Good morning, everyone. Thank you for joining us. Busy morning ahead, so we'll just get started. For anyone who needs access to Wi-Fi, the private network is under Altus, and the password is investorday. Thank you for joining us in person and on the webcast for our first investor day. We're very encouraged by the strong interest. I think we've had about 80 people registered to join in person, and I expect we'll draw a bigger crowd online. We recognize that many of you have traveled from different parts of the continent, so thank you for taking the time out of your busy schedules. We have a great mix of existing shareholders. In fact, we have about 56% of our outstanding shares represented at the meeting based on registrations.
We also have a lot of new prospective shareholders, so we'll strive to find a good balance in covering some background, but as well, going a little bit deeper. I'm joined today by several of my colleagues. Our presentations will be led by Bob Courteau, our CEO, Carl Farrell, our President, and Angelo Bartolini, our CFO. We'll introduce you to some of our colleagues from the different parts of the businesses who will participate as speakers throughout the presentation. We pride ourselves on our bench strength, and I do believe that this group of business leaders will validate that. After all, as Bob always reminds us, it's the people that contribute to the results and that drive the business. The full biographies of all the presenters are in the appendix, if anyone wishes to learn a little bit more about our backgrounds.
Of course, it should go without saying, there are many others from Altus Management who couldn't join us in person today. They are no doubt important members of the management team. Before I dive into the agenda, I did want to mention that we structured today's presentations based on the topics that have been most topical and a big focus for investors over the last several months. Most notably are Altus Analytics and Property Tax businesses, as well as capital allocation. We felt that this would be most productive use of everyone's time. We do recognize that we have several other businesses in our portfolio that do contribute to Altus' success. As you can see on the agenda slide, we'll have two sessions and then a short 10-minute break around 10:20 A.M., and then we'll break for lunch just before noon.
We'll have about a 30-minute break around lunch, then we plan to continue presentations just to keep us going. We would resume over the lunch break. Our goal is to wrap up by 1:30 P.M. latest. For those of you who wish to stay behind, we'll have about a 20-minute product demo session showcasing the capabilities of ARGUS Enterprise. With respect to your questions, we just ask that you hold your questions focused on the sessions at hand. We'll have about a 20-minute session at the end of each presentation. If you have any financial questions, we just ask that you cover that off at the very end. Of course, the most exciting slide.
Before we go any further, I do need to advise you that some of our presentation content and prepared remarks, as well as the discussion during Q&A, could and will include forward-looking information. Please review this disclaimer slide at your leisure. Additionally, please note that we use certain non-IFRS financial measures. Additional information pertaining to these non-IFRS measures is made available on page six. Of course, all currency throughout this presentation is in Canadian dollar unless otherwise stated. With that, I'll turn it over to Bob Courteau. Thank you, Bob.
Morning, everyone. Thanks for joining us today. We're really, really excited to present to this group today. So many familiar faces, so many of the folks that I've got to know over the years. I actually have to tell you that last night when we had our team together, I told them how proud I was of what we've been able to accomplish over the last few years and where we're going next. It gets so busy in your day-to-day life that sometimes you don't really completely understand what's going on right next door to you. Yesterday, as we did our dry runs and thought about how this all comes together, it was amazing for me to hear from our team, the people you're going to hear from today, about how excited they are about the company. We're at an amazing time.
I would say an inflection point. We're pivoting now into a place where we have the makings of an amazing, a great technology company. I'm going to talk a little bit about that at the front end of this presentation. Honestly, I really want to get to the team. I want you to hear from them. I want to have an opportunity to go deeper, to share with you a little bit about why our confidence in the business is sky high, both in terms of differentiation, in terms of future revenues, in terms of our competitive advantages, but most importantly, in terms of the quality of team that we have at this company.
For me today, it's one of those days where not only do we get an opportunity to share with you a little bit about where we've been and where we're going, but we do it with pride at an amazing time of the year, and we do it in a way where we can also get conviction ourselves. This is a really, really important day for us. As one show of strength, we have a couple of people in the room. Harvey Naglie, our past chair, still supporting the company, still an investor. He was there on the day that Altus Group was founded. We have our current chair, Ray Mikulich who's been an amazing contributor to Altus Group. I feel like he's my partner in growth. He knows real estate and the world of real estate as well as anybody.
He's got incredible followership, not only in New York, but globally. He's done things in the real estate industry that, frankly, we're pioneering. I'm a technology guy that's kind of learned real estate a little bit. Put us together, we think we built something amazing. Ray, thanks for joining us today. I don't even know where you're sitting, he's right at the back for you. Anybody that wants to grab him at the break, worth a couple of minutes of conversation. Thank you, Ray. Objectives for the day, I think I've talked about it. We want to make sure that we take the mystery out of the business a little bit for you. This presentation is not only to serve the investor day, but it's available online. We've got, I don't know, 200 people registered for this call online.
We want to actually make sure that we build a presentation that takes the mystery out of our business. For us, as we've moved down the path towards a technology data services company, we have a clear operating profile now and a clear operating platform. For new investors, it really is about two segmented business. Our Altus Analytics business, which is primarily a software data business, and then Altus Expert Services, which in its origin was a professional services business. I can honestly say that we've moved the platforms down the road, and you'll particularly get some visibility to that when we talk about how we are operating our Property Tax business and where that takes us in the future.
What is really cool about Altus Group is that it was put together with a number of acquisitions, originally in Canada, across the spectrum of real estate. If you look at the left side of this chart, we touch, participate in, develop, understand all aspects of the commercial real estate industry, and we find ourselves shaping and developing knowledge that we can use across the spectrum of our business. In fact, the reality is that these businesses are really insightful and contributing to the technology play. Across the business, we have amazing visibility. We've used this knowledge as part of our ARGUS roadmap. When you think about the capabilities inside ARGUS, we are involved in planning and development. We're involved in portfolio management. We're involved in deal flow. We're involved in really understanding the analytics of running a global business.
This information that supports our roadmap is the type of information that we can then put in the hands of our service providers to give them advantage. This is a give-get model that's been particularly effective in the past and one that has allowed us to take a position in the industry where now on the ARGUS side, we're a must-have technology across the board. We're taking that business globally. When you find yourself in a place where you have this kind of advantage, the second point of the story is that we want to be best in class in every one of those businesses. I'll just take one example. In here, we have a cost business both in Canada and Australia. Right beside that business, we actually, as part of the ARGUS portfolio, have a global leading capability called EstateMaster and Developer.
Basically, a combination of product that we built and product that we acquired that we're now combining with Property Tax business in Canada and emerging in the U.S. and in Australia, where not only can they use our software to actually start managing the oversight on major projects, and we have an amazing market share in the markets that we serve, but because they uniformly use our software, they can now collect the data that goes along with that. That's how we think across the spectrum of every one of the areas where we provide capability. We want to actually embed services, software, and data in a way where we are moving to an information services model. We've done that across the board. I'm proud to say that if you go in every one of the categories that we operate in, we have a leadership position.
We're number one virtually in every one of these markets that we serve. Frankly, in most of them, we're the fastest-growing. This idea of combining software services and data not only informs our roadmap for ARGUS, but it gives us competitive advantage inside each of the businesses that we operate. We do this on a foundation of success. When you look at some of the historical norms of this business, our goal in technology is a Rule of 40 goal. That doesn't mean that we won't invest in the business. That doesn't mean that we won't find ourselves stretching for new platforms.
What it means is that we have a guidepost, and we've done this since I've been here, that we're always trying to find ourselves making sure that these investments can have a return, not only in materiality for what we're trying to do over a short period of time, but we actually want to build a competitively insulated business. I'll talk a little bit about that on the next slide. Having made these decisions over time, organic investments, new developments, and knowledge of the industry, and combining that with strategic acquisitions, we build platforms that operate at the highest levels of opportunity in our industry. As a public company in the commercial real estate industry, we have an advantage.
When we think about Altus Analytics and when companies think about what they're trying to do to achieve their objectives, whether it's in an individual market or globally, these are must-have technologies. Most of what we sell in Altus Analytics is done without an RFP. That's the kind of privilege that we have across each of the products that we offer around Altus Analytics. On the CRE consulting side, because of our value, the results that we get, the knowledge we have, our data, similarly, we are the company that is the go-to company in providing these type of capabilities to the market. Because of that, if you look at Property Tax, and we'll spend a lot of time on that, as a simple example, we enjoy above average margins for a company like this. That's a big part of our strategy.
To summarize, we collect across the spectrum of our businesses. We are absolutely disciplined towards making sure that we employ technology that's going to make a difference for our customers. We're also focused on productivity and differentiation to create competitive advantage. Today, I think you could understand that what we want to focus in is a little bit of an undercover view of our critical businesses, Altus Analytics and Altus Expert Services. A couple of thoughts on that. We really want to make sure that we start pivoting as a company to businesses that are really focused on driving superior growth and leveraging the platform we put in place. I feel like these two businesses are now at a point, and I'll make a couple of thoughts around that, are now at a point where we can actually leverage the investments we've made.
That's a really big part of the pivot we're on, and we're going to isolate in on these businesses as ones that really can be critical in terms of the future of Altus Group. Specifically, we're going to overweight our investments in Altus Analytics and the number of adjacent categories we can go after, both organically and through acquisitions. We also are at a point where we can leverage the transformational investments that we've made in cloud already. This is going to be really a critical focus. You'll hear all about that. Carl's going to be up in a minute. Scott Morey's going to frame this up for you. Then right beside that, we have this amazing platform that we created that has multiple go-to-market opportunities ahead of us.
As a simple paradigm in that, again, we operate in the Property Tax business at margins higher than virtually everyone else in the industry. We can actually go out and acquire companies, put them on our platform, and get the kind of compounding an investor is looking for. We were able to do that because of the investments that we've always made in Property Tax in terms of modernizing, collecting data that drives differentiation, and really orienting ourselves to a place where we have a highly differentiated business. We're going to go deep on this. It would be fair to say that some of the feedback from investors over the years is that we can be seen as a little bit of a complicated company. Hopefully, today, we take a big step forward in understanding this competitive advantage. We always already have great investor support.
We're going to share with you today some of the things that we do that drive this engine of growth. As I said earlier, the foundation is in place. We made a significant investment to the cloud. For me, all of the things that we're doing in Altus Analytics are around a strategy that we put in place seven years ago, and it's really, really simple. If you look at the bottom of this slide, the chevrons. We enjoy amazing relationships. When you are a standard with customers, and you have the brand that ARGUS has, we get to have partnerships and relationships with the largest CRE firms in the world. It's an open door. People want to be with ARGUS. They want to understand who we are and where we go.
We've been able to take the position that we have, even with our Canadian customers, and take many of them globally. Certainly, because of the work that we've done in Appraisal Management, which in its essence is a must-have data and analytics business for the largest companies in the world, we have a door right to the CEO because we talk to them every quarter about their performance. One of the big advantages that Altus Analytics has is an open door to the commercial real estate world. We pushed our advantage. We were an industry standard in Canada and the U.S. A few years ago, we had a really tough decision. Do we actually double down on cloud now, or do we try and drive the standards that we have in Canada and the U.S. to Europe, particularly to the U.K., Germany, and France?
We took the decision to go that route, which means that the largest investment managers in the world that operate in those countries can bring back their data on an ARGUS standard in a way that they can check the box on their regulatory requirements. We've started that. Already gone through that process with the U.K. We released product to the market in Germany and France. We have closed deals in all of those markets with the largest real estate companies, and we put a big checkbox beside having the standard for the way people look at individual assets, their portfolio, and how they manage their funds in those five markets. Why is that important? Effectively, those five markets really give us an opportunity to deal with where 65% - 70% of the assets around the world are managed by asset and investment managers.
If somebody wants to compete against us, in all parts of our business, Appraisal Management and software, they have to find a way to establish relationships with those companies, then they have to build technology that's not unique to North America or Canada or the U.K. Very challenging moat to overcome. We've pushed that advantage because what we've done now with our ARGUS Everywhere strategy is we've taken these large companies to Asia, and we actually work with the service providers around the world where they can support some of our large customers in a multi-country, multi-language capability. We have 10 of 10 of the large service providers on our platform with global contracts. Really tough to replace that. We pushed it even further.
With the acquisition of Taliance and the development that we've done in integrating the platform, we have the first stack in the real estate industry for global asset investment management. What we're doing now is coming out with product and applications and partnerships where the other large players in the industry can actually partner with us to develop capability around that stack. Really important because what's happening in the global commercial real estate market now is that companies are trying to figure out how they can manage their business as a global company. The first four things in this chevron make us the only company that they can go to.
Every RFP that we're competing in as we now start becoming an enterprise software company is against companies that are working together, two, three, four companies with a huge amount of consulting work to try and compete against our stack. The last and most important part of this, which has been part of our multi-year strategy, is to deliver all of this in the cloud. That's a game changer in my mind because it opens up the door not only in terms of having clients be able to control their data on a global basis with our stack, it also allows them to integrate against their custom applications. If they have an environment where they're using other capabilities in the industry, we're going to partner with the best of the best to give them a full ERP financials to reporting to their investors.
The other thing that data in the cloud does, not unlike what you're going to see Rick Kalvoda show some information about where we are with Appraisal Management. It allows us to partner with those customers to collect data, partner with their network to drive data at the input level, property managers at the output level, investors, where we can help them collect that data and present it to them. Finally, we see this as an industry opportunity to be in the data analytics and index business. I will make a proposal here that this is some of the most incredible moats that you're going to see from any company. Now it's all about execution and growth. We feel like we put in a really good strategy around that.
Similarly, in Property Tax, we have very strong moats. For me, Property Tax, and we're going to show you how this business unfolds, is really about putting technology, data, and as this says, the best people in the industry to work in a way where you have advantage. You have knowledge. We're going to show you that on an industry basis, on a major accounts basis, and a volume basis. Because those three elements combine to create advantage around Property Tax. When we actually provide our orientation to the customer, when the largest companies in Canada, as one example, use Property Tax as our Canadian Property Tax business as giving them an advantage. What that does is it sets a blueprint for the industry because as we collect information for a major customer, we can repurpose that across the industry.
As we develop industry data, we can take it down into the industry around volume. More and more, we're moving to a global approach, a global platform that employs software and data to really drive a change in the way people do Property Tax. Effectively, we are now collecting data at scale because we have over 50,000 customers and over 100,000 establishments that we collect data on. We're the fastest-growing, number one sharer in Canada, highest share by a lot in the U.K., fastest-growing in the U.S. in a completely unconsolidated market. For me, it's all about the people.
We're going to talk about this digital transformation around the tax business that we started a couple of years. We will continue to be the market share leader in the markets that we serve. We want to be the fastest-growing even where we have privilege right now. We're in a great position against these two businesses. I wanted to do this fairly quickly because what I want you to do is to get to the meat of the order, hear from some of our talented executives about where we're going. If it isn't clear to you, pretty confident right now, pretty sure that the advantages we created are now in a position where we can go into every one of the markets that we want to serve and win. We can win not only in the markets we're established now.
Europe is our fastest-growing market now, Asia not too far behind. We've had a sequence of activity that gives us an opportunity to be a global enterprise company. The last thing I'll say is that the commercial real estate industry is changing quickly. By demographic, the new leader of a global asset or investment manager is younger. They want technology. They want to operate on a global basis. Data is important to them to create competitive advantage. We're at a point where people are continuing to invest in real estate assets as a way, as a point where it's becoming a material part of their business, whether it's a bank, an insurance company, a pension fund, pure-play investment manager. The missing ingredient on this opportunity is oversight. It's the collection of global complex data to determine performance.
All of the things that I've talked about today is to set us up as a company that provides that kind of insight. With that said, I'm going to get Scott Morey to come up and talk a little bit about some of the trends in the industry. Scott just joined us from One11 that we acquired. Come on up, Scott. That we just acquired. He's got an amazing reputation in the industry. I told him yesterday when we were doing the walk-through that I was going to introduce him as a real estate genius. That's what I thought I would do.
Well, you just set a really high bar. I want to thank everyone. Sure I can work this? Thank everyone for their time today. I've got three, there we go, overall topics that I want to talk about, and I'm going to take about 15 minutes to do that. What I want to start with is around what's happening in real estate relative to capital flow. Because I think that influences behavior, how companies report, how they operate, and what they do. I want to talk about those trends, which for some of you are going to be pretty obvious, and for those not super familiar with real estate may not be as obvious, but I think it's important. The second point is around what do we see relative to operating trends within the space. How are they managing these assets from an investment standpoint?
How are they managing these assets relative to from a property management standpoint, and then why that's important. I want to end on what we see as some of the technology demands and trends within our space kind of in general. Let's start. If I look actually on this first chart, this is just about overall demand relative to investment within real estate. The chart on the bottom left is from an acquisition standpoint and goes back actually to 2007. You see a dip during the recession. 2015 was a really strong year, and 2018 actually surpassed it. The chart on your right shows aggregate investment within the space, which in 2019 was CAD 1.75 billion. You see a projection on 2019.
I've seen different reports on it, the year's not over, so I don't really feel I'm qualified to estimate that on my own factor. The point is, I think, is that you're seeing significant demand within this as an asset class globally. Now, what's interesting, if you take that further, this is not a new trend, actually. Money is crossing borders more than ever. That chart on the bottom left, which is hard to read, which I apologize for, but if you have interest, let me know and I can send you the study that was done, effectively is taking that CAD 1.75 billion and showing you where it's going. Some would assume there's a lot of North American money going out, which is true. There's equal amount of money in other parts of the country that are going in certain sectors.
It creates this much more sort of diverse thing. I mean, imagine if you're on your own and you own whatever, assets in Toronto or I'm in Chicago or wherever you may be, and you want to invest in London, and how you manage that investment is something that's quite complicated. The chart on the bottom right shows U.S.-only investment for 2018 by quarter. The point of that slide is just showing the diversity of the capital that's coming into the States. I had another slide that showed a version of that in the U.K. I had a slide that showed that within France. I'm not showing you those slides. Again, the point is that money is jumping borders and has been for some time. If I take that down further, I'm going to focus more on North America.
For a long time, certainly the public REITs were rewarded for being specialized. I was in malls, I was in shopping centers, I was an office company, I was an urban office company, right? The trend we're seeing now more than ever is around diversity of the asset mix, that people that were solely in retail, so maybe I was in shopping centers, well, now I've got a bunch of multi-family apartment units. Now I've got an office building attached to it, or now I'm doing industrial phase. You're seeing that. What I've got actually on the far right is just a survey that was done around preferences for millennials. I don't think it's just millennials actually, in many ways.
Just sort of the idea of workshop play or using Brookfield as an example, with Brookfield Place, whether that was here, whether that was in New York. Those concepts are happening all over the place. Bottom right as well, that talks about construction. If my memory's correct, that's in 2018. 2017, they're saying the majority of investment going into development was for mixed-use projects. I just took some various press releases. Jones Lang LaSalle around malls with office space. Kimco, which is a REIT in the U.S., which is primarily open shopping centers, is doing a lot more mixed-use communities. The point is, it's a general trend. Actually, if I take Toronto and Canada, I think of SmartCentres is a great example of that as well, if you look at what they've done over the last 15, 20 years.
The diversity of their portfolio, if you look at where their growth is, it's in their annual report. It's all multi-family. Really interesting, actually. Again, you think about the skills it takes to invest or manage retail. It's totally different than multi-family, right? From a capital standpoint, for me, it's interesting. Now I go a level lower and I talk about unit-level profitability. What I mean by that is that, historically, if I said I was an office company, let's use malls as an example. How do you maximize the space that you have that's vacant? How do you maximize that in some fashion, right? If you looked at malls, they would call it in-line store. In-line stores, where they talk about temporary tenants. Now you talk about pop-ups. Pop-up stores are effectively just a shorter-term version of a temporary tenant.
