FLX.L Regulatory News (FLX)

Falanx Group Limited

("Falanx" or "the Company")

FALANX AND SOLARWINDS PARTNERSHIP UPDATE

Falanx Group Ltd ("Falanx", AIM:FLX), the global cybersecurity and intelligence provider, is pleased to provide an update on its partnership with SolarWinds-the circa $1bn revenue US-based provider of software solutions for network management.  

As previously announced, Falanx is the first SolarWinds® Threat Monitoring Service Provider™ (TMSP™) in the UK and South Africa. This partnership gives Falanx 'first-mover' advantage with the total addressable market of over 2,000 SolarWinds Managed Service Providers ("MSPs") within the UK. With an industry average of 50 customers per MSP, Falanx will partner with SolarWinds to sell its complementary services to around 100,000 SolarWinds end customers in the UK alone.

Falanx's role as TMSP is to provide Security Operations Centre ("SOC") services in support of SolarWinds' sale of its Threat Monitor software to its MSPs and onward to their end customers. In the early stages, this will require Falanx to support the installation as well as the monitoring of the new Threat Monitor. Over time, the MSPs will take on more installation responsibility but the monitoring role will remain the exclusive domain of Falanx. The Board believes an entry-level price of £200 per month, per end customer for the SOC service is likely to support mass adoption. Pricing per customer will be determined by the size of their IT estate and incremental services will be charged separately.

Consequently, Falanx has an addressable market of over 2000 MSPs. Of these, some are sophisticated enough to support and provision Threat Monitor themselves whilst others have customers that currently lack the required cyber security basics in place to consume Threat Monitor. The Company's immediate focus will therefore be to support those MSPs whose customers have an appetite to strengthen their current security posture. Internal estimates suggest that this equates to approximately 20% of the addressable market, or around 20,000 target end customers. As an illustration, if only 2000 end user customers take up this service at entry level pricing, this would generate £400k revenue per month on the Threat Monitor SOC Services alone. Falanx will be working with the SolarWinds network of MSP's in the coming weeks to plan, design and implement the roll out of this extensive programme, and it is anticipated that the delivery of these support services will commence in the first quarter of 2019. Current sales will have a limited impact on this year's revenue but could dramatically benefit future periods.

Furthermore, Falanx has agreed with SolarWinds to offer the full suite of Falanx's Cyber Security professional services to the MSP network, for onward resale to their customers in the UK and South Africa. The Board believes that these services will be attractive to a significant proportion of the SOC user base, which could generate a further £200k per month.

This partnership with SolarWinds reflects the Company's successful strategy in recent years of transitioning to an indirect 'Channel' sales model, leveraging MSPs' trusted status as well as their extensive sales reach and marketing capability, to efficiently reach a greater number of prospective customers. This transition has helped drive the growth in monitoring revenues by more than 250% in the last two years.

As referenced in the annual report for 31 March 2018, the Company has sufficient resources and committed facilities available to meet its current plans including the commencement of this transformational project.

Upcoming Events

Falanx will meet SolarWinds MSP's and clients at the upcoming customer conferences;

- Manchester, 7th November 2018, at the Renaissance Manchester City Centre Hotel 

- London, 8th November 2018, at the Hilton Park Lane

- Cape Town, 13th November 2018, at the Radisson Blu Hotel & Residence

- Johannesburg, 14th November 2018, at the Radisson Blu Hotel Gautrain

- Amsterdam, 15-16th May 2019, at the NH Collection Grand Hotel Kransnapolsky

https://www.solarwindsmsp.com/events/upcoming-events

https://www.solarwindsmsp.com/events/empower-msp-events-2018

Falanx will present its latest news to an audience of investors at the UK Investor City Forum, 6pm on 16th October 2018 at No. 1 America Square, 17 Crosswall, London, EC3N 2LB

Mike Read, Chairman and Chief Executive Officer of Falanx, commented:

"As we work ever closer with SolarWinds our partnership is developing into a fantastic opportunity for Falanx. Combining the marketing and sales power of a $1bn software company with our SOC services and expertise is transformational. As the only SOC service provider supporting the SolarWinds TM market in the UK and South Africa, just a modest uptake of services is required to dramatically change Falanx's financial performance. We are now very well placed to scale Falanx into a significant leader of Cyber Security services in the UK in the short to medium term."

Enquiries:

About Falanx

Falanx Group Limited, is a global intelligence and cyber defence provider working with blue chip and government clients. It operates the MidGARD cyber monitoring platform for corporate and governmental customers which utilises a combination of proprietary and third-party processes and technologies. For more information: http://www.falanx.com/