Special Report: Netlinkz’ VSN technology is uniquely suited to take advantage of broader tailwinds behind mobile data applications.

As technology advances, engineering solutions for major projects and networks are undergoing increasingly rapid rates of change.

With its Virtual Secure Network (VSN) platform, Netlinkz (ASX:NET) is positioned at the forefront of where industries are moving when it comes to data collection and transmission.

Netlinkz CEO James Tsiolis said when it came to the multi-trillion-dollar data economy, mobile applications were playing an increasingly important role.

A recent company presentation cited research that showed the global market for mobile applications totalled $US106bn ($144.9bn) in 2018 and is expected to grow at a compound annual growth rate of 18.4 per cent – climbing to $US150bn in 2020 and over $US400bn by 2026.

Similarly, the Ericson mobility report for Q2 2020 showed mobile subscriptions have reached over 3.2b across China and the Asia-Pacific – two of Netlinkz’s core target markets.

In view of those long-term growth trends, Tsiolis spoke with Stockhead about how the VSN platform is already gaining traction with a low-cost and flexible approach to data capture, as more projects shift to mobile devices.


Practical application

To describe how it works for clients on the ground, Tsiolis pointed to flexible technology being deployed as part of a water sanitation project in the Chinese province of Chengdu.

To run the operation, local authorities have deployed thousands of sensors that connect to the central dam to test various key metrics, such as water flow and water quality. And to connect it all up, they utilise the Netlinkz VSN technology.

“A large IOT project like that is basically a network of different devices and sensors in the water. So we help them build those networks and secure the data as well – at the end of the day we secure everything end-to-end,” Tsiolis said.

However, the key advantage in Netlinkz’ offering is that clients can install it in a flexible manner suitable to their project specifications.

“There’s no requirement for them to use any of our hardware which speeds up the rollout massively and provides enormous flexibility, and that’s a very important milestone for what we’re talking about,” Tsiolis said.

“Typically a lot of SD-WAN (software-defined networking in a wide area network) products come with lots of hardware. So even though it’s a software-based solution, you’re still buying their hardware as part of the deal.

“The key thing for us is that we’re not trying to sell them other gear. We’re helping them design a network solution specific to their requirements.”


Broad market

In terms of the addressable market, Tsiolis said Netlinkz’ model – defined by low cost and flexibility in its application – can be applied to many other industries.

For example, Netlinkz is participating in a tender process for a hospital network in the Asia-Pacific market based on the same value-add proposition.

“The reason they’re looking at our technology is because of its flexibility, and its ability to interact with existing infrastructure,” Tsiolis said.

“So we’re not going in to say – ‘you have to use us for everything’. What we’re trying to do is build as much flexibility as we can into what we offer.

“We want to disrupt things from a cost perspective, time to deploy and a security perspective, but we don’t want to disrupt someone’s business.”

And by deploying adaptive technology that can simplify data transmission process within existing infrastructure frameworks, Tsiolis said Netlinkz was ideally positioned to build sustainable recurring revenues.

“If you look at our Chengdu project, that could be a 25-year contract to underpin the project over the long term,” he said.

“We view sustainable infrastructure projects as one of our natural markets, because what mobile technology is doing is leapfrogging static legacy systems which are inflexible for these types of projects– they’re just not needed anymore.”

In that sense, Netlinkz continues to view the broader Asia-Pac region – encompassing China, India, south-east Asia and Japan – as a key target market in the years ahead.

“One of the main advantages is they don’t have a lot of the legacy systems, they are not wedded to big Western brands and they’re very price conscious,” Tsiolis said.

“And barriers to entry actually aren’t that high. Sure, you’ve got to invest in a local business but we don’t view that as a significant barrier.

“So from a strategic perspective, Netlinkz views that region as a significant pipeline for growth in the years ahead.”

This article was developed in collaboration with Netlinkz, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.