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Why this small cap tech share jumped higher today

The LiveTiles Ltd (ASX: LVT) share price is on course to have a strong finish to the week.

In morning trade the software company’s shares jumped 6.5% higher to 42 cents.

Why are LiveTiles shares jumping higher today?

This morning LiveTiles announced that it has strategically partnered with Victory Tech Services to jointly pursue opportunities with the United States Department of Defense.

Victory Tech Services is a leading IT services provider to U.S. government departments and is currently delivering a range of SharePoint projects across multiple agencies.

According to the release, the partnership formalises a longstanding relationship between the two parties which share mutual government customers such as the U.S. Marines and U.S. State Department.

Management believes this is a significant opportunity for the company, advising that the U.S. Government applications market is expected to reach US$10.6 billion by 2021.

As tech giant Microsoft is the top vendor in the market and LiveTiles has a strong strategic alignment and ongoing joint marketing initiatives with it, management believes it is well positioned to benefit from the sector growth.

Victory Tech Services is now seeking the necessary approvals and credentials to receive U.S. General Services Administration Schedule 70 IT Contract approval for LiveTiles’ entire product suite. If this is granted it will enable business to be conducted more efficiently with the U.S. Government in the future.

Should you invest?

While I’m not ready to invest in LiveTiles, if I were, I wouldn’t necessarily invest on the back of this news.

It may be a positive development, but I’d suggest investors wait to see how the partnership impacts its financial performance before parting with any money.

In the meantime, I think investors would be better off focusing on tech shares such as Citadel Group Ltd (ASX: CGL) and ELMO Software Ltd (ASX: ELO).

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended ELMOSFTWRE FPO. The Motley Fool Australia owns shares of Citadel Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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