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Why the Livetiles (ASX:LVT) share price has rocketed up 11% today

Livetiles Ltd (ASX: LVT) share price is up today after the software company announced new partnerships with Microsoft and a US apparel brand.
The post Why the Livetiles (ASX:LVT) share price has rocketed up 11% today appeared first on Motley Fool Australia. –

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Livetiles Ltd (ASX: LVT) has today strengthened its partnership with Microsoft Corporation (NASDAQ: MSFT) with a new deal.

The Livetiles share price has rocketed up after the company shared details of the extended partnership in an announcement to the ASX this morning.  At the time of writing, the Livetiles share price has lifted 11.63% to 24 cents.

Livetiles is a global leader in intranet and workplace technology software. It specialises in creating solutions that drive digital transformation in modern workplaces. Additionally, the company operations expand across 30 countries and service more than 1,000 Enterprise clients.

So what’s the deal?

In key points, Livetiles announced it had entered a “co-sell” agreement with Microsoft in the United States. The Microsoft US sales teams will be trained to sell Livetiles Reach and Livetiles Discover, and joint marketing is occurring between the two companies, targeting retail, manufacturing and healthcare industries.

In addition, Livetiles has secured its largest ever Livetiles Intranet deal with a US apparel retailer.

What is a co-sell agreement?

In this case, ‘co-sell’ means that Microsoft sales teams are being trained to sell Livetiles products alongside their own Microsoft products. Miscrosoft runs its sales teams as ‘centres’ known as small, medium and corporate. This will occur in the United States.

Livetiles mentioned a number of products in the announcement today including Directory, Quantum, Reach and Discover. The Livetiles Directory is a component of Livetiles Quantum offering.

The US based sales team are being asked to target companies that have a minimum of 1,000 staff. The idea behind this training and co-selling concept is to empower Microsoft sales staff to directly sell the Livetiles products. Alternatively, they also have the option to bring the Livetiles sales staff in on any potential business. Ultimately, they will work closely together to secure the client. It could be a very effective alliance.

What is a co-marketing agreement?

Livetiles and Microsoft will target the same potential customers and enterprise accounts. Again, these will focus on key industries such as retail, manufacturing and healthcare. It essentially means that both companies will continue with their own marketing efforts, but align their focus to the same potential clients for more effect.

Microsoft has identified 6 high priority ‘vertical’ markets in the United States. The above industries represent 3 of those 6. Those 3 jointly represent a potential 25,000 customers. The Livetiles average contract value at the end of FY20 stood at AUD$53,000. This means that securing a few more deals results in a lot more revenue for the tech provider.

Microsoft as a strategic partner

Commenting on the partnership, Livetiles CEO and co-founder Karl Redembacj said:

Our partnership with Microsoft has been instrumental in growing Livetiles Intranet into the leading industry provider in just a few short years.

Deepening Microsoft’s understanding of how Livetiles Reach and Livetiles Directory helps companies better manage their workforces in a COVID-19 impacted world will be a catalyst for growth this financial year.

There is already a strong relationship between the 2 retailers in this space with more than 50% of Livetiles clients originating through the Microsoft partnership. This deal only strengthens that further. 

Record intranet deal

In another highlight, Livetiles announced it had secured a record intranet deal with a US apparel retailer.

Today’s announcement did not name the apparel retailer. However, Livetiles president Daniel Diefendorf had this to say:

We’re thrilled to have secured a record deal with a leading US company for Livetiles Reach and Livetiles Intranet. It validates our product diversification strategy and focus on large Enterprise as companies emerge from the initial impacts and changes that COVID-19 has made to our working lives.

The deal represents a multi-year, multi-million-dollar win for the company. It will help the major US apparel retailer with its COVID-19 re-opening strategy. The delivery will see the Livetiles products deployed to 40,000 employees and 15,000 seasonal workers across 3,100 stores in 27 countries.

Additionally, the announcement stated that Livetiles was selected as a provider because its solutions could be rapidly deployed. They could also be scaled across all required regions, languages and regulations.

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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. glennleese has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of LIVETILES FPO and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool Australia has recommended LIVETILES FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Livetiles (ASX:LVT) share price has rocketed up 11% today appeared first on Motley Fool Australia.

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