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UKHotViewsPremium - An Individual Subscription
21 Mar 2019
*HotViewsExtra* Will the Government’s ‘Outsourcing Playbook’ put Public Sector outsourcing back on track?
20 Mar 2019
CloudBuy FY18 losses greater than revenue
20 Mar 2019
EMIS grows despite legacy distractions
20 Mar 2019
FY18: a better year for SDL
20 Mar 2019
HCL lands $1.3bn Xerox mega deal
20 Mar 2019
Aquis Exchange continues to grow under the radar
20 Mar 2019
BlackCurve optimises funding with new seed round
20 Mar 2019
Benchmark your Tech Services Business Against the Top Performers
20 Mar 2019
2iC focuses on wearable information architecture to scale business
19 Mar 2019
Tribal revenues down but profit continues to improve
19 Mar 2019
K3 gaining confidence
19 Mar 2019
LTG FY18: confidently building the business
19 Mar 2019
Octopus gains ThirdEye to detect light fingers
19 Mar 2019
IoT investor Tern shrinks losses
19 Mar 2019
Momentum continues to build at Softcat
19 Mar 2019
Time’s up to smell the coffee at Mindtree!
19 Mar 2019
Advanced World 2019 looks to the future
19 Mar 2019
Impressive Invenio attracts investment
19 Mar 2019
Breedr sires £2m funding for pig peak profit
18 Mar 2019
Starcom edges closer to EBITDA profit
18 Mar 2019
FIS and Worldpay agree $43bn merger
18 Mar 2019
Adtech search startup Adthena finds $14m funding
18 Mar 2019
UKCloud secures international investment to scale
18 Mar 2019
Fujitsu wins significant agile contract with DVA
18 Mar 2019
Stephen Kelly joins Kimble as Senior NED
17 Mar 2019
Another bad week for Facebook
17 Mar 2019
Another nail in the coffin of the bank branch network
17 Mar 2019
Interserve faces crucial vote
15 Mar 2019
Rimini Street: largest contract and first Salesforce deal
15 Mar 2019
Servelec sells Technologies business to Laurel Solutions
15 Mar 2019
Civica’s ‘TIPP’ an outstanding success
15 Mar 2019
HCL acquires SBE for digital consulting
15 Mar 2019
Cloud tidbits from Oracle in Q3
15 Mar 2019
BearingPoint growth slows
15 Mar 2019
Are you a Recruitment Agency or Training Organisation that specialises in the Technology Sector?
15 Mar 2019
Brand New Webinar: Avoiding Commodity Cybercrime
15 Mar 2019
Capita extends NI education network deal… again
14 Mar 2019
Webinar: Maximize Your Workforce Through Intelligent Services Automation, March 27, 2019
14 Mar 2019
Capita: basics in place as transformation year one ends
14 Mar 2019
Spring Statement clouded by Brexit uncertainty
14 Mar 2019
AON automates P&C underwriting with Zesty.ai
14 Mar 2019
Facebook Down - World doesn't End
14 Mar 2019
Mindtree buyout moving closer?
14 Mar 2019
TechMarketView Innovation Partner Programme shortlist announced
14 Mar 2019

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Thursday 21 March 2019

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If you’re a keen UKHotViews reader - who isn’t fortunate enough to have access to a corporate subscription to TechMarketView research - you can now subscribe to UKHotViews Premium, a new service for individuals.

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Posted by HotViews Editor at '00:00'

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Wednesday 20 March 2019

*HotViewsExtra* Will the Government’s ‘Outsourcing Playbook’ put Public Sector outsourcing back on track?

Outsourcing playbookThe recent problems at Interserve (see Interserve faces crucial vote) are another reminder of the perilous state that Public Sector outsourcing finds itself in throughout the UK. Whilst Interserve has ultimately survived to fight another day, the lingering fallout from Carillion’s implosion over twelve months ago (see Carillion's demise is ultimately bad for all Public-sector outsourcers) and recent reoccurring problems with a range of high profiled outsourcing contracts (e.g. Probation service contracts to be cancelled early) has put an industry, where the UK previously led the world, in real jeopardy. 

Interserve

This HotViewsExtra looks at how the Government and UK Plc are trying to put the sector back on track and whether these changes are likely to make the difference.

Read the piece here: Will the Government’s ‘Outsourcing Playbook’ put Public Sector outsourcing back on track?

Posted by Marc Hardwick at '12:12' - Tagged: publicsector  

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Wednesday 20 March 2019

CloudBuy FY18 losses greater than revenue

cloudbuyAIM-listed e-commerce and B2B e-procurement provider, CloudBuy, today announced its results for the 12 months to the end of December 2018 - and it’s not pretty. There was a 26% decline in revenue to £1.1m. Although losses have shrunk (by 25% to £1.6m) due to cost reductions, the firm is still in the unenviable position of losing more than it is generating in revenue.

Sales of Web and ecommerce services decreased 30%; revenue from Company Formation services decreased by 16%; and revenue from coding customers decreased by 33%.

Cash at 31st December 2018 was c£800k, a reduction of £1.6m in the year. Swinging into a profit and achieving cash flow break-even are important objectives for Cloudbuy. In a trading update in February, the firm explained that is was engaged in two opportunities, which if won would enable it to reach cash flow break even without further funding. Unfortunately, one of those wins is now looking unlikely so CloudBuy has agreed to drawdown £500k from an existing facility - to be received this month. A potential further drawdown of £250k would be undertaken should the second opportunity also not materialise.

As explained previously, much rests on CloudBuy’s PHBChoices partnership with NHS Shared Business Services. This is positioned as its “main growth engine” and is apparently showing “strong signs of growth” in the year to date. All eyes will be on this part of the business in the coming months to ascertain what degree of momentum has indeed been built.

Posted by Kate Hanaghan at '10:00' - Tagged: results   ecommerce  

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Wednesday 20 March 2019

EMIS grows despite legacy distractions

EMIS logoIn CEO, Andy Thorburn’s first full year as CEO of EMIS, he has achieved a good performance for the company despite dealing with the distraction of legacy issue resolution.

Total revenues increased by 6% to £170.1m, including a £0.1m two-month contribution from the acquisition of Dovetail (see EMIS places bet on blockchain with Dovetail acquisition). Recurring revenues stood at 83% of the total after increasing 5%. Growth was across all segments of the business. In Primary, Community & Acute Care, representing the lion’s share of the business, revenues increased 3% to £121.7m. In Community Pharmacy, revenues were up 14% to £25m. In Specialist & Care, the increase was 13% to £20.4m. And in Patient, revenues edged forwards 3% to £3.0m.

The big news over the period was EMIS settling with NHS Digital over legacy issues (see EMIS reaches settlement agreement with NHS Digital ). This was an important milestone, as EMIS needed to put itself in the best position possible for the GP IT Futures framework that will replace the GP Systems of Choice (GPSoC) agreement (see NHS Digital publishes GP IT Futures notice). As we have noted previously, the new framework poses a threat to EMIS, along with the other GPSoC suppliers (TPP, INPS and Microtest Health), as it marks a shift towards a more modular approach that is designed to make it easier for new suppliers to enter the market. However, EMIS is investing to make sure that it is aligned with the priorities of the NHS Long-Term plan; it is currently upgrading and extending its EMIS Web System, which serves 57% of GP practices in England, to form a new integrated clinical platform called EMIS-X, which supports NHS Digital’s interoperability standards. Over time, EMIS-X will become the platform for all EMIS Group solutions.

In the period in question, reported operating profit increased by 170% to £28.7m. Adjusted operating profit increased by 1% to £37.6m; this reflected reorganisation costs in 2017 as well as the cost of settling the NHS digital issue. Looking ahead, EMIS is aiming for mid-to-high single digit revenue growth, with a more even split of revenue from the NHS and enterprise sectors. That will mean the future business model more focused on the digital health marketplace. As a result, aside from success on the GP IT Futures framework it is also focused on continuing to develop patient-facing technology. EMIS is also aiming for the profit margin to head towards 30%. That would enable investment in the EMIS-X platform to be self-funded.

