Appex

Case Summary- Appex Corporation

Appex Lunyatech Systems Corporation (ALS) was formed in May 1986 by the merger of Appex Inc. and Lunyatech Communications Consultants (LCC). The merged entity integrated Appex’s expertise in providing Management information systems to the cellular industry, with LCC’s engineering expertise. ALS changed its name to Appex corp. in May ‘89.

Appex‘s clients were cellular networks and its business grew rapidly in line with the growth of the cellular telephone industry in USA. The no. of cellular subscribers had grown from 92000 in ’84 to 3.5 mil in ’89 and it was projected to touch 5 mil by ’90, 7.5 mil by ’91, and 20 mil by ’95. Appex’s revenues had grown from $1 mil in ’87 to $16.6 mil in ’90, and it had been rated as the fastest growing high-tech company in USA by Business Week.

Products and Services

Appex’s services/products were broadly classified into two categories- Intercarrier Services (ICS) and Cellular Management Information Systems (IS). The ICS business accounted for 60% of revenues in ’90 and consisted of services to assist cellular networks in provide roaming services to their customers. These included Positive Roamer Verification, Intercarrier Settlement Services (to settle roaming charges between networks), and Roaming America- to locate and forward calls to Roamers.

Meanwhile, the IS business catered to a cellular network’s primary needs in its ‘home’ market. It provided a software system to manage activities such as Customer info, billing info, accounts receivable, equipment inventory control etc. An alternative to IS, Appex Billing Services (ABS) was offered to clients who were either too small for IS or wanted a professional IS org to manage their systems. Appex charged its clients a fixed fee of $3-$4 per month per customer. IS accounted for 40% of Appex’s revenues.

Organization structure

During its pre-merger stage, the then CEO of Appex, Brian Boyle, had instituted a loose business structure...