The RPMGlobal (ASX:RUL) share price is up 9% in a week. Here's why.

RPMGlobal has acquired 9 add-on software packages in 6 years. What does this mean for the RPMGlobal share price moving forward?

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RPMGlobal Holdings Ltd (ASX: RUL) has seen gradual increases in its share price this week. Culminating in a 4.19% jump today, taking the 5-day share price rise to more than 9%. 

The company has been steadily consolidating its software and services portfolio, while trying to deal with the impacts of COVID-19.

At present, the mining software company currently has 11 of the 21 global offices either partially closed or fully closed, with previous positive COVID-19 cases in South Africa, Russia, the US, Chile and Indonesia. All of which have since recovered.

Regardless of the COVID-19 restrictions, the company has managed to acquire 3 bolt-on software products, bringing the tally to 9 in 6 years. The company's software solutions range from physical asset management, to mine scheduling, through to sophisticated budgeting and simulation tools. 

The uniqueness of each product within the mining sector, means that there is potentially a longer tail of revenue. A long tail that is still growing for every customer. 

Inventory optimisation

In late October, RPMGlobal announced that it intends to acquire Canada-headquartered, inventory optimisation management software company, IMAFS. A Software-as-a-Service (SaaS) and cloud-delivered provider of inventory optimisation software, IMAFS has more than 20 years' experience developing and selling its flagship product.

It connects to an organisation's enterprise resource planning (ERP) system and utilises proprietary artificial intelligence (AI) algorithms to improve inventory management. Its sole purpose is for optimising the inventories of large capital intensive companies. 

Other RPMGlobal software growth

However, IMAFS is the company's second SaaS product, with its first being launched as recently as 14 October. RPMGlobal launched its Haulage as a Service product. The product leverages the company's TALPAC calculation engine, providing access online rather than on the desktop.

Commenting on the move, RPMGlobal CEO Richard Mathews said:

RPM's cloud enabled SaaS solutions help to solve several key industry challenges, including the problem of siloed data. With HaaS, data is no longer trapped within individual desktop applications or siloed with individual users.

This cloud enabled approach enables operations to get the best overall haulage performance right across their operations irrespective of where the users or applications calling the cloud service are physically located.

According to IBM, there are many strong benefits of moving to an SaaS style application. Including, quicker implementation, scalability, ease of updates, and lower costs.

In other, organic software developments, RPMGlobal has released a scheduling and design tool for underground potash mines. This system provides sophisticated mine scheduling across all scheduling horizons. Lastly, the company has updated its AMT asset management product.

Specifically designed for asset lifecycle costing and budgeting, the latest updates have dramatically improved the speed and accuracy of maintenance budgeting. RPMGlobal claims the product is one of the only products on the market that is purpose-built for maintenance cost budgeting that works seamlessly with any miner's ERP.

Foolish takeaway

So far in first quarter FY21, RPMGlobal has secured a total contract value of $3.3 million. This has raised the annual recurring revenue stream to $13.5 million, up from $12.7 million. Moreover, the company CEO and CTO have long track records in the enterprise software industry. Once the restrictions from the COVID-19 pandemic have eased, the company will emerge back into the market with more products and increased functionality. 

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Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of RPMGlobal Holdings. The Motley Fool Australia has recommended RPMGlobal Holdings. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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