Posted by Georgina O'Toole at '09:59' - Tagged: results   health   software   digital  

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Wednesday 20 March 2019

FY18: a better year for SDL

logoIn-line FY18 results for SDL will have come as a relief for the management team after the frustration of the previous year when the company missed its financial goals. The year to 31 December 2018 ended with a 12.6% revenue lift to £323m and adjusted operating profits up 20.8% to £29m.

While all business segments improved (Language Services, Language Technology and Content Technology), performance was helped by acquired Donnelley Language Solutions which contributed revenue of £27.8m and £1.8m adjusted operating profit since the deal completed in July 2018. Without Donnelley, SDL’s total revenue (organic, cc) was up a more sedate 4.5%. Total SDL revenue rose 7.9% at headline level and 3.2% cc in FY17 so there is an improvement on an organic basis.

The company says much of the transformation heavy lifting has been carried out, however plans for 2019 include streamlining the back office. The focus during during the year will be on optimising the Helix business process automation programme (there does appear to be growing traction), further integrating Donnelley to drive deeper into regulated markets and developing its Language Cloud and Linguistic AI, and premium services and solutions.

As we have commented previously, SDL has the right tools and the market opportunity for its global content management and language translation software and services but operates in a fragmented and consolidating market. Interestingly, instead of trying to acquire its way to the top (although not all acquisition activity has been ruled out), management sees a better future from platform-based solutions that allow seamless interoperability across the localisation and content supply chain and started work on this strategy during 2018. This adaptation is both positive and necessary (and shows SDL has learned lessons from its previous acquistion activity) and is a sign it is updating its business model for the current/future landscape.

Posted by Angela Eager at '09:04' - Tagged: results   software  

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Wednesday 20 March 2019

HCL lands $1.3bn Xerox mega deal

HCLHCL Technologies has signed a seven-year $1.3bn renewal with Xerox to run portions of its global shared service operations, including administrative and support functions, selected information technology and finance functions, excluding accounting. As part of the agreement, a group of Xerox employees will transfer over to HCL. 

XeroxUnder its current contract, HCL manages aspects of Xerox’s mechanical, electrical and software engineering activities for printer and imaging product lines.

Shared services is going through significant change with increasing amounts of automation and robotics replacing the traditional ‘bums on seats’ model. HCL has already been working with Xerox for over 10 years and will no doubt be looking to evolve its shared services into “process-first, technology-led digital operations”. Expect to see significant roll-outs of both RPA and cognitive technologies with an accompanying shrinking headcount.

HCL joins is offshore peers in still being able to land mega-deals in a market lacking sizeable opportunities. Whilst TCS has led the way with a number of ‘dial-shifting’ contracts (see herehere and here) we have also seen Wipro land a 10-year $1.5bn deal with Alight and Infosys bank $2bn in Q2 sales.

Global Shared Service operations remain a huge area of opportunity for digital transformation and SITS suppliers and whilst most end users have started their automation journey few have really matured. 

Posted by Marc Hardwick at '08:54' - Tagged: contract   sharedservices   HCL  

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Wednesday 20 March 2019

Aquis Exchange continues to grow under the radar

aquisInnovative, equity trading marketplace, Aquis Exchange, has announced an encouraging set of full-year results. In its financials for the year ended 31st December 2018, industry disruptor, Aquis, revealed that revenues had doubled during the year to £4m, whilst EBITDA losses were down 18% to £2.7m. At the end of 2018, Aquis had grown its customer base to 27 trading members and accounted for just under 4% of continuous, pan-European trading.

Subscription-based, Aquis was established by the charismatic, investment industry veteran, Alasdair Haynes, the founder of another Pan-European exchange, Chi-X. Haynes is passionate about disrupting existing approaches to trading and is a strong advocate of the benefits of the subscription model. Under Haynes' stewardship, the Aquis Exchange applies a “fair-play” approach to trading, that seeks to eradicate, aggressive, non-client, proprietary trades. As a result, Aquis provides a cost effective and equitable, alternative to other exchanges, with lower toxicity and signalling risk.

Aquis completed its AIM listing in June last year, raising £12m in the process. The exchange is continuing to grow, currently accounting for more than 4.5% of European equity trades. Meanwhile, AkinovA, the electronic marketplace for re-insurance risks, recently announced that it was adopting the matching engine and surveillance tools used by Aquis Exchange in a deal with its technology arm, Aquis Technologies (see: Akinova and Aquis expand their partnership).

The Aquis Exchange is an interesting and genuinely innovative proposition, that has grown largely unnoticed by some in the investment industry. Similar to other areas of financial services technology, there is significant potential for the subscription model, employed by Aquis, to further disrupt the European trading ecosystem and for the exchange to continue to gain market share.

Posted by Jon C Davies at '08:23' - Tagged: results  

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Wednesday 20 March 2019

BlackCurve optimises funding with new seed round

logoThere is joy in simplicity of mission. I said so a year ago and I say so again. I refer to London-based startup BlackCurve, which develops software to help companies optimise product pricing across multiple sales channels and that’s it (see Startup BlackCurve prices in £500k seed funding).

Founding their business in 2016, the son (Philip Huthwaite, CEO) and father (Charles Huthwaite, CTO – now billed as Machine Learning & Analytics Director) team have gone on to raise a further £1.5m in a seed funding round led by Nauta Capital with participation from Mercia Fund Managers. I also note that peripatetic tech investor Nick Kingsbury (and member of TechMarketView’s Great British Scaleup programme advisory partner, ScaleUp Group) is on BlackCurve’s advisory board.

BlackCurve’s customer list includes solid, but lesser-known (at least, to me) names, such as Donaghy Bros, Electrical World and Ribble, but I do live a sheltered life. This suggests that BlackCurve is finding itself a market beyond the domain of the well-served mega-retailers, which seems a smart move to me.

Posted by Anthony Miller at '07:57' - Tagged: funding   startup  

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Tuesday 19 March 2019

2iC focuses on wearable information architecture to scale business

2iC logoLast week, we met up with Graham Booth, CEO and co-founder, and non-executive director, Charles Ward, of 2iC. 2iC was one of our 2015 cohort of Little British Battlers (see Little British Battlers: The Sixth Sense). Since then, we have kept a close eye on its progress (see 2iC: Innovation at its core); the company is revenue generating with profit being reinvested into product development.

2iC’s heritage lies in the frontline of defence. When founded, its raison d’être was to be the most innovate software company for the secure digital interoperability of field operations. However, over the last year or so, the company’s mission has evolved. Its focus, now, is on wearable information architecture, i.e. how to interconnect between individual wearable systems and other ‘things’ to deliver value in a system of systems. It is a subtle shift but one that, while drawing on the aspects of its work in the 5-Eyes defence markets of UK, Australia, New Zealand and the US, has relevance to a broader array of industries. This seems like an eminently sensible move, particularly as the UK defence market has proven to be very slow-moving and frustrating from an innovation perspective. One of those industries is health: 2iC is now pursuing opportunities around pandemic surveillance as well as the wellness of device-dependent patients after they have left the hospital environment. In these examples, 2iC can deliver individual wellness data combined with situational data to improve health and well-being outcomes.

The company has also formed several new partnerships to help it scale. In Australia, it has formed a partnership with systems engineering provider, Luminact, to offer smart integration and interoperability to the defence and industrial sectors.   While in the US, it is working with Kopis Mobile, developer of electronics and mobile applications for soldiers and first responders, in a similar fashion. These partnerships are designed to act as territory beachheads bringing 2iC closer to the customer with added local delivery capability. In the UK, meanwhile, it is working with 4Secure to form a Joint Venture around small information guards suitable for wearable (battery powered) or vehicle mounted use at the network edge. This JV will build on 2iC’s 2013 DSEI innovation award for a product enabling the co-ordination of behaviour between IT systems in separate domains.

Little British Battler programme logoThe increased activity means 2iC has had to ramp up is resources; it is busy hiring and has taken on a Software Development Director to focus on leading delivery and product development. Graham is, therefore, freer to focus on the sales and growth strategy. 2iC is also attracting the interest of growth investors as it scales internationally and into adjacent sectors. The biggest opportunities are still to come, as customers transition from trials into full deployments.

