Equity, compliance, and control in enterprise software

Our next speaker is Doug Gibson, founder and managing partner at Invictus Partners.

His presentation topic is equity, compliance and control in enterprise software.

Invictus Partners is a fast-growing Australian-born global enterprise software advisory firm.

That helps reduce software-related costs and risk.

Invictus Partners takes the cost and stress out of enterprise software license management and gives its clients back control.

Doug is a 30-year international IT veteran, having worked in SAP, Oracle, and IBM.

Doug's intimate knowledge of software vendors, licensing and auditing practice has enabled him to successfully assist clients to achieve positive outcomes in their audits, strategic software decisions and software contract negotiations.

Doug aims to grow his company into a worldwide organization.

Welcome to the presentation, Doug.

Thank you very much, Andy.

Thank you.

Um, so with that, I'd like to just introduce ourselves and then take you through what we do as a market because most people have not heard of, you know, this market about enterprise software advisory.

So I think before we do that one, it's good to get a bit of an understanding of the actual market and why we actually created our business.

So number one is.

We call it like an oligarch structure in the software industry that dominates.

So it's the usual players of IBM, Oracle, SAP, and Microsoft.

Most organizations have them, but they're this big beast that looks after itself and continuously grows, dominates, controls a massive amount of spend in most organizations that is continuing to grow out of control.

And they tend to control most businesses roadmapping IT, they dictate terms, they're very controlling, and their costs continue to rise

well above the standard CPIs.

But what you also have within those people is that you then have a, for want of a better word, an ecosystem of some of the largest global consulting firms that support these businesses and they drive that whole marketplace as well.

They're sort of like a symbiotic relationship between the two that continues to grow.

So when you start looking at any organization, they'll have software and they'll have services to support that.

The problem that you have is that the software vendors and the system implementers are in cahoots to make sure they can maximise the value of those deals.

It doesn't matter about the impact to the client, but maximise the value of those deals, right?

So what they're doing is they're actually promoting this market at the same time.

So we call it as there's no honour amongst thieves because they don't, because they work in cahoots to maximise the value and dominate the spend in a client's environment.

So what does this market size look like?

If you have a look at it, we've got the global enterprise software marketplace here.

We're talking about in 2022 is about 200 billion, but it's projected to grow out to 610 billion per annum.

But how do you get there?

Well, there's only a couple of ways.

One is they're forcing roadmaps.

So they're changing the way they're saying, we're no longer going to support these products.

You have to move or you will be unsupported.

They're hitting clients with audit and compliance and having massive penalties and creating financial compelling events.

This is all driving clients to have to move down a vendor dictated roadmap.

And the problem is when you do most ROI or total cost of ownership models, it doesn't add up to do that, but they're getting there because they're either going to be off support or they're going to be hit with an audit.

The challenge you then have as well is that basically for every $1 spent on software or cloud you spending on average $10 on services to help put it in or manage it and the challenge that you have is these two are now working together so you can imagine a $600 billion business a year.

Then all of a sudden, what does that look like when you start adding in the services?

So it's a very, very large market spend, but at the same time, a market opportunity.

And what we mean by a market opportunity is with this sort of spend, clients aren't in control.

They can't keep up to date with these terms.

They can't understand when they're getting audited, how to deal with these auditors.

And these audits end up in the millions and millions of dollars.

So clients, we always joke and say they, they break glass and call us, right?

So what they're looking for is how do you get someone that's going to come in and be a true client advocate to support them and be on their side to get more value out of those assets, take control of their roadmap and actually keep the money invested in them so they can put it into other things, not always into the IT side of things, because the vendor decides they're going to change a roadmap.

So where the opportunity is for us is how do we work in that massive industry and provide a, think of it as.

like an advisory level where Mackenzie and Bain and these guys are focused at the top from a strategy.

Think of it as we focus on that area around the IT enterprise software.

So we provide advisory and support for those clients to get the balance of power back in a client's environment as opposed to in the vendor side.

So we talk about equity compliance and control.

Why equity?

Because it's currently one-sided.

Most clients are still bullied by big vendors because the big vendors are large spend, they're enticing, they keep taking people out, they look after them but they also at the same time it's they sort of like we call it you know steel fist in a velvet glove where they're nice to the to the clients but in actual fact every single time it's just about growth.

They say we're strategic

but it's not about strategy it's about how good you are for me this quarter and what I'm going to get from it so it's trying to get that equity back in the relationships and from a compliance point of view making sure that your clients stay compliant because then you take the power away from the vendor because then the control falls back into the client side right so what we're doing is as a team our team is made up of ex people from vendor land so we understand all the tricks of the trade and all that knowledge that those vendors use to negotiate contracts and basically

force clients down a path, we understand all of those.

And we actually bring all of that knowledge to the client side and give the power back to the client to actually go back in those negotiations in managing those licenses in remaining compliant and taking control of their cloud roadmaps as well.

So that's great from a market point of view, but who are we?

So what we are, so we're in a

price software advisory firm.

So what we try to do is we try to get the client's control back.

We call it releasing the shackles of legacy software to get more value out of it.

But we've been going since 2014 and we have a goal to save our clients by 2026, $2 billion.

