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PIMCO Covered Bond Source UCITS Message Board

  • mays199 mays199 Mar 14, 2012 1:33 PM Flag

    COVR and GWRE -- do they compete directly?

     

    Is COVR moving with GWRE? Do these two compete in the same markets?

    I bought COVR after GWRE jumped $7 this morning.

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    • Coverall and Guidewire do compete, however whilst Coverall is more of a mish mash of accqusitions that make up an end to end Policy Admin, Claims and Billing Solution (Blue Wave provides the Claims part f/e). Guidewire has a single technology core built from the bottom up to manage data integration of these core systems much better.

      Guidewire is quickly becoming the IBM of Policy, Claims and Billing solutions, in so far as "No one got fired by buying IBM" way.

      Thats a great position to be in, seeing as there are almost 60 vendors in this space.

      Analysts covering this sector providing excellent information include Gartner, Novarica, Celent etc.

      I wouldnt put Coverall in the top 10 of Policy Admin Solutions. The top 5 out there (in no particular order) would be Duck Creek (Accenture,) Guidewire, ISCS, Oneshield, Exigen and potentially CSC (CSC dont have a super new solution however they are large have a lot of clients and a wealth of Insurance business experience) But clients generally just need to buy one system these days, which is not great if youre not even in the top 10!

      So from a new client win perspective COVR could find it very difficult to add new clients, unless they heavily discount license fees. (which is very bad for top and bottom line growth.

      On a more brighter note, at $28m COVR could be a target for acquisition by a large IT services Company for their technology and client list. See recent acquisition of WYDE by Mphasis.

      However, from a pure PAS software perspective I think that the outlook is pretty bleak for COVR and the other 50 vendors, who get most of their revenue on a recurring basis from clients they have had for years.

      Sorry its not the greatest news for those long, but Ive been in this space for a long time, so know a lot about it, and theres no way I'd be buying COVR shares.

    • Thanks, Jack. (Sorry I took a while to reply - I've been "under the weather" for a few days.)

      Some boards are okay, but some quickly degenerate into adolescent name-calling. One that is always assured is that the unexplained downward movement of stocks is attributed to unscrupulous MMs or shorts.

      Maybe you should listen to the next CC and ask some questions! Just tell them Mr. Elephant sent you ...

      ISO (in success overall)
      Space E.

    • I used to post on other boards, but don't much any more because there isn't a lot of intelligent discussion going on. Our banter has been quite refreshing, Space Elephant. I am interested because the product seems to have a lot of upside - there aren't any other Rating & Issuance systems that really do ISO rating, not even ISO's system. The price is low, so there is a lot of potential reward with little risk. That said, since they're publicly traded, management owes the share-holders a real plan, and they should be open to public questioning.

    • They do compete and GWRE would crush them every time. COVR is more Policy than Claims admin. GWRE is just getting into Policy. COVR is dead money and old technology

      • 2 Replies to redwandblue
      • You just said that they compete, then you said that they do very different things (eg policy vs claims). Which way is it? BTW, Cover-All did just acquire a claims technology company.

        Now that we've pointed out your inability to think logically, a few thoughts on "old technology." Cover-All's "old technology" is being shelved. Their NexGen products are based on SQL databases with Java-based user inter-faces. I wouldn't say it's the latest greatest technology, but that it's par for the course. I would venture to guess that GWRE is running off the same basic technology, as are most insurance policy/claims management systems. The difference is in how cleverly each company can code the routines needed to extract and reconcile the data consistently, correctly, and quickly.

        Now a few thoughts on COVR's challenges: GWRE would probably crush Cover-All simply because it's a much larger company with more resources to properly handle a sale. Cover-All can produce a quality product; their issues stem more around their ability to do everything else - sales, organization, customer support, etc. Until they can properly address these issues, their stock price will remain stagnant.

        Any growth COVR exhibits in profitability or revenue stems from a repeating cash-flow stream from the same clients who are essentially too small to easily switch. They keep paying COVR because they have to. Until COVR can consistently make sales and has the infrastructure in place to handle new customers, their stock-price will continue to hover in the $2-$3 range.

      • How do you like working for GWRE?

    • anything linked with "the cloud" is being given ridiculously high valuations.....further illustrates, at its current valuation, how cheap COVR is.

    • From what I gather, COVR and GWRE are like two Venn diagrams that have a smallish intersection, but they could be drifting into each other's territories like colliding galaxies.

 
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