Thinking about the flex space, the thing that's happening with WeWork and Industrious and other companies in office. You think about, I mentioned here with Prologis, investment of Flexe. Don't know if anyone knows who Flexe is, effectively like the Airbnb for industrial space. They are aligning retailers with vacant space in industrial warehouses. Really interesting, right? You've got this dichotomy, kind of this structure, in effect, about how do I maximize that revenue? Going to the last example of multifamily, if I was conventional, just traditional housing, right? Where I was effectively leasing units for a year.
Well, now you got people saying, "If that unit's vacant, if I could do an Airbnb, I'm going to rent it out as an Airbnb." "I'm going to do student housing or corporate housing or whatever." The market trend, in effect, is about optimizing the revenue and the investment within those assets and doing whatever you have to do at a unit or square footage level to drive up occupancy, even if you're highly occupied, or to drive up rates per square feet via density and getting more desks or more people kind of within those units. The last piece I want to end on relative to capital trends is around, and Bob mentioned a few minutes ago, is what's happening with institutional capital and where that money's going. Year after year, their allocations are going up.
Actually, CalSTRS this morning just announced increasing their allocations relative to REITs. You go, why does that matter? Why that matters is, one, is that as an investment class, real estate over the last 20 years, more and more so, is becoming institutional grade. High-end investment vehicle comparative with the other asset classes that people are putting money in. There's a burden and a blessing that goes with it. The capital is good, but there's things you have to do, in effect, and they expect you to do as part of that. The bottom of this slide, I talk about real estate investment trusts. I think it surprises people there's a REIT structure in 39 countries. Portugal just did in January. Equally surprising is the U.K. didn't have a REIT until 2007. It's still a relatively new vehicle for most of the world.
Having said that, you take certain parts of the world, it's been around for decades, with the U.S. being an example. Really grew in the '90s. It existed before that. Again, it's about the maturity and the requirements that go through when you have investors like that within real estate, how you report your information, aggregate information, and manage your assets. I want to shift gears. What does that really mean if I'm operating, I'm an operator of real estate, right? I'm managing this from an asset class standpoint. High level of increased complexity of understanding performance of fund portfolio and your investment. I'm cross-country. I got multiple asset classes. I'm trying to maximize revenue within those units. It's a highly complicated environment.
Where that went down from a lease accounting standpoint, that means for those solutions to be able to do that, it's not a long list. Actually, in many cases, it's a really short list when you start going global. Increase in third-party managing operators. If I'm buying assets in another country, I'm going to go hire someone to manage them. If I'm Kimco or I'm a shopping center company, I'm now in multifamily, I'm going to hire someone to go manage those assets for me because I don't understand that asset class in any detail, and I don't want to mess it up in the scheme of things. More complicated staffing models. Think about if you're renting apartments annually. Right, I got a one-year lease or a two-year lease. Typically, it'd be a one-year lease. I now decide to do Airbnb. How do I staff that?
I got to clean it, right? I got to turn those units over quicker. I got to have people on staff 24/7. It's a completely different model, right? We see on my side, people trying to figure out how they solve these models. Like, how do I do this economically in a way that makes sense, and how do I manage this in a way that makes sense? How do I understand what the performance of those assets are? Equally important for my investment partners, public or private, how do I report on them or provide them comfort, right, that I'm maximizing the value of these assets? The last one, which is really reinforcing that point, is about greater demand for transparency in historical and future performance.
I have this phrase, like if I had accurate information around the performance of my assets, and I give it to you late, like in six months, it's useless. If I give it to you tomorrow and it's inaccurate, it's equally useless, right? There's this balance between integrity of the information you're sharing and the validity, integrity, right? Timeless integrity of that information to make it worthwhile, the market is demanding it. You go back to the capital side. If I'm an institutional investor and you say, "I don't know," when they're asking you a question about the performance of your assets, that doesn't work. I've listened to earnings calls with REITs, and you get, like, "I don't know." I don't know doesn't work anymore, actually. You have to have the information at your hands and be able to respond to questions effectively.
Here's a study actually that Altus did in 2019, where they surveyed 400 individuals around what are you doing? How do you gather data? This is not a fun environment, actually, in all honesty. If you look at the bottom, 59% are manipulating or transforming data. It's fascinating, really, right? They have to because they don't have the technology in place to be able to do it, and they're trying to aggregate things in kind of unique ways. Then you look at the rest of them, searching for relevant data at 38%, like, I would not want to work in one of these companies, actually, in some ways. What it says, though, in all honesty, is around the demand, right, for streamlining and automation and transparency to be able to transform these environments where I'm not just gathering data anymore.
I've got data at my fingertips that I can then go ahead and analyze. Hopefully, that makes sense. I'm now going to shift gears and just talk about what does that mean to technology. Being global is more important than ever. You look at ARGUS' position is dominant, right, within their asset class. If I talk about property and lease accounting, I used to do a software survey for the Journal of Property Management in the '90s. There was 30 solutions that were doing lease accounting. Right now, there's barely even a handful. Actually, globally, there's really two. You could argue maybe there's even one. You're starting to see new entrants come in, but it's a complicated space.
Everybody needs, again, following the capital flow and what you're trying to do, being global, you've got to be in these markets, not just the major markets, even going forward in these outlying markets. Everyone's demanding the ability to aggregate multiple sources of data from a financial and operating standpoint. Again, more complicated environment. How do I get this stuff out? If I'm in Brazil, there's really funky kind of requirements from a tax itinerary and, tax standpoint. From a property management standpoint, you know, they're on their own solution sets. There aren't great solutions down there. If they're trying to aggregate that information in some fashion, right, how do you do that if you're getting your cross-market? The broader market has its own difficulty navigating PropTech space. I'm going to talk about this for a couple of minutes.
PropTech is like the most overused word in some ways. If you look definitionally, PropTech is defined as space as a service, that puts WeWork Industrious in there, software as a service, and technology as a service. According to CREtech this year, in the first half of 2019, CAD 14 billion went out in this category. If I go in 2018, CAD 10 billion went out in this category. Now, we think at best, there's about, at least in North America, 3,500 PropTechs roughly being tracked in North America. There were 509 transactions last year. If you do the math, I think it's like 14% or something relative to the total. It's even more interesting because when you look at that CAD 10 billion, if I take the top 20 deals, it was CAD 7.5 billion. It was 75% of the capital.
You've got all these startups out there hungry for adoption, right? Really a really small subset that are highly well-funded, and everyone else is scrambling, right, in a lot of ways. What's happening because of that is Now, I've been on the other side, actually, trying to figure this out. You don't know how to navigate that. Investment companies and real estate operating companies aren't staffed to figure out PropTech. They have to rely on someone else. What's happening is they're relying on companies like ARGUS, effectively, to understand that landscape, either through partnerships or investment or acquisitions. You take some of the other companies in different categories within real estate technology, they're doing the same thing. It's a highly complicated environment. The market wants partners. If you notice, the second to last bullet is a partner-first mentality.
They want that. They want more than just your product. They want your advice and your guidance today and in the future in navigating the space. The last part is the market expects economic returns on technology. I mean, if you look, I look at it, I always say the battle for technology, in many cases at a large scale, is the fight for capital for some of these things, right? Because it's not inexpensive. It depends on what you're buying, but it's not expensive. You take a development project, right, they may have hurdle rates of 8% or something, but you've got to go in many cases, and say, "Here's what you're going to get. Here's the value you're going to get, and here you drive then.
Technology, more and more, is in a situation and is providing solutions that creates direct economic value, and that is proven in many ways. I don't see solutions. A lot of cases, you look at the project stuff that's coming up, they don't have that story. They can't tell you how can I provide value to you, and they're coming in with economic models that from an owner operator investment standpoint, make no sense. It might make sense if there was associated value with it. In many cases, there's not. When you look at, I think, going back to the beginning on the capital flow relative to technology, in the capital flow and the investment trends I showed earlier, are not new trends in many cases.
How you see that ripple effect go down, I think sort of reinforces different positions within the market, what the expectations are, and then the providers like ARGUS in the space and how they effectively respond to them. Anyway, I want to thank you for your time. Hopefully that was constructive. I'd like to turn it over to Carl.
I apologize. I have a little bit of a squeaky voice this morning, so hopefully as I exercise the vocal cords here, the squeakiness will go away. As Bob said, it's a really exciting time for Altus Group. It's a pivotal time for Altus Group. The industry is moving. Scott gave some comments and some depth. Bob gave us his comments on the industry and how that all relates to the opportunity that we see in front of us. I'm going to spend my time talking you through Altus Analytics, one of our key focus areas, as Bob set up. I'll take you through some of the key segments of the business.
I'll introduce some of the key management team who are responsible for creating and executing these strategies so we can see again, the depth that Bob mentioned that we have within inside the Altus Group and inside the management team globally. Let's begin with Altus Analytics at a glance. Let's just remind those who are maybe new to us, new in the room, on what we mean by Altus Analytics. It's our ARGUS Software solutions. The name, the brand across the industry that is most recognized for an asset management, that we've been building upon for the last several years. Our Appraisal Management solutions, our global Appraisal Management business. Rick Kalvoda will come and talk about that shortly. Our data management solutions here in Canada. All coming together, serve the industry in a very integrated way. They're very much focused on, investment and asset management.
That's our focus, that's our core. The business is built, as Bob said, very rapidly over the last several years. We're now up to 7,000 customers at a global level, 75 countries represented using ARGUS Software and Altus services today. We've grown at a fairly rapid pace, 650 employees. Client retention, very high. It gives recognition to the brand we have, the quality we have, that we're keeping that level of recognition on a global basis. I move to overtime revenue has been strong. Over the last several years, we're moving more and more to overtime revenue, which we'll talk about at the end of the presentation with Angelo as we look at some of the numbers. Again, a very solid set of business metrics there to build the foundation to move forward from as we continue to invest in this business.
Let's go back to the software suite, the ARGUS suite of software. As Bob says, this represents the stack. This is the stack that brings all these functions together. We mentioned ARGUS Cloud. We're going to talk a little bit more about ARGUS Cloud in a second. Released in 2018, at the end of 2018, and is the underpinning to the strategies we go forward. ARGUS Enterprise, our key flagship product, over 4,000 global customers. Asset management valuation, it's the industry standard. It's the gold standard around the world, the currency that people use as they transact different properties and buildings. ARGUS Taliance joined the portfolio for fund forecasting a few years back, integrated with ARGUS Enterprise. Very strong data flow between the two.
ARGUS Voyanta is designed to capture different data elements around this cycle, brings it all together, cleans the data, reports on the data, brings that transparency and visibility that Scott mentioned the industry's looking for. ARGUS Developer and EstateMaster, Bob gave reference to them earlier on. We look at the whole development cycle with two very strong products. Not only do they manage the overall cycle of development, they are collecting key data as well, which is fed back into the systems. Newer products, ARGUS Acquire, our first cloud application, came out at the same time as ARGUS Cloud, but basically deal acquisitions and deal pipeline management. Fully integrated into ARGUS Enterprise utilizing the calculation engine, very important for deal acquisition teams.
ARGUS API, our newest application, which we will be releasing this month in December, allows us now to expand our reach into our partner network and to interact with other key vendors in the industry by providing industry standard application interfaces into ARGUS Enterprise. All of these coming together into the stack to manage global asset and investment management, one single platform. Today, 7,000 customers are using that platform. A great foundation again to move forward. We are trusted by some of the largest CRE companies in the world, as Bob mentioned. We are the gold standard in a lot of places, number one in a lot of places. Again, a great foundation to build from. How are we going to take this forward? What is the next level of this growth strategy? We mentioned the phrase, and I think we mentioned it several times, ARGUS Everywhere.
That has been the strategy for the last little while. This is basically falling into two existing elements of a strategy. Existing and new customer growth and geographic expansion. We've put a lot of effort into the last couple of years of growing the ARGUS products across new geographies, and again, upselling product into existing customers as well. In addition to that, we pulled out the top 200 global customers that we service and gave a very different focus from a product point of view, and also an approach from a delivery, sales, and service point of view. These are our larger deals, multi-product deals, global of nature, very much reliant on multi-product, where we're solving a much larger business problem. We'll talk about this a little bit later on.
With that now, the expansion into our partners, the service providers that we help support their businesses, our large customer set again, and then the potential for us to interact with other customers to drive a network effect of usage of our software through their organizations as well. In addition to this, we'll talk briefly about a new emerging opportunity in adjacent markets and around data. I'm going to come back to these in a little session. Let's break it down into its tenants. What are the tenants for this ARGUS Everywhere strategy?
You have the cross-sell, up-sell, which I touched on, I'll go into a little bit more detail, market expansion, cloud, transition, integrated platform, global development, all coming together to basically allow us to take our software, our revenues forward, expand our reach, and grow this business at the pace that we have done for the last several years. Multiple overlapping strategies all coming together. Spend a time talking about cross-sell, up-sell. 7,000 customers gives us a very large opportunity. 7,000 customers are mostly single product customers. We have the ability to go into that customer base and up-sell the products we have, up-sell additional users. To date, this has been one of our larger revenue streams over the last several years, so we won't be pulling back from that.
As we introduce more product into the portfolio, as we introduce cloud, it gives us the ability to keep going back to this place. We have the market room and space to go after even more new customers. Again, new customers, single product. We're not moving away from that. Our SMB channel is doing extremely well at the low end of the market in all of our geographies. We won't be pulling back from that. Market expansion. Historically, we grew our revenues in the Americas. It was the predominant part of our revenue. Bob mentioned now that EMEA growth is surpassing the Americas growth. Asia-Pacific is coming right behind that. Geographic expansion is the next large opportunity for us.
In 2019, we released key functionality that allows us to operate at all levels in France and Germany, valuation methodology, which was key to expand that business. We have the opportunity now to go even deeper into Europe. We invested in Asia-Pacific, put more resource in Asia-Pacific as that region continues to grow with us. We'll build on the work that's already been done and continue to build out this geographic expansion, continue to push more customers in those regions, invest more staff in those regions. We still have a lot of market space in existing territories at the same time, so penetration rates for us in existing territories plus new expansion areas gives us a significant market opportunity to go after. Transition to Cloud. Cloud came out in late 2018.
I'm going to go into a little bit more detail in a second, but it came out in late 2018. It allows us now to overlap a number of these strategies. It allows us to provide a very simple environment for our smaller customers. They don't have to worry about infrastructure, they don't have to worry about staff. We had some great experiences with our ARGUS On Demand product that's selling into this environment. We've seen great early acceptance on this SMB part of our strategy as our smaller customers want to get into this area as well. It also supports the geographic expansion of our larger customers. It makes it a lot easier now for our customers to deploy on a much more global basis, one standard, one set of software. The multiple instances before would have been on premise.
Now we're moving that away to a single instance in one cloud, bringing all the data and all the benefits together in a single place. At the same time, it allowed us to bring in our subscription model in July of 2019. Full subscription now for new customers coming onto cloud is starting to affect our economic model as we move forward. The strategy in place, which I think we mentioned to the market, is that we intend to move the vast majority of those 4,000+ customers across onto this cloud environment by the end of 2023. If you look just at the timeline, I did mention 2018, we did release at the end of 2018 the cloud environment. It's not a thing that's just come out recently.
We spent a number of months gaining experience on low volumes, being a little bit quiet about what we were doing, gaining experience, making sure the environment, the DevOps environment around cloud infrastructure, were all in place. As I said, in July, we really pushed a new release out, very functional. I think it was our third or fourth cloud release by then. Much more functional, which plays around the strategy of us pulling customers into our cloud environment as opposed to pushing customers into this new technology. We put a tremendous amount of new things into the cloud that customers could not do before, which they saw value in and wanted to transition.
That's been received extremely well in the market to this point. As I mentioned, all new customers in July moved to a subscription model, and in 2020, January 1st, all customers will be going to a subscription model. Completing the transition as we take the steps into that full overtime model. By 2023, we're looking for making sure that the vast majority of all customers globally are on the cloud. Integration. ARGUS Enterprise, Voyanta, Taliance coming together is a very powerful business solution. It addresses a lot of what Scott mentioned as some of the issues in the industry. It addresses what our large global customers are looking for, those top 200 customers.
Our ability now to service a much larger business problem and attract a much larger revenue stream, and one of the reasons Scott and the team joined Altus was to help us service that opportunity in the market. People are looking for a lot more than just software. They're looking for people skills, knowledge, and the execution around that. Integration is key to that as well. We're going to focus very hard on integrating the products, finalizing the next level of integration of the products in the platform in 2019 and 2020. The products are already out there. You'll see another version of that coming pretty soon, but we're going to push very hard on these much larger transactions. They're key to the strategy in 2020. Upsell and cross-sell opportunity into our existing 200 customer base.
Most of the customers in the base do not have multiple products. The ability now to upsell integrated products into that space exists for us on a global basis. With the global functionality, the cloud platform facilitates that approach. Again, very important to us and a key differentiator to us in the market. We're differentiated at the product level, now we're differentiated at the stack level. Bringing these things together in a fully integrated way with the APIs gives us clear differentiation in the market. Global deployment, just go back to that. I did cover it a little bit. Having a single cloud platform, when I'm talking to our larger customers, their biggest issue is how do I create a standard around an operating environment, then how do I create a standard around data? Scott mentioned that there's many different systems out there being used.
Our larger customers tend to have multiple systems overlapping. We're now providing an environment where it's easier for our clients to roll out a standard against one set of software and one set of data standards, then provide the facilities for them to report back, to bring that transparency back in inside of ARGUS Enterprise, utilizing Voyanta and utilizing Taliance. We're addressing some key aspects of the market that Scott alluded to. Again, a significant opportunity for us on that top 200 first, but also an opportunity in our smaller customers as well. We've simplified for our smaller customers how they may want to go out of a single geography into two geographies. Not to move away from the first opportunities where we are today.
I went through the tenets of the strategy to operate in the markets we are today and expand those markets. We also have adjacencies which are very interesting to us. You look at the bottom chart there, it kind of looks at software segments by customer. Debt is a key segment. We're only in 4% of debt. We focus in the other areas, and we're much better known in the other areas. Our global Appraisal Management business is growing very quickly in that area, too. The ability now to go into a new segment aligned to what we do today exists for us. Whether we acquire to go into that segment or we build to go into that segment, we have tremendous expansion opportunities in adjacent segments as well, which we shouldn't overlook.
We're looking very, very hard in the future as we look at our development plans and our strategies, which one of those segments makes sense for us to go into next. This is ARGUS Data. Bob brought up the importance of data. Scott brought up the importance of data. Every conversation I think I've had recently with one of our large customers is around what can we do with the data. I've got all this data inside my organization. How can I do things with it? How can I bring it together? Can you partner with other people? How can you bring their data with your data to help me get better insights into my business? ARGUS Enterprise in the cloud brings us the ability now to have access to our clients' data. It's pristine data. Valuation data, current and historical data.
As it moves into the cloud environment, we have access to that data. Today, we are providing the functionality for an individual client to go back across all of their data and do benchmarking, aggregation, things they could not do before. Drive out transparency, drive out insights from that data. As we go forward, we'll be able to aggregate this across multiple organizations. Start looking for key indicators, indices, metrics, benchmarks across the industry, and bringing that data back in to individual customers. The ability is now to give a lot more insight to what a customer has today. How am I performing against somebody else in this geography, this asset type, this part of the world, that part of the world? Those insights are coming very, very quickly.
