Australian company TZ Limited is looking to capture a larger share of the growing Internet of Things market following the development of open APIs to allow third-party device control.

In the past several years, Internet of Things (IoT) enabled-devices have become almost commonplace as building managers seek to better manage energy use, collect data and automate certain processes.

This trend is only expected to continue as economies reopen and businesses look for ways to protect their employees and meet new restrictions designed to stop the spread of the virus.

In 2020, this industry’s value was estimated at US$389.2 billion. By 2030, that figure is expected to grow by more than 170% to reach US$1.06 trillion.

Australian software company TZ Limited intends to become a leader in this market with its proven technology already being used by a large and growing pool of A-list clients, including Apple, Microsoft, Netflix, UPS and Adidas.

Founded on the back of innovative digital locking technology that included its own patented locks, TZ has used the past year to transition away from hardware and focus on ways it can generate the most value for both its clients and its shareholders: its software platform.

Please join Mario Vecchio for an interactive investor briefing during which he will share his insights into the IoT market and explain how TZ’s new business and revenue models will capture this opportunity, on Thursday 21st October at 1pm (AEDT), by clicking this link.

The first step in this process was to recapitalise the business and improve the company’s financials.,

In this time, TZ has successfully reduced its debt burden from $11.75 million to $2.5 million, achieved positive cash flow, rolled out new client resource management (CRM) and enterprise management planning (ERP) systems and commenced hiring additional staff to meet growing demand.,

During this process, the company was able to continue growing its order pipeline, and during the September quarter this year had 54 deployments on the books – up from 22 the previous year.

With these changes in place, former Cisco director Mario Vecchio (who has previously served on TZ’s board of directors) has been appointed to lead the next phase of the business’ growth.

Mr Vecchio intends to scale up the company’s revenue to $100 million by running TZ as a technology business. 

Please join Mario Vecchio for an interactive investor briefing on Thursday 21st October at 1pm (AEDT), by clicking this link.

Open for new opportunities

Though TZ has historically been a hardware business specialising in smart locking devices, the company is now shifting its focus to its software platform, which Mr Vecchio believes has been undervalued by previous management.

TZ will continue to sell devices, however these sales will increasingly be tailored towards high-value, unique markets where the company can maintain a 50% margin.

At the same time, TZ has introduced ‘Device Connect’, an open API system that allows third-party devices to be added to and operated by TZ’s software platform, instantly increasing the size of the company’s total addressable market and revenue opportunity.

Source: ASX TZ Limited

‘Device Connect’ is already delivering wins for the company, most recently enabling TZ to broker a deal with video streaming pioneer Netflix to provide software to power the company’s existing hardware.

The new model

To fully realise the value of this shift to become a software business, TZ is evolving its perpetual licensing revenue model into a multi-term software-as-a-service (SaaS) model – a change Mr Vecchio expects could increase revenues by 50% or more.

While TZ will continue to sell devices, which have a 50% margin, expanding the offering to software will allow TZ to target high-margin recurring revenue at 80%. The evolution of the business model drastically increases the company’s annuity revenue base, and brings the company in-line with other service providers commonly used by TZ’s existing client base.

Source: ASX TZ Limited

Through the TZ platform, clients will also have access to a self-serve data analytics service, and the company is working on a number of enhancements that can be sold to customers as add-on modules (also sold on annuity licenses), allowing them to add and remove features as required.

Further enhancements are being made to allow TZ to function on iOS, Linux and Microsoft Azure operating systems, and to improve rollout speeds no matter how many devices are being added to the platform.

Join TZ Limited (ASX: TZL) CEO Mario Vecchio for a live investor briefing on Thursday 21st October at 1pm (AEDT). Book your spot here.

Global expansion underway

Looking to capitalise on the scale of these new opportunities, TZ is expanding its global footprint with new offices in several strategic countries.

Notably, Mr Vecchio is opening a development office in India to support the ongoing enhancements of the platform as the company moves to meet customer demand for better data capture and insights.

A new office in the UK will also enable TZ to strengthen existing partnerships throughout Europe and build its presence in this critical region, where a large share of access control IoT devices are manufactured.

TZ is also pushing further into the Asia-Pacific region through a new office in Singapore, to further support the work done from the company’s Australian home-base.

These new offices add to the company’s existing bases of operations in South Africa and the US, where the company has already secured numerous contracts and developed a strong network of clients and partners.

Having delivered a profit last year – its first since the company was recapitalised in 2020 – TZ is well-placed to continue its growth and this exciting time in the company’s history represents a unique opportunity for investors to get in.

Join Mario Vecchio for an interactive investor briefing on Thursday 21st October at 1pm (AEDT). Book your spot here.

Reach Markets have been engaged by TZL to help manage their investor communications.

Sources:

• IoT World Today, How Smart Enviroments Will Take Shape Post-COVID-19
• Reach Markets, TZ Limited Webcast Replay
• Statista, Internet of Things (IoT) total annual revenue worldwide from 2019 to 2030
• TZ Limited, ASX Annoucement: Business Review for the Quarter ended 30 September 2021
• TZ Limited, Technology