The term "subcontracted" is being used misleadingly here in my opinion.
- ISX purchased CRM+trading platform licenses from Fino and Gibi for each of the clients. The license entitles the clients to deploy and use the platforms.
- AuthenticateBV (which is a subsidiary of ISX) set up the cloud-based environments, installed the CRM+trading platforms and set up the integrations to ISX's APIs.
Saying ISX subcontracted work to Fino and Gibi is similar to saying that someone building a Windows 10 computer is subcontracting work to Microsoft because he obtains a license to deploy and use Windows 10 from Microsoft. It doesn't make sense to me because the actual work, in this case, lies in the assembly of the hardware components, installation of Windows 10, hardware drivers and other applications, and ensuring the finished computer works to the client's satisfaction. Of course, Microsoft is there to provide support for Windows 10-related issues, but only if the system builder runs into difficulties. Microsoft is not going to be the one deploying Windows 10 onto the computer.
So is sub-contracting being used properly or misleadingly here?
What 'grates' ASX is those platform licenses made up the bulk of the costs, and they were booked as revenue even though they were licensed to the clients. ISX wouldn't have asked the clients to purchase the platform licenses directly from Fino and Gibi so it won't book the payments as revenue because that's
not how these jobs are
normally executed. But then the agreement tied performance to revenue, not profit, so ISX has done nothing wrong as far as the agreement goes.