With our API strategy, which I say is first released is December of this year, we're now able to bring in third-party data very easily into this ecosystem. We can use ARGUS Cloud as an aggregation layer for all the data for the industry and begin to drive more insights out of single, multiple customers, plus other external data. That data could be built into new data products. We could go out and sell these insights, these indices in the future if we wish to go down that path, or bring it back into the workflows that we currently are building, that we currently address, and give a lot more value to those workflows as well, and pass this data on to other workflows inside our partner ecosystem. This data aggregation will continue. As we all seem to understand now, the importance around data is paramount.
As we go forward now, our ability from all parts of our business to bring back and aggregate in a very organized way and then visualize and produce analytics around this data is key to where we're going as well. Okay, moving on to software. I will invite my colleague, Dhinaker, to join me in a second. Bob mentioned how we've built and predicted strong moats around our business, and I think we've reinforced that point several times. One of the key ways we're going to continue to do this now as we go forward is to better understand the workflows associated with asset management and our industry. How do we serve those workflows today? How do we get more depth and breadth into what we're providing to our customers around those key workflows?
We're going to reinforce, again, that functionality going forward, and Dhinaker will talk about that in a little while. We've created a partner framework through APIs to reinforce our position as well, to become that standard that people want to interact with, and we interact with them. As we've gone forward, we've harmonized a cloud development organization. We've basically built ourselves a new infrastructure, which is basically focused around cloud going forward for the future. Doing that, we've built a diverse team. We've brought more skills to the table over the last several years, and I'll touch on this in a second, to do so. We have a very diverse global team that's helped us put these products together to bring a product which is globally available and works at enterprise scale.
Very important for us to be able to do that as we tackle these larger enterprise situations. Perhaps, Dhinaker, if you want to join me, you can take this on for me. Dhinaker Dhandi is our Vice President of Product Management, and he'll go into a little bit more detail from here.
Thank you, Carl. I think one of the things I want to start off with is discussing what really changed or what really modified our approach to building this cloud-based platform, and what we're truly solving for. You heard Carl here a couple of minutes ago where he talked about workflows, right? He talked about a focus on workflows. I wanted to explain a little bit more about what we consider workflows. For us, workflows is the business process, a standard business process we follow in the commercial real estate asset and investment management. For example, acquiring an asset or a portfolio of assets is a comprehensive workflow. That includes a lot of stakeholders, from lenders to brokers to legal and due diligence and third-party advisors.
Numerous stakeholders are part of that process, and they're exchanging data, and they're going through the step of formally acquiring an asset or portfolio, right? Another similar example is about building or defining a budget or a business plan for an asset or your overall investment or your overall fund. That also requires a lot of stakeholders. What we've seen through our research, through our understanding of our customers, is that the workflows today are a little challenging, right? We have a lot of clients that are using a lot of different point solutions to solve for different aspects or to gain different value from the workflow and move that business process together.
What we're seeing is that there's a challenge in terms of exchanging that data as part of that workflow between your internal stakeholders, from your acquisition teams in a CRE firm to your asset management team, or with the external stakeholders, like a third-party appraiser or a lender. This creates that data challenge where they won't be able to standardize or maintain a uniform data that can help them make those insights or predict those insights around any of their workflows. That's one of the biggest challenges that they have, right? Is the transparency around being able to transfer that data or even collaborate more efficiently with everybody, right? People want to have more efficient workflows.
This is really what modified, and this is really what played into our thinking when we were thinking about ARGUS Cloud, is that we shouldn't focus on trying to do a feature function, but we should think about how we can help our clients solve or have a more efficient workflow throughout the process, right? How can we use the core competencies of ARGUS, its valuation data, its industry-standard data formats, and its network effect of being able to communicate with external stakeholders to then provide more value throughout the entirety of the workflow. This is a quick view, right? This is a snapshot of all the different tools our clients and our people in the CRE industry use to solve for different pieces of the workflow in each of the different workflows that we've highlighted. I think I've highlighted about seven or eight workflows here.
All this shows us is that there's a scattered landscape today, right?
There is a range of local and global solutions that people use, whether it's in North America, EMEA, and APAC, to solve for different pieces in that workflow. What we know is that as ARGUS being the industry standard, we have the power, we have the competency, and everything that is generated in terms of the valuation models, the asset models, the investment models that we have within our ARGUS suite, which is the standard across the world, we have the capability of being able to use that to help our clients use these point solutions more effectively by building a framework, a platform that would really be a framework that allow us to partner with these different solutions and help our clients move the data seamlessly and in alignment with a standard that they're familiar with from the end-to-end workflow process.
This really expands the use of ARGUS across the organization. Today, where ARGUS is used by the asset managers, the analysts, and the acquisitions, now we'll start seeing the ARGUS being used more broadly, all the way through fund management through executive teams. Because we now have a capability of building a platform that allows you to give you the right data that you want at the right step of the workflow, and still allow you to use all these point solutions in a harmonized fashion. One of the other things that I also wanted to talk about is that none of these workflows are in silo in a commercial real estate asset or investment management space.
Every one of these is interconnected because the data from one of these workflows or the output that comes out of one of these workflows feeds into another workflow. A quick example is how when you acquire an asset, the information that you get when you acquire an asset about its forecast and what you're predicting it and how you expect it to perform over the next 10 years helps support the budgeting and planning as well as the daily performance of that particular asset. They can take that information that we have predicted and ensure that they're building the right business plan to optimize the income and revenue for that investment.
What we know is that all of the data that feeds into these different workflows, again, going back to our standard, helps us solve not just for one workflow, but to solve for an interconnected space around the different workflows that the organization has. What this helps us do is, again, add value to our customers of having a consistent level of information throughout the life cycle of their investment, not just throughout the life cycle of their asset, and throughout the life cycle of their whole process around managing their funds and what have you. It also enables us to grow and drive additional market share from a business perspective and increase the network of ARGUS users within the organization and increase the network of ARGUS users that service all these key CRE organizations.
One of the things we've so far talked about, like how we were thinking about the cloud solution and what we're doing. The first step is how we move our existing customers or how we help our existing customers get the value of cloud, as we build out a unique single collaborative data platform that solves for these workflows. When we did this, and a key milestone was in 2019 of this year or July of this year, where we delivered the cloud-only deployment of ARGUS Enterprise. That was the first step. We put a lot of thought and a lot of care into how we developed that step to enable our existing client base to move to the cloud. We call this the pull approach.
Instead of trying to push customers to take the new solution, which obviously takes a lot of time and money for people to re-implement new solutions, we wanted to make sure that we try to address it, where we eliminate the biggest barriers of adoption to ARGUS Cloud or to the cloud that our existing customers have. What we did was ARGUS Enterprise, which is our flagship product, which has a lot of our customers. We devised the cloud implementation in such a way that people could take all their data and people could take all their existing integrations and implementations that they have around their ARGUS Enterprise and move that to the cloud in minutes. The user experience from a front-end standpoint for their end users will completely be seamless. They don't skip a beat, they'll continue to work on it.
What we've done is provide them the ability to move that seamlessly and quickly to the cloud. Once that data is in the cloud, obviously we've expanded on the analytics and the API capabilities in there. Now we've started to show them that there's more value of having their data in the cloud by once we allow them migrate, giving them the capability to have access to a portfolio dashboard or benchmarking capability. We also have the ability for them to now use more robust web interfaces or APIs to build more seamless integrations with either their custom implementations or with other point solutions that I quickly showed you there earlier. These are some things that we provide as an added value without, A, disrupting their business or having them re-implement or reinvest a significant amount of revenue to try to move to the cloud.
This approach has been well-received by our client base, this is something that we have tried to focus on because the user experience of this approach is one of the key factors that we prioritize. We also made sure that this allows us to then build new value. Instead of trying to replace the existing ARGUS Enterprise functionality immediately into the client, we wanted to build new value or build new capabilities that can give them additional value as our customers move to the cloud. What I wanted to do real quick was invite Erica Tabrizi, my colleague, to the stage so she can show you a quick demo of how we're supporting the migration of our customer base to the cloud and what is the additional value that we're delivering for clients that migrate their existing ARGUS Enterprise solution to the cloud-based subscription.
This is going to be a really quick demonstration of the seamless migration that Dhinaker just mentioned of how we're able to actually capitalize on what our clients already have within the ARGUS Enterprise platform and replicate those assumptions into the ARGUS Cloud Database. From there, what we can really do to leverage that data. For those of you that are familiar with ARGUS Enterprise, what you'll notice here is that the application looks the same as it did before. The users are not having to learn anything new in particular. In addition to that, they're going to be connecting up in the top left-hand corner to the ARGUS Cloud connection. What you'll see right now is I actually have a hybrid version. I'm connected to my on-premise database as well as my ARGUS Cloud connection.
This is to enable me to actually migrate the settings that I have within the ARGUS local instance of the database to the ARGUS Cloud. From here, we have the ARGUS Cloud Setup Wizard, which actually takes us through a variety of different tasks to migrate the data over. We didn't want our clients to worry about duplicating charts of accounts, permissioning, anything of that nature. What you'll see here is that I have a variety of different tasks that have already been clicked, ticked off, and it's moved all of this information over. Once again, capitalizing on what our clients have already done within their ARGUS Enterprise instance to duplicate those assumptions to the cloud. Very quickly, I'll finish this off. You'll see that it'll update the roles within here, and it all happens within a matter of seconds, right?
You're not taking days, weeks, months to actually move that data over or replicate it within the ARGUS Cloud instance. From here, you'll have access to your same portfolios. As Dhinaker mentioned, we are wanting to leverage this data within our different apps that we've released, as well as the different front-end capabilities that we have within the ARGUS Cloud. If I were to move over into our ARGUS Cloud platform, this is where our clients are able to access the capabilities as well as the apps that they have access to. The same portfolios exist within here. One of our first capabilities that we released with ARGUS Cloud is a flexibility for our clients to do internal benchmarking.
What they can do is spend less time aggregating all the data that's in silos today, potentially, and be able to create an internal benchmark and dashboards and compare scenarios. Effectively, they could have a star portfolio, if you will, and then compare against that. Through here, we can dive in. We can see the variety of different scenarios that we have. We have a dashboard that will allow us to very quickly and easily slice and dice our data pertaining to which classifications or attributes that are set up within the solution. Give this a second. From here, we can also, like I said, compare back. We can take all of our assumptions across our entire scenario and compare it back to our internal benchmark that we have set.
This is going to give me positive and negative indicators of how this particular scenario, Q3 2019 value, compares back to my base case that I've set. I'll spend a little bit more time on this, at the very end of the day if you all want to stick around. That's the seamless migration from your local instance or your on-prem instance of ARGUS Enterprise to pushing that data into the cloud. Yes. Very much.
Thank you, Erica. Like Erica said, we obviously have a 20-minute or 30-minute session of a deeper demo of all this functionality. Again, showing you a quick glimpse of the simplicity and the user experience that we have been cognizant of to enable our customers to seamlessly migrate their implementations to the cloud, then also showing you some additional web capabilities that they can take advantage of, and additional information that they can take advantage of with their ARGUS Enterprise data being in the cloud. One of these things that we wanted to share today was how we are thinking about the transitioning of the functionality of ARGUS Enterprise into this single collaborative data platform called ARGUS Cloud.
Our original state, what we could say before the launch of ARGUS Cloud was we had an enterprise-level ARGUS application, which was the ARGUS Enterprise, which included some key functionalities such as valuation and cash flow, being able to sensitize your models, your investment models, being able to plan your investment and fund management, or also being able to build out your budgeting and planning for your assets and portfolios. We've done as part of our first iteration to the cloud is build that hybrid environment, right? Where you still have the front-end experience of the ARGUS Enterprise solution, but now all your information is on the cloud.
With your data being in the cloud, we've now built other additional web services to then support new functionality and new capabilities and new value to help our clients make the right decisions with the data that they have in ARGUS Enterprise. One of the first steps there was the ARGUS Acquire application. Again, it was our first iteration into building an application that solves for a specific workflow.
In this case, it was to solve for the acquisition workflow and being able to collaborate more efficiently in managing your deals or managing your pipeline of asset acquisitions. The other piece that we're building on top of that is the API solution, which will now enable our clients to seamlessly integrate with other web-based solutions and other point solutions that they use where the information from ARGUS Enterprise is important to help make decisions, or the information from those solutions coming into ARGUS Enterprise is very key for them to move forward with their business.
Our long term is taking all of this ARGUS Enterprise functionality and building it as native web functionality, but not as a focus as a like for like replacement of what we do in ARGUS today into what we should do in the cloud, but more around building this native function that helps to address a key challenge as part of that workflow. An example of that could be when you're going through your acquisition, you are underwriting a model, or you're conducting an analysis of that model as an acquisitions team, you want to be able to build a cash flow, a quick and dirty cash flow to screen that deal a little bit deeper.
Being able to use the valuation and cash flow components from a native web format on the cloud will allow you to do that instead of going into ARGUS Enterprise and building a full model, or instead of going into another application that does a full valuation solution, and then using that information as part of your workflow. That's the kind of focus, and that's the kind of long-term strategy and transition that we're thinking about for ARGUS. Now I'd like to bring Carl back up and continue the discussion around Altus Analytics. Thank you.
Thank you, Erica. One of the questions I've been asked consistently over the last several months is, where are you on the development cycle, the investment spend? As Bob mentioned, we focused the business 2013, 2017, on becoming a consistent Rule of 40 business. We did extremely well with that. We began basically looking at our cloud development in around early or mid-2017 timeframe. At that time, we went from a single development team into a multi-product development team, two product architectures. We created that second development team, and we increased our investments throughout that time from late 2016 right the way through to today. We've gone from a single product platform organization to a multi-product platform organization. You've seen the investments come as we've basically built out the cloud infrastructure. You've seen the results, you've seen what Dhinaker just demonstrated.
You've seen how we're going forward with product and functionality. During the end of 2019, we've leveled out now on the size of these teams, and we began during 2019 to transition skills. Similar headcount, but moving more skills to our cloud development platform as we wound down our on-premise development. As we go forward in 2020 and beyond, we'll migrate to a single cloud-based team, same capacity, but just migrating skill sets from on-premise to cloud. We've been through a large transformation here, and those transformational investments have occurred. The large investments occurred between 2017 and 2018 as we ramped up basically the objectives we needed to hit. We're staying at the same development capacity now moving forward, and we'll vary our development capacity based on our revenue increases in the future. As revenue grows, we'll increase our development capacity as well.
That's what I've been kind of explaining to some of you in the audience and some of the colleagues out there the last little while, but I thought a chart was more illustrative. A key note there, it was the launch of ARGUS On Demand, something I overlooked in a little while. That gave us a great experience before Cloud. It was a hosted solution, but a true software as a service solution where we scaled up to over 1,000 customers. It gave us that experience to build the DevOps organization that we needed to for our Cloud transition as well. Those thoughts, those experiences, those expenditures also came along on this line as well. We're well positioned at this point as we go forward to continue to innovate, continue to build those new Cloud apps, but at the same capacity going forward.
We're not going to pull back on the innovation. Okay. At this time, I'll invite Matt Cotter to the stage to talk about how we're going to execute these strategies. Matt is the one who's responsible for ARGUS Software and delivery. He'll take us through his plans.
I get the job of talking about how do we turn all of this into revenue. One of the things you've heard a lot of today, and Dhinaker mentioned it, Carl mentioned it, is kind of a discussion around transition from a development standpoint, from a product standpoint, from a market opportunity standpoint. The field is going through the same process as well. If you rewind a couple of years ago, the organization, based on the product set that we had, was very much kind of single use case, single product focus. We were selling AE for valuation. The world that we find ourselves in today is a little bit more complex. Multiple products acquired over the years, integrated, and what we have facing us today is, for lack of a better phrase, kind of a trifurcated marketplace.
If you start at the bottom, this started before I joined, really developing an inside sales channel, relatively low cost, high volume sales channel that can be expanded very rapidly globally to capture more of that transactional activity. We need a couple more seats, et cetera. Cautiously optimistic, it's been quite successful over the last 12 months, right? I'm looking at Camilla here, who's going to kick me if I say anything more than cautiously optimistic. That's gone really well. In the middle is what I would call our core business, right? Historically, that's kind of our core business, where potentially it's multi-product, more likely that is multiple seats across larger enterprise, probably single geography. That business has been growing rapidly.
The real change for us has been at the top of that pyramid, where what we see is kind of true multi-product, full stack opportunities at an enterprise level being deployed globally, right? These are more likely to have an opportunity for managed services, as opposed to just, we're sending you software, off you go and implement it. These are large, multi-million dollar opportunities. What's been encouraging for us is the volume of these that have been coming at us, that we've been developing, that we've been responding to. We feel really good about where we sit in those. What we've done as a field organization is organized around that, right? We have a channel that's run by kind of an inside sales professional that she has built over the last 12 months.
We have a field organization, and then going into 2020, we're going to have a handful of strategic account managers that have the kind of charter inside the organization to go get the best and the brightest to rally around those really transformational opportunities for us going forward. It's an organization that's gone from what I would say is somewhat monolithic based on the product set that we have, to really having three separate distinct channels to organize around, each with their own set of KPIs, each with their own set of metrics that we're looking at, each with their own quotas to get super tactical as we drive forward on it. In addition to organizing around these multi-product deals, these core deals, and these more transactional, one of the things that we've tasked the field with is helping us along that transition to a cloud environment, right?
As opposed to just selling AE, taking those 4,000 AE customers and migrating them over to the Cloud. Since July 30th of 2019 is when we launched Cloud, the pickup has been cautiously optimistic, right? We're cautiously optimistic in the pickup. It's been really, really strong. We're very excited about it. It's been in all of our geographies around the world. We've done new Cloud, not only new Cloud customers, but migrations of existing customers. One of the things that's been really interesting is the thesis. The hypothesis had been that end of contract, kind of end of current service plan would be a real trigger to start moving customers. Customers haven't waited for that, right?
Customers have started to move before the end of their service plan, which is an indicator for us that, candidly, that we hit the mark from a functionality standpoint, from a deployment level standpoint, et cetera. In December, when we launch APIs, that will be a really seminal moment for us as it relates to our larger customers, right? Our smaller customers are really somewhat self-contained in terms of how they interact. When you go to the bigger customers, lots of modifications, I have lots of integrations, I work with outside parties, et cetera. The API and the launch of that allows us to enter into really, I would say, tangible, tactical conversations about how do we migrate those bigger customers, the bigger service providers, bigger investment managers, et cetera. We're in active conversations with all of them today. They've had a view to the roadmap.
They've had a view to where are we going with the API. This allows us to talk more about not roadmap, but more about execution and how do we get you from point A to point B. The last point here is with the launch of the API is what it kind of frees us up to do is to really put wood behind the arrow from a marketing standpoint, from a campaign standpoint, to go really start to push hard on this in the first half of 2020. I believe the first time we're kind of talking about statistics and all that is at the end of the first quarter earnings call. We should have some good things to talk about in terms of what progress have we made.
On that note, the last part that I could talk about here is where are we in this strategy? There are a lot of moving pieces. T oday, we're talking about this last night at dinner, that we've got a lot of different initiatives underway. As a potential new investor or someone who's been around for a while, what would give me comfort is these things have been in play for a while, right? These are not things that we're starting January 1st. We're not in the planning phase for these. We have been working on these for some time. Some of these were in play long before I showed up, and certainly I've not lacked for things to do over the last 12 months, getting us ready to go on some of these. There's been a fair amount of execution already.
You look at even just take the third column there in sales readiness. Things are in place. Developments happened. The cloud we have learned from AOD, it's not a new world for us. Things as tactical as sales compensation, sales readiness, sales execution, those have all happened. As we go into kind of January 1st of 2020, I think Bob made this point. This is about our ability, our organizational willingness, our organizational readiness to just hit execute and to just run really hard and really fast. If that's the issue that we're facing, I feel pretty good about where we are. Now I get the pleasure of introducing Mr. Kalvoda. We debated his walk-up music. He was more Michael Jackson. I was a little bit more Metallica for him, but he's going to come up and talk about our global Appraisal Management advisory business.
