A positive announcement has stopped the LiveTiles Ltd (ASX: LVT) share price from tumbling lower with the market today.
In morning trade the intelligent workplace software company's shares are flat at 24.5 cents.
What did LiveTiles announce?
This morning LiveTiles announced that it has been granted U.S. Federal Government General Services Administration (GSA) approval.
This means that LiveTiles is now an approved GSA Vendor under the U.S. Government's IT Schedule 70 multiple award schedule (MAS).
As an approved GSA vendor, the procurement of the company's software by governmental agencies can now occur at an accelerated pace. Management estimates that the reduction in procurement duration is from an average of over 10 months to under 30 days.
Its GSA vendor status was granted following a rigorous approval process including technical assessment and validation.
This could be good news for its future growth. The U.S. Federal Government is the largest buyer of IT products and services in the world. It is projected to spend over A$127 billion in 2020 on IT. This is over 100 times more than the total spend on IT and digital initiatives by the Australian government.
What now?
GSA approval will allow LiveTiles to both expand on existing implementations within agencies that are current customers, and to also create new opportunities with other agencies through co-selling partners including Microsoft.
The approval positions it strongly within the U.S. public sector for creating and accelerating opportunities to drive new customer growth in a key industry vertical for the company.
Management notes that it also paves the way for LiveTiles and its partners to pursue joint opportunities with Microsoft under Microsoft's recently announced A$14.6 billion JEDI cloud contract with the U.S. Department of Defense.
This will help expand the number of opportunities through LiveTiles' growing partner channel pipeline, along with pursuing higher Average Contract Values (ACV).
LiveTiles' co-founder and chief executive officer, Karl Redenbach, said: "Attaining GSA Approval is fantastic news and a testament to the hard work of our team and partners over the last year. We have been preparing for this approval for some time and will immediately execute plans to aggressively comarket and co-sell with our close partners in the U.S. public sector."
"Driving adoption and modernisation of systems is a clear imperative of the U.S. Government, which aligns very well with Microsoft's goals as highlighted by their objectives with the JEDI contract," he added.
