EXCITE TECHNOLOGY SERVICES LTD — Management Reports 2016

Apr 28, 2016

==> picture [133 x 33] intentionally omitted <==

ASX ANNOUNCEMENT | COVATA LIMITED

**CEO

Business
Update**

**29

April
2016**

**Washington

D.C**

To
our
Valued
Shareholders,

I
thank
you
for
your
continued
support
as
we
execute
upon
our
business
plan
and
I
am
pleased
to provide
this
update.

Before
I
turn
to
the
business,
I
will
provide
key
highlights
from
the
Appendix
4C
released
today
on the
ASX.
At
31
March
2016,
Covata
held
$7.7
million
in
cash
compared
to
$8.5
million
at
31 December
2015.

Net
operating
cash
flow
for
the
quarter
ended
31
March
2016
was
($1.8
million),
$2.4
million
less than
the
previous
quarter
ended
31
December
2015,
which
was
($4.2
million).
This
decrease
is mostly
due
to
(a)
the
receipt
of
$1.65
million
AusIndustry/ATO
R&D
tax
incentive
in
Q3FY16
and
(b) a
non-­‐recurring
($.5
million)
research
and
development
investment
in
Safe
Share
3.0
and
the Covata
Platform
paid
in
Q2FY16.
Rapid
progress
has
been
achieved
within
the
UK
Government (with
associated
costs
in
Pounds
Sterling
being
roughly
two
times
the
Australian
Dollar),
whilst
cash burn
has
remained
within
expected
levels.
Our
cash
receipts
for
Q3FY16
showed
growth,
increasing from
$25,000
to
$65,000.

Now
turning
to
our
operational
highlights
in
Q3FY16.
It
has
been
a
busy,
exciting
and
demanding quarter
for
the
Company
as
we
continue
to
expand
our
Platform,
Telco
and
Government
channels and
execute
on
the
deals
underway.

Early
January
was
a
slow
month
for
new
business
due
to
holiday
season,
but
in
February
we launched
Covata
Key-­‐as-­‐a-­‐Service
(KaaS)
alongside
Cisco
executive
Pankaj
Srivastava,
who
travelled

©2016 Covata Limited or its affiliates

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from
San
Francisco
for
this
high
profile
event.
At
an
executive
lunch
of
technology,
security
and finance
professionals
Pankaj
articulated
his
teams
focus
on
Cisco’s
newly
formed
IoT
and
Service Exchange
Platform
(SXP)
programs,
and
illustrated
how
security
and
Covata
will
play
in
this ecosystem.
The
company
has
had
strong
interest
in
this
from
around
the
world
and
we
will
keep everyone
abreast
of
this
as
it
develops.

In
terms
of
our
progress
with
Cisco,
there
have
been
interruptions
to
our
progress
due
to unavoidable
delays
caused
by
the
recent
restructure
as
20
year
veteran
CEO
John
Chambers departed
and
was
replaced
by
Chuck
Robbins
in
Q1FY16.
In
Q3FY16
Cisco
announced
another
major restructure
instigated
by
Mr
Robbins,
which
has
seen
the
creation
of
four
new
divisions
including; “Cloud
Services
&
Platforms,”
“Security”
and
“Applications
&
IoT.”
Many
company
executives
have been
inwardly
focused
throughout
these
months
and
it
does
take
‘until
the
dust
settles’
for
efforts to
get
going.
Despite
these
delays,
Covata
is
well
positioned
to
benefit
from
these
major
changes. Mr
Robbins
has
been
quoted
as
saying
that
“security
is
our
customers’
number
one
priority”
and that
“The
Internet
of
Things
is
essential
to
our
digitization
strategy,
and
is
a
key
pillar
of
growth
for our
future.”
Covata’s
data-­‐centric
security
solutions
rest
within
these
two
areas
and
with
the restructure
complete
I
am
excited
about
the
potential
of
this
partnership
this
year
and
beyond.
I strongly
encourage
anyone
with
an
interest
in
Covata
and
the
Cisco
partnership
to
watch
the
videos of
the
event
available
on
our
website.

