All,
Long time reader first time poster.
Stock market is a new investment vehicle for me, been active for only 2 years now (have my fair share in property investments) and I truly appreciate the comments and insights shared by the guys like Goldbear, Writer and many others. I learned fair bit from you guys. Must say, you guys have changed my opinion about online discussion forums.
Please continue to share your insights and I will be reading whenever I can. I generally refrain from posting as I lack the writing/analytical skills some of you have mastered.
Main reason to jump in and post is due to below link which I felt worth sharing and provide good insight. The link also has comments from one of the guys from Littlehedge who met with Dave in Melbourne. You can see his comments/assessment below.
http://www.littlehedge.com/buddy-platform-introduction/
The meet up with Dave and Nathan (who leads the local sales efforts in Melbourne) was fantastic and they were both incredibly generous with their time.
We spoke at length about the Ohm product (of which there was a base station present) as well as how installations are progressing in Australia and abroad. We were pleased to hear that Nathan has been busy installing Ohm units into sites in Melbourne, whilst also assisting with more complex installs around Australia (assisting the Buddy team in Brisbane and Adelaide).
Partnerships – We spoke about partnerships coming from three key channels, telcos, utilities and building services companies. Each of these channels has relationships with a broad customer base who are potential customers of Buddy Ohm, and by forming a partnership would add additional cross-sales revenue to their current customer base.
We spoke about the economics of an electricity company (who are incentivised to increase power billing charges) seeking to avoid costly increases in supply and instead manage peaks/inconsistent electricity demand with their customers
Telcos (like Digicel) already have an existing relationship with many of the customers that suit the Ohm product and provide them with enterprise telecommunications services. Dave noted that the ease of installation of the Buddy product set meant that there is little training required to upskill a channel partner (Nathan mentioned completing installs in under an hour).
Dave confirmed that accelerating growth will come via additional sales partnerships and refuted the notion of a telco putting together their own “version” of the Ohm noting that the business model for telcos has evolved to being a reseller of third party hardware (handsets, routers, etc), and they should have no interest in entering the manufacturing industry.
Therefore, we see the possibility of a partnership with either of a telco, a utilities provider, or a building services company as equally likely and expect a number of these partnerships to be announced over the next 12 months.
Competition – Buddy stands alone as a provider of an end to end solution to energy verification and monitoring. Before the two M&A deals fell through last year, Buddy was focussed primarily on the software side of turning IoT device data into actionable insights. By missing out on the Zentri deal Buddy needed to look elsewhere to meet their customers’ hardware requirements, to do this they moved forward with the Buddy Ohm product line, hiring Richard Lum with his considerable consumer electronics hardware experience and industry contacts (gaining Buddy access to premium manufacturing partners).
Hardware manufacturers such as Clipsal could produce similar sensors to Ohm, however, they do not have the experience or infrastructure to support a cloud based data repository and management portal.
Similarly, an IoT software platform manager like CISCO doesn’t necessarily have the desire to begin making hardware sensors to roll out to the mass market. This combination of a full end to end solution with quality hardware (Richard Lum) and effective cloud software (Dave’s close relationship with Microsoft) was how Dave saw Buddy’s competitive advantage developing and eventually becoming their economic moat once they have established distributor relationships and gained market share.
In order for a competitor to disrupt Buddy’s offering, they will need to provide a solution that encompasses software, cloud, and hardware whilst being easy to install and something that an existing building manager can make the most of.
Dave spoke about the increasing demand for consumer IoT devices in the USA, however pleasingly reiterated that the consumer IoT market is not on-strategy for now, as the margins presented by the SME customer base and product line up are far higher than the home market.
We asked Dave about the most important thing he is speaking to the team about and he told us that it was 100% focus on making the most of the Buddy Ohm product, and on attacking the smart cities opportunity. It was really pleasing to hear that Buddy won’t be pitching for hodge-podge business outside of their strengths, in fact, Dave mentioned that in the mean time this is likely to result in less frequent “Thor-like” custom IoT deals being done.
Nathan mentioned that there are two instant Nabers benefits that installing a Buddy Ohm grants an existing building, the addition of a real time dashboard and the addition of a BMS (Buddy) both receiving favourable treatment in the Nabers rating system.
Control – There are no immediate plans to extend Buddy Ohm to having control over electricity or network applications, however as users become more comfortable with BMS controls it is something the company will evaluate.
New Sensors – Are being considered and are driven by user demand. As more Ohm devices are being installed more customer feedback around use cases for additional sensors are being discussed.
Key markets – Australia and the US will be the markets of focus for direct distribution with partnerships in other markets to be considered also. Dave mentioned that markets with high energy prices such as Australia and Central America are fantastic opportunities for Ohm, however, noting that pricing is able to be altered by region/market to take advantage of local pricing.
Parse – Facebook delaying the shut down of their Parse service hampered app switching, however, Dave is happy with both app uptake and data collection rates and has provided test data to prospective customers. On discussing Buddy’s origins as an mBaaS it was clear that Dave has a deep understanding on the service and market Parse provides (Buddy was originally a Parse competitor). We believe that Buddy is therefore well placed to support the migration of existing Parse users and enhance the Parse data asset to its full potential value.
In summary, there are 3 key takeaways that made us incredibly happy to be shareholders in Buddy Platform.
1. Dave is 100% focussed on selling Buddy Ohm to SME customers, he knows his market opportunity and is going after it.
2. Dave knows that growth via channel partnerships is the way to achieve initial scale without upfront investment (in staff and marketing).
3. Dave values highly transparent shareholder communication and goes above and beyond to keep the market updated where appropriate.
We hope to speak again with Dave when he is next in Australia and were truly impressed with his efforts to get to know his local shareholders.
