Hearing that lots of projects particularly in the data analytics and migrations space getting canned and I know a few in that space that were let go. Although I could say they may not have a compelling skillset needed for work in the future pipeline - don't think they had any certifications. Or you could say the segment is becoming fragmented with everyone now cannibalizing each other.

On the other hand, work in support and managed services seem to be stable but that is also the least desirable end as well. Being certified for cloud is not worth it in my opinion and probably why there is more demand in these jobs. Because I think people hate doing exams that provide little reward after they end their career.

Back to Prophecy. This might be ok with subscriptions but don't think ARR will grow much with talk of analytics projects getting stalled. Also the merge of Snare and Emite perhaps feels like an example of feature creep. @Wini and @Valueinvestor0909 make a very compelling thesis (and brave enough to pick the low). But after what I'm seeing, upside here feels a bit limited imho.

@edgescape I would be surprised if the products "merged" into a single platform.

On a call with NWR yesterday the CEO made an off the cuff comment about more collaboration between the products but that would probably start from some of the insights/learnings from building the new eMite iPaaS platform may be applied to future Snare upgrades or features.

I can't comment too much on industry outlook, it wouldn't surprise me if things are slowing down on a more bearish general economic outlook, though the recent Services Australia win sets a good base for eMite growth over the next year. Hopefully can build from there!

I'll just say that it was big data project for an Aussie company which for various reasons I can't reveal and if anyone else knows may I suggest to keep it to yourself for now.

The project involved moving a large amount of data from an on-prem enterprise system to cloud where more resources can be spun up to do the analytics.

Obviously you can't compare a big data project to what Prophecy has to offer. But I think the news does reduce the CAGR of the big data analytics market for any potential work going forward (minus the win you mentioned which is now past). But I realise is top down thinking as opposed to bottom up thinking inn reference to your post on Services Australia. And yes I think I know Prophecy is not really a big data product but still do analytics to a degree.

I still remember buying the Livewire pump (to be clear this was some other fund but can't remember who) on this around 1.30 before selling out in frustration to put some money in other stocks (which I won't mention here) which I've taken profit on and obviously wonder if I should put that profit back here or something else.

So a few questions for me to decide:

Is it worth investing in what looks like a very mature, fragmented and highly competitive sector?

What extra data points does your products/services offer and add value against other products out there? (Think this is the main thesis though)

What is the strategy of taking market share from other players (which looks like there are many both on contact centre and cyber)?

And I do admire everyone's optimism about Prophecy despite the very competitive areas they operate in.

I can understand that finding something underappreciated or missed by the market is the way to find abnormal returns and this maybe could fit the bill?

Not a clear cut decision when I'm trying to reduce the number of holdings in to ones I feel more comfortable holding

@edgescape Funny enough I was only reading that Livewire post you mentioned a few weeks ago: https://www.livewiremarkets.com/wires/an-aussie-microcap-that-could-double-from-here

To be fair to Tim, the business maintained it's ARR growth above the 20% he was targeting, but instead of the ARR multiple going from 5x to 9x as he hoped, it went back to 2x! Something about following the man and not the dog as @Strawman likes to say?

I think you raise fair questions. All I would add is while "big data" is a huge addressable market with tons of competition from big players, eMite does focus on the contact centre niche. There is little direct competition in that space, with most of it coming from customers not having the complexity required to go beyond the basic analytics/reporting functions from their contact centre platform software.

Also I think it's worth pointing out that while the contact centre software market itself may be mature, eMite only exists in the cloud. The transition from on-prem to cloud is far from mature and it means eMite's niche is growing strongly in an otherwise mature market.

Finally, I think all of the fundamental analysis of the business comes back to overlaying the valuation over the top. If the market was pricing PRO on 9x ARR I would also be quite sceptical on the business being able to maintain the growth required to support that. At 2x ARR, if they can keep their 20-30% growth going (and Services Aus contract essentially gets them there for FY25), it looks compelling to me.

@Wini Thanks for that. Yes this is my thinking as well, Emite is operating in a subset of the larger analytics space and carving a niche. But it is also not very well understood by most investors and I think also harder to ascribe a value. It will require patience before the wider audience starts appreciating this space.

Working in the IT/consulting space, I'm more heavily biased against software companies because I've unfortunately seen the darker side of software development.To invest in a successful software company, you need to attract and retain the best developers and that requires cost. Also there is a tendency for them to move to bigger and more reputable firms. So while there are attractive margins, there will be significant cost involved in keeping the software development continuous and uninterrupted. I also feel the analytics/monitoring space is not considered a hot sector in software at the moment.

Also not to mention falling for the livewire pump (I swear never again!). If I lose the opportunity here then so be it. Can't hold everything right?? Once bitten twice shy. Will require a bit more convincing before I get on board.

I'll keep on the watchlist for now in case I start get bored of something I'm holding.