Leading
up
to
the
Cisco
event
in
Sydney
we
filed
two
new
patents
pertaining
to
KaaS.
These
are covered
under
the
global
PCT
treaty
for
18
months.
We
have
received
global
media
and
technology executive
recognition
for
KaaS
and
believe
that
it
is
not
only
unique,
but
in
demand.
The
design
and architecture
is
progressing
well
in
our
newly
opened
San
Francisco
office
with
Cisco.
I
am
pleased
to advise
of
a
new
hire,
joining
from
Cisco,
where
he
previously
held
a
title
of
‘Head
of
IoT
Solutions.’ Management
believe
that
this
key
hire
will
ensure
our
engineering
and
business
development remains
aligned
and
highly
visible
within
the
Cisco
business
units
we
are
operating
within.
This allows
us
to
best
position
Covata’s
platform
to
be
part
of
the
solution
for
as
many
opportunities
as possible
across
SXP
and
the
wider
global
Cisco
business.

I
would
now
like
to
provide
some
detail
on
the
Safe
Share
side
of
our
business.

With
the
major
release
of
Safe
Share
3.0
at
the
end
of
last
quarter,
our
engineering
team
has progressed
the
product
roadmap
to
release
3.1
that
underpins
the
proposed
release
of
4.0
in
the second
half
of
this
year.
As
with
any
piece
of
technology
the
support
functionality
is
a
vital component
of
the
sale
and
rollout
of
a
product.
Last
quarter
we
refined
the
service
level agreements
necessary
for
large-­‐scale
deployments
and
this
quarter
we
have
put
in
place
our
global support
structure.
Q3
saw
terms
reached
with
NSC
Global
to
provide
support
to
Covata
customers globally.
This
partnership
allows
NSC
Global
to
be
the
support
channel
for
other
Telco
partners,

©2016 Covata Limited or its affiliates

==> picture [133 x 33] intentionally omitted <==

their
customers,
and
Cisco.
Through
NSC
Global
we
have
trained
support
teams
in
the
USA,
UK
and a
24/7
support
office
in
Cape
Town,
South
Africa,
where
circa
21
people
have
been
trained
on
level 2
support
for
issue
resolutions.
The
result
is
that
Covata
has
a
globally
scalable
around
the
clock support
capability
to
enable
the
company
to
procure
large
enterprise
size
contracts.
The
benefits
of this
partnership
are
numerous
and
it
should
be
noted
that
the
Company
has
not
had
to
incur
what would
have
otherwise
been
substantial
ramp-­‐up
costs
and
capital
expenditure.

Covata’s
position
within
T-­‐Systems
has
been
strengthened
with
the
launch
of
Safe
Share
in Switzerland
and
clear
targets
and
objectives
have
been
tied
to
the
sale
of
the
product
across Europe
for
the
2016
calendar
year.
Combined
with
both
country’s
sales
teams,
Safe
Share
is exposed
to
a
much
larger
target
market.
T-­‐Systems
Digital
is
now
targeting
the
top
100
enterprise customers
from
the
automotive,
banking/finance,
and
insurance
verticals,
for
the
sale
of
Safe Share.
The
digital
team
are
focused
on
multi-­‐country
licensing
deals
-­‐
structured
as
both subscription
or
annual
pricing,
rolled
out
as
staged
deployments.
Additionally,
the
team
are vertically
aligned
to
automotive,
banking/finance,
and
insurance.
Growth
from
the
T-­‐Systems partnership
has
been
slower
than
expected,
however
we
remain
confident
in
the
T-­‐Systems pipeline
throughout
Q4
and
beyond,
due
to
the
aforementioned
changes.
Highlighting
Covata’s prominence
within
T-­‐Systems
was
a
recent
quote
from
Perre
Klatt,
the
Head
of
T-­‐Systems Switzerland,
who
noted
that
Covata
along
with
Huawei
were
examples
of
key
collaborators
that would
underpin
the
launch
of
their
Open
TelekomCloud
in
March.

