The following article was posted yesterday at the premier website for actionable stock market opinion and analysis, Seeking Alpha. Seeking Alpha handpicks articles from the world's top market blogs, money managers, financial experts and investment newsletters - publishing approximately 250 articles daily. Boasting more than 1 million members, the website has a strong readership among money managers, research analysts, investment bankers, and serious individual investors.
Found at www.seekingalpha.com/article/639331, the article is presented below in its entirety:
One of the hot growth areas in technology and cloud computing right now is enterprise content management (ECM). The ECM industry is expected to exceed $5.7 billion by 2014 with Gartner predicting a compound annual growth rate of 10.1%. IBM Market Insights predicts adoption of cloud computing to grow by 26% CAGR between 2010 through 2013.
The ECM cloud adoption is fueled by runway document and digital data growth. The economic and operations impact delivered includes: cost savings, quicker time-to-value, improved compliance & disaster recovery, increased service delivery, increase IT efficiencies, and enhanced competitive positioning.
There are a number of big names in the field including IBM (NYSE:IBM), Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), and OpenText (NASDAQ:OTEX), suggesting that the industry has a lot of potential. It may seem that there is little room for such a small player like GlobalWise Investments (GWIV.OB) to operate in with such large multinationals in the space, but according to an analyst report by Murphy Analytics, the company actually has substantial room with its unique business model.
There is a big difference between the markets served by Tier 1 and Tier 2 focused players and the small and medium business market targeted by GlobalWise. Although the average deal size is smaller, GlobalWise is able to pursue many more opportunities. GWIV has already made headway in the marketplace by partnering up with well-established companies such as Lexmark, Samsung, and Dell.
Looking further into GlobalWise Investments, the company, via wholly-owned subsidiary Intellinetics, is a leading-edge technology company focused on ECM solutions for the digital age. The ECM industry continues to grow rapidly as a result of unrestricted proliferation of digital content within today's business environment. Leveraging its proprietary cloud-based computing software, GlobalWise is poised to capture a significant market share of this burgeoning industry.
GlobalWise's ECM service is delivered to customers via five unique delivery models which cover the spectrum of business needs: Cloud/SaaS (Software as a Service), Hardware Vendor Integrated Service, Software Vendor Integrated Service, Premise (Client-Server), and Hybrid (Premise & Cloud/SaaS). This diversity gives advanced security & privacy features with an on-demand structure needed for large Tier 3 and Tier 4 businesses that are currently underserved by the market.
The Intellinetics platform defines a new industry benchmark and game-changing approach by combining advanced virtualization & automated content management with an open and service-oriented architecture using web services. The company provides strategies, tactics, and technologies used to manage paper and digital assets from capture to long-term archive, without the need for manual processes conducted by a full time employee.
Leveraging management and key department heads, Intellinetics has a strong foundation from which to capture significant market share within the lucrative $149 billion Business Software & Services industry.
Recent financial results for GWIV show the potential of this sector. On May 16, GWIV said that total revenues for the quarter increased 51% y/y to $360,328. The company further noted that it has significantly ramped-up its sales efforts and has entered into five new channel partner agreements since February. GWIV commented that it believes the expansion of its reseller program to include Latin America in the second quarter of 2012 will continue to increase, driving growth for the next several years.
As a side note, the only analyst covering this stock has a 12 month target on the stock of $4.60 a share, providing some pretty decent upside for investors.
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