TZ leads the world in “internet of things” (IOT) locking device technology.
IOT objects are objects that have built-in intelligent with a unique profile and with the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.
The Internet of Things presents an immense opportunity to revolutionise business as we know it. Across the globe, businesses are connecting their “smart objects” and harnessing data like never before to create powerful new business value. The ability to connect devices to IT systems and then to leverage the data that can be transmitted from those devices, allows organisations to optimise business processes, make more informed decisions, identify new revenue opportunities, and understand and predict customer behaviours.
TZ smart locks as part of an integrated network can offer a secure environment and provide a complete, real time view of the state of that protected environment. The ability to track behaviour of people, things and data through space in real-time provides enhanced situational awareness which allows for the creation of effective and efficient operating conditions and workflow practices.
Although the potential application of TZ smart locking technology is wide and varied, the Company currently provides turn-key hardware, software and service maintenance solutions to two key high growth applications:
In the markets we participate in, the Company is highly differentiated from our competition. We are the only shape memory alloy (SMA) actuated electronic lock on the market and this allows us to stand-out in a crowded marketplace. SMA actuation is a lightweight, solid-state alternative to conventional actuators such as hydraulic, pneumatic, and motor-based locking systems.
The efficiency, form factor and capability of our devices enables flexibility in configuration, communication and networking … and we have over 180 patent applications to reinforce this position.
In addition, TZ solutions are built on an open and extensible hardware and software technology platform that allows flexibility for customisation in configuration, workflow and operating practices. This allows customers flexibility to upgrade and/or extend their systems as needed to suit the requirements of today and also those that may emerge in the future.
In the IXP business, sales cycles can be more than 12 months as new and large data center infrastructure projects can take a significant amount of time to move through the construction and fit-out phases. Where we are expanding existing deployments the decision making process is much quicker typically less than 120 days.
In the PAD business, sales cycles are typically shorter. For example, sales to the corporate sector typically have a 3 to 6 month cycle depending on whether it is a new deployment or an established customer with on-going requirements. Large postal and logistics contracts are often tender based and require significant engagement before a contract is awarded. This can be in excess of 12 months.
Our customers represent some of the largest corporations in the world with multiple sites and operations across many geographies. Once a customer embraces a TZ solution we typically see strong sales developing as our customers look to expand the deployment of our solutions to new sites and/or to new geographies.
TZ has a hardware, software and services offering.
TZ has a hardware, software and services offering.
Hardware and software licenses are sold upfront. Software maintenance is charged on an annual basis to cover updates, upgrades and remote phone support. Services such as design, development, installation, commissioning are all charged on a fee-for-service basis. Maintenance and support services are charged annually.
The Company typically enters into multi-year software and service maintenance contracts.
It’s not difficult to recognise the tremendous growth in Cloud Computing. All that data needs to be housed somewhere and we’ve seen an incredible number of new data centres spring up all over the world to address this need. Based on research, we understand that there are about 25 million data centre cabinets installed across the globe today and this number is increasing at around 2 million cabinets per year.
Of these new cabinets, we estimate about 10% will use electronic locking and this number is growing each year as a result of increasing compliance requirements such as PCI-DSS for the Payment Card Industry or HIPAA for Health Information Security. These regulations will lead many organisations to consider more secure and sophisticated data centre cabinet access control systems. This is where our IXP offering fits.
To target the 90% of the cabinet market that still use mechanical locks, TZ recently launched its TZ SwingHandle™ product which represents a mechanical lock with the capability of being upgraded in-the-field with the simple attachment of a proprietary TZ electronic module. The Company’s strategy here is to offer data center cabinet manufacturers a mechanical lock substitute that supports a simple retrofittable electronic upgrade path after deployment.
The trend in agile work practices across the globe has helped TZ gain a foothold in the accountable mail management and day locker markets. We have successfully established a solid corporate business in the US and Australia and are looking to expand this into new geographies.
TZ is the premier provider of accountable mail lockers to the corporate US market. TZ’s client base represents some of the world’s largest corporate brands in the world particularly in the technology and financial services sector. With over 200 Locker Banks supplied to the corporate sector since launch in late 2011, and a solid pipeline of run rate business, the Company continues to demonstrate very strong growth as new customers address the challenge of delivering parcels and mail to an agile workforce.
TZ’s Day Locker offer was launched in Australia mid 2014 and the business has grown substantially from a zero base to over $4M in 12 months on the back of sales to Westpac, KPMG and another major banking group. On-going Day Locker sales to these customers in line with their progressive office establishment plans, together with already identified new pipeline business in Australia should continue to drive local revenue growth.
The focus for the near future, is the launch of the Day Locker offering to TZ’s US corporate customer base.
As e-commerce grows, the number for parcel deliveries increase. For Postal and Logistics organisations, with the increase in parcel volumes, the costs associated with unsuccessful first try deliveries to the home are therefore very real and increasing. That’s why Parcel Lockers have become an integral part of a Postal Organisation’s e-commerce strategy. Postal and Logistics Organisations are actively embarking on Parcel Locker deployments. The market for this is therefore very large. In Germany where there is approximately 870 million domestic parcel deliveries per year there are over 2,500 Packstations (or Parcel Lockers) deployed by Deutsche Post to service the market.
TZ has successfully won tenders to supply Singapore Post, Pos Malaysia, Pos Indonesia, Poste Italiane and a major Logistics and Transportation corporation in the USA with their parcel locker requirements. In each of these relationships, TZ provides an end-to-end solution, customised to meet their needs and fully integrated into their back-end systems.
Since deployment in early 2013, Singapore Post have moved from their initial pilot of 5 POPStation Locker Banks to over 100 Locker Banks with plans to double this to 200 in the next year or so. POPStation won the 2015 World Mail Award for “Best Retail Access”.
Although our other postal and logistics customers are still in pilot phase assessment, the potential for roll-out remains substantial.
With the established customer base and pipeline of new business, together with the potential of the US market, the Board believes that the Company is well placed to continue to deliver year-on-year sales growth.
TZ is a technology company and we have a track record of significant investment in the development and commercialisation of new and innovative technology. TZ has invested over US$40M to pioneer our IOT locking device technology to the world. So the Company’s heritage is investing in product development for growth.
We believe that to maintain a technology leadership position, the Company needs to continue to invest in building its platform of hardware and software capability. This investment is tightly coupled with defined segment strategies and sound business case assessment that either supports the Company to penetrate and expand current areas of business or to take the Company into new business streams that can deliver the exponential growth ambitions of the Board.