At
the
end
of
March
we
provided
an
update
to
the
market
on
our
progress
with
the
signing
of
new Telcos
in
AsiaPac
and
LatAm.
Within
LatAm
reseller
negotiations
with
Caribbean
Telco
Digicel
have been
progressing
for
four
months
and
the
reseller
agreement
is
awaiting
signature
by
the
regional General
Manager.
It
has
been
held
up
due
to
other
internal
priorities
and,
as
always,
we
note
there is
some
risk
until
signed.

In
Asia,
it
is
exciting
to
welcome
Chunghwa
as
a
partner.
The
official
signing
ceremony
has
been delayed
into
May
to
allow
for
senior
management
from
both
companies
to
be
in
attendance
and hold
go-­‐to-­‐market
discussions.
Chunghwa
is
the
largest
telecommunications
company
in
Taiwan and
services
the
majority
of
the
country’s
largest
enterprise
and
government
bodies.
There
are known
geo-­‐political
and
cyber
security
concerns
within
Asia
and
we
believe
that
Chunghwa
is
an excellent
partner
to
enter
the
AsiaPac
market
with.

Lastly
within
the
Telco
business
is
the
rollout
of
Barmer.
There
have
been
delays
since
January
2016 due
to
issues
out
of
Covata’s
control.
That
being
said,
the
good
news
is,
the
planning
and
rollout
is underway
and
will
be
carried
out
in
a
staged
deployment
in
line
with
the
customers
desired onboarding
schedule.
At
the
tail
end
of
Q3
revenue
has
been
recognised
from
this
deployment
and

©2016 Covata Limited or its affiliates

==> picture [133 x 33] intentionally omitted <==

will
continue
in
coming
quarters.
What
the
rollout
of
Barmer
has
reminded
us
is
that
we
do
not dictate
timeframes
to
our
customers;
they
largely
determine
when
and
how
the
rollout
takes
place in
large
enterprises.
Staged
deployments
are
advantageous
as
they
will
allow
us
to
manage
multiple large
scale
enterprise
deployments
at
one
time,
whilst
keeping
costs
and
staffing
requirements
in check.

I
will
now
provide
as
much
detail
as
possible
into
the
growth
I
believe
is
coming
from
a
historically strong
sector
for
Covata
-­‐
Government.
The
15
Australian
Government
Departments
and
Agencies using
Safe
Share
have
provided
us
with
a
compelling
case
study
to
underpin
our
efforts
in
the
UK Government,
utilising
the
G-­‐Cloud
platform.

There
are
two
ways
in
which
we
are
interacting
with
UK
Government
Departments
and
Agencies: direct
and
through
partnerships
with
parties
tendering
for
large
government
contracts
(Prime Tenderers
or
Primes).
The
company
is
dealing
directly
at
various
levels,
up
to
CIO,
in
a
number
of UK
Government
departments.
Broadly
these
cover
law
enforcement,
justice,
healthcare
and
foreign affairs.
Safe
Share
stands
out,
firstly
because
of
its
security
platform,
and
secondly
because
of
our deep
DoD
and
government
heritage
in
Australia.
Accordingly,
we
are
in
advanced
discussions
with
a number
of
top
tier
Departments
and
Agencies.

The
second
approach
sees
Covata
partner
with
Primes
who
are
implementing
large-­‐scale deployments,
which
often
involve
multiple
products
and
vendors.
We
advised
the
market
of
one specific
instance
where
Safe
Share
has
been
named
in
a
Prime
bid
for
secure
file
sharing.
As
of
this date
the
Company
cannot
name
the
Prime,
but
we
do
wish
to
advise
of
the
progress
as
much
as possible.
There
are
multiple
stages
to
the
contract
and
the
Prime
has,
since
announcement,
largely advanced
through
Stage
1.

• Stage
  1
  refers
  to
  the
  takeover
  of
  “as
  is”
  status
  which
  requires
  the
  transfer
  of
  a
  substantial number
  of
  employees
  and
  the
  take-­‐over
  of
  existing
  IT
  infrastructure.