Thanks, Matt.
There you go, I'll give you that.
Thank you. I won't do any moonwalking up here, so don't worry about that. As Matt said, good morning, everyone. As Matt said, I'm going to talk to you about Appraisal Management. I oversee the global Appraisal Management practice of Altus Analytics within Altus Group. I'm going to explain to you a little bit about what Appraisal Management is, what we do, how we help out our clients, then talk a little bit about where we are at this point. I'll get into about technology and data, one of our big focus and initiatives going forward as far as how we expand our services and expand clients going forward.
Show a little bit of a demo on some of that reporting that we're doing on that data, finally, talk a little bit about our expansion, how we're seeing our growth plans going forward, some of our growth initiatives. First of all, what is Appraisal Management? What is it we do? How do we help out our clients? If you think about it, we do valuation consulting work for any large institutional owner of many properties, of a large portfolio of institutional properties that has a frequent valuation process, that needs ongoing valuation needs. It really expands the whole breadth of the investment cycle from the acquisition of the asset to the disposition of the asset. We help out on the transaction side.
We'll do due diligence, risk analysis, purchase price allocation, sensitivity analysis, anything that is valuation-related, we assist our client in understanding the impacts of that valuation, not only on that property, but then on the overall portfolio as well. Once they've acquired the asset, onboarded on our platform, the biggest part and the core of our business is managing that valuation cycle. Anywhere from annual, quarterly, more and more on a monthly basis, even on a daily basis. We work with about 10 funds where they do daily pricing of their portfolio, is we assist the client in that valuation process. We bring the assets on the platform. We'll talk a little bit about the technology.
We administer the overall process, working with the third-party valuers, review the appraisals, and in some cases, even do some of the valuations, benchmark the valuations and performance of those assets, and then the reporting back to the client's investors, and even some cases, the fund consultants as well. Anything valuation-related is where we assist our clients and the investors on that process. Where are we now, and what differentiates us from anybody else providing that service out in the market? Well, first of all, we started this practice, we started this service about 20 years ago. It really didn't exist prior to that. In those 20 years, we are currently at over 120 institutional clients that we work on over 165 individual funds where we do this valuation process on.
Within those funds, it consists of over 8,000 assets, with a combined value of almost 2/3 of a trillion dollars in gross asset value. A lot of assets, a lot of clients, a lot of funds. Because of that, because we are the largest provider out there, we're also setting the market standards. It's the best practices on what's new and different. We also have the proprietary analytical tools. We built different systems to not only manage that process, the Altus Data Exchange, which is the workflow and the document management platform, but also the benchmarking and attribution analysis. I'll talk a little bit more about just how that technology and how that data flows into this overall process. As a result of that, excuse me, is we do 22 of the 24 ODCE funds.
The NCREIF ODCE index, the open-end diversified core equity index is kind of like the Dow Jones Industrial Average of commercial real estate. Of the 24 funds representing over CAD 250 billion of gross asset value, we do 22 of those 24 funds. We have great penetration, great coverage within the open-end fund index. There's open-end fund space. There's also the closed-end funds. There's the separate accounts, there's the REITs. There's so much more opportunity out there, where more and more clients and investment managers are looking at bringing these best practices into the other types of funds as well. We see a lot of runway there. Using the technology and what we've developed for the process, we're also collecting a lot of data as well. Over 400 data points on each of the individual appraisals.
If you take 400 data points on each of those 8,000 valuations every quarter, that's 3.2 million data points that we're collecting every 90 days. Not only collecting the data, serving that back to the clients where they can look at their individual properties, slice and dice their properties and their portfolios, also we're aggregating that data and anonymizing it, where clients can then look at their properties, their markets, their portfolios, and benchmark that and compare it to their peers, to the other 8,000 assets in that market. If they have an office building in New York, they not only know and understand how that property is being valued, how their property is being valued. How does that compare to the other 120 properties being valued that quarter? How does it compare from the prior quarter and prior quarters before that?
It's not only the technology, it's the data that is feeding that technology and helping out our clients. Probably, as has been mentioned several times here, it's the expertise on top of that. When our group came over from PwC in 2010, there was about 45 professionals. We now have a staff of over 200 professionals that are working with the technology, working with the data, and helping our clients interpret that data, understand that data, and actually actioning on that information and on that data. Out of the 200 people that we have, experience is very important, especially now we're 10- 11 years into a market cycle, of a up cycle. 25% of our staff have an average experience in the industry of over 20 years.
We've been through two, three, four market cycles, which is very critical in interpreting that data and helping out our clients understand where they're going with their assets. Because of that, again, the top 120 institutional investors, some of our clients, the Blackstone, the Brookfield, the CalSTRS, the Invesco, Morgan Stanley, they're not only here in the U.S., but we've expanded to Europe, we've expanded to Asia. We're expanding globally with our clients. As they're going global with their assets, with their portfolios, with their investors, they're looking for a global solution on this Appraisal Management as well. We're providing that solution, that technology, and that data back to our global clients and across the breadth of the globe. From a revenue model perspective, almost every engagement that we have with those 165 funds is a three -to -five-year contract.
Our fee model is on a per asset basis. Each of those 8,000 properties has a specific annual fee that is billed on a quarterly basis. It varies based off of the complexity, the type of process that we do, the frequency of valuation, but then also the complexity of the property. If it's a 300-tenant regional mall, different fee structure compared to a single-tenant industrial building. Overall comes out to annual fee that especially on a three-to-five-year contract, recurring valuation cycle provides great recurring revenues throughout that cycle. I mentioned technology and data is a very key part of where we're going forward. It starts with ARGUS Enterprise. Every single one of those 8,000 valuations are done in an ARGUS Enterprise model.
That data, that cash flow, that file is loaded into Altus Data Exchange, where that data is reviewed, integrated or collaborate with the third-party appraiser, with the client to review that appraisal, finalize it. We extract the data. Data is put into DataBridge, where the calculations are done to anonymize and aggregate that data for benchmarking purposes, for valuation benchmarking. After that value is done, calculations of the performance of that asset, of the client's individual portfolios, data is pulled from NCREIF, and we do the performance analytics. We do the attribution analysis. We not only understand how the client's properties are valued, based on that valuation, what's the income, what's the appreciation, what's the total return of that asset, of their portfolio, and how does that compare to an index? How does that compare to the NCREIF ODCE index?
Again, back to understanding is, have my properties, has my portfolio over, underperformed? Not only just has it over, underperformed the index, what's the cause of that? What was the reason for that? Was it selection effect? Was it allocation? Was it the markets? Was it the sectors I was invested in, over, under allocated? Was it the individual properties, the actual performance of the individual assets that I bought? Did they over, underperform? All of that helps our clients in just that whole, taking those 3.2 million data points that we collect, bringing that together, marrying it up with that valuation data or with the performance data, rather. It's the performance data, which is backward-looking, the actual performance of the assets, with the valuation data, which is forward-looking, a 10-year cash flow for that property.
Bringing that data together and giving our clients a clear, transparent understanding of not only their properties, but then how it compares to the peer properties as well. Next I'm going to just show you a little bit on the reporting side, because more and more we're seeing as we're collecting millions of data points, and that's marrying that up with lots of other data points out there. It's less and less about the data and getting the data. It's more and more about how you refine the data and how you interpret and digest the data. We're helping our clients, more How do I switch to here? Oh, it'll switch. Okay. You can switch.
Right now, what we do is we'll send our client. A client can go into DataBridge, and the individual properties, they'll see individual property, they'll see the value per square foot, they'll see pricing assumptions. They'll see all these individual metrics on an individual property basis. It's rolled up to sector, rolled up to market, rolled up to market sectors, and to the overall portfolio. When you have 100 properties, that's like 10, 15 pages of information. 10, 15 pages of numbers.
More and more to help clients interpret that and to visualize it, we're doing more and more reporting, like what we have here is. This is just an example of one of the types of dashboard reporting we're doing internally, where similar to what I said is a chart with a bunch of data points that they're getting, where they can see and compare themselves to the averages of the benchmark. You actually now can come to a dashboard. A client can not only see their blue diamonds there, where they are, I don't know how much you can see there, but the blue diamonds, where they are relative to the dark green line, which is the average or the mean in that market for value per square foot, for discount and pricing, and for occupancy, et cetera.
You can also see where they are within the dispersion of that data from the peer or from the benchmark. Within that green field, the 25th to 75th percentile, or the gray, the 10th to the 90th percentile. You can see that across each of those assumptions and valuation metrics. You can also see down below, you see value per square foot in not only each of the top 12 CBSAs within the U.S. and then overall, but then also the individual sectors. Into each individual market sector as well, each CBSA and sector there. You not only see that on a static basis, and then the individual properties down below, and you see the relative over/under performance, green being higher value per square foot, red being the lower value per square foot.
You can actually go in and start looking at other metrics. You know what? I only want to look at my L.A. portfolio. You can drill down just to your 16, or I believe it's 10, L.A. properties, and now get a sense of where is my performance, where is my valuation metrics relative to just that market or to just if I want to focus just on my 16 office properties, I can now drill into and see the information just on my 16 office properties that represent CAD 1.7 billion of value and start seeing that relative performance to the benchmark. Previously, 15 pages of numbers that you had to try to interpret and visualize that data, it's now coming to them. It's not only that, but you can now look at each of those individual metrics as well.
You might want to look at your discount rates and how that's dispersed against the different markets and sectors. Where I am. Looking at San Diego, does it make sense that my San Diego industrial and overall is higher relative to the benchmark, or Denver or Dallas, Fort Worth being lower? Very quickly visualizing that data, drilling down. The next step, we're now not only into the different markets and sectors, but now into the individual properties. You can still drill down to the individual properties, getting the performance, getting the valuation metrics and data, but you can do it selectively as you go through your overall portfolio.
That's just to give a little sense of where we're going more and more with taking the 3.2 million data points and making that much more consumable by the clients, and then taking it from there to the performance side and everything else with understanding, helping a client understand their portfolio and trends. You can flip back to the next slide. With that, the big focus on technology and data is where do we see ourselves? Where's the growth initiatives going forward? With that technology, with the data, it's with our current existing clientele. It's our current customers that you saw Scott Morey's presentation, how much real estate is seeing capital flows into real estate. Our clients are growing. They're buying more assets, buying more properties. We're growing with that.
More and more focus on the daily pricing with the whole, in the U.S., the whole switch from defined benefit to defined contribution plans, so the 401(k)s where you need daily liquidity, daily marks. Working more and more with our clients on more frequent valuations of the portfolios. Also new customer growth. Not only just new clients, new funds within the customers. I mentioned we work a lot with the open-ended funds. Every quarter, clients can get in and out. They need a mark in order to determine how those clients get in, or the investors get in and out on a quarterly basis. Separate accounts, closed-end funds, even REITs, they have less. It's more for reporting purposes. We're seeing because you don't just get a value from the valuation anymore, you get all of the other analytics and metrics and data.
They're seeing more and more value add from the valuation process. They're seeing more and more standardization and efficiency and technology involved with that, is we're seeing clients expand to their other portfolios as well. Finally is from a geographic side. I mentioned five years ago, we went to Europe, and we've expanded to over 1,200 assets in that market, been seeing a lot more interest in Appraisal Management services over there. Went to Asia last year, already signed up several of those global funds, global investors that are looking to bring a standard valuation process across all their portfolios globally. Also just with some of the regulations that are occurring in Europe.
AIFMD, Alternative Investment Fund Manager Directive, is there's regulations going in place globally that are directing investors to come up with or to have in place independent third-party valuation management practices, which, oh, by the way, there's a lot of value add from that as well that help them in managing their portfolio. That's a little bit about our growth. Where are we or where have we come over the last few years? Just in the past four years or in the past, probably since 2015, almost double at our revenue. 80% growth in revenue, 75% growth in both number of customers and clients, as well as the number of assets on our platform. Again, over 8,000 assets currently.
That's where the number of assets is, as we get more and more into that technology and data and what can be collected and served back to our clients, we expect to see this asset. As we expand more within our customers, we expect a lot more assets on the platform, which then is very circular. It feeds back to more data, more valuable data, and more valuable benchmark information back to our clients. That's all I have on Appraisal Management.
Okay, Rick, you want to stay up here? We're coming to the end of the section on Altus Analytics. As Bob said, we're trying to give you some insight, some depth into this part of our business. two very key parts of Altus Analytics, both solid businesses, growing, lots of potential for the future. Hopefully, you can see the insights around where we're going, the strategies we're employing. At this time, we can spend a few moments, for those of you who may have a question on any of the presentations on Altus Analytics this morning. I just assembled the team back on the stage, put them all in one place. If there's a question, I'll moderate some questions for a few moments before break. Left-hand side of the room first. Yeah. Right. Let me just repeat the question for those people online.
The question in the audience was, as we rewrote or moved ourselves into the cloud, did we have to sacrifice any of the functionality, I think, through the approach, the hybrid approach we've taken? I'll push that over to Dhinaker.
The answer is no. We did not sacrifice any functionality. I think we were very cautious. One of the pieces or one of the things that really helped us was that ARGUS Enterprise was built on a very solid architecture, and an architecture that supports an enterprise-level implementation, even though if it was in an on-premise environment. All we did was to try to help make sure that it's moving to the cloud seamlessly. Our key focus was so that we don't diminish any functionality, because that would have been very detrimental to helping migration if we had any limitations for the existing application. Even if you did implementations, like even accessing your database directly to pull information out of things that we couldn't do, we also enabled that support for users to move to the cloud, to help assist them with that process.
Thanks. There was a question on the right side. Gentleman. Okay. I'll add to that, and maybe Matt, you want to jump in, and even Bob, if you want to jump in on that. We have a fairly large addressable market as we talked about through the presentation. We picked debt as an example. Debt, from our perspective, is an equal size market to where we sit today. There's a massive opportunity in that particular adjacency. There are a number of other adjacencies which we could go to as well. The concept there was to give you a feel of we're not over-penetrating where we are, but we have at least, I will use the word a doubling effect of opportunity, at least that level as we go forward.
Yeah.
Matt or Bob, do you want to add to that?
Yeah. If you take debt specifically, because I think that's one where we spent the most time, it's the most logical extension for us. If you look at the lending market, it's just in pure dollar terms, is orders of magnitude bigger than the equity side of the equation. We have a current customer that's a lender that we're talking about that has CAD 80 billion in uncommitted loan. The market on that side of the equation is massive. Figuring out how we go in there, what our solution footprint looks like, what are the offerings, what's the value proposition, that's the work that we're doing right now. I think Carl's right. I think it's a game changer for us from a market expansion standpoint.
Bob, you okay?
Thank you. Now that I have the mic, I'm all made up. I do have a follow-up for Rick.
Yes, please.
Just a different question. Two of them. Appraisal Management, it seems like more of a managed services, technology-enabled managed service business. In the future, does it still reside in Altus Analytics? Why, if it does? I might be getting ahead of myself here, but on the Property Tax side, is there a similar way that you could take your learnings on technology platform-enabled repeating recurring services and bring that into a tier of the Property Tax business? Thanks for my questions.
Yeah, I think, first of all, just as being part of Altus Analytics, everything we do is working very closely with ARGUS Enterprise. It makes sense for us, not only from the usage perspective, but also we don't have thousands of clients. We have 110 clients, maybe want to double that at most, just because we work with the largest investors, all of which are currently ARGUS Enterprise customers as well. It's very symbiotic relationship, and it makes sense for us to be part and working closely with ARGUS. It's actually something more on the Property Tax side as well. We're working more and more closely, and it gets back to the ingestion of data, not just us, but for our clients as well.
Bringing that data together, and it gets down to that we're very focused on the asset level. It's not just logging into a system and seeing the valuation data, logging into another system and seeing the performance data, but it's seeing everything related to that asset within one single sign-on with one access. When you log in, you see a property, you see the assessed values, you see if a Property Tax side is working with our clients, not having to go somewhere else to get that. Because not only do we work closely in the data from the Property Tax side, the appeal process, the assessment value, flows into the valuation. Everything is valuation related. All of that comes together for a client.
The more we make that more seamless and one place for acquisition, or of looking at that data, it just helps our clients out more and more. I'd say not just with ARGUS, but even with Property Tax as well, is very key to bring all that together and work closely.
Next question, gentleman with the glasses first, I think had his hand up. Thank you. Sorry.
Hey, Carl. You mentioned that Cross sell was your largest opportunity. Do you have a sense of how many of your customers would take on a full portfolio or what other products your customers would take, and what that would mean in terms of an opportunity?
Let me just clarify the comment as well. It is the largest volume opportunity. Probably the largest revenue opportunity is our focus on our larger top 200 clients, where they're buying much larger solutions from us. I think today the statistics showed that the penetration level of multi-product in the volume area was quite low. We have a lot of runway to go for additional users, extra products there. We also have the top 200, I think only five of the top 200 have deployed ARGUS Everywhere. We have a tremendous opportunity in the top 200 to continue to get more of what we originally have and extend the product. Matt, do you want to add?
No, that's completely correct. The other interesting part about that is if you look at market segmentation, just take the U.S., for example. There are, I think, roughly 7,500 registered investment managers. A couple at the top and a huge long tail at the bottom. Every one of those investment managers can use the stack that we can present, right? From an asset to portfolio to a fund. We think there's a huge opportunity out there for kind of this full-stack deployment of the technology that Carl and Bob have put together.
Just a follow-up. You also showed some different processes. You showed some partners within those processes. How do you think about working with these other companies as partners versus displacing them and getting into some of those? Thanks.
Perhaps I'll open it up and again, you guys jump onto this, and Scott maybe. My discussions, I think Bob's discussions with some of our largest partners and the state of the market is they're looking to partner with us and other large vendors. They're looking for us to interact and to move data between us seamlessly and take away from the problem, which Scott identified and Dhinaker identified. There's a lot of market pressure on us to be a lot more open, hence the API strategy. We think that this is the right place for us to be going quickly for our larger partners. We think there's a lot of revenue opportunity for us to, one, support the approach, and two, the data coming back, being that platform to centralize the data is another key strategy that Bob alluded to as well.
Scott, Matt, anyone want to jump on that? Take it.
Yeah, I think I'd just reaffirm it. I think there's consistency in swim lanes, if that makes sense. Again, going back where as you look is from sort of more tactically on the accounting side and the lease accounting and kind of how that works. There's no perfect solutions globally in place. Again, with the diversity of asset class and geography, they need a means to aggregate that data in some location. There really is nowhere to go, actually. I mean, for years, the industry's been building in many cases. You have, as Dhinaker showed us this chart, you've got certain tools that kind of help in some fashion. I think ARGUS is in a unique position to play that role. That's why those partners, I think, want to participate and want to establish relationships with them.
Yeah. I would agree with that. I think one of the things that, if I were to give us some credit around, is staying very focused on what we think we're good at, and that's asset investment management. There are a whole bunch of tangential technologies out there that we're not going to play in. To Carl's point, us being an open, more interconnected part of that ecosystem is going to be absolutely critical from a customer's perspective. At the end of the day, if we're doing right by the customer, the rest of it'll figure itself out.
Let's go for the gentleman in front. He was
Yeah, just got a question on Appraisal Management using data that you're collecting from clients in other areas of the business. I would imagine your clients there are sensitive about that data. To what extent can you use it outside of Appraisal Management in other areas?
Yeah. No, confidentiality of data is very critical to them. I mentioned when we aggregate the data, we anonymize it. As you drill down into market sectors, there's not enough. We have a three-five rule if there's got to be at least three managers and five properties before we show a benchmark. We make sure there's no way anyone can back into and see anybody's individual asset or any individual data points. We're very focused on that. I will say, just from the client perspective, they're opening up more and more, and they're seeing, a lot of times we say real estate is 10, 15, 20 years behind the other asset classes. Part of it is just that sharing of data, that information being out there, being more ubiquitous.
