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Cloud movement has Prophecy shooting for the stars

Business

A move to a software as a service model as more global companies look to migrate services into the cloud is beginning to yield results for South Australian listed company Prophecy International Holdings.

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The Adelaide-based firm with offices in Sydney, Manila, Denver and London has 87 staff and a market capitalisation of about $38 million.

Its main two products, eMite and Snare, both had a strong finish to the 20-21 financial year and have a combined sales pipeline of more than $40 million for the 21-22 year.

The eMite software is designed to help call centres correlate and analyse data across multiple channels.

It achieved record new sales of $3.7 million in 20-21, including $1.7 million in the June quarter and has an estimated sales pipeline of $16 million for FY22.

Significant recent customer wins have included Airbnb and Johnson & Johnson.

Prophecy CEO Brad Thomas said strong global relationships with companies including Genesys and Amazon Web Services had helped achieve the record eMite revenues.

He said eMite had been operating under a SaaS model since 2018-19 and that had been a key to its popularity among new customers.

“They don’t want to be spending capital in acquiring software, they want a service they can turn on or off, scale up or down and they want the ease of getting it as a service so they don’t have to set up their own infrastructure – they want to offload that to companies like us,” Thomas said.

“Contact centres and call centres are becoming more complex as customers implement not just voice calls but email, various chats, bots, social media messaging so they become what’s called omnichannel and any contact via any channel comes through that contact centre.

“Typically contact centre employees access multiple systems, not just the phone system, as well as back-end systems such as Salesforce or Service Now and what we do is we take all of those inputs and we correlate them together and we enable customers to run very complex analysis in real-time as well as getting historical trending.”

Prophecy sells software into more than 40 countries with about 70 per cent of all sales in the United States.

It started as a developer of accounting software in the early 1980s and built a number of products over the years before starting to acquire companies.

In 2011, the business acquired a company called Intersect Alliance and its Snare cybersecurity product and in 2015 it acquired eMite, which are the company’s two main products now.

“All of the others have really come to the end of their natural life or didn’t really have too much growth potential and we divested all of those other businesses back in about 2016-17,” Thomas said.

While Snare sales did not reach the record FY20  level of $6.83 in the 20-21 financial year, they finished strongly in the June quarter and have an estimated sales pipeline for 21-22 of more than $25 million.

In a statement to the ASX last month, the company said the Snare sales result was driven by fewer decisions in the government sector in the United States during the transition of the new administration and the COVID-19 pandemic.

“Europe was very problematic in this past financial year in getting business done and we also had significant disruption in our government business in the US with the new administration coming in so that did slow down,” Thomas told InDaily.

“We already have 4000 customers globally with Snare including some of the big banks and finance companies, oil and gas, big retail, health and government defence and military.”

“But we’ve definitely seen disruption over the last 18 months as people really had so much uncertainty and they weren’t really making decisions but I think now they have realised we’ve just got to get on with business and work through and around the limitations that COVID is imposing on us globally.”

Prophecy won the Technology and Innovation category at the Business SA 2019 Export Awards.

Thomas said the addition of some very large customers in the second half of the financial year had provided a timely boost to Prophecy’s bottom line as more companies looked to move their contact centres off-premises and into the cloud.

“Particularly on the eMite side we are riding a multi-year trend of customers moving to the cloud from legacy on-premise systems – they are looking for the better op-ex model, they are looking for more flexibility in a world of remote and home workers and it’s much easier to do that in a cloud-based solution,” he said.

“That was happening anyway pre-COVID and we’re just seeing a continuation of the trend of people moving their contact centres off-premise and into the cloud and that’s something that’s going to continue for the next five or 10 years at least.”

Prophecy International Holdings was ranked 95 in InDaily’s 2020 South Australian Business Index of the state’s top 100 companies.

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