• Over
  the
  coming
  months
  the
  contract
  progresses
  to
  Stage
  2;
  known
  as
  “future
  state.”
  It
  is here
  that
  contracts
  around
  partner
  vendors
  and
  specifics
  around
  customer
  requirements are
  finalized.
  Technologies
  like
  ours
  are
  what
  enable
  the
  Prime
  to
  deliver
  a
  successful
  IT rollout
  for
  the
  10-­‐year
  contract.
  It
  should
  be
  noted
  that
  they
  are
  less
  than
  three
  months
  into a
  10-­‐year
  engagement.
  In
  other
  words,
  3%
  of
  the
  way
  through
  the
  life
  of
  the
  contract,
  and this
  opportunity,
  whilst
  having
  the
  potential
  to
  be
  significant
  for
  the
  Company,
  will
  take more
  than
  one
  quarter
  to
  close.

We
intend
to
continue
to
build
and
strengthen
the
quality
of
relationships
across
the
UK Government
to
put
Covata
in
the
strongest
possible
position
for
success
within
the
UK
Government. Pipeline
progress
is
at
varying
levels
of
maturity
(from
early
stage
through
to
advanced)
and
the

©2016 Covata Limited or its affiliates

==> picture [133 x 33] intentionally omitted <==

Company
will
normally
only
make
an
announcement
where
definitive
and
final
arrangements
are reached.
We
operate
within
a
highly
competitive
space
and
we
are
conscious
and
respectful
that
in the
government
and
Defence
sector,
confidentiality
is
expected
of
a
Company
of
our
nature.

Over
the
course
of
Q2
and
Q3
we
have
necessarily
evolved
our
licensing
model
in
response
to customer
requests.

We
anticipate
that
as
the
Company
advances
and
matures,
the
way
in
which
we
explain
and measure
the
business
will
similarly
evolve.
The
Software
as
a
Service
(SaaS)
subscription
model
fits the
procurement
and
business
objectives
of
some
companies.
This
is
often
the
case
where
a company
starts
with
a
business
unit
or
a
group
of
users
and
the
uptake
of
users
increases throughout
the
organisation
over
time.
For
other
organisation’s,
they
are
looking
at
a
more
holistic security
solution
across
large
parts,
or
the
whole
of
the
organisation.
This
became
apparent
after the
Barmer
deal
by
way
of
enquires
from
large
enterprises
as
well
as
new
leads
entering
the pipeline
from
UK
Government.

In
many
cases
they
are
demanding
pricing
for
an
“enterprise-­‐wide”
license
to
cover
all
the
users
for a
fixed
price
over
a
period
of
time;
often
three
years
or
more
and
on
infrastructure
of
their
choice. This
hybrid
approach
to
software
licensing
and
delivery
does
not
change
managements
top
line revenue
goals
and
targets,
however
the
illustration
of
a
subscription
Telco
model
has
been supplemented
from
Q3
onwards
with
a
hybrid
model.
The
drivers
for
adopting
this
are
compelling; the
UK
government
business,
which
is
less
than
six
months
old,
now
has
a
pipeline
representing over
250,000
employees.
The
majority
of
these
opportunities
are
likely
to
be
enterprise
license sales.

Furthermore
within
the
UK
Government,
I
am
pleased
to
have
announced
today
the
signing
of
a Heads
of
Agreement
with
a
large
UK
Government
department.
We
believe
that
this
will
accelerate results
in
the
government
channel.

In
summary
of
Q3
sales
progress,
I
can
say
that
the
Company
is
focused
on
deal
execution
above and
beyond
anything
else.
The
close
of
each
quarter
comes
around
quickly
but
we
have
made
very big
gains:

1. The
   Prime/UK
   government
   project
   in
   healthcare
   and
   communities

2. Two
   new
   Telco’s
   named
   and
   expected
   to
   sign;
   and
   thus
   delivering
   on
   Asia
   and
   Latam

3. Signed
   Heads
   of
   Agreement
   based
   on
   Q3
   efforts
   with
   major
   UK
   Government
   Agency

4. Global
   operating
   team
   and
   support
   model
   now
   underway

5. Direct
   sales
   opportunities
   to
   large
   European
   enterprises
   evolving
   quickly

©2016 Covata Limited or its affiliates

==> picture [133 x 33] intentionally omitted <==

1. New
   2016
   sales
   targets,
   the
   activation
   of
   T-­‐Systems
   Switzerland
   and
   executive
   level focus
   should
   deliver
   T
   Systems
   growth
   on
   track
   in
   Q4
   onwards

