In the three years since Keysight Technologies’ last investor day, the company has been working on one theme: transformation. From being part of Agilent to charting its own path as an independent company; from hardware to software; from boxes to services.

“It’s pretty amazing to take a step back and look at the dramatic transformation over the last three years since we became independent,” said Jason Kary, VP treasurer and investor relations at Keysight, during the company’s 2018 investor day.

Keysight has four primary business segments: communications solutions; electronic industrial solutions; Ixia solutions; and services solutions. Its commercial communications business is its largest source of revenue, accounting for about 32% of the company’s $3.2 billion in revenues. Keysight reported that it has more than 32,000 customers in more than 100 countries, with 14 research and development sites and about 12,600 employees globally. Keysight estimates that its total addressable market is worth about $15.5 billion and that it holds about 22% market share — leaving plenty of room to grow.

Here are the strategic highlights from Keysight’s 2018 investor day:

-Keysight has focused on shifting from a hardware focus to becoming more software-centric and is reaping the benefits. President and CEO Ron Nersesian said that Keysight is seeing 14% compound annual growth in its core software orders since 2015, and the acquisitions of Anite and Ixia bolstered the company’s software position as well.

– Keysight sees 5G and automotive as high-growth areas for test. Nersesian said that the company had “very high double-digit” growth in 5G orders during its fiscal 2017 year, and that at some points in the year, 5G order growth was in the triple digits from the previous year. Its automotive testing is also seeing high growth, he said. Keysight has been able to parlay its experience in areas such as radar for aerospace and defense into the automotive market as more radar testing is needed for Advanced Driver Assistance Systems.

-The company has bumped up its research and development investment slightly each year, from 12% to the current 15% and has taken the strategy of “not only investing more but investing earlier,” according to Nersesian. Some of that growth has been organic and some due to Keysight’s acquisitions, noted Jay Alexander, SVP and CTO of the company.

– Keysight executives said they continue to be interested in acquisitions — “tuck-in acquisitions,” as CFO Neil Dougherty put it, with a focus on high-value software and automotive targets. But in some areas they have had a difficult time finding targets that meet their investment criteria. Keysight has made half a dozen acqusitions that increased its capabilities in technology or services, including test company Anite with expertise in protocol testing; Ixia for network visibility; Scienlab, which focused on test solutions for the automotive industry; and services companies Primary Standards North America, Electroservices and Liberty Labs. Keysight will continue to pursue acquisitions, but in some areas — such as expanding its global services footprint — it’s decided to pursue organic growth. The Ixia and Anite purchases have enabled Keysight to expand its addressable market and portfolio, and develop new integrated products. The Ixia integration is still in process, according to Mark Pierpoint, the head of the Ixia Solutions Group, but should be complete by the third quarter of this year.

-Keysight is focusing on expanding its test-related services by offering calibration services for brands other than its own, introducing Test Asset Optimization Services and stepping up its refurbished equipment sales. The company just announced its Test Asset Optimization Services, which focus on helping customers to increase the utilization of their test equipment assets, keep better track of inventory, establish and equipment loan pools and eliminate old equipment (which also provides Keysight with more inventory for its refurbishment business). Keysight is also moving from a free customer support model to one with tiered charging, starting later this year.

-Keysight aims to be a one-stop shop for test needs and recently launched a comprehensive test platform called Pathwave to help speed product development cycles. While Pathwave was somewhat downplayed during the investor day presentations, Nersesian said that the company plans to build it out over several years and expects that the platform to yield results similar to Keysight’s growth in software and 5G.

The company also announced a $350 million share buy-back program, expanding a share repurchasing effort that was suspended when Keysight acquired Ixia.

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