Cambridge Technology Enterprises announces its 9MFY18 and Q3FY18 results
Cambridge Technology Enterprises (NSE: CTE; BSE: 532801), a leading global technology company focused on Artificial Intelligence as a Service (AIaaS) to transform organizations into AI-first leaders, today announced its unaudited financial results for the quarter and nine months ended December 31, 2017.
- New York, NY (1888PressRelease) February 13, 2018 - In 2015, we proposed a two-year business plan for FY16 and FY17 to achieve minimum scale. CTE focused on three areas – building partnerships, acquiring referenceable clients in our chosen verticals and acquiring relevant expertise in technologies.
In FY15, the base revenues were INR 32 cr and we believed that it will take us two years to get to a minimum scale. We had set out to build a foundation that allowed us to be better prepared to take advantage of this market opportunity. In FY17 CTE recorded revenues of INR 100 cr while implementing its business plan to focus on the convergence of cloud and big data.
CTE had achieved a base of:
Approx. 350 employees from ~150 in Jan 2015
INR 100 Cr revenues approximately from INR 32 Cr in FY15
5 verticals
12 partners
10 offices/locations
Today, we stand out because of our unique approach towards the entire lifecycle. To start with, through Cambridge Innovations, we work with the most innovative startups in the US, we serve the large enterprise clients with Cambridge Bigdata, we maintain data for them at Cambridge Bizserve, and provide decision support through Cambridge DataScience.
a. Cambridge Bigdata: Build and manage technologies for enterprise clients.
b. Cambridge Bizserve: Provides data support and managed services for the applications we build.
c. Cambridge DataScience: Assist CxOs make decisions by drawing substantial strengths in insights and data analytics.
d. Cambridge Innovations: Work with the most innovative US startups, helps us identify cutting edge technologies and attract the best talent to work with CTE.
AWS Advanced Tier Partner: CTE is an AWS Advanced Tier and a Marketplace Consulting Partner with competencies in Big Data, DevOps, Enterprise Applications – Oracle and the Managed Services Program. CTE joined AWS Partner Network (APN) in January 2015, rapidly graduating to the standard tier and was promoted to the Advanced tier within six months of re-entering the APN program at AWS.
100% certified professionals: CTE is one of the few organisations in the world with a 100 percent AWS certified Cloud Operations Center with the ability to provide 24/7 management of Public, Hybrid and Private cloud architectures. We have more than 30 AWS Certified Professionals with 5 AWS Solutions Architect -Professional that demonstrates our Ninja-level Networking skills - capable of designing and deploying cloud architecture on complex AWS and Hybrid cloud integration projects.
Expertise in deployment: The team brings a proven experience of managing over ten million instance hours in the cloud. CTE’s best-in-class cloud competency has been instrumental in establishing and managing cloud programs for large and small enterprises alike including Iron Mountain, Recall, Cengage Learning and Pega Systems.
Partnerships: Our partners are an extension of our team, enabling organizations to accomplish better understandings from their data. CTE has strengthened its partner ecosystem with AWS, Microsoft Azure, CA Technologies, Forgerock, New Relic, Pentaho, Oracle, Rackspace, Apica and Tableau.
Self learning organization: CTE is appraised at Level 5 of the CMMI Institute’s Capability Maturity Model Integration (CMMI)® v1.3 for its services. Being appraised at the highest level of CMMI for its services demonstrates our focus and commitment towards continuous process maturity, innovation and delivering value to our customers. CTE is continually proud to maintain the highest standards of software quality & engineering and be part of a select group of global companies appraised at the highest level.
Global Presence and Competency Centers: In line with providing its global clients access to 24/7 development cycle, CTE reinforced its US presence and expanded its offshore delivery centers in India across Hyderabad, Bangalore and Chennai. Furthermore, the company realizes the significance of trained and skilled employees and has invested heavily into training employees through its competency centers in India and the US.
Launched Cambridge Innovations: Launched in Q3FY16, Cambridge Innovations (CI) invests and partners with early and growth-stage businesses that transform industries and are creating the next generation of transformational businesses based on AI and ML. Cambridge Innovations has over ten investments in its portfolio.
CI partners with the most innovative U.S. startups and helps CTE realize three kinds of value as follows:
1. Attract and upskill talent: Since the launch of CI, CTE has grown its workforce from 250 to 350 approximately. CI enables our employees to work with the best minds in the industry and stay abreast with cutting edge technologies.