Lastly
I
would
like
to
conclude
this
business
update
with
a
discussion
on
the
extensive
marketing and
branding
efforts
undertaken
this
quarter
to
raise
Covata’s
profile
within
key
markets.
In Europe,
alongside
our
partner
T-­‐Systems,
we
exhibited
at
CeBIT
Hannover
where
we
were
visibly represented
with
signs
and
logo
placement,
as
well
as
by
having
key
Covata
personnel
on
the ground
and
involved
in
customer
meetings
and
with
T-­‐Systems
executives.
It
was
a
privilege
to
be invited
by
T-­‐Systems
as
only
a
select
group
of
partners
were
in
attendance.

The
major
event
we
participated
in
during
Q3FY16
was
RSA
–
the
world’s
largest
security conference
held
annually
in
San
Francisco
and
the
first
year
Covata
had
a
booth
and
branded presence.
Our
staff
engaged
over
1,000
people
from
across
the
security,
technology
and
finance industries
–
including
some
current
shareholders.
We
received
significant
brand
recognition,
saw traffic
to
our
website
increase
substantially,
had
several
RFP
requests
and
used
our
time
in
San Francisco
to
meet
with
institutional
investors
interested
in
the
cyber
security
space.
Our
presence at
RSA
also
coincided
with
the
launch
of
our
San
Francisco
office
where
we
have
both
Covata
and Cisco
staff
collaborating
and
advancing
KaaS.
Overall
I
believe
our
“launch”
in
San
Francisco
was
not only
timely,
but
also
a
success
that
will
pay
dividends
to
our
shareholders
in
the
years
to
come.
We have
patents,
certifications
and
partners
like
Cisco
that
will
help
ensure
we
rise
above
others
in
the Cyber
Security
landscape.

To
my
fellow
shareholders,
thank
you
for
your
continued
confidence
and
support.
I
look
forward
to updating
everyone
on
our
future
progress.
Please
find
the
supporting
slides
below.

Regards,

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Trent
Telford

Covata
Founder
and
CEO

©2016 Covata Limited or its affiliates

Covata Q3 FY16 Business Update Support Material April 29 2016

Q3FY16 Operational Highlights

• The Company held $7.7 million cash at the 31 March 2016.

• Cash receipts increased from $25,000 (Q2FY16) to $65,000.

• Advanced direct sales negotiations with a Primer Tenderer and several Government Departments and Agencies within the UK.

• Added to All Ordinaries Index on March 18, 2016.

• Launched the new 'Key-as-a-Service' (KaaS) offering with tech giant Cisco on February 3[rd] .

• Made key hires in the San Francisco office to support KaaS development and Cisco pipeline.

• Started deployment of Safe Share, Covata’s highly secure filesharing solution, to protect sensitive data for German health insurance company, Barmer GEK.

• Enterprise traction achieved in existing and new European markets including Norway, France and Switzerland.

• Awaiting signatures in LatAm and AsiaPac for two new Telco’s.

• Exhibited at RSA Conference 2016, the world's largest global cyber security event.

• Named 'Cutting Edge Managed File Transfer Solution' in the 4th Annual 2016 Cyber Defense Magazine InfoSec Awards.

• Safe Share business model evolving into a hybrid licensing model of annual enterprise deals combined with monthly subscriptions.

• Engaged international IR specialists MZ Group ("MZ") to lead a strategic investor relations and financial communications program in North America.

• Presented at the 2016 Source Capital Disruptive Growth Conference and the ASX Spotlight Conference both in NYC.

**All dollar amounts are in AUD.

The Value of the Covata Platform

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----- Start of picture text -----

The Covata Platform has the ability to underpin multiple products to bring
a data security element to a number of industries and types of companies.
Safe
Share
Original Cloud
Social
IoE Equipment Application
Media
Manufacturers Vendors
Covata
Platform
Product
Platform
----- End of picture text -----

Covata’s Global Business Structure

The Company operates two distinct business arms:

• Safe Share channel distribution

• Covata Platform integration partners

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----- Start of picture text -----

Key-as-a-Service
/Covata Inside
----- End of picture text -----

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Safe Share

Safe Share Engineering Update

Within Q3 FY16 Covata released 3.1 which added additional features to the major 3.0 product release. These features were developed in line with requests from current and pipeline customers.

