Knosys Outsources Intranet Platform as Customer Migration Uncertainty Looms

Strategic Partnership to Enhance Customer Experience

Knosys Limited (ASX – KNO) has announced a significant development in its intranet business through its wholly owned subsidiary, Greenorbit Pty Ltd (GO). The company has entered into a two-year agency agreement with Oak Engage Limited, a UK-based provider of intranet and employee experience platforms. This partnership allows Greenorbit to introduce Oak’s advanced intranet solution to its existing customer base as either an upgrade or replacement for the current Greenorbit platform.

Shifting Focus to Core Competencies

Greenorbit’s intranet solution currently contributes approximately 30% of Knosys’ group annual recurring revenue, serving customers primarily in Australia and the United States. However, Knosys is now concentrating its product development efforts on its next-generation Libero library management system and maintaining its knowledge management offerings. By partnering with Oak Engage, Knosys avoids the need for costly and time-consuming intranet platform development, enabling faster access to new features and technology for its customers.

Agency Agreement Details and Financial Implications

Under the agreement, Greenorbit will act as Oak’s agent for customer introductions and billing for an initial two-year period following each customer’s migration to the Oak platform. Oak will engage directly with customers to finalise licensing arrangements. Greenorbit will receive remuneration based on a multiple of the annual recurring revenue of each migrated customer, contingent on migration timing, subscription dates, and retention conditions. Customers who choose not to migrate will continue using the Greenorbit platform under existing terms.

Management Perspective and Market Position

John Thompson, Managing Director of Knosys, described the agreement as the best outcome for both customers and shareholders. He highlighted that this approach provides access to new intranet technology without the need for Knosys to invest in development, accelerating time to market and enhancing customer operations. This move reflects Knosys’ strategic prioritisation of its library and knowledge management solutions while maintaining a competitive position in the intranet space through partnership.

Looking Ahead

While the agreement opens a promising avenue for Greenorbit customers to access cutting-edge intranet technology, the financial impact for Knosys will depend on the rate of customer migration and retention. The company’s ability to navigate this transition smoothly will be critical in sustaining revenue streams and shareholder value.