Posted by Georgina O'Toole at '13:31' - Tagged: health   defence   lbb   internetofthings   littlebritishbattler   scaleup  

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Tuesday 19 March 2019

Tribal revenues down but profit continues to improve

Tribal logoTribal Group’s revenue for the year ended 31 December 2018 fell by 5.7% to £80.1m (FY17: £84.9m) reflecting the impact of IFRS 15 accounting changes, currency fluctuations and the end of its Ofsted contract in its Quality Assurance Solutions (QAS) division.

The education software and services supplier saw revenue growth in the UK (up 8.7% to £42.6m) but found business elsewhere more challenging. Revenue from Asia Pacific fell 17.5% to £17.8m and Rest of World was down 19.2% to £9.7m. Annually recurring revenue improved by 2.7% to £38.5m (FY17: £37.5m).  

This time last year Tribal returned to full year statutory profit for the first time since 2013, and it continued to make progress in 2018. Statutory profit was up 58.3% to £4.1m. Adjusted operating profit for the year improved by 26.4% to £10.8m (FY17: £8.5m) and statutory operating profit was up 23.0% to £4.6m (FY17: £3.7m).

Revenue in Tribal’s Student Information Systems (SIS) business, which represents 71% of total revenue, fell by 5% to £57.0m (FY17: £60.0m)—this is largely blamed on the impact of IFRS 15. It won four new higher education customers during the year and added a number of new further education customers.

In QAS, revenue fell by 6.2% to £16.7m (FY17: £17.8m) largely as a result of its Ofsted Early Years contract concluding in March 2017. Adjusting for the end of this contract, revenue improved by 10.2%.

In the other part of Tribal’s business, including i-graduate, revenue fell by 9.9% to £6.4m (FY17: £7.1m). This part of the business has been restructured and combined with QAS to form a single line of business in 2019 called Education Services.

Tribal sees a good pipeline of UK opportunities in 2019 and it secured a contract, in partnership with Sopra Steria, with the Construction Industry Training Board at the start of the year. However, it says there are few new customer opportunities in Asia Pacific. Tribal has done well to continue to drive efficiencies and remove costs, but it is proving far more challenging to achieve revenue growth. 

Posted by Dale Peters at '10:13' - Tagged: results   education   software  

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Tuesday 19 March 2019

K3 gaining confidence

logoThe encouraging signs that have been emerging from K3 Business Technology Group over the past year (see here) were confirmed with the release of full year results that showed a return to operational profitability alongside a reduction in net debt and improved cash generation as the benefits of two years of transformation started to come through.

Reported results for the 12 months to 30 November 2018 were compared with a 17 month prior period. They showed revenue declining from £118.2m to £83.3m, however an (unaudited) 12 month comparison indicates a 0.8% increase. This reflects the business shift from licence to subscription revenue and the transformation effect. However, the 12 month gross profit increased 5.5% as K3 benefitted from more sales and higher margins from its own IP. Even with a 17 month comparative key metrics moved in the right direction, including a gross margin of 52.7% vs 51.6%. The company also turned an adjusted loss of £1.6m into a profit of £4.6m.

The K3 story is one of a company transitioning from a VAR to a product-led company that is also relying more and more on its own IP, while maintaining its 3rd party software and managed services business units. Revenue from its own IP has been ramping up and contributed £17.5m during 2018, 21% of total revenue (vs. 19.8% for the prior 17 months). Gross profit on its own IP is also increasing: 73.6% vs. 64.1% for the preceding 17 months.

Reassuringly, the pool of its own IP has been growing. Where its K3 I fashion product was the prime offering, K3 has added K3 I Imagine, its cloud based micro service architecture, technology agnostic platform that is hosts itself, and its Dataswitch offering. The Imagine platform, which provides customers with application integration and the ability to access new functionality (e.g. IoT) is already opening doors within existing customers. But it is also taking K3 into new areas of business such as kiosks, and enabling it to engage with the ecosystems of key customers like Ikea. It is very early days for Imagine so revenues are negligible but the interest appears to be there – the British Heart Foundation has hooked into the product – which bodes well for future K3 revenue growth.

The need for change never ends and work continues at K3 but the company is gaining confidence as its own IP portfolio expands. 

Posted by Angela Eager at '09:53' - Tagged: results   cloud   software  

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Tuesday 19 March 2019

LTG FY18: confidently building the business

LTG logoLearning Technologies Group (LTG)’s aim is to “build a leading end-to-end workplace digital talent and learning solutions provider, to partner global clients through the creation, implementation and maintenance of their integrated talent and learning strategies.” It is setting out to achieve that though a combination of acquisitive and organic growth.

A big step on this path was the acquisition of PeopleFluent in May 2018 (See  LTG benefits from successful acquisition integration), which has been integrated ahead of schedule and expectations. It extended LTG’s reach from corporate digital learning into talent management. That acquisition, as well as a full year contribution from NetDimensions, had a major influence on the FY18 results (to end December 2018).

Headline revenues increased by 83% to £93.9m. And within the new total, the changing shapre of the business is highlighted: 68% of recurring revenues vs. 38% a year prior, due to the transition towards a software license model, and 74% of revenues now coming from outside the UK vs. 45% in FY17.

It is the software and platforms business (64% of the business) that is driving growth – up 9% organically, with growth across all software businesses. Meanwhile, in the reported period, the content and services business (excluding the Civil Service Learning contract) suffered an 8% organic decline (due to a strong prior year comparator). The transition of the Civil Service Learning contract added another £3.3m of revenue decline. The content and services business operates on a fixed price, non-recurring, projects basis, so it is welcome that it now accounts for a smaller proportion of the business.

The strong EBIT margin (adjusted, up 300bp to 29%) and cash generation (which allowed net debt to fall to £11.5m) means that management can continue to invest to achieve its strategic aims – a goal of £200m revenue and run rate EBIT of at least £55m by 2021. Run rate R&D now stands at £17.5m (19% of software and platforms revenue), with much focus on integrating the product set for greater functionality. And the company points to a “healthy pipeline of acquisition opportunities); the recent acquisition of Watershed added useful data analytics capability inhouse.  LTG is answering the call for a more comprehensive set of learning and talent management services by large corporations and Government organisations; it continues to display confidence in its approach.

Posted by Georgina O'Toole at '09:50' - Tagged: results   software   learning   talent  

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Tuesday 19 March 2019

Octopus gains ThirdEye to detect light fingers

logoIt’s a bit confusing, this, as there are at least three startups with variations on the name Third Eye. There’s Israeli drone startup Third Eye Systems, US-based ThirdEye Technologies, which develops systems for the visually impaired; and there’s London-based ThirdEye Labs, which develops software to interpret CCTV footage in retail stores, the one we’re interest in. They’ve just raised £2m in a Series A funding round led by Octopus Ventures along with retail and consumer sector specialist investor, True. Original seed investor Episode 1 Ventures also participated.

Founded in 2016, ThirdEye Labs take footage from in-store CCTV cameras and analyses shop-floor activity. Though mainly designed to detect theft, the software can also be used to analyse footfall to optimise shop layout or to make sure staff are in the right place at the right time. The app side of the platform software works in real-time and issues alerts; there’s also a back-office app for fuller analysis of the video footage.

If it ‘does what it says on the tin’, you can see how ThirdEye’s platform might help bleary-eyed security staff peering at multiple camera images in a darkened room catch more thieves. However, they are not first in this game. For example, Dublin-based Kinesense has developed software which can ‘analyse thousands of hours of video’ though I think this is only done offline. There are other purveyors of forensic image processing too. But ThirdEye may be the first with a specific focus on the retail sector, and claims to have ‘caught an average of 27 thefts per camera month’.

One to watch – if they don’t watch you first!

Posted by Anthony Miller at '09:48' - Tagged: funding   startup  

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Tuesday 19 March 2019

IoT investor Tern shrinks losses

tern2018 results are out for Tern the investment company specialising in the Internet of Things (IoT). 

Headline figures saw it recognise a loss for the year of £0.3m, compared with losses of £1.7m in 2017, driven in part by year-on-year turnover up 58% among portfolio companies. Employment within the businesses also increased by 52% in the year.