Features of the Safe Share 3.1 release

Collaborator forwarding: Allows users who have had content shared with them to on-share that content with other users subject to the permission being granted by the owner/manager of the file. Multiple file download: The Safe Share Web Application now allows users to download multiple files. Selected items are automatically zipped and downloaded to the chosen download location. Static web application assets: Provides a faster and more consistent experience for end users on all web browsers.

4.0 is scheduled for release in the second half of this year and it will include a host of new and improved features.

Safe Share Global Support

Last quarter the Covata team focused on the Target Operating Model and Service Level Agreements.

This quarter we reached terms with NSC Global to enable them to provide support to not only customers they bring to the table but also Covata globally. This partnership enables NSC Global to be the support channel for other Telco partners, their customers, and Cisco.

Alongside NSC Global we have trained support teams in the USA, UK and a 24/7 support office in Cape Town, South Africa, where circa 21 people have been trained on level 2 support for issues resolutions. This means Covata has global, scalable and around the clock support capabilities, enabling us to sign large multi-national contracts.

Telco Channel

Covata Partners

Covata targets Telco partners in Europe, LatAm and Asia with strong enterprise customer bases and is selling Safe Share. We currently have Macquarie Telecom, Colt and T-Systems.

Pending Partnerships:

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The Company has previously stated objectives of having a Telco partner in both AsiaPac and LATAM. Chunghwa and Digicel have been actively engaged for all of Q3 and the signing of both contracts are impending.

• Chunghwa is the largest telecommunications provider in Taiwan with annual revenues of circa US $7Billion. The contract signing is set for the 9[th] of May in Taiwan*.

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• Digicel is a privately owned Telco operating in 33 markets across the Caribbean, Central America and Oceania regions. The contract has reached the point of signing with the regional Managing Director, yet has been delayed due to internal priorities*.

Both of these partners have identified government as a key target customer as well as banking, finance and insurance.

• There is always a level of risk until a contract is executed

~~Covata Safe Share has Launched in T-Systems~~ Switzerland as a Principle Product

“Industry-wide collaborations, like with Covata or Huawei, employed here in Switzerland, is why we expect with great pleasure the launch of the Open TelekomCloud March 2016."

Perre Klatt

Head of Deutsche Telekom subsidiary T-Systems Switzerland Inside-Channels.ch 25 February, 2016

Telco and MSP Business Model

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ASX ANNOUNCEMENT

COVATA LIMITED Sydney – 23 December 2015

• Rollout as part of a larger IT solutions project.

• Initial deployment of Safe Share did not begin until late March due to T-Systems readiness of infrastructure.

• Training complete and rollout now underway.

• Revenue started to be recognised in Q3FY16 and will continue for the life of the contract.

• A number of European insurance companies approached Covata post the announcement of Barmer GEK and these have been qualified.

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----- Start of picture text -----

Food,
Beverage & Government
Hospitality
Airline
Other
Education
Financial
Insurance
Services
Automotive
Real Estate
Legal
Technology
Manufacturing
----- End of picture text -----

Covata Delivering in Targeted Regions

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Government

Australian Government: A Global Case Study

Covata currently has, through Telco Partner Macquarie Telecom, 15 Government Departments and Agencies using Safe Share, with 1 additional Department in trial.

Use Cases:

• Facilitate the transfer of very large files both inside departments and between agencies.

• Provide a secure channel to share data externally. In some cases this is with a large number of external users, for example one department has 36 originators but they share sensitive data with 770 external users.

• Allows users to set up a shared space that acts as a secure data room to store sensitive materials.

• Using our APIs, two departments have been able to automate the secure sharing of data between themselves. Any file that is dropped in a defined folder is automatically shared allowing for regular reports to be easily and securely distributed.

UK Government: What is G-Cloud?