They are actually opening up more and more and understanding the value of sharing that. 30 years ago, you had a sale transaction, you guarded that. You knew something about some property that sold in the market. That was your competitive advantage compared to everybody else investing in that market. Now there's sales transaction data everywhere. Everybody has that, and it makes real estate as an asset class that much more better, and advances it as an asset class. I think clients are seeing more and more just data in general. Again, we're very focused on the confidentiality, but being open to sharing it with that confidentiality is they're becoming much more open to that. I think 8,000 properties, sharing quarterly, daily valuation data through that benchmark is a testament to that, is how things are.
Next question. Gentleman there.
A question for Scott. How has your role and your team's role changed since being part of Altus, and what can you do now as part of a larger company?
That's a great question. I'll answer that in a couple of ways. We are remaining true to kind of our market positioning pre-acquisition, meaning our number one goal is to be trusted advisors to our clients. There's a level of objectivity, independence goes with that. First point. Second point is that there's a lot of market insight we can provide relative to the product direction and other parts of the organization within Altus and ARGUS that we think is valuable. We think, and I think personally, that we as a firm, ARGUS is uniquely positioned, and it really is, in some extent, I'd argue, a non-competitive product other than categorically in certain areas you see people kind of bubble up. We're actively participating in providing our thoughts around what we see and how it might calibrate and impact the roadmap.
The other level, going back to the point I just made about ARGUS being a unique product set, we now have an enterprise level, Matt and I, discussions with key accounts about how we do this together. We've been fortunate, I think, with the level of relationships we've had in the organization of what tiers. In fortunate in their trust and belief in us and our opinions around that. There's a lot of collaboration going on relative to some of these key global accounts and some other accounts actually about how we work together to get to the right solution for those individuals. The last part I'd say too is we were North American based. We were doing work in other parts of the world, but more on a limited basis.
We're seeing greater demand on our side, which we thought as part of the transaction, we thought it would lead to opportunities for us that we may not have achieved otherwise, whether domestically or outside of North America. That's holding true as well, which we think is great.
Go right next to you, gentleman there. We'll go far side.
Thank you. Just when you think about the breadth of your growth opportunities, the ones that you mentioned in the presentation and then incrementally that we've talked about in the Q&A, what do you think of in terms of, or how do you view the bottlenecks to pursuing that growth? Is it sales? Is it product development? Is it accelerating the rate of customer adoption? Perhaps none of the above.
All of the above. All of the above. No, as we said, we've done a lot of the hard work now. We're in execution mode. We have different strategies. We have to make sure we allocate our resources internally in the correct manner. We have to make sure we're being focused to these strategies, that if we're going after the transitional part of the strategy with the sales team, it's getting the balance with the sales team as we execute on that, after we go after the top 200, after we go after market expansion. Matt is tasked with bringing that balance together. I think that's really important. At the same time, organizationally, be ready to deal with all of this as well. We've had a number of months in the AOD experience around cloud that has all brought this back to the platform.
Operationally, we have to be ready for this. We think we put a lot of time, effort, and investment in making sure that operationally we can support the execution of these strategies as well. It's not just going after these things, it's how internally we deal with the financial systems. We've implemented Salesforce, for example, across the whole organization, so there's complete transparency between the different sales teams globally. We put new financial systems in, so a consolidated financial system that we're all using for transaction, new provisioning system. All these internal building blocks, we actually made the investments in 2018, 2019, and they're coming to fruition as well.
Yep.
Does anybody go and anybody else want to add to that?
Yeah. I don't think of it necessarily in terms of bottlenecks. I think of it more in terms of risks. At the end of the day, what would keep us from hitting our objectives? The biggest one that I see is distraction. The path has been laid out. Bob and Carl and Angelo and everybody has done a really good job at putting us on a path for the next three, five, seven years, and it's maintaining the focus. Old phrase, right? The main thing is the main thing. Making sure that we stay focused on the main thing is the biggest risk I see. I don't necessarily see capacity bottlenecks or choke points in the system somewhere. It's just making sure that this group stays focused on the main thing is the biggest one that I spend a lot of time thinking about.
The gentleman behind you.
I've got a question on slide 39. One of the bullet points there, you say there's a 20% price premium for cloud over the legacy on-prem. I'm just wondering, is that a comparison from a one-time perpetual license to a recurring cloud license? What timeframe are you making that lifetime value comparison?
Yeah.
That's equivalent to, so it's what on-premise subscription would be to a cloud subscription.
Okay, great. Thanks.
Starting in front, sorry, then we'll come across to the left.
Yeah. You spent a lot of time talking about data collection here today. I'm kind of curious, is there an incremental revenue opportunity on the data side that you haven't talked about, or is it sort of weaved into the current solutions here?
I think we've been alluding, I think Bob started, as we went down that path in Bob's presentation, I think we were alluding to the opportunity that's coming. Okay? That there's a large amount of data now in the ecosystem. With cloud, we get more access to that data, with our appraisal business being more integrated into our core ARGUS business. We have different types of data with APIs bringing more data onto the platform. We have the ability in the future to start developing more product around that data. There are opportunities coming very quickly to us. We've made sure that we have the technology platforms and the approach and the contractual ability to do certain things, but now we're building up the data. It is a future for us. It was on the adjacent new opportunity part of my presentation, but it's definitely in our focus.
Is it too early to give us a bit of color on how something like that would look here?
Sorry, can you repeat?
Is it too early to give us a bit more color on how that data monetization would look?
A little bit. We know it's a large opportunity. I say we're looking at it from two angles. We may build new product by ourselves, partner with others to build product, and we'll certainly be able, as I think Dhinaker mentioned, to bring it back into our own workflows and create new applications that we can sell with that data. We're still in the early stages. We're still looking at the types of data that we can see coming towards us very quickly. As we architect the roadmap forward now, it's definitely in our future plans to architect this in.
Yeah, just to kind of add to that. As Scott said earlier in his presentation, he talked about how people are more hungry for financial and operational data, and we've started seeing that as to our market research. Even Bob mentioned that commercial real estate's getting younger. People are trying to focus on trying to look at this data as competitive advantage. We learned a few things as we started looking with ARGUS On Demand, for example. There was an earlier question around data aggregation and concerns around that. We have over 1,000 customers that are on our ARGUS On Demand hosted solution. I think barring one or two customers, zero of them had any pushback on what our clause was in terms of being able to aggregate their data and give them additional value.
All of this really helps us and sets us up, to Carl's point, of truly trying to understand the type of data that we're bringing in, the type of data that we'd add value, either in the valuation workflows or in the acquisition workflows, and help address what we are good at and what we can do and who we can partner with to help support this capability.
Right. I will reiterate, it's the cleanest, most pristine data that is in the industry coming out of that platform. That is a clear differentiator for us. Yeah, and Bob just made the point that we're okay to get paid in software on that data as well. Gentlemen there.
In terms of the global expansion opportunity, can you talk about what your customers or who your customers are currently using in those regions, if there are ARGUS equivalent that is incumbent that you have to displace, and how difficult that might be? Maybe if they go the other way-
Yeah
use those guys coming into the U.S.
First of all, and again, others can jump in onto this one. I don't believe there's an ARGUS equivalent standard. We are the standard. We have the largest footprint. As we enter a market like Germany, a large market, there are some smaller incumbents, who basically focused it more in the SMB market that had the local functionality. Now, we brought that functionality, and also France, I would say the same. We did acquire Taliance. Now my apologies, Taliance in France, which gave us a quick step into the French market and gave us a quick step with the understanding of the functionality and things we had to do to enter that market. We're more facing off against some smaller geographically based incumbents. A lot of it's Excel as well. Excel is still our biggest competitor.
As we begin to push into these markets with the benefits that we've just basically alluded to, we think that the push we've seen or the results we've seen so far will continue as we grow those markets. You want to jump on?
Yeah, I would just say it is. Maybe to take that down a level. If you look at the different markets that we really operate in, Bob talked about kind of the five or six or seven key markets that we really spend time in. There's a very different level of maturity around the world. For example, in the U.K., there are well-entrenched small competitors that we are cautiously optimistic in our ability to displace quite rapidly. We've had a lot of success over the last 18 months. Germany, there are two that you could think of. France, Taliance was really the one with FinA sset, so we acquired that. If you go to Asia and you start looking at Singapore and Hong Kong in particular, it's still Excel. Like it is still really Excel. There aren't many local valuation competitors there.
Australia, we bought DYNA as part of that, and so that was really the dominant one. To Scott's point, although I would dispute the non-competitive because of the guy with the quota. It is a really good market for us, especially in these kind of large global opportunities. There really isn't anybody else that offers the value proposition
We've got time to take one more question. Right at the back there. Thank you.
Hi, thanks. Going on the Appraisal Management side, how much of that business right now is consulting software, and then what you need to kind of monetize more of that data?
One, none of it's software. What we do, that fee that we come up with on a per asset basis, that's inclusive of the data and the software, so the technology that we have. That's an all-in fee that we include in there. Almost the same on the software side. We're happy to take the fees from the service side for the data side of it. That's just a part, and really how it's evolved. It was a natural byproduct of what we were doing. We started with one fund originally, started collecting the data, we started putting it in Excel, then we put it in a database, and we started building tools on top of it. It's evolved over time. It's a very critical part of the valuation management, of the Appraisal Management process. It helps our clients.
It's an all-in-one solution, one fee for all three components.
Okay. Okay, I'm going to wrap this part of the session up. We'd like you to take a 10-minute break. There are refreshments outside of the room. We'll see you back in here in 10 minutes. Thanks.
[Break]
Okay, welcome back. I thought that was a great session this morning. When we talked about how we were going to set up the agenda for the day, what we were trying to do is really focus on strategy and execution in the front half, but you'll get another crack at Altus Analytics when we do our financial modeling and start talking about how we expect the business evolve. We didn't want to take away from some of the big building blocks of success. Let's talk about Property Tax. The only hard part of this is that was a tough act to follow, but I got a great group of folks up here that are going to help me try and get through this.
Right at the top of this session, really want to frame up a little bit about how we're thinking about Property Tax. First of all, this is a business that really is about really driving market share into the markets that we own. The biggest shift that we've gone on in 2019 is to start thinking about how to make it a global business, where we can invest in capacity, particular markets, and methodologies and strategies, and then amortize those over all of our business. We'll try and talk about that. We do that from a really great platform. Each of these business leaders and the business strategy that we've evoked in the individual markets have proven to be successful. When you look at it, we're really driving in three key markets, Canada, the U.S., and the United Kingdom.
In those markets, we basically have now got to the point where we have over 50,000 customers, a factor higher of establishments. What comes out of that, building on the theme of the last presentation, is a huge amount of data. Good revenue growth by share. We put ourselves in a really good place in the market. We haven't spent a lot of time on this, but we have really focused or had a lot of questions about the challenges in the U.K. and Ontario. As you're going to see and as we go forward, that's only a small part of the story. Really, we have a balanced business now where effectively 1/3 of our business comes from each of the markets, and we have an amazing growth profile going forward.
that's a little bit of the reason why we're thinking about this as more and more a global business. The competitive advantage in tax starts with our people. By being the share leader, by having the strongest position in every one of the markets, what we end up having is the ability to be the company that is the best employers, and in individual markets, you end up with the relationships and the teams that want to work on the best assets. if you look in Canada, our turnover of employees is really low at the senior level and even at the intermediate and lower levels in our business because we have the best portfolios, we have the best way of doing the business, and Terry will tell you it's because they have a great leader. Isn't that right, Terry?
That's right. Pretty much.
That could be said universally. When you're the market share leader, there's always demand for people. Alex may talk about this today. The problem is you can't leave Altus Group and get the same productivity that you're going to get at one of our competitors because you don't have the tools. You don't have the data. You don't have the scale. You don't have the capabilities that Altus Group does across the market. These things all work together. You can't get a great outcome for the customer if you don't have the data. You can't scale if you don't have the opportunity to understand individual markets and how that information scales globally. You can't invest in the technology. Most of our competitors, particularly the large companies that do Property Tax as one of their products, can't build the technology infrastructure that we have.
These competitive advantages work together to get great results. Because a lot of the results, the outcomes of the work we do become public data, we can see our productivity, our performance against the competitors in the market. It's a known value proposition. For me, one of the things that has been really interesting is when we go in, not unlike a software company that goes in and talks about the value their software drives, we can go into our clients and show our returns, the benefits that they get by using Altus Group because of our model relative to our competition in all the markets we serve.
For those that are coming up to speed on what Property Tax is and what tax appeals are, I thought we'd just take a couple of minutes and just really talk about a simplified view of the different elements of Property Tax that will set up the next couple of slides that talk about how we're now turning this into a business model that employs data software and professional services. Terry, why don't you just give a-
Sure
... couple of minutes on the framework of Property Tax appeals?
Sure, Bob. As Bob said, this slide's an attempt to give a simplified overview of the Property Tax business. Property Tax is, for those of you who don't know, is the largest source of revenue for local municipalities and school boards. It's also the single largest operating cost for our clients' properties. The way Property Tax works is the municipalities and school boards derive their budget of taxes they need for the year. They distribute that to property owners based on the relative value of their property. From our clients' perspective, the cycle starts when an assessment cycle comes into play. Some jurisdictions will reassess every year. Some jurisdictions every two years, some every three years, et cetera.
At the start of an assessment cycle, our client will get an assessment notice, and it'll tell them what the assessed value of their property is, which is then the basis for their Property Taxes. We then move to the second spoke in the wheel, where, the client asks us to review all of those assessments on their portfolio and determine whether their assessment's fair, whether it's above market value, whether it's equitable compared to other properties of similar status. On the basis of that review, then we'll then make recommendations to clients on whether there's merit in challenging that assessment.
If there is, we then move to the third spoke in the wheel, where we're either entering into pre-roll negotiations with the assessment authority or filing an appeal to the tribunal and then navigating that appeal right through the process to a hearing and ultimate conclusion of the appeal. We probably find in most jurisdictions, most of our appeals settle before they actually get to hearing. We do provide the full negotiation services. If we have to go to hearing, we'll provide the advocacy for the client, and we'll also provide the expert services. At the end of the process, we'll get hopefully a reduction in assessment. We've been very high success rates across the board on our appeals. It turns in on the fourth spoke, a refund for the client. We have a very high-value service.
We have high success rates on our appeals. As the previous slide showed, 77% of our contractual arrangements are on a contingency basis. That means we don't get paid till our client gets paid, and so it's a very low-risk proposition for our clients. I think in the U.K., the process is very similar, just basically replace market value assessments with ratable assessments based on gross rental value.
Cool. The reason we wanted to do that is that at a superficial level, that doesn't feel like there's a lot of barriers to entry on this business. What we have absolutely done is differentiate our business. Just to build on it, three major markets. Not only do we find ourselves in a position where we get the benefit of our advantage as a solution provider. This slide also tells you that you're going to see positive trends in Property Tax. As a simple example, at the bottom of the slide, we just get a natural uplift of Property Taxes that comes from the natural origin or orientation of the increase in taxes as you move forward. More and more, we find ourselves in really accommodating or creating value or product around Property Tax. I'll show you a little bit of that.
If you take the Property Tax assessment, it's core to what we do in every market. Right beside that, we do things like due diligence, tax consulting, tax management, and budgeting in Canada. One of the big trends that's happening in Canada, a little bit driven by us and our success, is that people are now starting to outsource tax, and we have an outsourcing capacity. We'll go to a client, we'll show them their internal performance versus our performance and give them a proposal to outsource the whole tax process to us and frankly, even take their people, not unlike what you'd see in a traditional outsourcing agreement, where we can help them migrate their data and information onto our platform. That's a trend that's really going on. We've done three or four transitions over the last three quarters with some of the REITs.
We're in-house at companies like the large pension funds, where they have massive portfolios. Frankly, with some of these in-house organizations, we're actually taking them on the road to have a North American relationship with us. In the U.S., we also, for example, have a very healthy personal property business. The reason that the personal property business is important is that in some complex property, you also have to value the contents, the machinery, the equipment inside that asset. I'll get Mark to talk a little bit about that as we explore what we're doing in healthcare. This creates complexity, but also advantage in our market. In the U.K., we've actually built out product capability for the large owner-operators, where we are starting to do things like an empty rates offering. We're giving them good insight on how they manage a portfolio.
We move upstream in terms of doing lease consultancy, because it's a 50% of our revenue comes from a tenant-based system. By doing lease consultancy, we enter into a relationship where we help them get in, particularly for larger tenants, where we help them get into those premises, and we earn the ongoing tax revenue as we go forward. It's not just about Property Tax, it's not just about our technology and systems, it's about building adjacent capabilities, products, and services as part of the value chain.
What I love about this business, and I've been on record a few times of talking about it, is that we already have a leading industry position, and in every market, we've come from a starting point where it was completely unconsolidated. When we started with Canada, which was the original business, this was a regional business where we accumulated two or three of the big players, and then through organic and tuck-in acquisitions, now we have 60% share in the large customers in Canada. Similarly, Alex and I were talking about it, literally seven, eight years ago, we were at 3%, 4% share roughly right in the U.K. market. Alex organically took that up to 5% or 6%. We bought a company called CVS that got us to roughly 10%.
Since buying CVS and driving the changes that we've had, we now operate around 20% of share, biggest by far in the market, and our stated objectives are to grow that by another 50% going forward, where we'd like to operate in the 30% share basis organically, and there's still opportunities for tuck-in around the different industries and opportunities that we were going after. Scale and share really gives you an opportunity. Finally, in the U.S., our approach to the market, because it's a completely unconsolidated market, is to take an industry approach to the business and target states. The center of gravity on the U.S. market is Texas. Strong player in the Texas market. We identified certain states that we wanted to be in, Maryland, Washington. We're doing some really interesting work in some of the middle states.
We actually wrap a lot of our work around this industry model in the U.S. so we can be a national provider. Very quickly, we become one of the top three providers in the U.S., but most importantly, we're the fastest-growing. The great thing about this business is that taxes are forever. I showed you on one of the previous slides, there's a natural growth that we get, particularly in a contingency environment where we get paid more for the work as the values go up, which inevitably they do in every market. When there's volatility, we do really well.
When the Alberta economy went down, it was one of our highest-performing markets because up or down creates volatility. When economies go sideways, the governments want to continue their tax revenue. They create opportunities for us through that necessity that we can take advantage of. It creates more opportunities to get good outcomes for our company. We can grow through acquisitions. We can take targeted acquisitions that are lower margin, put it on our platform. They want to come to us. We're the acquirer of choice because of our culture, the team, the orientation. Most of the people in our business have entrepreneurial backgrounds. We showed how we can create a culture where you can be a business leader as part of our business, but we also put those acquisitions onto a better model where they have better access to technology.
One of the big things that you need to know is that this is a recurring revenue business. The measurement we use for recurring revenue is the fact when we go from one appeal cycle to the next, we carry customers in the mid-90s as a percentage as we go forward. That allows us, not only because of the results we get for them, because we have models that allow us to carry them forward and contracts that allow us to carry them forward as well. We're working on consultant productivity, data-driven productivity, and really, really find ourselves now with a shift to contingency pricing, where now 70% of our revenue comes from contingency pricing. This is something that we've driven towards. With some of the large customers, we even come up with contracts that allow for win-win.