2. Generate revenues: CTE generates revenues by entering into contracts with the CI companies and their clients, and build future clients for CTE from a pool of tomorrow’s leaders.
3. Equity upside: CI model envisaged that it would take us 3-5 years, in general, to generate liquidity from our investments, but we are pleased to announce that in Q2FY18, we realized an equity value of USD 250,000 by way of partial sale of our investment in Roadzen, Inc. Subsequently, the company has reached an agreement to exit some of its investments to realize approximately USD 700,000 in equity value. These are pending necessary approvals. Therefore, CTE will potentially realize USD 1 Mn approximately from exits in the current fiscal.
In acknowledgment of the value created by CI, Rohan Malhotra, Co-Founder and CEO of Roadzen said, “CI has been a fantastic strategic investor and a valuable technology partner to Roadzen. As we execute our next set of milestones, we hope to continue working with Aashish and the CI team to reshape traditional auto insurance.”
The equity value realization has demonstrated the viability and potential of the business plan of CI.
Performance:
• Realization from exits as % of investments made in Year 1 of CI launch i.e. FY16 = ~60%
• Realization from exits as % of consolidated investments as on Sep 30, 2017 = ~14%
Launched Cambridge Bizserve: Launched in Q4FY16, Cambridge Bizserve is a vertical focused to effectively manage business processes and provide business insights through analytics to its clients. Cambridge BizServe has expanded its operations in the Philippines with the inauguration of its new office in Davao City.
Appointment of CTO & Chief Data Scientist: We announced the appointment of Dr. Rajan Lukose as the Chief Technology Officer and Chief Data Scientist in Q3FY17. Dr. Lukose brings the experience of working as Senior Research Scientist at Hewlett Packard Laboratories for over a decade. He also worked at the Xerox Palo Alto Research Center. He has over 25 patents registered in his name and has several laurels including an IBM award in Computational Finance. He has over 20 publications like ‘Learning User Purchase Intent From User-Centric Data’, ‘Local Search in Unstructured Networks’, ‘An Economic Approach to Hard Computational Problems’. He received a PhD in Physics from Stanford University and had done his thesis on ‘Internet Dynamics’. Dr. Lukose is based out of San Francisco, US.
Launch of Cambridge DataScience: Cambridge DataScience was launched in Q3FY17 to assist CxOs make decisions by drawing substantial strengths in insights and data analytics.
CONSOLIDATION EXERCISE
In Q4FY17, we started the exercise of consolidating our base to keep the right pieces and put it all together in a thoughtful manner to improve our profitability and scalability. Consolidation meant we focused on figuring out the verticals and technologies that are more profitable and scalable. Based on market feedback, we concentrated on providing an integrated offering and creating value with disruptive technologies for our clients.
Successful completion of consolidation exercise
In Q2FY18, we successfully completed our consolidation exercise and post consolidation we retained approximately 80-90 percent of various metrics mentioned earlier.
We announced in our press release titled ‘Business Plan Update with Focus on Artificial Intelligence for Vision 2020’ that we are focused on AIaaS to transform organizations into AI-first leaders.
Focus on AI-first
Becoming an AI-First Business means getting ahead of the competition and becoming a leader in your industry. It means offering a more personalized and seamless experience for your customers, from the moment they hear about your product or service to the moment they complete their transactions and beyond. It means more productivity from your staff. AI-First businesses have the technology to free their employees from monotonous daily tasks so they can tap into their creativity and focus more on the aspects of business that still require a human touch.
Artificial Intelligence is not a one-size-fits-all solution. It incorporates numerous aspects of technology, platforms, and services tailored to meet your specific business needs. That’s why CTE offers solutions ranging from strategic workshops to AIaaS implementation.
CTE has been a leader in implementing cutting-edge IT solutions in a world that is becoming increasingly digital. Today this includes, being at the forefront of an AI-first Business.
There are AI services and solutions that can be integrated into our client’s business model to improve the way they do everything from advertise to interact with their current customers. Whether our client is a start-up or a Fortune 500 Company, our goal is to help it analyze its individual needs and challenges, develop a unique plan to meet them, and put that plan into action.
Explaining the AIaaS Model
AI can make immediate contributions towards critical business decisions leading to increased profitability for the organizations. Through the AIaaS model, we enable businesses unlock the value of their data by bringing together unparalleled access to cutting-edge technology and expertise in building solutions for some of the world’s largest and most innovative enterprises. We are excited to partner with enterprises on cutting edge technologies, provide superior value and more effective service on revenue generating IPs.