Tern, previously known as Silvermere Energy, has a history of investing in tech start-ups going back to 2013 and has continued to build up its IoT portfolio with new investment made in FundamentalVR, a virtual simulation business targeting the medical sector. Other portfolio companies include Device Authority (IoT security automation), InVMA (an IoT systems integrator) and Wyld Networks (IoT connectivity).

Further funds were raised in 2018 with a placing in July bringing in £2.9m, taking total fundraising last year to £6m and making it look likely the portfolio will expand further. 

The IoT product and services market remains on the cusp of significant growth and Tern’s strategy to invest across the IoT value chain has positioned it suitably to take advantage.

Posted by Marc Hardwick at '09:46' - Tagged: results   internetofthings  

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Tuesday 19 March 2019

Momentum continues to build at Softcat

Softcat logoSoftcat has published another set of solid results, achieving strong revenue and profit growth in the six months ended 31 January 2019 (H1 FY19).

Revenue was up 21.1% compared to the same period last year, reaching £434.0m (H1 FY18: £358.3m). Growth was strongest in Hardware, which was up 24.7% to £195.0m. Software improved by 19.4% to £200.9m and Services by 13.4% to £38.1m.

Gross profit improved by 26.5% to £94.7m (H1 2018:  £74.8m) and operating profit was up by an even more impressive 40.4% to £33.9m (H1 2018: £24.1m). Gross profit per customer also improved, reaching 18.7% (H1 2018: 14.5%).

Softcat added 620 new customers during the period and has now extended its run of delivering year-on-year income and profit growth to 54 consecutive quarters. Not surprisingly, CEO Graham Watts, said he was “delighted” with the trading performance, which saw growth across all customer segments and technology areas. Enterprise was the fastest growing area of the business, but SMB and public sector were not far behind.  

The company estimates its share of the market to be 6%, so it sees plenty of opportunity for future growth. The business has won new customers, but it has also invested in forming deeper relationships with existing customers. It is seeing continuing demand for hybrid cloud, security, software and services, and is actively developing its teams to support its new public cloud and security support services. Management expects full year outcomes to come in marginally ahead of previous expectations.

Posted by Dale Peters at '08:58' - Tagged: results   cloud   software   services   hardware  

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Tuesday 19 March 2019

Time’s up to smell the coffee at Mindtree!

logoAs we signalled last week (see Mindtree buyout moving closer?), it’s ‘game on’ for Bangalore-based mid-tier Indian pure-play (IPP), Mindtree. Mumbai-based peer LTI’s (L&T Infotech) parent company, Indian industrial conglomerate Larsen & Toubro (L&T), has acquired the 20.3% stake in Mindtree held by Indian entrepreneur, VG Siddhartha, founder-owner of the Café Coffee Chain business. L&T is paying Rs980 per share for the stake, about 2% over the previous day’s close.

L&T has also issued an order to purchase up to a further 15% of Mindtree stock at the same price or lower, along with an open offer to purchase up to an additional 31% of Mindtree’s stock on the same terms. After hitting a Rs1,162 peak in September 2018, Mindtree’s shares had plummeted to Rs770 by October until rumours of the deal revived interest in the stock. If successful, L&T intends to keep Mindtree an independent listed business though would ‘extend support … going forward’. Besides it’s IT services pure-play subsidiary LTI, L&T also own a Technology Services unit which provides engineering and R&D services to industry.

Mindtree was founded back in 1999 by executives from top-tier Indian pure-play Wipro. Since then, Mindtree has built a successful business, often winning against larger peers. Most recently, Mindtree was recording double-digit growth and margin expansion despite a slowdown in its business in Europe (see Mindtree advances – US surges, Europe stalls). Management is vigorously opposing L&T’s bid.

L&T (in)famously – and unsuccessfully – attempted to acquire the late, great Satyam after its fall from grace (see L and T: If we don’t get Satyam we’ll buy someone else!). More recently, management has been on a quest to turn LTI, currently with annual revenues of some US$1.3bn, into a US$2bn revenue company by 2019. A merger with near-US$1bn Mindtree would do the trick nicely!

You can see our prescient preview of this deal – and who else among the mid-tier IPPs might be up for grabs – in OffshoreViews Musing on the Mid-Tier Indian pure-plays.

Posted by Anthony Miller at '08:52' - Tagged: offshore   acquisition  

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Tuesday 19 March 2019

Advanced World 2019 looks to the future

AdvancedYesterday a couple of us made the trek to Birmingham to participate in the impressively attended Advanced World annual conference.

Business software supplier Advanced’s annual shindig, primarily for its for partners and suppliers, was an upbeat event grouped under the theme of ‘rethinking, recharging and reshaping’ business models to accommodate ever faster and greater levels of change. As you would expect AI, Machine Learning, Data and Intelligent Automation all featured prominently and were weaved throughout the entire conference.

Proceedings were kicked off by a keynote from Advanced CEO Gordon Wilson that also saw the launch of MyWorkplace – a Cloud-based platform designed to help customers accelerate their digital transformation by joining up the various different systems they are running all in one place. The resulting ‘ecosystem’ of different applications benefits from a single sign-on and an API platform for partners and is tailored to a range of different sectors. 

Other keynote speakers included Carolyn Fairbairn, Director-General of the CBI who provided a positive outlook on the future of British business and in particular the tech sector despite the risks of a cliff edge no deal Brexit now just 10 days away. Themes included the importance of tech transfer and collaboration between British Universities and Business and the very real value of Corporate Social Responsibility.  

The final keynote was an interesting take on the future of the workplace by recruitment firm Hays’s MD Mark Staniland and looked at the role technology will play helping firms deal with issues such as an ageing workforce and skills shortages and how machines and humans will likely coexist in the workforce of the future.

Posted by Marc Hardwick at '08:51' - Tagged: advanced  

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Tuesday 19 March 2019

Impressive Invenio attracts investment

LogoFast-growing SAP-centric services provider Invenio Business Solutions has secured £11.6m of funds from BGF, the UK’s most active investor. The money will be used to help the business scale by expanding its offering, improving its services and growing through acquisition.

Formed in 2006, the specialist Reading-based SI has established strong footholds in both the tax and revenue management processes segment and the media industry sector. Last FY (the twelve months to 31st March 2018) Invenio turned over £25.5m, up 51% yoy. Operating profit increased almost fourfold to just over £7m. Since that time the company’s headcount has grown by a further c.50% suggesting that the heady pace of expansion has continued unabated.

Invenio now has over 750 employees working for customers worldwide with delivery centres across seven countries - UK, India, Mauritius, Saudi Arabia, Fiji, USA and UAE. Its customers include Universal Music Group, Kuehne & Nagel, the BBC and the Fijian and Saudi Tax authorities.

The SAP services market, estimated to be worth over £2b in this country alone, continues to provide a happy hunting ground for ambitious challenger SI’s. Great British Scaleup Keytree (see here), for example, has doubled in size every three years and now boasts one of the largest SAP practices in the UK. One suspects that the Invenio growth story is far from over.

Posted by Duncan Aitchison at '07:49' - Tagged: investment   systems+integration  

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Monday 18 March 2019

Breedr sires £2m funding for pig peak profit

logoAnd cattle and sheep too – indeed all livestock. This is Exeter-based ‘farmtech’ (if there is such a term – and if there isn’t, there is now!) startup Breedr, which has developed a data-driven app to help farmers maximise livestock profitability. Breedr has raised £2.2m in a seed funding round led by LocalGlobe with participation from Mons Investment (which also backs Berlin-based farming services startup InFarm) and angel investors

Founded in 2018 by an Aussie-born son of a farmer, Breedr collects life-cycle data (I guess you’d call it that) on livestock, such as breeding history, medicines and health, through to regular weighings, and provides analytics so that farmers can determine the best time for selling (which can be done through its marketing portal), breeding or slaughter.

Breedr works with industry standard EID (ear identification) tags and selected tag readers, and there are plans to integrate the product with popular farm management systems. Breedr charges a subscription fee to use the platform and also levies a 0.5% transaction fee should livestock be sold through the portal.

