Electronic locking device developer TZ Limited (ASX: TZL) has finalised terms for a $1 million hosting and services agreement with global transport and logistics firm DSV South Africa.
The three-year agreement will see TZ carry out a complete upgrade of the technology infrastructure which underpins its smart parcel locker bank technology first supplied to DSV three years ago.
It will provide system monitoring, network management, software subscription and maintenance for DSV’s network of 450 banks throughout the country, valued at over $3 million.
DSV’s smart locker banks (or collection points) have become a popular choice for businesses and individuals to send and receive parcels safely, at a place and time convenient to them.
It eliminates the need for a courier driver and recipient to be available at the same time and place in order for a parcel to be delivered.
The system circumvents the problems linked to traditional supply chain logistics, while reducing courier company costs and improving service level metrics.
According to TZ, parcel collection flexibility is a “huge and under-serviced” market opportunity, with a growing number of consumers opting to have their products delivered to after-hours collection hubs.
TZ managing director Scott Beeton said the DSV agreement will be fulfilled through TZ’s local partner Ricoh South Africa and represents a 25% increase in annual recurring revenue from the region.
“This demonstrates [our] focus on building annuity revenues through the offering of ongoing services such as software subscription together with new hosting, monitoring and maintenance services to our customer base,” he said.
“DSV’s decision to extend its relationship with us is an example of existing clients returning for deeper, more meaningful relationships… [this is] where most of our growth is coming from.”
The deal also shows TZ’s shift from previous perpetual licensing strategies to subscription-based fully-managed cloud solutions for a growing list of clients including Apple, Google, Microsoft and a host of major US and Australian universities.
“As global economies emerge from the COVID-19 pandemic, there has been a heightened demand for our access control, smart lock and self-serve locker bank solutions,” Mr Beeton said.