If a business has already recognized AI as the way of the future and are ready to make a complete investment, AIaaS is the best option. We apply our expertise in building AI technology to our client’s existing platforms by integrating customized AI solutions via web programs and an API. We host and manage our client’s AI applications without them required to put together an internal team. AIaaS elements potentially includes:
• Joint and/or customer-owned IP development
• Identification of business opportunities for AI application
• Revenue share business model
• Development of API to leverage AI power
• Management and continuous support for your infrastructure as it relates to your AI solutions
Along with a fixed management fee, CTE will be eligible to receive substantial share in the incremental growth in the net revenues of the client derived from CTE’s algorithm. Working with clients in AIaaS model leads to potential upside in profitability based on performance unlike the standard time and material pricing model.
New Client in AIaaS
As a progress, CTE announced its first client in AIaaS in Q2FY18. Based in North America, the client has a strong focus on the BFSI vertical. Under this engagement, CTE will own additional IP along with the rights to resell and adapt the IP in Australia, Europe and Asia-Pacific regions.
The solution is aimed at optimizing the client conversion ratio in one of the key lines of businesses of the client by employing a systematic, automated and statistically sound methodology to optimally formulate offers. The solution employs a number of state of the art algorithmic techniques such as contextual multi-armed bandits, and using techniques in the emerging subfield of counterfactual machine learning.
CTE’s broader engagement will help the client in solving a variety of business problems and optimizing their existing processes, a few of which are listed below:
• Deploy cutting edge approaches in AI/ML in the area of contextual multi-armed bandits enabling the system to adapt to changing environment.
• Efficiently ask what-if questions using methods of counterfactual machine learning.
• Leverage AIaaS model for continuous improvements and refinement to the optimization algorithms by deploying the latest research and improvements in the field of AI/ML.
• Access to data scientists, researchers and statisticians with a focus on helping customers address their Data Science problems.
• The application of such a framework can be adapted to other parts of client’s businesses helping to drive a unified scientific framework across the whole business.
Under the AIaaS model, CTE benefits from receiving a share in the incremental revenues of its client’s business by deploying its proprietary algorithms.
REITERATING THE VISION 2020
In Q1FY18, we announced our Vision 2020 to potentially achieve USD 50 Million revenues in the next three years from the following focus areas:
a. Organic Growth: Over the next three years, on an average we expect an annual revenue of USD 10 Million approximately from each of our four growth drivers i.e. Cambridge Bigdata, Cambridge Bizserve, Cambridge DataScience and Cambridge Innovations.
b. Upside from equity: We believe it will take us 3-5 years to generate liquidity from our investments. However, CI will potentially realize USD 1 Mn approximately from exits in the current fiscal, ahead of its schedule.
c. Inorganic Growth: We have the potential to explore inorganic growth opportunities in the areas of Big Data and Data Science.
In order to build and fund Vision 2020, CTE is now embarking on its investment phase. CTE is now building the foundation that can deliver on Vision 2020. The company expects the next 12-18 months to be the investment period and we expect majority of our growth to come post that. As the company expenses all investments in competencies, recruiting, training, infrastructure; this will impact net profitability while the company funds this foundation. The company is funding the ongoing expansion through its internal accruals.
Aashish Kalra, Chairman of Cambridge Technology Enterprises said, “We are focused on transforming businesses into AI first leaders and will give ourselves the next 12 months to achieve the right clients for our business because if the convergence in AI/ML and adoption by markets is delayed then we will consider providing other potential services to our dozen plus enterprise clients for whom we have built applications and strengthened our relationships over the years.”
About Cambridge Technology Enterprises
Cambridge Technology Enterprises (CTE) is a leading global technology company transforming organizations into AI-first leaders. CTE is enabling its customers to create AI solutions that transform their businesses; by helping solve the world's complex and most interesting business challenges with AI. CTE gives organizations unparalleled access to cutting-edge technology by bringing together the best-in-industry using its years of expertise in building solutions for some of the world’s largest and most innovative enterprises; leveraging Big Data, Cloud & Machine Learning experience. CTE’s products and services address all the transformational AI needs of an organization — from strategic workshops to implementation of transformative business solutions through its AI as a Service (AIaaS). CTE’s expertise across multiple domains makes it the preferred choice for organizations seeking an AI Partner to innovate and leapfrog the market. CTE is assessed at Maturity Level 5 for CMMI v1.3 with ISO 27001:2013 certification. For more information, visit www.c7e.co or follow ( @ ) cam_technology on twitter.
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