As of now, we're at $825 million in spend savings through optimisations and audit defence with a global goal of 2 billion by 2026.

We've got clients across nearly every industry.

We've got good blue chip clients, repeatable clients with all of these ones as well.

We're also in engagements with clients now to start putting in managed services.

to look after their broader footprint.

We typically get engaged with one of the vendors and expand out because they trust us and they start getting us to be their advisor and strategy advisor across all their license footprint.

Then how do we manage their footprint for them, keep them optimized and compliant.

agreement.

We specialise in a number of software vendors but we're across global now as well.

We started in Australia, we got operations through partnerships in Europe, in North America, in Middle East and we also have our own footprints over there as well.

And what we're doing is expanding our footprint because this requirement is global and there's not many players that play in this space.

So there's a great market opportunity coming at the moment with regards to where the industry is going.

So what is our goal?

So we want a $50 million trade sale by 2026.

So how do we know that?

We know what's been in the market.

We know people that have done similar things to us, what they've been bought, how they get measured and done as well.

But if we look at this year, for example, we started this financial year with $2.6 million of services already assigned.

Our goal is to get to $5 million in services this year.

We've already got $2.6 million and we've got $9.8 million of qualified pipeline already.

We're literally getting a proposal out the door every single week.

And we're also building out a lot more in our managed services, which is three year annuity contracts.

So what we're looking to do here.

is grow that business continually double so we've doubled year on year 2023 we didn't double year on year but what had happened was Europe took a hit but Europe is back on what I mean by that is Europe slowed down in the market overall there was a lot of uncertainty towards the end of last year that has now picked back up and we signed three new clients in the last two months that is starting to ramp up as well so and you're also starting to get traction coming out of North America as well which has been a good uplift because

as an Australian company that also helps you with exchange rates at the moment.

So where we're at is how do we start growing that business double, double, double?

We're doing that also through a lot more automation in our business as well.

So we've got the right people, but we're not scaling through a massive resource model.

We're doing that through automation on our processes, using robotic process automation, AI, and those sort of tools that we're investing in to help us take on more work with less resources and get more repeatable business.

So

What we're saying to here is why don't you come along and be part of, you know, getting the balance of equity back into the software movement.

We're looking for a $1.5 million investment.

Whether we're in a chunk or cross multiples that we're looking at to invest that over the next three years, that'll drive an extra $35 million in value for our business.

So there are two options that we're looking at.

One is through direct equity or the other is convertible note.

Number of organizations have taken, or people have taken on a convertible note.

And that's where they seem to be preferring it.

However, they have already gone.

And some of those have converted into shares given they've seen where the business is going and what we've achieved and everything that we've said we've adhered to and over-delivered on.

So our exit strategy is 2026.

Someone who's gonna buy us will be somebody that's gonna be looking for buying the right resources in that marketplace.

Cause the resources that we have are very rare.

So people will buy you to get access to your teams as well as your install base as well.

With that,

I'd like to hand back over to you, Angelina.

Fantastic, Doug.

Thank you for the presentation.

Do you have time for a few questions?

Yeah, absolutely.

Thank you.

Great.

So the first question being, you talk about oligarchy dominating the enterprise software industry.

Do you see any of these dominant industry players as potential acquirers?

And if so, is there not a conflict of values today?

Yeah, yeah.

So would they like to?

Yes.

Would we sell to it?

No, because we think that there's other areas that organizations that would be looking at it.

We already know, for example, Bain, McKinsey, BCG are starting to move down from that high level strategy down to the next tier.

And there's a gap in their ability to fulfill on that area.

So that's why we're already doing, working in that area.

We've had some interactions with some of them as well in early stages so that, you know, being on their radar, because that's more where we want to play.

is in that area because we find that if we end up going down the path of one of those big boys, you just get dissolved and any value gets removed as well.

It is not a conflict, but it washes down what we believe in.

We know that what we stand for, there are a couple of organizations out there that this does resonate with because they believe strongly in that as well.

Like I said, Mackenzie, Bain, the BCG, they believe strongly in that as well.

And that's a huge opportunity that you have identified.

How can you be confident that you will be able to capitalize on this and hit your growth?

Yeah, yeah, no, it is right.

I mean, it's a massive number.

But so if you have a look at where we're at, if we just look at this last couple of months, right, so in the the catalyst that has started with regards to some of the vendors, like SAP doing triggering and saying you have to move to our cloud, we're not going to support you.

That's actually triggered off a raft of

business opportunities for us.

We launched one small product offering, which is a jumpstart to get in 12 weeks ago.

In 12 weeks, we've had seven clients sign up to that offering immediately.

And those are just in Australia.

We've got some clients over in Europe and the US that are looking at it as well.

And these basically are jumpstarts that opens up their 80, $100,000 engagements that open up into over a one and one and a half million dollar program.

So we started to see that just off the back of one vendor changing their strategy.

So we're in the right position for it, and we've got the right offerings.

So we feel confident in that side.

Well, thank you, Doug, for your presentation, Q&A.

It's great to see you.

Look forward to chatting to you next time.

And thank you for the opportunity, Angelina.

I appreciate it.