Livestock monitoring is of course not a new idea and there are many products already established in the market. Breedr’s ‘raison d’etre’ about ‘peak profit’ is a great marketing differentiator and may well catch farmers’ attention. The platform is still early stage, but if Breedr can develop a large network of farmers (currently just UK, but with plans to extend to Australia and the US this year), then the value of the data should be multiplied many times over – as will its uses. And the value of the startup too, of course.

Posted by Anthony Miller at '09:23' - Tagged: funding   startup   farmtech  

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Monday 18 March 2019

Starcom edges closer to EBITDA profit

Starcom delivers on interim promiseJersey-based telematics firm Starcom grew its FY18 revenue 10% yoy to US$6m, boosted by exchange rate gains and an US$1.1m deal for its Helios vehicle tracking equipment and services to a North African government buyer late last year.

Though it failed to match management expectations of becoming EBITDA positve, the company came tantalisingly close to breakeven as its EBITDA loss shrank from US$193k in FY17 to just US$8k. Net loss too fell 32% to US$920k whilst gross margin improved to 40% due to increased sales of more profitable products such as Tetis, Kylos and Watchlock.

Multiple contracts signed in the last couple of months indicate a strong pipeline for FY19. These include a three-year US$500k agreement with Xplosive Solutions to monitor cattle in South Africa and a five-year US$600k deal to track shipping containers for Israel Chemicals.

Further contracts with electric motorcycle manufacturer Zero Motorcycles and US air cargo shipment provider Cubemonk should also help Starcom grow its recurring revenue. We look forward to seeing whether new products can contribute to further growth and push Starcom over that all important EBITDA profit line in the current financial year.

Posted by Martin Courtney at '09:07' - Tagged: results   telematics   iot   StarcomSystems  

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Monday 18 March 2019

FIS and Worldpay agree $43bn merger

fisGlobal payments provider, Worldpay, and financial services technology giant, FIS, have today announced plans to merge. Under the terms of the agreement FIS shareholders will own approximately 53% of the combined entity and Worldpay shareholders approximately 47%. Worldpay shareholders will receive approximately 0.93 FIS shares and $11 in cash for each Worldpay share.

FIS and Worldpay look like a good fit and the two companies have fairly, complementary offerings. FIS is no stranger to largescale M&A. Traditionally strong in retail banking and payments, the company boosted its presence in capital markets, asset and wealth management solutions, with the 2015 acquisition of Sungard. (See: FIS makes a sizeable bet on Sungard). Similar to Worldpay, prior to its acquisition, Sungard was itself a leader in its own core segments.

The $43bn deal is the latest sign of the accelerating pace of change in the global payments space and comes during worldpayan active period for M&A in the sector (see: Visa wins Earthport battle as Mastercard buys Transfact). The announcement follows a healthy set of full year results for FIS, off the back of strong growth in its core North American markets. During the recent earnings call, FIS leadership discussed the company’s willingness to acquire capabilities and scale in the face of the evolving marketplace.

The transaction is subject to regulatory and shareholder approvals and is expected to close in the latter part of 2019.

Posted by Jon C Davies at '08:25' - Tagged: payments   M&A  

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Monday 18 March 2019

Adtech search startup Adthena finds $14m funding

logoI am inclined to overlook the rather excitable marketing hype that styles London-based Adtech startup Adthena as “The Ultimate Search Intelligence Solution” acknowledging the fact that founding CEO, Ian O’Rourke won the Developing Entrepreneur award at the WCIT Enterprise Awards in 2016.

And it’s testament to investor confidence in its market success that Adthena has raised a further $14m in a Series A funding round led by Updata Partners, bringing the total raised so far to some $18m. Founded in 2012, Adthena reported a £3.36m net loss in 2017 (latest accounts on record) on revenues of £2.82m. With offices also in Austin and Sydney, Adthena boasts over 200 clients including marquee brands across many industry verticals. The new funding will be used to expand Adthena’s US presence as well as boost R&D.

I assume the search for profit will probably take a little longer.

Posted by Anthony Miller at '08:19' - Tagged: funding   startup   adtech  

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Monday 18 March 2019

UKCloud secures international investment to scale

UKCloud logoUKCloud, the provider of secure multi-cloud hosting dedicated to the public sector, has attracted international investment from Digital Alpha Advisors, LLC of £25m.

Digital Alpha highlights the potential it sees for the UKCloud business due to the low levels of cloud penetration in the UK public sector to date. UKCloud was created to provide a secure, scaleable, and cost-effective cloud platform to drive the digital transformation of UK public services. It has differentiated by offering hyperscale cloud technologies and traditional Enterprise technologies on a single platform hosted within secure UK datacentre facilities.

It has, over the last couple of years, expanded its offerings (see UK Cloud: responding to a changing market), for example, through the launch of UKCloudX last summer, targeted at the OGD community, defence and security/intelligence agencies (and involving a £15-20m investment( and UKCloud Health, launched in 2017. It has also expanded its sovereign cloud platform in the face of Brexit uncertainty.

Digital Alpha is an investment firm focused on digital infrastructure and services required by the digital economy, with a strategic collaboration agreement with Cisco Systems, Inc. The agreement will support the further enhancement and expansion of teams and technologies behind the UKCloud platform, allowing new product lines to be shaped that are pre-packaged with Cisco’s multi-cloud offering, as well as strengthening alignment with Cisco in the UK. Cisco were one of UKCloud’s first alliance partners, providing many of the data centre technologies which power the UKCloud platform.

UKCloud generated c£45m of revenues from IaaS and PaaS in the UK public sector in its last completed financial year (to end March 2018). It has been a year-on-year growth story. However, growth has slowed and recent investment has been designed to support the return to punchy growth that CEO Simon Hansford is keen to see. According to Hansford, this Digital Alpha investment, designed to scale up the business, will “accelerate our investment in sales, marketing, customer experience and new markets”.  The timing couldn’t be better. Once Brexit uncertainty is out the way, Whitehall will be focused on ensuring that systems and processes are Brexit-ready; in some cases that will result in the acceleration of digital transformation and a shift to the cloud. UKCloud faces significant competition so its ability to differentiate will be crucial to picking up market share.

Posted by Georgina O'Toole at '07:00' - Tagged: public+sector   funding   investment   iaas   PaaS   PublicCloud  

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Monday 18 March 2019

Fujitsu wins significant agile contract with DVA

Fujitsu logoFujitsu has won a contract with the Northern Ireland Driver & Vehicle Agency (DVA) to develop a new booking and rostering software system, supporting its other software applications and providing call-off development services.

Valued at c£16m over seven years, with an option to extend by three years, this is a significant win as part of the DVA’s Strategic Partner Procurement involving agile development at scale. Under the contract, which is due to begin in October, the DVA has stated that it may want to integrate the system with others in the department or across other areas of the Northern Ireland Civil Service.

The system development will be undertaken using an agile and DevSecOps approach around a Microsoft.Net platform. Fujitsu has over 1000 employees certified in its global Microsoft practice, 200 of which are in the UK. In Northern Ireland, Fujitsu states it has a “diverse, highly skilled and agile capable workforce”.

This is great news for Fujitsu. In its UK public sector business, which accounts for over half of its total Services revenue, Fujitsu faces the prospect of further disaggregation of its legacy contracts (see UK Public Sector Supplier Prospects). It has started to build digital reference sites the UK public sector, for example in the Home Office Biometrics Programme (HOBS – see Fujitsu identifies with Home Office HOBS programme) and in the Northern Ireland Causeway programme (data sharing – see Fujitsu extends NI Causeway contract). However, to have a case study of this scale will be surely welcome.  

Posted by Georgina O'Toole at '06:11' - Tagged: public+sector   contract   agile   digital   DevSecOps  

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Sunday 17 March 2019

Stephen Kelly joins Kimble as Senior NED

KimbleKellyStephen Kelly is to join the board of Kimble as the Senior Non Executive Director with immediate effect.

I’ve known Stephen for many decades starting with his time at Chordiant. Then as CEO of Micro Focus before moving to become COO at HMGovt. Then finally as CEO of Sage until his departure on 31st Aug 18. See - Sage CEO steps down.  I doubt there is anyone else around with that breadth of experience.

