high. Hence what may happen is that Intellect will end up doing more business with new age banks or banks in emerging countries with no past IT baggage.

4. Stickiness of Business – I would be interested to know what wrap around services (enhancements and upgrades) can Intellect offer to customers to have an assured annuity business in place.