This is a really interesting strategy. A yearly cost for implementing, running, supporting, and upgrading the solutions they have in the market. This really does ensure that there is cost certainty, especially in the industries that TNE specialise in, which is mainly government related. These people value cost certainty, and if upgrades are included then cost certainty over a significant period becomes a reality.
I do think that it will have significant challenges around scope, contractual terms, and overall price, but this should help build up the market for an organisation that has worked the base well, but needs new logos. It will also turn activities such as consulting into annuity revenue which will be valued much more highly in valuations than one off revenue.
I know they spoke about this a while ago, but I just saw a advertisement for it were the CEO was announcing it to industry.
TNE Price at posting:
$15.30 Sentiment: Buy Disclosure: Held
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