I’ve also known Sean Hoban for getting on for 20 years. First via Edenbrook - where I was investor via Elderstreet. Then, more recently in 2012, because I became an early stage investor (with Kelly) in Kimble where Sean is the CEO. A year back, in Mar 18, Accel KKR made a significant investment in Kimble which also enabled angel investors (like me) and management to sell some of their shares. I am not at liberty to divulge the valuation but I have said publicly that, in % terms, it was the best investment I have made this decade (so far!)

Kimble is really motoring at the moment - in particular in the all-important US market. 50% of new business now comes from the US where Kimble has opened offices in San Francisco, Chicago, Boston and Atlanta. Kimble is aiming for revenues of c£20m in 2019 representing a growth rate of over 50%. Kimble is now a global leader in professional automation software (PSA); listing many of TechMarketView’s own clients like NTT, TCS and Kainos (See - Catching the TMV spark) as customers.

Given both Kelly’s background & experience and Kimble’s ambitions, they seem a great match. I am even more sure that my shareholding is in safe hands!

Posted by Richard Holway at '15:40'

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Sunday 17 March 2019

Another bad week for Facebook

Facebook As every week nowadays seems to be bring bad news for Facebook, last week was yet another bad week for  Mark Zuckerberg.

The week started with extensive media coverage that Facebook should be broken up. This as a response to Zuckerberg’s plans to integrate Facebook, Instagram, WhatsApp and Messenger - which would, of course, make a breakup even harder. Was this Zuckerberg’s plan to thwart the breakup all along?

Then, this was followed by the longest outage of Facebook ‘s services on Thursday - See Facebook down - World doesn’t end.

That was followed by news that two of Zuckerberg’s most trusted and long-serving lieutenants were to leave. Chris Cox - Chief Product Officer and Chris Daniels - head of the WhatsApp division.  Although not explicitly stated, it did seem that both departures were because they disagreed with the direction Zuckerberg was taking the company.

Then the awful shooting in Christchurch, New Zealand saw Facebook in the headlines yet again as the atrocity was live streamed on Facebook for 17 minutes - and then reloaded thousands of times. I’ve written countless times about Facebook’s contention that it is a ‘platform’ and not a ‘publisher’. But it has taken huge amounts of advertising revenues from responsible publishers. As Facebook is learning, you need lots of staff costing megabucks to monitor and censor stuff. But can you see any responsible publisher airing that video? Or, come to that, the large amount of horrible stuff - from self-harm manuals to vicious trolling and bullying?

I hear of more and more people disengaging from Facebook. Indeed the number of users in the developed world is indeed on a plateau and is expected to fall in the near term.

Posted by Richard Holway at '15:04' - 1 comment

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Sunday 17 March 2019

Another nail in the coffin of the bank branch network

ChequeThere was a time as recently as ten years ago, when we visited our branch of Lloyds in Farnham everyday to pay in cheques. Now it is a complete rarity.

On Saturday I received one of those rare cheques. I normally use the web version of Lloyds excellent online banking system. But, as I didn’t want to traipse in to town again, I used the mobile version which allowed me to take a photo of the cheque and upload it to my account. It worked first time and the cheque was immediately credited to my account.

As paying in cheques was the only reason for my rare visits to my branch, this was yet another nail in the coffin of keeping open an expensive branch network. But when I celebrated this on Facebook I had several comments reminding me that a third of people over the age of 65 didn’t use the internet. Indeed the news media is full of negative reports about branch closures. I suppose I ought to have some sympathy with those who still rely on visiting their branch. Must admit on the rare occasion I have queued to see a teller, the person at the head of the queue seems to be using it to have a long chat about non-banking issues. So should bank branches remain open as a social amenity for old people?

I’m afraid to say that I think the branch network is in terminal decline. They say ‘Use it or Lose it’. Well, I’m afraid I can’t now see any reason to use my Lloyds branch at all.

Posted by Richard Holway at '09:36'

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Friday 15 March 2019

Interserve faces crucial vote

Interserve logoOutsourcing firm Interserve could enter administration later today as it faces a crucial vote on its future. At today’s emergency meeting, shareholders will decide whether to accept a rescue plan. The deal would see lenders take control of the business in a debt-for-equity swap, which would cut the company’s debt by c.£485m and inject £110m into the business. However, this deal would leave existing shareholders with just 5% of the business.

If the rescue plan fails to win the support of 50% of voting shareholders it will enter into a pre-pack administration, overseen by EY, which will wipe out shareholders' stake entirely. Interserve’s largest shareholder, with a stake of c.28%, Coltrane Asset Management has so far opposed the deal.

We will have more on the result of the vote and the impact on the business, which employs c.68,000 people worldwide (approximately two-thirds based in the UK), next week. 

Posted by Dale Peters at '10:28' - Tagged: outsourcing   bpo  

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Friday 15 March 2019

Rimini Street: largest contract and first Salesforce deal

logoRimini Street has posted another strong set of results covering Q4 and full year 2018 as organisations continue to warm to the prospect of costs savings and budget release for reinvestment in growth initiatives.

The 17% revenue growth of Q4 to $67.7m, matched that of Q3. While still strong, the rate of growth has been slowing. Discussing the results, CEO Seth Ravin said Oracle and SAP were aggressively discounting fees and Rimini Street had lost some bids as a result. We see that as an indication of the worry levels within Oracle and SAP but it does put pressure on Rimini Street. For the full year to 31 December 2018 revenue grew 19% to $252.8m. One of the notable events was the signing of Rimini Street’s largest contract in its history, worth $26m over three years.

2018 was a year of investment which was reflected in a fluctuating bottom line. Q4 operating income dropped from $4.3m to $3.6m while net income was $2.3m vs. a $3.9m loss. Across the full year operating income increased from $22m to $25.4m. However the full year saw a net loss of $68m vs. a loss of $53.3m. Activity to improve the balance sheet, alongside investments in new products and services, support capabilities, geographic expansion and sales and marketing infrastructure incurred costs but are investments for growth and the company plans further investment in 2019. One of those areas will be international growth – currently it represents 35% of total revenue and expanded by 30% over the year, so there is headroom for further expansion.

We would expect the Salesforce partnership, whereby Rimini Street provides a service to support Salesforce Sales and Service Clouds, to be another area of growth. Set up during 2018, the first contract has been signed post year end and it is a significant one. Global holding company EBSCO Industries, who has 26 companies in its portfolio, selected Rimini Street Application Management Services (AMS) for Salesforce to maximize the value and ROI of their Salesforce investment. EBSCO has been a Rimini Street customer since 2015 (for SAP support), this extension expands the Rimini Street footprint within the company and shines a light on the extent of the opportunity ahead. 

Posted by Angela Eager at '10:03' - Tagged: results   software   ApplicationServices  

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Friday 15 March 2019

Servelec sells Technologies business to Laurel Solutions

Servelec logoSheffield headquartered Servelec has announced the sale of its subsidiary Servelec Technologies to Laurel Solutions, an affiliate of FFL Partners. The terms of the deal have not been disclosed.

Laurel SolutionsServelec Technologies provides remote monitoring systems, secure Supervisory Control and Data Acquisition (SCADA) systems, and business optimisation software. It achieved revenues of £18.0m in the year ended December 2017. The acquisition extends San Francisco-based Laurel Solutions’ portfolio in remote asset monitoring, control, and industrial IoT enabled technologies.

Montagu Private Equity completed the £225m acquisition and delisting of Servelec Group plc in January 2018. Things have been moving rapidly over the last year or so, with a three to five-year business plan in place (see Servelec on mission to deliver ‘full potential’). At the end of 2018 Montagu sold the systems integration business, Servelec Controls, through a management buyout backed by Alcuin Capital Partners (see Servelec Controls sold to PE-backed MBO team).

The sale of the Technologies and Controls businesses means that Servelec is now wholly focussed on the public sector markets of health and local government, with the latter spanning social care, education and youth services. The business strengthened its proposition in this area through the acquisition of C:Vision in January 2019 (see Servelec acquires C:Vision).

Servelec has faced strong competition in the local government market and the NHS market has been somewhat sluggish. However, Servelec’s proposition ties in nicely with the Government’s integrated care strategy and interoperability agenda, and it has a clearer focus for 2019, which they hope will drive growth in the business.