We'll charge them some part of the contract at a time and material basis, but we also will drive contingency. Customers love that because it's low risk for them. All of these things drive an economic model for our business that's fairly powerful. Look, of course, there's competitive pressure out there, and in virtually every individual market, we see price pressure on our business, but our wild card is the public performance of Property Tax says we always do better than the competitor, and our customers are not going to be swayed by lower price when they can get a better outcome, better value from Altus Group. Most of the risk around economic or legislative changes always lead to better outcomes or better appeal opportunities. With that said, what I'd love to do is just start getting some of the other folks involved here.
I'll set up right away the idea of the way we run the business is to make sure that the five drivers that create predictability, revenue growth, and margin are as follows. It's volume and value of appeals. The more volume you have, the higher value. That is the input on your economic drivers. Our success rates create stickiness but also better outcomes in a contingency model. The contingency contracts allow us, the customers, to actually take a bet on us, and we can drive contingency up through the combination of value and market share when they have less choice. We drive better contingencies. Frankly, as you go into the mid-market, they're less oriented to understand the value of real estate, and we can get higher contingencies on that because they don't have the in-house expertise or the knowledge about Property Tax.
Big driver for us, particularly in the U.K., but we're taking that into Canada more and more. Obviously, operational productivity, putting systems, things like machine learning, robotic process automation, the ability to do one appeal, repeat that appeal is really critical, and volatility is really good for us. The more volatility, the more at bats, the more returns we get for our customers. That drives us towards having a highly predictable, good revenue growth, nice margin expansion business. We, as a company, Property Tax, are also driving a digital transformation that's allowing us to make sure that we looked at tech-enabled efficiency, data-driven insights, a modern service delivery, and data-related businesses. Question's going to get asked at the end of this, how are we going to monetize the data? Not unlike what I described with software. I don't mind getting paid in software.
I don't mind getting paid in contingency fees. More and more, we're looking at the massive amount of data that comes out of our tax business and imagining that we're going to be able to turn that into good value for our real estate customers, good value for our partners, and good value for our company. With that said, the global strategy is one where we built up really very, very cool competencies in each of the markets. The primary competency in the U.K. is a volume competency. It's not to say that we don't do major accounts. Alex, in the last year, has started deploying some really interesting industry models because of the size of our business. Their capability and the work they've done around data in terms of volume is really, really exceptional. We'll get a chance to talk about that.
Similar in the U.S., in its formation, this was originally an industry business. What we do in healthcare and how we go after the information around healthcare to create differentiation is really, really cool, and it's something that we're deploying now in other markets. I'll give Mark Bedford, who runs that business, among other businesses in the U.S., to talk about that. Finally, in Canada, we're the market leader across everything. We have a really, really good share, but we'll get Terry to do a little bit of a case study on one of these major accounts opportunities that are going forward. Why I love this slide is when you think about our global strategy, what we're trying to do is build capability, data insights, technology, business approaches that allow us to win in all three spectrums, volume, major accounts, and industry.
With that said, I thought I'd kick it off. This is an opportunity to talk about how we achieve some of these great outcomes for our business. Terry, why don't you go first? Talk a little bit about the Toronto Bank Towers appeal.
Sure, Bob. Thank you. Bob mentioned volatility, and this case study is an excellent example of how that volatility can turn into an opportunity. It involves the six major bank towers in the financial core of downtown Toronto, all of which are trophy assets for our clients. In 1998, the City of Toronto introduced market value reassessment for the first time, and it was the first reassessment in the City of Toronto that had occurred in more than 50 years. You can imagine the volatility of that and the difference in changes in markets on different properties over that 50-year period. With the result of this reassessment, the taxes on these six trophy properties was supposed to have gone down significantly. There was a bit of a political uproar in the City of Toronto, and then the city introduced what we call tax capping.
What they did was they limited the increase in taxes on all commercial industrial properties in Toronto at 2.5%. Immediately, we kind of thought, "Geez, we've just been regulated out of business." Who's going to want to look at their taxes if they're only going up 2.5%? To fund that cap on taxes, what they did was they clawed back the decreases that other properties were supposed to see or supposed to realize as a result of the reassessment. These bank tower properties, whose taxes were supposed to go down drastically, they had 93% of that reduction clawed back, so they only saw 7% of the tax reduction they were supposed to get. three years later, 2001, there's another reassessment occurs.
As a result of volatility and shifting of market values, suddenly the taxes on these properties started to go up, even though they didn't realize the tax decreases they anticipated they were going to get. This involved all of our largest clients, and the logos of some of them are up there. The six trophy properties, downtown Toronto, all major clients. Some of them have flipped through other clients over the years. Can you just go to the next slide, Bob?
Yep.
This slide shows the results of the taxes. The red line at the top is what the taxes on these properties would've been collectively had they not filed appeals, contested their assessments, just paid the tax bills they received from the municipality. Blue line shows the result after the appeals. You see on the far left side there, 2001, 2002. We're starting at 2001 in this chart. Taxes are going up. They should've been going down prior to that. Now they're going up. We filed appeals for the 2001, 2002 tax years. We didn't get started on a hearing until 2005. It takes a long time in Ontario to get through the process, and we went through 65 days of hearing at the Assessment Review Board over three years.
We got an interim decision of the board in 2008, and through those hearing days, we had five different expert witnesses, all from Altus, that gave evidence at this hearing. In 2008, we got an interim decision, and the interim decision decided on most of the issues, and we won handily on all of them, pretty much. We went off to the divisional court, Court of Appeal. Court of Appeal sent it back to the Assessment Review Board to carry on with the hearing. We started carrying on with the hearing, and in 2012, we reached the settlement of the appeals, then resulted in the lower taxes there. In the interim, you'll see where the red graph kind of peaks and then drops off a bit.
That was in the middle of the hearing where I think after the interim decision came out, the assessment authority then had to do another reassessment for the next four years. You can see they obviously sharpened their pencils. They knew they were losing, and they reduced the values. We then got retained on the next reassessment cycle for 2012 after we'd settled the old appeals to pre-negotiate the assessments for the next four years. We then got retained again in 2017 to pre-negotiate the values for the next four years. The assessment authority was a willing participant in that because we'd taken them to court, we'd beaten them up. They realized that they had to deal with us, and they reduced that.
Over the course of all of that, we saved the clients over CAD 146 million in taxes, which is probably understated because it doesn't reflect what could have happened if we didn't pre-negotiate the values or if the assessor hadn't sharpened his pencil on the earlier reassessment. The taxes on these buildings, you can see from the left-hand side to the right-hand side, over that period, 2012 - 2019, taxes have gone down 12%, while municipalities are all in a state where they're constantly increasing taxes on other properties. All in all, a really solid outcome for some of our most major clients. Recurring work, we were constantly working on a time and material basis on these properties over that period.
Yeah. The interesting thing about that is if you save CAD 146 million in a growing market, this is how you have staying power with your clients. You can be sure the list of clients that Terry showed up there want us representing all their portfolios across Canada, which is why you end up in a place where you have 60% share with the largest clients. Terry now is driving a model to go into the secondary markets across Canada with a volume approach that is similar to what we're doing in the U.K. Alex, why don't you talk a bit a little about London hotels, but then back into a little bit about your overall strategy and productivity for digital transformation.
Yeah. Okay, so this is a quite neat, simple little case study that will hopefully give you some real insight into how the volume model works in the U.K. This one, this example centers around a group of clients that operate two to three-star hotels in central London. The early work and the early evidence suggested that the assessments were too high, so we start the appeal process on behalf of those clients. Early engagement, we discovered through our discussions with the Valuation Office that this evidence was compelling, and we were going to see significant reductions on behalf of these clients as a consequence. More interesting was that this evidence wasn't unique to these specific hotels. Any similar type of establishment with the same qualifying criteria were going to end up receiving the same kind of reduction in their assessment.
In our model, what happened then was we pushed this to our lead generation team, who then extracted and profiled the data to identify every other opportunity that existed in the rating list with the same qualifying criteria as an opportunity. This then gets pushed into our sales team, and as that moves into our sales team, that data gets profiled, and then gets a bespoke go-to-market message. As the engagements and the new instructions come in through the door, the client services team then step in to manage these new clients through the onboarding and the gateway process. In simple terms, and on face value, all we've really done is taken a good but limited opportunity and turned it into a bigger one.
What you have to appreciate is that this is only one example of this kind of work that we're doing in the U.K. There are many, many more similar examples that we're running concurrently in all sorts of locations on all sorts of different property types. Really what this case study is talking to is a business model that is focused around scalable, repeatable success that is driven by data-enabled opportunities and sales, and then supported by a separate but integrated process management capability. When you look at the results, if you flick to the next slide.
Sorry.
What you actually see behind those numbers is greater success rates, improved efficiencies, and most importantly, greater value for our clients and customers. In this example, that's evidenced by about GBP 6.3 million worth of savings for 64 odd clients, happy clients, 26 of which were existing clients when we started this process, and 38 of which are new to us as a consequence. That, in a big way, talks about how the U.K. model works.
Yeah.
Every time we take success, we're looking to turn one job into multiple jobs, and that's how you improve and drive that margin improvement.
Right. The productivity that you derive from that in terms of being able to reuse appeals with evidence, and particularly what I love about the U.K. model, we don't limit this to our own success. We have a data team that is evaluating what some of the other competitors are doing, and if they have any kind of a success out of appeal, we turn that into sales leads. Maybe you'd talk about that a little bit.
That's exactly right. Every two weeks, there's a schedule that reviews changes that have happened within the rating list. We track all those changes. We look for new occupations. We look for mergers. We look for splits. We look for any kind of reconstituted assessment. From that gets pushed into our sales capability, and we'll find new opportunities from that. As Bob says, it's not linked only to our own success. We'll track movements in the list that are generated by competitors. If we think that we're seeing a trend, what we'll do, because we have the capability of doing it, is profile that data really quickly and get it into a sales capability that is pretty unique in terms of our market.
Our ability to extract more opportunity from each of these changes is much greater than it would be if we didn't run the model that we do.
By the way, Mark Walker is Head of Finance and Operations in the U.K., and Amer Rasul works with me globally around finance and operations for tax. Mark came from CVS, and as part of our transformation, we had a three-way team. We had the Altus team, we had the CVS team, and we brought a third-party consultant in to actually transform the way we do business in the U.K., where in each part of the process, we identify process improvements, technology, and people to actually optimize that part of the process. Why don't you take two minutes on that, Mark?
Yup, sure. I think in terms of the output from that as well, it's around data, I think coming back on this data topic, and then also building the suite of MI around it as well. Really, if it moves, we measure it, and then we actually use that data to feed back into the business. Alex has talked about from a sales perspective, a lead profiling perspective, but it happens right across the business. I think generally around the business as well, if they see Alex and myself turning up, they're kind of looking to see what trends are we now spotting that we actually want to then build back in the business.
The other comment I was going to say in the U.K. at the moment as well is that in the current 2017 rating list, the government have introduced some more barriers, really, to barriers of complexity, really, in the system. Actually that's benefiting us twofold because it's historically always been a proportion of the market in the U.K. that have tried to actually go through the process themselves. Those barriers basically are making it completely impossible for somebody to do that process themselves under Gateway, under CCA. They're going to need an agent to support them through it. The other thing it's also led to is that the way that the business in the U.K. is structured around volume approach, so we have departments that are specialists in doing each aspect of the process, and this is kind of how we structured ourselves.
Our competitors, by and large, they tend to have one person look at the whole thing, and they're just really, really struggling to get their heads around Gateway, CCA, and so on. Again, that's providing another great opportunity for us in the U.K.
Cool. Last comment
If you want me to cover that digital transformation, there's a slide that's a bit further on.
Okay, sure.
I can do that.
Well, let's just before we got a few for the executive panel, so we'll pick up the digital transformation as part of that. Mark, just before we jump into the panel, why don't you talk a little bit about this industry idea and some of the things we're doing in healthcare and hospitality?
When we got acquired by Altus, I guess back in 2013, our practice was pretty much straightforward healthcare. We represented hospitals, senior care facilities, and medical office buildings. The way we got into that niche was interesting because we decided, my partner at the time, Trey Beazley, who's actually the President of the U.S., came to me one day out of the blue and said, "Hey, I need a tax consultant because I'm an appraiser, and I got this idea that nobody in the Property Tax community knows how to value hospitals." I said, "Well, you're right. I don't." We decided instead of bird hunting, we went elephant hunting. We went right to the top, went to the biggest for-profit hospital firm in the United States, knocked on the door and said, "Hey, give us just one.
We know the one we want, but if you just give us this one." We hit a home run with it. They were very impressed. They gave us five. They gave us 10. We ended up working 70, 80% of the entire portfolio, which then led us to the next biggest operator, and then that led us to the next biggest operator. By the time Altus acquired us, we owned 80% of the healthcare market, the addressable healthcare market, which would have been for-profit hospitals, MOBs, medical office buildings, and senior care. As a result of working for the hospitals who owned all the medical office buildings, about that time we started really rolling on the hospitals.
The REITs showed up and said, "Hey, we want to buy all the medical office buildings because we can run them better than you can." They're like. Yeah, that's a great idea. We need the money to expand. We'll sell you all the medical office buildings. The REITs inherited us. As a result of them inheriting us, they had all this senior care, assisted living facilities, some nursing homes, but mainly the assisted living stuff, some of the independent. They said, "We've got all these operators that are running these senior care facilities, and nobody's paying attention to the Property Tax." When the RIDEA thing kicked up in the States particularly, and they became partners with a lot of these operators, they became concerned about what their bottom line was.
They said, well, they pushed us down to the senior care operators and said, "You need to hire these people to help save you money because it benefits both of us." That's how we transitioned into. Currently, we have 800 and some odd hospitals, 1,800 senior care facilities, and about that many medical office buildings, and we still dominate that market. The thought is that we're going to use that same approach, and have already started to move into the hospitality sector, the data center piece, and-
Retail
... retail. We're in retail more from the standpoint of the big box. The big box retail is a very special piece outside of the malls and the strip centers, and we have quadrupled the number of properties in big box in just the last two years. We are getting close to owning half of that market.
What's your take on data inside a market, in an industry like healthcare? Why is that important?
When you get your hands on the majority of the data from the biggest players, it builds a moat around you because all of a sudden you own more information than anybody, any of your competitors can get their hands on, because it has to almost come from the operators themselves. It's not generally available out there. You can't go to CoStar and get some of the things that we have. By having that, people understand that we have more knowledge. If I have a medical office building and there's six of them around there, I can convince somebody very quickly that I really ought to be doing all of them and not just one of them because it gives me control over what the assessor's seen in terms of presentation, rents, expenses, cap rates, that type of stuff.
Once you become a dominant player in a particular market, it just gets better. Once you get the critical mass together, you can steamroll the competition. They cannot compete.
Exactly. Cool. Get your questions ready. I'm going to get these guys warmed up a little bit as we work through this. Terry, legislative changes. You talked a little bit about this. Risk or opportunity? Particularly we've seen in the U.K. and Ontario that we saw a little bit of a slowdown in appeals being settled. Does that mean that we've lost the economic value? How do you think about this? You've been in the industry forever. When I first came here, I'd see the government decide to do things. Great example is they cap increases in tax on rental in Toronto at one point. It's a big part of our revenue. How does this all work?
Well, every time the government comes in and changes things to try and fix things, they generally create new problems, and it's just a matter of trying to understand what the changes mean, how you can affect those to the benefit of your clients, and then turn that into an advantage. In Ontario, we had a system, and it's not like any other litigation. Most litigation, if it's going to settle, it settles just before the hearing starts, and that's the way Ontario had been working. What the board realized was that 95% + of appeals to the board were settling, and they were having to cancel the hearing.
They decided to change the rules in Ontario, and they brought in this system where you had to go through a whole schedule of events before they would set a hearing date, and that schedule of events occurred over a two-year period. When you filed your appeal, you had to wait for them to, first of all, set a schedule of events for your appeal, which could take two or three years for them to do that. You had another two-year stretch to go through all the process before you get to a settlement conference where if it wasn't settled, they'd then set a hearing date. What that did was delayed our revenue, particularly during the interim period where they were redoing the scheduling and they'd canceled all the previous hearings. The revenue opportunity from our appeal caseload didn't go away. It just got delayed.
Now we're in a period where they're revisiting it again. They're looking at it saying it's too long. They want to compress it. They're bringing out new rules now to compress some of it a little bit. Our challenge, it creates a little bit of a capacity challenge, but there's a huge opportunity there as well, because as much as we have a capacity challenge, the assessment authority has an even bigger capacity challenge. If we can adopt our processes and the way we approach things and get ahead of the curve on it, we're going to be in a great spot with the assessment authority because they're not going to be ready to go to hearing. That gives us some leverage in our settlement discussions.
Maybe combining one of the interesting things by having a very large global tax business is that we can work our way through these dips and changes in a way that eventually the economic value of change is better for us. if you're a boutique player in Ontario and you got to go for two or three years without any revenue, that's not a company that's hiring people, that's thinking about adding customers, that's investing in technology. we love that because we're building a business here that can stand on its own. we can take a long view of how we can set up a competitive advantage.
Why don't you, Alex, talk a little bit about when we bought CVS knowing that there was going to be some economic headwinds, and you turned that into something that became a competitive advantage for us against some of the other players in the market. spin into this idea of how a digital transformation comes out of that.
I think at the point at which we did the acquisition of CVS, we were in a shift from one cycle to the other. What was happening was there were fundamental changes in the way in which the appeal process was going to work from what was the old 2010 list into this new 2017 cycle. That was centered around this three-stage appeal process. Check, challenge, appeal, as they named it. In addition to that, Mark referred to it earlier, they introduced this Government Gateway barrier. Before you could even appeal, you had to register through this gateway and then appoint an advisor before you could even start this process. Well, if you think that most operators have got thousands of clients, you've got to persuade thousands of clients to go through this gateway.
To do that, they need to have their own personal documentation, passport, driving license. This is a really big headache. One of the reasons why we've seen from one list to another, the overall number of appeals on a like-for-like basis dropping off is because of these barriers to entry that have been introduced, essentially to cut down on speculative appeals. For us, what we did and what we've always done is had an attitude that says, "Look, these changes are coming all the time. Regulation is coming all the time." If you've done this for long enough, over 20-odd years, each cycle, you see new barriers and new changes that they introduce. Rather than lament the passing of the old days and when it was easier, switch your mind into a place that says, "Is there a business at the back end of this?
Is there an opportunity to still service our clients in a profitable, meaningful way? And if there is, then let's get our heads together in terms of how we navigate this new environment." what we did is a combination of bringing the CVS business together and the Altus business. We had some really clever ideas about the way in which we're using data. what they had was this really great energy and this business structure that said, "Let's separate out all the different functions and shift away from what was a traditional consultant-led model to a model that breaks the processes down." By doing that and by rethinking your pricing and your go-to-market strategy, we were able to create a model that on independent statistics at this point is enjoying a really dominant position in an environment where many would say it's harder than ever to operate.
I think that is testament to a different way of approaching the business. When I talk about digital transformation, if you flick to that slide, there's some circles there. If we talk about that in a kind of U.K. context. Next one. No, this one. I like to frame this around essentially the client journey. What's key, if not fundamental, to the success of this transformation is good data. Not only in terms of its quality and content, but also in its structure. What's also really important is the external environment and the future state environment is placing increasing value on that. When we look to identify our priorities as we move through this transformation, when we start by enhancing client offering and experience, good data powers a sophisticated client communication strategy.
Good data powers differentiated service offerings like client portals, like bespoke reporting, benchmarking, modeling, real-time progress reports with things like live chat. What this then does is create increased client engagement, improve client retention, and improves your ability to, or your opportunity to cross-sell adjacent services or offerings. When we move to the next sphere, we talk about automating repeatable activities. Well, this is time saving and efficiency. This is where we can leverage opportunities from things like machine reading and robotic automation. We move to the third, and we go into what I consider to be probably the most critical of the five spheres on this slide, where we're talking about identifying high-margin business opportunities.
