Actual Experience PLC (LON:ACT) Chief Executive Officer Dave Page caught up with DirectorsTalk for an exclusive interview to discuss the two new significant customer deployments and what this means for the future of the company.
Q1: Good news today with the announcement of two new customers, can you tell us anything about the customers?
A1: Of course, I can’t tell you a great deal because of the nature of the contracts we have with our partners.
What is worth bearing in mind for everybody is these customers are like all the customers that our partners target our technology to, they’re all big blue-chips and you would easily know their names, they’re typically what you would think of as blue-chip, large enterprise customers.
This particular case, there’s a couple of them; one in one partner and one in another partner, one is a Software as a Service provider which is a household name and the other is a government department, again everybody would have heard of a) the government and b) the government department.
So, they’re very very significant, large enterprise customer deployments which is where our technology is targeted and that’s really most of what people can take away from this today.
Q2: Now, you’ve called these ‘land and expand’ deals, can you explain for us what that actually means?
A2: So, partner customers, they might deploy at full-scale immediately, we think those sorts of deployments will be fewer and further between but equally they might start small and grow and they can either grow very quickly or grow very slowly or in fact of course some of them might not grow at all.
The point is coming back to the fact that they’re all big, large scale opportunities, we’re uncertain whether they’ll go full-scale immediately or slowly.
What you should bear in mind I guess is that the scale of all of these customers means that each of them has the potential to deliver revenue to Actual Experience of about $500,000 per annum, once they’re up to whatever full-scale is in that organisation, about $500,000 to us. Some are going to be bigger than that average, some of them are going to be smaller than that average but that’s probably the way to think about these deals and the whole idea of ‘land and expand’.
Q3: How did these customers come about?
A3: They came about because of what we’re thinking of as the new focus of the new two partners involved.
So, if we backtrack a little bit and go back to the major announcements back in April and June last year, about a year ago, those deployments were catalytic, they bought a lot of validation to the partners that our technology can be deployed at extremely large scale inside extremely large organisations. They understand, of course, that the customers of the partners have been happy with what our analytics has been providing which is ultimately the most important thing.
What that has done is really, as summertime leading to autumn time, those two partners started to deliver more commitment, more resource, more focus and as a result of that, we saw the early starting of pipeline generation, first names appearing in this new pipeline around Christmas time or just before Christmas time.
The sales cycle, such that it is, brings us up into the March/April period where those early pieces of pipeline are coming to what a salesperson would think of as closable opportunities as in the salesman could legitimately say ‘ok, let’s have the order now’. That was the March/April time, the first couple from that new pipeline were coming in that closable window around March/April.
These two deployments are really as a result of all of that, they’re the first two, one in each partner actually, but the first two of these new wave of pipeline which have come through closed and gone into deployment.
Q4: So, what does this say about the future of Actual Experience?
A4: I think the most significant thing is that the machinery of these two partners is starting to work for us, they’re producing pipeline, they’re producing closable opportunities and this should now start to gather pace and consistency. We should shift now from, I guess, a deal now and again to a deal every quarter, a deal every month and so on so that acceleration should start to come through which is obviously very exciting.
I think the other thing to bear in mind I think for everybody today, one of the important things to remember, the partners that we have are common with a lot of other vendors that deal with these major partners but there is a difference between most of how those vendors are dealt with and how we are dealt with.
So, most of those vendors are sold or resold for example, that might be CRM, Customer Resource Management, so the sales force of these partners would say to the customers ‘do you have a need for CRM?’. The point is that these are standalone product in a portfolio of products that our partners would deliver to those customers and of course, they’d try and sell them.
That’s very different to where we’re moving to and developing and where these deals sit because these deals are actually part of the products and services of our partner organisation so we’re not sold independently, we’re sold as part of a product that’s sold to all the customers of our partners.
So, there’s a systematic scalability to this as once you’re built in then you can genuinely access the whole customer base of these partners and I think that’s a very distinctive difference. It’s also one of the reasons why it’s taken, perhaps, a little bit longer for us to get to this revenue generation point with our partners. You do have to put the extra effort and the extra miles to get built in, once you’re there, the scaling over the medium and long-term is very exciting indeed.