Posted by Dale Peters at '09:46' - Tagged: acquisition   software   socialcare   iot  

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Friday 15 March 2019

Civica’s ‘TIPP’ an outstanding success

logoMany thanks to the six exciting tech SMEs selected by Civica Innovation Partners to participate in our third TechMarketView Innovation Partner Programme (TIPP) yesterday:

  • Ampliphae
  • Eyequant
  • Fiscal Technologies
  • Microshare.io
  • Service Robotics
  • Switchee

logoTop teams from each company spent an hour with Civica executives and TechMarketView research directors discussing how their innovative machine intelligence solutions might provide great partnership opportunities for Civica.

You will be able to read more about these companies soon in UKHotViews, where you will also find announcements of future TechMarketView SME programmes.

You can find out more about the TechMarketView Innovation Partner Programme here and about Civica Innovation Partners here.

Posted by Anthony Miller at '09:32' - Tagged: tipp  

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Friday 15 March 2019

HCL acquires SBE for digital consulting

hclHCL Technologies has acquired US-based Strong-Bridge Envision (SBE) for a reported $45m. SBE will be integrated into HCL’s global Digital and Analytics business.

Bringing SBE into the fold will add capabilities around digital strategy development, agile program management, business transformation and organisational change management. When combined with HCL’s existing expertise (e.g. experience design, apps modernisation, data analytics), this should help the firm deliver the full spectrum of services for customers undertaking digital journeys.

SBE works with Fortune 1000 enterprises and is headquartered out of Seattle. HCL’s challenge will be to truly globalise that capability.

In December, HCL made its biggest ever acquisition when it bought various IBM software products in a $1.8bn deal. Although SBE is a much, much smaller purchase, we think there is great potential for it to be impactful.


Read how HCL stacks up versus Accenture, Atos, Capgemini, Capita, Cognizant, DXC, Fujitsu, IBM, and TCS in TechMarketView’s new Market Readiness Index report: Have the leading IT services providers adapted for digital?

Posted by Kate Hanaghan at '09:19' - Tagged: acquisition   digitalstrategy  

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Friday 15 March 2019

Cloud tidbits from Oracle in Q3

logoOracle described Q319 as “stellar” but it wasn’t obvious from the numbers and Q4 guidance disappointed the market, sending shares down 4% in extended trading.

Part of Oracle’s enthusiasm stemmed from take up of its Autonomous Database – 1000 customers so far and 4000 pilots entered into during Q3 – which Larry Ellison described as the most successful introduction of a new product in Oracle’s 40-year history. And 32% revenue growth from Fusion applications and 30% from NetSuite was respectable. Nevertheless, total revenue declined 1% (+3% cc) to $9.6bn and guidance for Q4 is flat to 2% growth. Net income was a tax benefit-aided $2.7bn vs. a loss of $4bn while operating income increased 5% to $3.4bn. The overall operating margin improved but that was because the low margin hardware business is shrinking, although cloud business helped margin growth too according to Oracle.

The important story is cloud growth and it remains opaque. Cloud Services and License Support grew just 1% (4% cc) to $6.7bn, while Cloud Licence and On-Premise Licence revenue fell 4% (flat cc) to $1.3bn. On-premise maintenance fees will have contributed significantly to the Cloud Services and Licence Support line suggesting less than stellar cloud growth.

Management said the cloud business was more than double what it was 3 years ago but that needs to be viewed in the context of faster cloud growth from SAP (40% Cloud subscriptions and support growth in Q418) and Microsoft (Commercial Cloud revenue up 48% in its latest quarter including 76% Azure expansion). Oracle customers appear to be attached to their on-premise products and Oracle’s full stack cloud propositions are not proving to be as attractive to new customers as those from competitors. The Bring Your Own Licence does add a complicating factor however.

Fluctuating cloud growth is to be expected (especially now that investors are becoming twitchy about the rate of cloud growth across the market) but Oracle’s rate of cloud growth appears to consistently lag the market despite the heavy investment in SaaS, PaaS and IaaS.  

Posted by Angela Eager at '08:45' - Tagged: results   cloud   software  

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Friday 15 March 2019

BearingPoint growth slows

LogoEurope-centric consultancy BearingPoint could not make it three years of double-digit growth in a row. The Amsterdam-HQ’d firm’s 2018 revenue increased by just 4% yoy to €739m – a significant tail off from the 13% top line surge delivered in the previous twelve month period. The core consulting activities performed slightly better with sales up by 6% yoy, while BearingPoint’s software and solutions business found the going heavier than in prior years. Profitability was reported as remaining strong.

From a regional perspective, France, Benelux, Africa was called out as having had a good FY18 with expansion bolstered slightly by the acquisition late last year of Belgian data specialists Inpuls. The UK & Ireland, which we estimate accounts for less than 10% of firm-wide revenues, was cited as the other stand out performer achieving “far above” market growth. Our most recent analysis showed that demand for UK SITS consulting services increased by 5.6% last year (see here).

BearingPoint made over 1,100 new hires in 2018, lifting its headcount to over 4,500 employees. The partnership was also enlarged with the appointment of 21 new admissions. Given the modest revenue growth last year, however, it is unlikely that the BearingPoint’s overall global consulting network of more than 10,000 people expanded anywhere near as dramatically.

The firm has undoubtedly come a long way since leaving the Chapter 11 ashes of BearingPoint Inc behind in 2009. Under the stewardship of new managing partner Kiumars Hamidian, appointed last September, the business is driving to develop even more of its own services around proprietary IP in areas such as AI, Robotics, and Cyber Security. Twelve months ago, however, BearingPoint believed that it was set to reach its goal of one billion euros in revenues by 2020. The slower 2018 means that the firm will almost certainly have to wait a year or two longer to reach this impressive milestone.

Posted by Duncan Aitchison at '08:13' - Tagged: consulting   resullts  

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Friday 15 March 2019

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Thursday 14 March 2019

Capita extends NI education network deal… again

Capita logoCapita has secured another extension to its Education Network for Northern Ireland contract in a deal that could be worth up to £90m. The contract will see Capita continue to provide a managed IT service for schools in Northern Ireland as part of the C2k programme, including the provision of its SIMS management information system.

Northgate Managed Services was selected as the successful bidder for the network back in 2012; it was originally worth £170m over five years. Capita inherited the contract after it acquired Northgate Managed Services in 2013.

In 2017 Capita won a £50m two-year extension to the deal taking it through to the end of March 2019. It was expected that a replacement system would be available at the time this extension reached its conclusion but according to the Education Authority (EA), the non-departmental body responsible for managing C2k, this has not been possible.

As part of the process of replacing the network EA had to consider moving C2k to the Northern Ireland Public Sector Shared Services Network (NI PSSN). The contract to deliver NI PSSN has recently been awarded to BT (see BT's regional focus pays off with PSSN deal). Due to the complexities of the C2k programme, moving it to NI PSSN cannot be achieved until March 2021. EA is finalising a procurement exercise to replace the existing agreement and has already started market engagement.

The two-year extension is worth around £50m to Capita with a possible further one-year extension to provide a transition period. According to the contract award notice, the deal could be worth up to £80-90m over the three years. This is another useful contract extension for Capita as it works through its transformation strategy, it follows recent renewals with Westminster City Council, Gas Safe, and PSNI.

Posted by Dale Peters at '10:00' - Tagged: contract   education   network  

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Thursday 14 March 2019

Capita: basics in place as transformation year one ends

logoToday’s full year results mark the end of the first year of Capita’s three year transformation plan. So far the focus has been on fixing the basics - where there has been progress - the next phase is proving the new model and delivering growth.

FY18 results reflect the transformation plan, resulting in adjusted revenue down 5% to £3.9bn while adjusted operating profit fell 25% to £335m. CEO Jon Lewis described the transformation as “firmly on track”. Operating profit fell 53% in H118, so the full year result suggests movement in the right direction. The year saw cost savings of £70m and a further £175m planned for 2019, more investment in products and people, and changes to the sales function. It also saw the introduction of the One Capita operating model, which is a first for the company, and reorgansing down to 6 divisions as the company sought to simplify and strengthen.