This is where good, intelligent-led target identification through data is critical to improving your success rates and your margins, which is becoming increasingly important in an environment when you have to do far more work at the front end of the appeal process. We jump out of there and go back inside again, more internal, when we talk about redesigning internal processes, and this is what we've just talked about and Mark made reference to, and this is kind of a tribute, if you like, to the CVS model. Here you have to make a fundamental shift from what was a traditional consultant-led model to a model that separates all the processes out and then removes repeatable and simple tasks from your key revenue generators. The final sphere in that is the enhancement of employee experience and productivity.
Of course, if you execute on the first four, then you get greater success. If you get greater success, then you get better morale, you improve your culture, it allows you to reward better, and of course, that then links to retaining your top and best talent. I think in the concept of digital transformation in terms of improving our existing model, I'd describe it like that. I think there are additional opportunities you can get if you get all of that in place with adjacent offerings and sharing data and using data with others. In terms of focusing internally, that's how I would-
Well, we measure things like employee productivity, revenue per employee, and have tracked it over the number of years. Each of these improvement areas has specific metrics associated with them. As I said earlier, what comes out of this is an employee dependency on the model, which creates stickiness and value. We've had our competitors in each of the markets are always trying to hire our people because we're a leader in the market. That goes with the situation we're in as the market share leader. The only ones that have ever left are the ones that weren't doing well, and they did really poorly in the other model. They weren't aware enough to understand that they needed these capabilities to do tax at the level of productivity that we drive. This is a really good segue into talking about the transformation of our business.
This afternoon or in the next section, we're going to be going through the business metrics around each of Altus Analytics and Tax, and we'll dive into some of that information. At this point, I'll just open it up for questions. One more slide. I'm going to open it up for questions here. This is self-explanatory. Probably the best thing I'd say about this is, if you look at the key metrics in the business, we've been driving at 15% CAGR growth. When you look at it this afternoon, we'll show you some of the continuing success on an annualized basis. Obviously, there's volatility in this business, just a sort of normal way, but not on an annualized basis. When we think about where we're going on a go-forward basis, we've already been on record as saying 2019 is going to be our best year ever.
We've disclosed that 2020, based on our platform, is going to be better than 2019. We got this business rolling, and we have a really amazing growth runway. The profitable growth, I think about it as a platform, being able to create compounding cash flow, the ability to put acquisitions and hires on our platform, phenomenal. Market share through multiple revenue sources and different approaches is available to us. This digital transformation, honestly, in every one of our businesses, Altus Analytics, Property Tax, across the board, this is the way we want to run our business. We want to use modern technology to build a modern platform to get us strategic advantage. I would say that honestly, there isn't another Property Tax company in the world that's thinking about digital transformation. This is our distinct competitive advantage.
With that, now I will open it up to Q&A. Thank you, Camilla. Go.
Hey there. Just trying to understand a little bit better how things work in the U.K. with the tenants bringing the claims. I understand if you're an operator of a hotel, but most properties probably have dozens or however many tenants. How does it work with properties with many tenants? More broadly, how does it work with the tenants bringing claims in the U.K.?
In the U.K., it's a tax. Business rates, as we call it, or Property Tax, is a tax on occupation. As opposed to North America, where the owner of the building would pay the tax, it's actually paid by the individual tenants. If we took this building, for example, if there were 30 different occupiers inside this building, even a number of occupiers on a single floor, they would all have an individual tax assessment, and they would all have to pay. If we were going to represent everybody inside this building, we'd need instructions from every single occupying business, which is different to North America.
It's crazy. That's all I can say. It's crazy.
Just follow that. Is that what you do? Do you represent everyone?
Yeah, absolutely. Well, we attempt to. It's not often that you advise every single occupier in a multi-let office building, but we would certainly attempt to. that kind of talks to that sales model that I was referring to in the case study. if you assumed that you represented one occupier in this building, and through your early discussions on the value, you begin to become aware that the basis of valuation is too high, you know that that's going to roll all the way through the building.
If you can then quickly identify all the other tenants or occupiers in the building that are unrepresented and are not being advised, then that goes into your sales capability, and you say, "You need to speak to us because we can help you with your assessment." What you're attempting to do is turn that one opportunity into multiple opportunities.
How much of your business is that type of work versus, say, the hotel example where there's one operator for a very large property?
All of our Property Tax work, with the exception of the empty rates business, will be occupier-focused.
I understand that, but how much of your business is representing dozens of tenants in a single building versus one very large tenant for a property?
said differently-
Owner versus occupier
Of owner-operators, people that have franchises versus the tenants of a building.
How would you?
We have a large existing client base as well. Our development of this sort of, we term it, the intel capability, is growing. I would say currently about 10% is where we're actually able to feed back into the sales model from all the different areas of the business, these opportunities. Certainly, that's an area that's been growing over the last couple of years since we put the businesses together as well. That's another area we just see as we move into the next rating cycle, growing even further. When you're actually picking instruction up as well at that point, currently, you have no idea whether that is actually going to be a successful appeal or not. Whereas actually being able to use the intel is actually creating significant efficiencies through the whole process. If we said that our average assessment value is GBP 80,000.
Yep. Give or take. You assume an assessment value is a hypothetical rental value. That'll give you an idea. If our average is GBP 80,000 as an assessment value, that means our average client size is somebody that would be paying GBP 80,000 a year in rent. I know that's quite hard to work out relative to different markets, but what it says is that the lion's share of our client base is in what we would call mid-market.
Got a couple back there, I think. The gentleman in the Yeah. Just work your way back there. I was going to say the gentleman with glasses, the one wearing glasses.
Are you guys the only ones using the volume model in the U.K., or is that kind of a standard amongst your peers as well?
I would say we're unique in the way in which we operate it. Prior to the CVS acquisition, we were the two largest volume players in the U.K. market. With us coming together, it would make us the largest by volume. That isn't to say, even with our scale and size, we're 20% of the U.K. market. It shows there's significant other parts of the market that are being advised by others. Just to add as well, the Valuation Office, part of the government machine that sort of manages all this, publishes quarterly figures. We're able to obviously then analyze from a national perspective the volume of checks that are both going into the system and then obviously being settled, and similarly in terms of challenges and then appeals down the line as well under the CCA capability.
We're able to assess at any stage what our actual market share is of each of those different metrics in the process. That allows us internally to be able to gauge where we stand. We're also able to run freedom of information requests. Although the actual trail isn't named, we've got a pretty decent idea as to who's number one. That's not a difficult thing to work out. Much further down the line, who two, three, and four are. We're able to assess not only our overall market share, but where we stand vis-a-vis everybody else in the top 10.
Maybe going back to your revenue model, so 77% are contingency type of revenues. Maybe can you give us a sense of the take rate? For example, the Toronto Bank Tower study, you achieved CAD 146 million of savings per client. Ultimately, how much did you get for yourselves there, if you can share that? Also, can you confirm what the other 23% of that equation is? Is that your engagement fee or your maintenance fee from your clients, just so we can-
Terry, why don't you talk about the status of-
Yeah. The Bank Tower appeals, unfortunately, weren't contingency. They're part of the other 23%. We got paid time and material, an hourly fee for the work we did on that. As I showed, the project went over multiple years. There was recurring revenue from that on a time and material basis. The contingency versus time and material or flat fees varies across geography, even within Canada. Toronto, for example, tends to be closer to 50/50 on fee arrangements. You get out in Western Canada, it's much higher proportion of contingency fees. U.S. and U.K., again, I think are higher on the contingency fee basis as well.
We're almost 100%.
Yeah. Almost 100%.
Yep. I think we'll take two more questions, Camilla, and then we'll make people available.
Thanks, guys. I believe in the past, there was a vision to create a self-service platform for some of the smaller markets or smaller independents. Also to create a managed service for the largest clients, kind of like Rick's business. Is that still part of the vision, and where are you guys on that front now?
Yeah. Look, basically what I showed you in the segmentation is, look, we want to have a global industry model. We want to have a global major accounts model. We want to have a global volume model. The volume one's interesting because we think we can stretch it down. The farther you go down, the higher the contingency you can take because it's pure opportunity for the small tenant in London. As you go up, you have to compete on value. You hit some point in the wall where people are not going to give up contingencies on Yorkdale, as an example. They're going to charge where they're going to want time and material.
Even with the REITs, we've been able to come up with a modified contract, which is a certain amount of time and material. At a certain contingency, lower than at the low end of the volume band, but still a contingency. Obviously, we're trying to move our model down that road. To support that scale, you need to have systems across that whole scale. Really, it's about modifying what we're doing now to be able to actually extend the potential markets that we serve. That's really what we're doing. Technology gives you that opportunity. Really what you should take away from this, the concept of a digital transformation model is really a new platform for the way you do Property Tax.
If the smaller players are struggling because of your scale, is it actually cheaper, in your opinion, to go out and consolidate as opposed to building organically?
Consolidate versus organically hire or grow?
Yeah. Is it more efficient, you think, right now?
That's a yes answer. We're open-minded. I think the big thing, maybe because we said we'll get these guys to do some closing comments about how they see the future of Property Tax. Look, at the end of the day, we love the team we've built. The primary driver, organic or acquisition, is we want to put people on our platform that are going to really be innovative, accept modern ways of doing business, but really become part of this service-oriented model and the teams that we're creating. We want to be acquisitor of choice. We want to put them on our platform, and then we want them to love the idea, and we want to work with people that want to be with Altus Group because that's going to create a better career and working environment for them. I'll stop there.
Mark, why don't you go first? Final thoughts. Why are we going to be great?
Because our competition's not very smart.
Alex, why are we going to be great?
When I talk about that differentiated model, I don't think that's a question of choice. I actually think that's necessity. I don't actually think you're going to be able to operate with that classic traditional style in the future, because all the signs are saying that this is all about data. In any environment, I think they are moving further and further away from adversarial person-to-person type negotiations. That's not the model that governments want in the future. What they want you to do is prove with fact that the assessments are incorrect, provide the information in the right format, and they'll issue the refunds. They don't want that kind of gray area that's existed in the past.
if you don't modify your model and you don't get your head around the use of data, which is why scale is so important, because if it's around comparable information, the more clients you've got, the more data you've got, the more capable you are without needing the help of others, then you're going to find the future really difficult, in my opinion. I think we'll see further consolidation in the markets for that reason.
Super. Terry?
The trend we're seeing across Canada is the assessment authorities and the review boards are trying to speed up the velocity of how quickly appeals get resolved, either through pre-rule negotiations or speedier path towards appeals. If we can adopt, use technology to get through our book of business quicker, we're going to be a step ahead of the competitors who won't be able to do that.
Yeah, I got to stop there. Mary, you're going to be up shortly. Mark, you're good. Look, we're so confident about what we're doing in the business, and we feel really good about the runway for growth across organic, non-organic productivity, and flat out just winning new business, because we really have a whole construct that's different from our competitors. I'm going to stop there. I think we're doing lunch right now, so we're all here. Feel free to get your questions in directly, and thanks for listening to us. Appreciate it. Thank you.
[Break]
Ready to get started? Is this on now?
Yes.
It is. Okay. Good afternoon, everyone. Welcome back. It's great to see everyone. Thanks for your presence today. We had a couple of great sessions this morning, so everybody keeps saying it's a hard act to follow. I think the bar is really set up high now, but we're going to give it a go. Joining me today is, and presentations will be done by Gordon Richardson, who is the EVP of Altus Analytics. Amer Rasul, who is our VP of Tax North America, as well as helping Bob on a global basis. Mark Walker, who is the EVP of U.K. Tax. Then we also have Bob and Carl, who are going to help us with the Q&A at the end of this session.
What we're going to cover in this segment is I'm going to do a high-level overview of our consolidated financial performance, and then Gordon's going to provide us with a little bit of insights into the AA financials, as well as looking into the outlook that we provided back in June. We're going to give you a little bit of insights into how that was built up. Amer is going to take us through the financial overview for Property Tax, and as well, give you a bit of the highlights and insights into some of those revenue and growth drivers. I'll talk a little bit about capital allocation, and we'll wrap up with Q&A. Just some really high-level macro observations. We have an attractive financial profile at Altus Group.
I mean, you heard this morning about the CRE market, how it's growing, how the industry is looking for more transparency, performance management, technology, and that just creates a platform for us to grow financially. We've been able to develop a stable revenue base across the economic cycle, the business cycle. We've weathered storms before, and we're ready for the future. We have a high degree of predictable revenues, given that we have been transforming our revenues from more one-time to more of an over time nature. You'll see more about that later on in the presentations. We have a strong financial position, strong balance sheet with lots of room to borrow. Our borrowing capacity is quite strong. We have a proven track record of profitable growth and capital allocation, and I'm going to talk a little bit about that towards the end.
In terms of our consolidated performance, if you look back to 2013, and if you exclude our geomatics division and just concentrate on the CRE segments that we have, you'll see that we have a pretty compelling growth story. Been able to achieve 12% revenue CAGR, 10% EBITDA CAGR. That is during a phase of investments, both in products, in our AA practice, in terms of growing our business platform to be able to attack the global opportunity. It's been in phases where we've done acquisitions, and not all acquisitions necessarily are immediately accretive in day one. We heard about CRE, CVS. We carried that for the first year. We kept the investments in, but it's paying off big time now. Despite that, we've been able to continue to perform. As a result of this, we do have a strong balance sheet.
Our debt levels are at a very manageable level with lots of additional room to borrow. Finally, over this period of time, we have taken our revenues to a much greater degree of overtime revenues, which gives us predictability. It gives us more ability to be able to also provide more disclosures and more clarity in terms of our future forecasts. A little bit more in terms of how we've been transitioning our business. If you go back in time, if you go back to 2015, for instance, what you'll notice is that our business was a little more balanced in terms of some of the segments. Our focus has really been to grow our Altus Analytics and our Property Tax business. If you look at those two segments, you can see global tax going from 32% of revenue contribution to 36% today.
Similarly, Altus Analytics has gone from 30% to 36%. That growth is just going to continue into the future as we continue to invest both organically and through acquisitions. If you look at our diversity in terms of the geographic contribution, where we were very highly concentrated in Canada at 53% back in 2015, that's now down to 39%. We've actually taken our revenues globally, and so now you'll see that in the U.S., we're at 37% from 31%, and Europe has grown to 18%. Again, we expect this dynamic to continue. We often get asked, how insulated are we in terms of the economic cycles, the business cycles? I've been getting that question since, I don't know, 2013, 2014. I think we've weathered this period. When you take a look at our business segments, so I've provided a little bit of analysis here.
What do we consider to be factors that would insulate us, and what are some of the factors that could potentially hurt us? If you look at Altus Analytics, the fact that we are now moving our revenues currently at 70% on an over time basis to 90% will give us, again, a very strong base and insulate us from any potential downturn. What Altus Analytics also provides, as we talked about earlier this morning, it gives clients a greater degree of transparency, a better understanding of performance in times where perhaps the market's not going so well. They're going to want to have more understanding of how they can drive value through their investments. Potential risks, we possibly could see a little bit on the pricing side, but given the recurring, given the subscription basis, it would not be very significant.
In terms of Property Tax, well, that's an area of savings. If there is any issues in the marketplace, companies are going to want to save money. We actually experience higher volumes in those periods of times. We get a lot more new clients. There's a greater degree of fluctuation in terms of valuations, providing us with greater opportunity for savings for our clients, thus resulting in greater revenues for us. We view that as a low revenue risk. We do have in our cost and valuation practices, we consider it low to medium. In our cost practice, typically, our engagements are from three to five years. You could weather. You typically outrun any downturn in the markets because of the length of the projects. If there is some issues in terms of new projects, then you're involved in workout opportunities.
There's always opportunity even in that segment. We have been able, in our RVA practice, to actually transform some of that business from what used to be more transactional to annual and quarterly valuations. Again, that would also just transcend any sort of potential downturn. Okay, I'm going to turn it over to Gordon now, who will provide us an overview of AA.
Thank you, Angelo. Just at a high level, AA, the last five years delivered some pretty strong performance, doubled revenue, 50% growth in EBITDA. That's during a phase when we've been making some significant investments in product, especially cloud, and also transitioning the model over to a more over time and a subscription basis. Very strong performance over the last five years and a balanced business model, a good mix of both software and data and Appraisal Management. Also from a regional perspective, a third of our business is already international, and that international business has been showing faster growth over the last two or three years. As Angelo mentioned, we're already a 70 %+ over time revenue model, looking to hit 90 within sort of the next two to three years.
Back in June, we walked everyone through a strategy about cloud and about subscription and how we were going to be changing the licensing model for Altus Analytics, for ARGUS Software specifically. Part of that strategy is we showed what we felt was the long-term financial potential of Altus Analytics and a CAD 400 million target for revenue in 2023 and 30 %+ margins in 2023. We're five months into that. I'd say after five months, we're still very comfortable with that target we gave ourselves. We're still very much on track to hit that target. I want to spend a little bit of time in the next couple of minutes just to walk you through how we're going to get there and some of the assumptions and some of the key drivers there.
The biggest piece actually of that revenue growth, that doubling of revenue over the next four to five years, is on our subscription and maintenance base. There's sort of two drivers to the growth. One is just the natural, what we call the stacking effect of subscription. What you sell in a period, you add on what you sold before, you go into the next one, and so on, and I'll walk you through that. The other one is just growth in our new license sales, which we've seen for many years, a continuation of that new license growth. Both of those sort of aid what the total outlook for our subscription revenues. I just want to walk you through how our subscription revenues are going to scale over the next four or so years.
If you look at 2020, we're going to walk into 2020, January 1, with a certain amount of what we call secured revenue. Secured revenue is contracts we've already sold sitting on the balance sheet for us to recognize, or contracts we've already sold 2019 and prior, which we're going to renew. We got top quartile 95%, 97% renewal rates. There's a certain amount of what we call secured revenue. Next year, we're going to sell more new licenses. We're going to recognize some revenue off those new licenses, and the combination of those two is what we're going to see as subscription and maintenance revenue next year. When we then roll into 2021, we still have that core base of 2019 and before business. It's either roll off the balance sheet or it's renewing.
We then get the full year impact of everything we sold in 2020. On top of that, we stack new sales from 2021. You follow the same math going into 2022. You stack 2019 on top of 2020 and 2021, then new sales from 2022, and so on. That stacking effect actually delivers some fairly significant growth over the years. If you then zoom out and look at the total, how we get to CAD 400 million on the right, and where we're starting, roughly CAD 200 million or so this year. There's sort of three main components about how we're going to see that growth. The first one is our subscription and maintenance business, our license business. That is going to contribute about 60% of that total revenue growth to get to CAD 400 million.
If you look at that 60%, 50% of it is going to come from just the natural stacking effect of selling the same number of licenses every year. An additional 10% comes from selling more licenses each year than we did the prior. If you go back to what Carl and Matt were talking about earlier today, about all the various sources of sales and opportunities we have with the customers, whether it's add-on sales, whether it's global expansion, whether it's integrated solution, whether it's cloud migrations, there's a lot of different paths for us to get to that license sales number and that sales growth. In addition to that, we've got a data and Appraisal Management business, and Rick spent some time early today on the Appraisal Management side. Little similar business. They actually also have this secured revenue block.
All these contracts, all these customers they've been working with for years still generate the revenue next year and the following year, and they're adding more funds, more assets, new geographies. We expect by 2023, they can contribute an additional 30% of that total revenue goal to get to 400. Lastly is what we call services. It's our classic consulting. It's the One11 advisory. It's our training. Most of that is point-in-time, one-time revenues. It's consultant engagements. It's training classes. It's also been consistently growing over several years, and we're expecting that growth to continue, especially as we sell more and more integrated platform transactions, which require more sort of consultant and advisory and training help.