The UK Government G-Cloud is an initiative targeted at easing procurement by public-sector bodies in departments of the United Kingdom Government of commodity information technology services that use cloud computing.

G-Cloud consists of:

• A series of framework agreements with suppliers, from which public sector organisations can call off services without needing to run a full tender or competition procurement process.

• An online store – the “Digital Marketplace” (previously “CloudStore”) that allows public sector bodies to search for services that are covered by the G-Cloud frameworks.

• Covata is currently on G-Cloud 7 and will seek to increase Safe Shares importance in G-Cloud 8, launching August 2016.

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“Digital Marketplace” AKA G-Cloud is a cloud technology platform used exclusively by the UK Government

Covata on G-Cloud Available here:

https://www.digitalmarketplace.service.gov.uk/g-cloud/services/7427475545690211

Covata on the G-Cloud

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~~G-Cloud Sales Models~~

Direct

Covata plans to sell directly to UK Government Departments and Agencies as it is an approved vendor on G-Cloud.

Covata has a full time executive with more than 15 years industry experience and has partnered with a team of former ex-government senior executives, focused on direct sales into the UK Government.

UK Government Channel Partners

Covata plans to partner with multi-national IT Primes to be the secure file sharing solution included in multi-year, multi-vendor tenders. A Prime refers to a party tendering for large government contracts.

UK Government Highlights: Direct

Covata is in advanced stages of negotiations with a number of tier-one Government Departments and Agencies.

To accelerate and scale the Company’s expansion into the UK Public Sector, a Heads of Agreement was signed on the 28[th] of April by the Covata CEO and the Managing Director of a Government Department charged with protecting British interests around the world. This agreement is intended to not only enable this Department of Her Majesty’s Government to be a user of Safe Share, but also on-sell the product into other Government Departments and Agencies.

This Heads of Agreement, signed in Q4FY16 but worked on throughout Q3FY16 is intended to achieve the following;

• Establish a discovery/alpha project by mid May to promote Safe Share as an “OFFICIAL – SENSITIVE” secure file sharing SaaS application to prospective clients.

• Develop a commercial arrangement by the end of June, that will augment Covata’s forthcoming G Cloud 8 extensions (launching August 1).

• Assuming a commercial arrangement is achieved, the agreement will have an Initial Term of one year and will automatically renew in one year increments unless the agreement is mutually terminated.

• Due to commercial and competitive influences the name of the Government Department will be made public once the agreement is finalised in June.

UK Government Highlights: Channel Partner

Covata is in negotiations with a multi-national Defence Prime awarded a UK government tender, announced on February 29. Covata was a named solution in the successful bid and will support the Prime as it advances through the process.

The Prime is three months into a multi-phased, multi-year deal;

Phase 1:

This phase is the takeover of ‘as is’ status, which includes the transfer of full time government employees into the Prime’s workforce and the takeover of the IT infrastructure.

Phase 2:

Over the next three months the Prime will determine, for the customer, what is known as ‘future state’. This is where the solution architecture and supporting vendors will be commercially engaged. From here the ‘future state’ software and infrastructure required by the Government customer and its stakeholders will begin implementation.

NB: These contract negotiations remain under strict NDA

Safe Share Hybrid Sales Approach

“Market demands are changing our business model. Data security in 2016 and 2017 is an enterprise wide issue, requiring enterprise wide solutions. Safe Share is on point for this. Data security is a C Suite concern and this means the licensing needs to be flexible to meet the demands of CISOs. This means our business model is becoming a hybrid of direct Government & Enterprise and the Telco channel model.”

Trent Telford, CEO Covata

Transition from Subscription (only) Model to a Hybrid Model

Management Targets Remain Unchanged

At
the
end
of
Q2FY16,
with
our
acceptance
onto
G
Cloud
and
the
contract
win
with
Barmer GEK,
we
are
increasingly
responding
to
demands
for
enterprise
licensing. The
Software
as
a
Service
subscription
model
Gits
the
procurement
and
business
objectives
of some
companies.
This
is
often
the
case
where
a
Company
starts
with
a
business
unit
or
a
group of
users
and
the
uptake
of
users
increases
throughout
the
organisation
over
time.
For
other organisations
they
are
looking
at
a
more
holistic
security
solution
across
large
parts,
or
the whole
of
the
organisation.
In
these
cases
they
are
demanding
pricing
for
an
“enterprise
wide” license
to
cover
all
the
users
for
a
Gixed
price
and
over
a
period
of
time,
typically
three
years
or more.

