Why Appen’s big problem is that it’s not a tech company

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At the heart of Appen’s woes, analysts say, is one simple fact – it is still a services business.

The deal had been a buy-versus-build equation for the company, with Figure Eight’s tech-based annotation software able to annotate videos like dash-cam footage 50 times quicker than a human.Mr Brayan said at the time it would have taken Appen five years and $4 million to build a similar platform.backed the deal, saying if it was integrated well, it would help alleviate some of the big risks to Appen.

Still one of Appen’s largest shareholders with 7.5 per cent of the business, along with his wife and Appen founder Dr Julie Vonwiller, Mr Vonwiller told“I don’t subscribe to the theories that somehow annotated data will be replaced by machine automation. I think we’ll always have a human in the loop in data annotation requirements,” he said.

But within 10 hours of the public announcement, Telus had withdrawn from discussions, leaving Appen management in the dark about why it had walked away.The company’s statement a day later revealed no answers. However, analysts speculated that either Telus was spooked by the approach being leaked or it had not anticipated the trading update Appen gave simultaneously, which indicated that revenue had slipped below last year’s levels.

One possibility for Telus’ ongoing growth, Mr Ahmed said, was the decision by the Canadian business to combine its AI data labelling services with other business processes it offers, such as call centre services and content moderation.

 

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