The one thing I'd note, though, is when you look at our services business, we're starting to do more managed services work, data modeling, lease abstracts, data aggregation, and that's recurring business. That's over-time business. We're actually starting to make some of that green block, that services, some of that's starting to become over-time revenue as well. If you then look at, ultimately at 2023, we're at CAD 400 million. 90% of that is over-time revenue coming from a data type business and a software type business with the balance coming from services, which is starting to become over time as well. I won't dwell too much on the assumptions. You've heard a lot from Carl and Matt and others around the various sources of growth and whether it's in software or it's in the Appraisal Management and data business.
The one thing I'd say when we think about the CAD 400 million goal, it's what's not in it. There was a couple of questions, we've sort of touched on this earlier today. This is primarily an organic target, which we're going to achieve. It doesn't assume material new products, acquisitions, or a significant change in our pricing. The second part of our target, CAD 400 million was the first. The second part was, how do we get to greater than 30% margins from where we are today, sort of in the high teen, low -20% level? Touching on what Carl said earlier today, we've been making a number of transformation investments over the last few years. Cloud is a classic example, global expansion. Those investments are behind us. They're in our run rate. We're not looking to make additional step-out investments to deliver this CAD 400 million.
We're now in execution mode. This is all about being as efficient, as effective, and as productive with that existing investment as we can. There will be some additional areas of spend, whether it's new markets or whether it's sort of operating our cloud platform with all the users we expect to get. This is where we expect, on average, over the next four years, our expense growth to be several points below revenue growth, which would then, on its own, deliver a 30% margin. Lastly, and we talked about a little bit on the June investor call, is some of the new metrics we're looking to start reporting next year. With a new business model, comes with sort of the need to give greater visibility into how we're doing, how we're progressing, and what we expect to see.
There's sort of four we've highlighted here. One is this notion of over-time revenues. You've heard over-time revenues a lot today. Over-time revenues is basically all our revenues we get to recognize on an over-time basis, including on subscription. What it excludes is those one-time revenues, whether it's around services or the point-in-time revenues we may see on certain subscription contracts. It's only the over-time component. On cloud adoption, we're looking to start reporting the percent of our AE user base contracted on ARGUS Cloud. That'll be a key measure of how we're seeing in both our existing user base and how new customers are rolling onto cloud. Historically, we've also been reporting out what our AE maintenance retention rate is, 97% being consistent at 96%-97% for the last four or five years.
Next year, we're going to start rolling in subscription into that calculation as we start to renew those contracts. Lastly, more disclosures around the geographic revenues so we can start to appreciate the growth potential and results we're starting to see in our international regions in Europe and Asia Pacific. On that, I'm going to hand it over to Amer to talk about tax.
Thanks, Gordon. I'm going to give you a quick overview of where global tax stands and where it has been over the last several years. Sorry, give me a second. This actually paints a pretty nice picture. If you look back five years to a trajectory of growth, we've essentially doubled revenues globally since 2014 to 2019. We've gone from about CAD 100 million up towards a TTM of CAD 200 million in the most recent period. If you understand how we did it has been done by going outside a core market, which traditionally was Canada. It was a Canadian-centric business, and now we're a well-balanced global business with equal weighting, as Bob mentioned earlier, in the U.K., Canada, and the U.S. A couple of things I would like to point out. This was done organically, primarily organically within Canada, the growth you see in Canada.
For the U.K. and the U.S., it was two significant acquisitions. One we did in the U.S. when we bought out the local tax practice of SC&H, and in U.K., the CVS tax practice, which positioned us for growth in U.K. and the U.S. now we're a well-balanced portfolio, and then we continue to see growth opportunities, as I mentioned, in the U.S. the trajectory in the U.S. will continue to go forward. as we mentioned in the U.K. with the share increases, we expect that to continue to grow as well. the growth has been done on a profitable basis. Our margin profile has improved over that same time period. a couple of things about that, Bob talked about a platform efficiency on being on a common platform as we do acquisitions, as we grow. We try to take cost out.
We did that last year in the U.K. when CVS and our legacy U.K. practice came together. There was a bunch of synergistic costs that came out of the business and the efficiencies in the business processes, putting more technology into the services businesses. That's going to continue to improve our margin profile. The other thing to note about the tax business is historically, as we add volume in terms of appeals and case settlements, our capacity doesn't have to scale to the same level. We have the systems and the people already built in. As the revenue profile grows, we expect those margins to improve across the global practices. This is actually a good way to look at it.
If you compare ourselves to your typical multi-line CRE services firm, our global tax practice has a much better profile, not only on the margin basis but prospective revenue growth basis. Our belief is that given these inbuilt strengths, its intrinsic value should be higher than your traditional service business in the CRE space. Just going to spend a bit of time on our revenue. A lot of the questions we get from analysts are: how do you predict your revenues in tax? You have so many different jurisdictions, geographies. How do you forecast your revenues? On a quarterly basis, it has some inbuilt factors or risk factors as we call them, which are listed there. Number of jurisdictions, the mix of cycles, which I'll talk about a bit later, and the timing of the settlements with the changes in process.
On an annual cadence process basis, we see growth coming. Really you should be looking at an annual basis or in some cases over a multi-year cycle basis where we have talked about the revenue doesn't disappear, it just gets deferred. That's the way to look at our business is the growth over a year or over a period of years, and that's the natural step up that you see in the graph. The risk factors that are listed there, as we grow our portfolio, we add more clients, we add more jurisdictions. Those actually help us because they sort of offset each other. A recent example is, obviously, you know about the pullback in Ontario in the last two years. The offset to us there was the pickup in Western Canada. There's natural built-in risk offsets as the portfolio grows across the globe.
This graph shows a better for the picture, and I'll show you one for the U.K. This is a settlement pattern for the entire Ontario market over the prior periods and the current periods on the case settlements. What's important on this graph is you'll see for each assessment cycle, which is generally three or four years, the level of case settlements starts to accelerate towards the middle to the end of this cycle, as the assessment authority is trying to clear the cases. If you look back in history, you see a sort of natural pattern. The one to keep your eye on is on the right side of this graph, where we have the red bars, which is the current cycle. You can see that the cycle has started off slowly, as it has in the prior periods.
What that tells you is there's a built-in backlog of cases to be cleared, which will accelerate over the next two to three years. That is good for our revenue profile. We've said this year was a record year for global tax. We have a similar pattern for the U.K., so we know the next few years would be better if you take that logic forward, knowing the backlog of cases we have and the value that is locked up, and we're going to continue harvesting that over the next two to three years period. Similarly, in the U.K., similar graph showing the natural cadence. You can see we're really at the early stage of the settlement period, and that cadence of backlog cases will continue through the early part of the next cycle to get that backlog cleared off.
That means we're going to harvest revenue from that. Just a quick point of information. I talked about the many jurisdictions we have, the countervailing cycles, and how that helps us. You can see these are our major jurisdictions where we currently operate, and there are various one to two year or up to four-year cycles, and they fall within the various years going forward. That's a natural built-in protection. If we have an offset in one jurisdiction, it's generally picked up by another jurisdiction which tends to peak. That's something we keep a close eye on, gives us visibility. We know where we are going as a business. The numbers are there, and we can give some visibility to you guys as we go forward.
There are certain jurisdictions, like if you look at Texas, Alberta, BC, these are jurisdictions which run on an annual cycle, and the level of revenues there are very predictable. As we go shares on those markets, we can give you a very good insight, and they're a natural offset to the multi-year cycles. Angelo?
Yeah.
Thanks.
Thank you so much. Thank you, Amer, Gordon. It's fantastic. What you can see here is we have two great independently strong businesses. If you look at AA, as we've shown you, we have a great five-year outlook. We're doubling our revenues in that timeframe. The margins are scaling up throughout that period of time. We're targeting to get back north of 30%. It's a healthy growth and it's a consistent growth. It's got 90% of recurring or overtime revenues. On the Property Tax, again, great opportunity there. High growth, large backlog from what I saw. The fact that we're growing market share, despite the fact that you've seen this quarterly variability, which we will have, but over time, over this course of a year, it grows. You've seen that over a period of years.
the greater scale that we have, the less variability we actually will have over time because we will have those natural offsets. high margin business in the near term. It's spinning out lots of cash as we're investing in some other parts of our business. Thank you guys for that. I want to spend just a few minutes on capital allocation. We sometimes get this question about how we're using free cash flow. Are we going to increase the dividend, share buybacks? That really speaks to kind of optimal capital structure. We view ourselves in growth mode. I think that message came out loud and clear. There's lots of opportunity in terms of acquisitions in both these businesses. There still is opportunity for organic investment.
Doesn't mean that it's a step-out investment, but it doesn't mean also we're taking our margin up, doesn't mean that we're not innovating. Doesn't mean that we're not going to come out with new products, go after new markets. All that is going to happen, but we're going to do it within certain guardrails. In the near term, the foreseeable future, we're going to reinvest the cash that we have. It's going to go back into the business. It's going to increase the value of both of these business segments. Down the road, to the extent we have any excess cash, short term, we pay down debt. Obviously, you do that. In future, to the extent that we get to a point where we're having excess cash, then we'll consider dividend raises, share buybacks. That's a natural consideration.
As part of this capital allocation, I talk about reinvestment in terms of acquisitions, and just want to spend a minute here. We have a very disciplined approach when it comes to acquiring businesses. There is a lot of companies out there. They have to go through certain filters for us. We have three main filters, first one being strategic. Is it core to our strategy? Does it fill in some white space in terms of product, in terms of geographic space? Does it complement the business? Is there cross-sell opportunities? Does it give us a larger moat? All considerations from a strategic standpoint. Obviously, the financial criteria, we're all focused on that. Is it financially accretive? When does it become accretive? It doesn't necessarily have to be accretive out of the chute, but it does have to have a time where it does become accretive.
That speaks also to your ROIC, your return on investment. We measure that. We report that to our board. Just some of the other considerations under the financial section is, what does it do to margin? What does it do to our growth? How do we fund it? What's the best tax structure around it? Those are all considerations that also go into our acquisition strategy. Lastly, cultural fit. You heard Bob talk about that earlier today. When we onboard new companies, when we onboard people, we want to make sure that they have the same mindset, that they have the same value system, that they have a mindset around high performance, high execution, that they're really going to want to stay and participate in our growth. Those are three very important filters.
from here, obviously, once we make a call, we have a very disciplined due diligence process. We have a great integration process. You heard what we did with CVS. we've been pretty successful. Just wanted to highlight where are we spending our money, what areas of our business. Today, we've talked really primarily about the two segments, or two primary segments. what you can see over the course of the last three years, primarily it all went into either AA or Property Tax. Again, these investments enhance the overall value of our businesses. They may have slightly different dynamics, slightly different reasons why we're doing them, slightly different timing of returns, but at the end, they will drive value. If you look at just the CVS, we talked a little bit about it this morning. Overnight, we basically doubled our market share. More than doubled.
We became the primary market leader in that market, which gave us some room. It gave us some flexibility in terms of pricing, go-to-market strategy. It's not always just a one-way benefit. As Alex talked about it, we acquired a business that had some pretty interesting processes around how to drive value for them, how to move appeals very quickly and efficiently through the process. Our focus was more on making sure we got maximum value per appeal. What we did was we brought those two processes together. We're maximizing overall value. Win, win. Win for the CVS employees, win for the Altus employees, win for the investors. Oh, I should just point out. Sorry, I moved a little too fast there. What have we accomplished in tax? Since 2014, 375% increase in revenues in the U.S.
263%.
263%, thank you. A margin increase from 22% to 27%. Pretty attractive. Just in summary, and then we're going to turn it over to Q&A. We got a huge opportunity in front of us in both these businesses to drive revenue, to drive margin, EBITDA, overall value. We are in growth mode. You've seen that. We're investing. We're going to continue to invest. We're not shy about that. M&A focus is going to be primarily on these two segments. I think we've stated that loud and clear. We have a strong financial position. Our balance sheet is strong. We're able to do it. Lastly, we have high confidence and great visibility in terms of our financials, which gives us great runway and opportunity. That's it. I'm going to open it up to the floor for any questions.
Financial, if you have any questions from any of the segments this morning, happy to take them. Right there.
Amer, you talked about continued Property Tax growth in the next few years.
Yeah.
What happens in 2021 when U.K. and Ontario cycles reset? Do you anticipate other jurisdictions able to offset the resets in those geographies?
Yeah. The four-year cycle for both the Ontario and U.K. ends next year. One of the things that's in the numbers for the U.K. over the last two years primarily and going to next year is the annuity billing, which is a cumulative number, and we get the biggest annuity billing next year in the second quarter. What I've talked about is, as you saw from those charts, the backlog of cases still to be settled. We expect that to continue to settle through 2021. We don't expect a significant drop-off as a result.
The settlement values going into past the appeal period come in at full value, right? You get the full savings for that whole period of time, which usually offset the startup mode. Frankly, there was a chart in there, if you look at it, that in 2016 and 2017, we were roughly about the same amount of revenue. Part of that is that's the first year of those cycles as well. Our expectation is we're going to get better, we're going to have better share, we're going to grow our business, and frankly, we'll probably even do some acquisitions between now and then. We're looking at this as a nice run for a few years.
Yeah.
Hey, guys. Hate to be the one, I got to ask the question. You've given us great target details for analytics on revenue and margin, not on tax. What's the time to double for the tax business and margin upside? If you're not giving it today, why not?
Well, we didn't want to take away from the exciting information that we gave you and make it too easy for the analysts. No, the reality is there is a bit of that. We fuss with that philosophically and directionally. Look, we have amazing visibility in our tax business. If you remember, we started talking about Q2 2019, a year before, as a turning point on the business. We have a CRM in place. We know the amount of economic revenue we're carrying in all of the cycles, and we're fussing with it. We're fussing with giving broad guidance on an annual basis. I would even tell you that some of our investors prefer that we don't. If we were to do something, it probably would be like where we are now.
When there is a quarter or a situation that occurs that causes some skepticism or anxiety about the investors, we might use that opportunity to give guidance. We don't feel obligated to do so because the business is healthy, the results will speak for themselves, and we've already told you that 2020 is going to be better than 2019. The first question is, what about 2021, right? It's a slippery slope if you're not careful.
Got it. Fair enough. I have a follow-up, if I may. Angelo, on capital allocation, do you guys have a plan on how you break what side of the business you want to feed in terms of a mix? Like you want to feed them equally, analytics and tax.
If you looked at annually, they kind of offset each other. It kind of depends on the opportunity that we get. We're not going to box ourselves in to throw out a number and not take advantage of something. Again, it's about growing the overall value, and that's what we're focused on.
I'd probably add that the big difference is that we're really preoccupied with adjacencies in Altus Analytics. The assets we have in our core, we're in really, really good shape. As we talked about earlier, this debt category is a really interesting one. Rick has done a great job now of having sort of 40 debt funds that we're driving some really good success with, which we can platform and turn into benchmarks and that. It's a really good starting point organically. We've done a number of large deals with companies like Wells Fargo, DekaBank, and our pipeline has some capability. We're going to put capability in our roadmap around debt, all leading to might be interesting to buy a nice, good size company in the debt area to really have a depth. On the tax side, the companies we're buying aren't as good as us.
Mark's here on the panel.
He's exceptional.
He may take exception to that. You can ask him the question. Certainly now that we have Mark on the panel, we can honestly say that what we're buying is things like share or going after an industry or picking out a state or going after a particular set of people. It's a little bit different. We think we have the most modern, advanced, interesting, exciting platform for the industry. It's more of an economic acquisition where we add to our machine. Whereas in tech, and specifically in things like debt, and we're looking at stuff in data as well, it's about extending our value. That's an important nuance. For sure, in tax, it's about driving economic value fast, buying things that we can put on our platform that add culturally to our team, that give us more breadth, but they're coming on our platform.
If I listen to Mark, he'd say there's not really great companies to buy because we're so much better than all of them.
We're smarter.
It's a great answer. Hey, Paul.
Today, there was very little focus on cost and valuation. Just wondering, why'd you decide that? Also, what do you see as the synergies between those two businesses and the rest of the company, and how do you think about those two longer term?
Yeah, obviously, one of the things that we haven't done with those two businesses is grow them outside of their current geographic markets, where that's not the case for tax and Altus Analytics, which is a preview of our priorities. That's really what you should. It's obvious that we're saying that we're going to over-invest and double down on these two categories. Doesn't mean they're bad businesses. We think there's opportunities to continue to develop them in Canada. More and more, not unlike the example I talked about with CoStar, we're looking at different models. How do we take those businesses forward? Looking out more and more that we're going to have a number of great businesses, but we want those businesses to contribute to these breakout opportunities rather than be in another place for investment.
Just a question on tax around your strategy to target a higher percentage of contingency revenues, and curious how that ties in with your global strategy to leverage your national strengths across various geographies. Is there a way in which you pursue that opportunity that will help drive higher contingency revenue? Or is it just a different sort of set sales process? A bit more color on that would be helpful. Thanks.
Yeah, for me, anecdotally, the team in Canada, and I wish I had it up here a bit, the team in Canada has particularly been focused on volume. The simple example of that is, in Western Canada, Kyle Fletcher, who runs that group, had put together a team, done some benchmarking with Alex and the U.K. team about how to set up these secondary markets. What they observed very quickly is that there was less pressure on contingency fees in these secondary markets, very few people calling on them, and really, really good opportunities because nobody had been there. If you take that low pressure on contingency fees, high volatility on the potential for appeals, and then plug right onto that in a market like Medicine Hat, Red Deer, there's probably three or four big employers.
That creates pretty cool at-bats, and we've already had really good wins out of that. Now we want to do it at scale. We want to take six, seven, eight, nine, 10, 11, 12 in those markets and use technology to do the work, not our really smart people. We want to reserve our really smart people for the CAD 124 million tax savings, not the CAD 60,000 tax savings. That's the stretching of our business. Again, as I said earlier, the lower you go in the market, the higher contingency fees you can get. We'll always have a time and material business. I wouldn't sneeze at it. We charge high fees when you save CAD 124 million, trust me. We earn them, and they're happy to pay them, but they also lead to having the best data, the best customers that contribute to our overall economic value.
Hopefully I answered your question. I probably went farther than you wanted. Cool.
I'm done.
Are we wrapped up? Camilla, am I supposed to wrap up now? Is there a slide? Okay.
There you go.
Thank you.
Of course there's a slide.
Cool. Well, look, I think for me, it's always fun to hear from the team. Obviously, we spent some time talking about what we were going to say today, but some of the off-the-cuff remarks were the best. If you haven't figured it out, we are absolutely trying to be the best in every market we serve. We think we have some attitude. I think Mark, you kind of summed it up pretty well today. We are absolutely not complacent with that remark. We're innovating, we're challenging, we're learning from each other, we're benchmarking. Innovation shall come not only through technology, it's in our contracts, in our business models, in ways that we imagine that the customers want to buy and work with us.
We believe that we can further our current business performance with the investments that we've already made, and we believe that the future is going to be very, very good because we'll have good visibility on our revenues. The wild card in all of this is whether the industry comes back to Altus Analytics and desires a platform that gives them good insights and it becomes an enterprise stack. That's the wild card. That's the upside. That's the opportunity for our business. I think what you heard from Scott and Matt today, and myself I guess, that there's trends now that say that that's happening. More RFPs, more great conversations at the CEO level, more companies making decisions to drive global data capability. What you have is a company that has both, that has differentiation, that's running, that's in a great position. Thanks so much.
We value so much our relationship with the analysts, with our investors. We think of you as partners. We love the hard questions. Some of you take us to places with information that is additive to our business models, and for that, we thank you. Thanks for taking the time. Hope you enjoyed the day. Thanks very much.