January 29, 2019 - QUIS recently announced that it is now selling through the Microsoft Cloud Solution Provider (CSP) Program as a Direct Provider. The CSP licensing model enables QUIS to be the center of the customer relationship by providing direct billing, sell combined offers and services, as well as directly provision, manage, and support Microsoft Office 365 and Microsoft Azure. The CSP program provides the platform for QUIS to realize recurring revenue from Microsoft cloud licensing, in addition to managed services and SaaS subscriptions solutions (see Exhibit 2). QUIS recently announced that it has attained a Gold Datacenter competency, demonstrating a “best-in-class” ability and commitment to meet Microsoft’s customers’ evolving needs in today’s mobile-first, cloud-first world. The National Retail Federation (NRF) 2019 conference was held in NY from Jan 13-15, 2019. The world’s largest retail conference and expo was attended by ~40,000 people, including 700 exhibitors. Microsoft made some key strategic announcements with Kroger, Walgreens, and Albertson’s as it further grew its Azure base in the Retail sector. We would expect QUIS to announce new customer contracts as part of the Microsoft CSP program. As shown by Exhibit 2, we see considerable leverage in the business model as initial $25-50K consulting projects could turn into multi-million dollar annual contracts. We expect the closing of the first one or two acquisitions to provide support to management’s M&A strategy. On consensus estimates, QUIS is trading at a 2020E EV/Sales of 0.8x versus its North American IT Services comparables trading at 1.2x.