In a few weeks, Inpixon is expected to spin off its VAR business into a separate public company which will be called Sysorex. Inpixon will focus on operations related to the development of Indoor Positioning Analytics (IPA) technology, while Sysorex will specialize in providing third-party hardware, software, and related maintenance and warranty products and services that it resells to commercial and government customers. The spinout will free up Inpixon leadership and resources to focus solely on growing the IPA business, which is a fast growing (Original Equipment Manufacturing) and an Independent Software Vendor (ISV) segment within Inpixon. While the dedicated management team of the Value Added Reseller (VAR) business will continue to attend to strengthening customer relations to gain competitive edge in a lower margin business, which is why this segregation is so pivotal. After the spinoff, Inpixon will be in an advantageous position to grow rapidly.
Once the divestiture is complete, there are a couple of areas in which Inpixon’s IPA business could really gain traction.
First, the European Union passed a sweeping set of new privacy regulations called the General Data Protection Regulations (GDPR). The GDPR poses substantial challenges to many European companies because the new data privacy laws impose rigorous restrictions and regulations on how private data is to be treated. Failure to abide by GDPR guidelines can result in heavy penalties, so many companies are scrambling to become GDPR compliant.
Inpixon’s IPA solution will be GDPR compliant for those companies handling indoor positioning data. The company expects its compliance documents to be completed by the end of the month, meaning Inpixon will be able to offer a GDPR compliant solution to its customers. The company believes this capability will prove to be a significant competitive advantage going forward.
Second, Inpixon’s strategy for gaining market share with its IPA product is already gaining traction. The key performance indicator used by company is the amount of indoor square footage covered by the IPA sensors. Inpixon is focused on leveraging the strength of its channel partners to find leads and close sales. This strategy is already proving to be effective as quantity and quality of leads has increased, according to the company. Additionally, the company is experiencing shorter sales cycles and an increase in mission-critical use cases, which should translate into accelerated revenue growth. The added benefit of using channel partners, is that the company will not incur the cost of maintaining an in-house sales force.
Last month, Inpixon issued a press release stating that its sales pipeline is experiencing steady growth across several industries, and that several transactions had successfully been closed. According to the release, the prospective clients range from one of the world’s largest technology firms, to the U.S. government, and a Middle Eastern telecommunications provider.
Once the spinoff of the VAR business is complete, it appears as if the faster growing IPA business will have plenty of growth opportunity in its future.
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