This
hybrid
approach
to
software
licensing
does
not
change
managements
top
line
revenue goals
and
targets,
however
the
illustration
of
a
subscription
Telco
model
has
been
replaced with
a
hybrid
business
model.

For
example
the
government
business
in
the
UK,
which
is
less
than
six
months
old,
now
has
a pipeline
of
more
than
seven
departments
representing
over
250,000
employees
where enterprise
licenses
are
under
various
stages
of
the
sales
process.

The
announcement
of
the
Heads
of
Agreement,
signed
with
the
large
UK
Government
Federal OfGice,
validates
our
approach.

We
will,
where
we
can,
report
the
enterprise
license
value
of
the
deals
signed,
in
addition
to Telco
user
growth.
Nonetheless,
this
will
be
reGlected
in
cash
receipts
and
revenue
recognition in
future
quarters.

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UK Government Pipeline

In the 5 months since the G Cloud launch, we have a pipeline of over 250,000 employees across various UK Government Departments and Agencies. This is a new customer base for Safe Share through a mostly direct approach, with evolving partnerships with Prime Tenderers and a strong support network of ex UK Government senior executives.

Historically Government has been seen as a slow and costly channel however “worth it in the end” due to the high value, long term entrenched contracts. This channel has the potential to deliver substantial returns in the near to mid term.

Covata Platform & KaaS

Covata and Cisco: The Future of IoE and Security

Pankaj Srivastava, VP at Cisco Systems Sydney, February 3rd, 2016

Summary of Cisco Partnership

• San Francisco Office open and hiring underway.

• Delay in progress caused by two transitions within Cisco’s business and operations. The first transition last year was the departure of long standing CEO John Chambers and the second transition saw the creation of four new business arms this year. Both these changes caused significant internal restructuring thus slowing down progress. Despite the delays, Covata is well placed to benefit from these major changes.

• Safe Share used as Cisco’s white labeled file sharing solution on their SXP platform. The product was used in a trial between Cisco SXP and FoxConn.

• Covata CEO Trent Telford and Cisco VP Pankaj Srivastava are aligned in their vision for the future of IoT and Security, as was demonstrated by the successful event held in Sydney on February 4[th] . At this event Pankaj highlighted:

• Cisco believes IoT is a multi trillion dollar opportunity

• Security is a primary concern for their customers

• Covata is an important component of their security and content management strategy

• We have made a key hire from within Cisco to drive our Business Development to ensure it remains aligned and highly visible within the business units we are partnering with. This allows us to ensure Covata’s platform is part of the solution for as many opportunities as possible across SXP and the wider global Cisco business.

Safety and Security are Top Concerns within IoE

“It is now almost universally recognised that traditional data security technologies such as PKI and VPNs will not scale and is unmanageable with billions of new devices being connected to the Internet. Covata’s platform and underlying patented “Secure Objects” has the potential to change the way we transfer data in an interconnected world.” Trent Telford, Covata Founder and CEO

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Cisco SXP Remains Focused on Core Verticals

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Global Brand Awareness

RSA Conference 2016

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At RSA, the world’s largest security conference held in San Francisco, Covata staff talked to well over 1,000 attendees from across the security, technology and finance industries and branded charging stations garnered strong brand recognition.

CeBIT Hannover 2016 and Cisco Connect

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Covata’s elevated position with our global partners has seen the Company invited to participate in a number of conferences across Europe.

~~Safe Share , a product to help solve~~ the immediate threat of data breaches.

The Covata Platform , the data security solution to underpin an interconnected world.

Contact

Covata Nichola Parker Vice President, Covata Nichola.parker@covata.com +1(571)353-4723

MZ

Chris Tyson Managing Director, MZ North America chris.tyson@mzgroup.us +1(949)491-8235