I've sold my holding in DTL DTL are, and have been, a very well run company for a long time. My decision is more about me increasing cash with the current strength of markets and the real risk of a re-rating of DTL (from a high P/E) and the Fed Govt tendering for a panel of Microsoft Licence Providers. They dropped 9% a couple of years ago when Microsoft changed the licence revenue model. DTL have always been very cagey about how material the Fed Govt MS Licence deal is worth. This lack of transparency means the risk is hard to quantify and I've erred on the side of caution.

The whole of Fed Govt Microsoft licensing expires in June this year. The govt has shifted its model to a panel based arrangement. The tender for the panel closed in Sept and is being evaluated.

The Fed Govt has had panels in place before but DTL got 100% of the sales due to lack of competition being able to handle the complexity. Now they have competition with Insight Enterprises.

• Insight is listed in the US and is Microsoft's largest global LSP with 25+ years of Microsoft licensing expertise.
• It has won major state government contracts in South Australia and Western Australia in 2025.
• Microsoft's largest global partner and worldwide solution assessments partner of the year.
• It was also 2023 Microsoft Australian Partner of the Year.

Insight also bought (Nov 25) Sekuro - an AUS cybersecurity company. Sekuro had $200M revenue annually with 300 employees. Security services in Fed Govt is also a revenue earner for DTL. The risk here is Insight being able to grow in this sector but this would be incremental.

DTL revenue only grew 6% last FY but EPS was up 11%. This isn't sustainable on a high P/E, especially if there is more than one member on the panel when announced. But if they are sole supplier again then I'll probably lose out.