R&D payoff Sandvine's enhanced value creation should begin to pay off soon and if/when it does
the margins will remain the same. This is not so for ALLT and PKT which oursources
the value creation software portion of their DPI platforms. The value added portion of
2011 sales amounted to about 20% of their revenues and hopefully will explode over
the coming couple of years.
It's also noteworthy to point out Sandvine has real time reporting capabilities built into
their software where ALLT and PKT can only report on data roaming usage at the end
of the day. This is a superior difference and should drive value added sales going
forward. Sandvine has real time reporting with post paid data, prepaid data and
provisioning also. Most of the other guys can only have real time reporting on the
provisioning side of the equation. At some point in time one would hope they will
invest more heavily in sales than in R&D to get the revenues moving back up at
a brisk pace. I guess I'll have to hold for a couple of quarters to see if this becomes
a reality or not? Sandvine has 3 times more cash per share than the others but is
trading at a high discount right now. If they can begin to drive revenues and especially
the value added revenues at a brisker pace the shares can appreciate substantially
from the current level!
GLA...