ServiceWare had
the misfortune of bad IPO timing. That is, the company went public at the
end of August, when the market began to crumble. And, as has been the case
with most IPOs since then, ServiceWare has seen an erosion of its stock
price. Priced at $7, the stock now trades at $3-3/8. The market cap is $79
million.
But in the IPO shakeout, there are many opportunities; ServiceWare appears
to be one. The company was founded in 1991 and was primarily a computer
consulting firm. Since then, ServiceWare has transitioned successfully into
an e-business software company. In 1997, the company launched a product
called Knowledge-Pak Architect. Basically, it is a sophisticated knowledge
base for customer support. Have a question about your PC? Or network?
Well, ServiceWare will have the answers.
Of course, ServiceWare has continued to innovate. There is the Web site
RightAnswers.com, a portal for technical support. You have access to
information on such products as Novell, Microsoft and 3COM. There is the
eService Suite, which is an end-to-end knowledge management system. What’s
more, ServiceWare purchased the Molloy Group, the developer of the Cognitive
Processor. This technology maps customer interaction relationships.
Also critical is having top-quality content, as well as providing content
for new technologies. For example, ServiceWare recently added content for
Red Hat Linux and Lotus Notes.
The company has been demonstrating strong growth. In the past quarter,
revenues were $8.4 million, which was up 92% from the same period a year
ago. Losses were moderate at $2.2 million.
The customer base is impressive. In the past quarter, ServiceWare added
nine new customers (there are more than 200). Examples include: H&R Block, Sage
Software and VisionCompass.
A significant validation of ServiceWare came from EDS, the mega computer
services company. In early June, EDS took an equity stake in ServiceWare
and entered a strategic alliance. The eService Suite will be integrated in
the EDS Digital Customer Relationship Management system.
As technology becomes more complex and prevalent, the need for advanced
technical support will increase accordingly. But human-based technical
support is very expensive. With ServiceWare, companies can provide top
service at a price that makes sense. And while investors may not be
noticing this, many big companies are.
