Sunday, January 15, 2012

Acceleware - This is a company with tremendous potential

Acceleware (TSXV:AXE) has a lot to celebrate as we usher in 2012. Over the last year the company has undergone some major changes, and as a result has moved into a cash-flow positive territory. I am certain this feat can be appreciated if we consider the economic environment that all business's have faced over the preceding year. To have taken the company this far in this short amount of time speaks volumes of the dedication and commitment by the entire management team, which is led by CEO, Geoff Clark. What this company can achieve over the coming year is not something I, nor anyone else, can guarantee. I do however, see virtually limitless potential, and feel that the current management team is not only well positioned, but has the vision to take advantage of all possibilities that present themselves, as well as to pursue all viable opportunities they feel would bring added value to this exciting company.

There are several ingredients required for any company to be successful. One of the things I like about Acceleware is their grasp on how important it is to align themselves with partners and customers who will be capable of aiding the management to continue to drive the company forward. The list of companies that Acceleware has, both in terms of partners and for customers, is quite impressive. While there are many examples to pick from, let's look at what the company produced working in conjunction with Paradigm Ltd., and what type of reception this product has seen. http://www.pdgm.com/getattachment/Resources-(2)/Press-Release/Paradigm-to-Highlight-Technological-Breakthroughs-/PR-2011-05-Paradigm-to-Highlight-Technological-Breakthroughs-Offered-in-the-Paradigm-2011-Release-at-EAGE-wpic.pdf.aspx

http://www.pdgm.com/getattachment/Resources-(2)/Press-Release/Fugro-Selects-Paradigm-Reverse-Time-Migration/PR-2011-08-24-Fugro-Selects-Paradigm-Reverse-Time-Migration.pdf.aspx

http://www.pdgm.com/getattachment/Resources-(2)/Press-Release/Paradigm-at-SEG/PR-2011-09-08-Paradigm-to-Feature-Key-Technological-Breakthroughs-Introduced-in-the-Paradigm-2011-Release-at-SEG.pdf.aspx
As you read through these reports I think you will begin to get a much broader understanding of just how powerful this technology is, and of course how it is being chosen by well established companies who are leaders in this sector. With this technology being released only this last year, I fully expect we will see enormous growth in its demand.

As I mentioned there are numerous companies that Acceleware has partnered with over the years. Here are a couple of links that will help to give you an understanding of just how in-depth Acceleware is, based on their business and solutions partners, who include the likes of Nvidia, Microsoft, and AMD, to name a few. http://www.acceleware.com/business-partners
http://www.acceleware.com/solution-partners


On Dec. 14-15, 2011, Acceleware attended the GTC Asia Conference in Beijing, China. This was truly a very valuable conference for Acceleware to have attended. The amount of interest was reported to be exceptionally strong, with many people and companies stopping at the Acceleware booth to express a sincere interest in all that Acceleware had to offer. While there was some interest shown by some companies towards the EM technologies, it was obviously the RTM technology that drew the most interest. Acceleware was not only well received at the conference, but was also the recipient of a very meaningful reference from Nvidia.  http://www.hpcwire.com/hpcwire/2011-12-15/emerging_companies_ride_wave_of_gpu_computing.html
I find it quite compelling when I can read articles such as this, and to see the optimism being given towards Acceleware from a giant such as Nvidia. This in combination with the sincere showing of interest from any number of potential customers carries a lot of weight in my opinion. One point that comes to mind when I try to estimate the potential for Acceleware in the Asian market, and that is they have a very valuable technology which can be brought directly into the market by some of the companies associated with Acceleware. For example, we know that Paradigm Ltd. has a very close working relationship with Acceleware, as does Tsunami. Both of these companies have branch offices in Beijing, and are well respected by the customer base they serve in that area. Aside from the Asian market, both of these companies have excellent global representation. I believe the amount of interest being afforded Acceleware in terms of their RTM technology in the Asian area, is undoubtedly connected to the fact the geologies they are currently facing are becoming increasingly more complex. This seems to hold true for most exploration projects globally, and is due in large part to the necessity of moving into off-shore settings for further oil/gas exploration targets. It is in these complex geological settings that Acceleware's RTM technology can truly show its full value. Here are a couple of links to both Paradigm and Tsunami which I think you will find helpful in getting a sense for what these companies can contribute. http://www.pdgm.com/Home.aspx
http://www.tsunamidev.com/

Acceleware can potentially expect to gain some ground in another area where off-shore exploration seems to be building rapidly, and this would be off the shores of Africa. As with many, if not most off-shore projects, the geology is complex at best. What stood out in my mind was when I learned that a significant percentage of this exploration can be traced back to Asian origins. As China continues to experience massive growth, and the future need for energy continues to grow, we are currently witnessing a surge of Chinese investment into the energy sector. This all points to significant potential for Acceleware looking forward.

I believe that Acceleware stands to profit greatly from their RTM technology, and quite likely we could see a significant rise in the amount of companies who will decide that this technology holds the key to interpreting the data they have to work with from ever-increasingly complex geological settings. There are those who will argue that fossil fuels are going the way of the dinosaur, and while long-term this may hold some degree of truth, there is no realistic way that I can foresee the transformation to a world that is free from both oil and gas in the immediate future. The fact that the Chinese are avidly investing into numerous energy projects around the world helps to substantiate this view. We are being told by virtually all energy companies that any major new discoveries will be predominately from off-shore exploration. With this in mind, it becomes much easier to see the potential for Acceleware going forward. As with any business that realizes success, there are times and events that help to lift that specific company to the next level, and in the case of Acceleware, I believe there could quite possibly be some significant gains made from their RTM technology, beginning this year and continuing.

I feel it only proper that I should add, that although I concentrated mostly on the RTM technology in this post, there was no shortage of interest shown towards Acceleware in Beijing recently, and this would have included several of the technologies Acceleware possesses. I have no knowledge of any deals that may be in the works, but I do know that this much interest from large well established companies in this region, could have a very positive outcome for Acceleware. I think we will definitely be hearing and seeing a lot from Acceleware in 2012. Aside from RTM, Acceleware also continues to enjoy growth at virtually all of their CUDA training classes offered in conjunction with Microsoft. A similar set of training courses based on OpenCL are being offered in conjunction with AMD, and these too are enjoying great success.

The fact that Acceleware has 55.95M shares outstanding (approx. 60M fully diluted), and a market cap just shy of $4M CAD, with a move into cash-flow positive ground, I truly believe this is a company that will begin to be noticed, and quite likely sooner than later. Of the 55.95M shares, Nvidia holds 8M of them, and to me that speaks loudly of their belief in Acceleware.

For anyone who finds Acceleware as a potential investment choice, I recommend that you do your own due diligence. Acceleware has a website which can be found at www.acceleware.com, and I would suggest that as a good starting point, as well as all reports which can be viewed on Sedar. I think you will find many of the press releases quite informative also, http://www.acceleware.com/Press-Releases

For disclosure purposes, I have received no compensation of any kind for this post or my opinions. All opinions contained herein are strictly my own. I own shares of Acceleware.



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