During the year gains from new and extended contracts were outweighed by contract losses and scope and volume changes in Government Services, Customer Management and Specialist Services, while there was also a decline in transactional revenue in People Solutions and IT & Networks. Previously identified problem contracts are still a drain but positively, losses from the main three ones reduced from £50m in 2017 to £30m in 2018.

There are signs that the changes are having a positive impact, such as in consultative selling based on industry knowledge. Evidently this approach has helped Capita’s partnership with Transport for London around the London congestion charge zone, low emission zone and enforcement contract. Five of Capita’s divisions are involved in delivery and its ability to demonstrate that it could work across multiple divisions led to the opportunity to provide ultra-low emissions zone charging.

With another two years of transformation to go, there is still a lot more work to be done but there are indications of progress within the FY18 results. The share price dipped initially but had recovered at the time of writing.

Related reading:

Business Process Services Supplier Prospects 2019 and Beyond

Enterprise Software Supplier Prospects 2019 and Beyond

UK Public Sector Supplier Prospects 2019

Posted by Angela Eager at '09:15' - Tagged: itservices   businessprocessservices   results.  

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Thursday 14 March 2019

Spring Statement clouded by Brexit uncertainty

Philip Hammond source: HM TreasuryYesterday, Chancellor of the Exchequer Philip Hammond delivered a Spring Statement that will hardly be noticed after the chaos of last night’s Brexit votes. Much of what he discussed was predicated on the UK securing a deal to exit the EU. Time is almost up on achieving an orderly exit (although we may be looking at Meaningful Vote 3 next week), MPs voted to reject a no deal Brexit last night (but we may still end up with it), and a delay (potentially a long one) is looking increasingly likely. Hence, it remains to be seen how much of what Philip Hammond said in his statement will actually be realised.

The Office of Budget Responsibility’s (OBR) Economic and Fiscal Outlook, whose projections are also based on the UK making an orderly departure from the EU, reported that economic growth has slowed since Budget 2018. GDP growth for 2019 has been revised down from 1.6% (in October) to 1.2%. However, thanks to higher tax receipts and lower debt interest than expected the OBR’s underlying borrowing forecast for 2019 has also been revised down to 1.1% of GDP or £22.8bn (£2.7bn lower than predicted in October 2018). The narrowing of the deficit should give the Chancellor more scope to increase spending on public services later in the year.

The statement included announcements of more investment in technology and infrastructure, including: £53m from the third wave of the Local Full Fibre Networks challenge fund; £45m to upgrade cloud computing infrastructure at the European Bioinformatics Institute in Cambridgeshire; and £79m for a new UK supercomputer (ARCHER 2) at University of Edinburgh to replace the current national high-performance computing platform (ARCHER).

The University will work with United Kingdom Research and Innovation (UKRI) to install ARCHER 2, which will be up to five times faster than the UK’s current capabilities. The contract notice for the hardware element of the project was published earlier this week. UKRI will also tender for Service Provision and Computational Science and Engineering (CSE) support.

In a further effort to boost R&D in the UK, Hammond said from Autumn 2019, PhD-level occupations will be exempt from the Tier 2 visa cap. This is something that was applied for doctors and nurses last year and has been welcomed.

Hammond stated his intention to launch a full three-year Spending Review before the summer Parliamentary recess (20 July 2019), which will be concluded alongside Autumn Budget 2019. However, this is dependent on a Brexit deal being agreed. The Chancellor also promised a £26.6bn “deal dividend” to help end austerity once the risk of a no deal Brexit was removed. What happens to the Spending Review if the decision to leave the EU is delayed or we leave without a deal was not discussed, but departments will still need visibility of settlements if they are going to plan effectively.

As mentioned in October 2018, the plan for future funding is based on day-to-day departmental spending growing at an average of 1.2% per year from 2019-20. However, we already know the NHS will be the big winner in the Spending Review after the Government announced last year it would receive an average 3.4% a year real-terms increase in funding over the next five years.

The Chancellor launched a consultation on how best to support private investment in infrastructure. The Infrastructure Finance Review will inform both the Spending Review and the updated National Infrastructure Strategy, which will also be published in the Autumn. HM Treasury also released the final report of the Digital Competition Expert Panel, which makes recommendations on policy changes to help unlock the opportunities of the digital economy.

Investments in technology, infrastructure and skills are to be welcomed, but what we really need is some certainty. The economic projections and many of the policies announced by the Chancellor are based on the UK securing a deal for an orderly departure from the EU, which remains in significant doubt. There’s a little over a fortnight to go but there are many more twists and turns to come.

Posted by Dale Peters at '09:06' - Tagged: policy   budget   brexit  

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Thursday 14 March 2019

AON automates P&C underwriting with Zesty.ai

aonGlobal insurance broker, AON, has revealed that it is working with innovative InsurTech, Zesty.ai, to use artificial intelligence to assess property risk. San Fransisco based, Zesty.ai, was founded in 2015 by Kumar Dhuvur and Attila Toth. In December 2018, the company raised $13m via a Series A funding round, led by Luxembourg-based, private investment fund, Blamar.

Zesty.ai provides analytics, powered by AI, to access 130 billion data points on buildings and surround areas, in order to automate risk analysis and pricing. Data is analysed automatically, without the need for human intervention, or a physical presence on site. The approach utilises regularly updated, satellite imagery and aerial photographs, in order to automate the underwriting process. At an individual property level, Zesty.ai creates a predictive score, to evaluate risk and inform the underwriting process.

The use of AI and automation in the underwriting process are key focus areas for the P&C insurance sector, as insurers seek to modernise their approaches and improve customer engagement. As the insurance industry evolves, the use of real-time risk analysis and bespoke underwriting are becoming increasingly realistic prospects for mainstream insurers (see: Pay-per-mile insurer By Miles raises £5m). The use of technologies such as AI is helping the insurance industry to accelerate business processes, improve accuracy and reduce fraud.

Posted by Jon C Davies at '08:10' - Tagged: insurtech  

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Thursday 14 March 2019

Facebook Down - World doesn't End

Facebook DownYesterday I attended the Prince’s Trust Awards at the London Palladium as I have done for more years than I would care to remember. Always moving. Makes you realise how fortunately you - and your own offspring - have been.

As usual I was posting on Facebook when suddenly at around 4.00pm I couldn’t post any photos anymore. I thought it must be me or the number of other people in the audience live streaming the event.

But this morning I learned that Facebook had suffered the biggest outage in its history. The last time the site was hit was in 2008 when it had a ‘mere’ 150m users. Now it has 2.3 billion users. Users could still view Facebook but couldn’t post anything. The outage affected WhatsApp, Messenger and Instagram as well.

At this time, the reason for the outage is unknown but Facebook said it was not a DDoS.

At a personal level, it might not have mattered too much although some users said they couldn’t eat if they weren’t able to post photos of food anymore! But some companies rely on Facebook Workplace for internal communications.

For Facebook it meant the loss of tens of millions of ad revenues.

It also brought into focus the power that a few large tech companies have on the lives of billions of people throughout the world. The internet celebrated its 30th anniversary this week. The whole objective was that the internet was a self-healing web. Ie one bit goes down but the system mends itself and keeps functioning. But if users just rely a few sites we all become very vulnerable. Maybe that’s an argument AGAINST Holway’s MYTOP? See - MyTop kills Apple..  At least Facebook going down just meant fewer cat videos were posted. But if WeChat went down in China many people’s everyday lives would be affected as they couldn’t make payments or order stuff too. A bit like Facebook, Google, Amazon and all the online banking systems going down at the same time.

Posted by Richard Holway at '07:52'

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Thursday 14 March 2019

Mindtree buyout moving closer?

logoFurther to my post earlier this week (see NIIT Tech buy-out moving closer?), reports in today’s  illustrious Economic Times of India is predicting that a deal to buy a significant stake in mid-tier Indian pure-play Mindtree is ‘days away’. The protagonists are mooted to be Baring Private Equity Asia and Mindtree peer LTI (aka Larsen & Toubro Infotech). Readers of our recent OffshoreViews report will know which horse we are backing.

Can’t wait for the next exciting instalment!

Posted by Anthony Miller at '07:19' - Tagged: offshore  

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Thursday 14 March 2019

TechMarketView Innovation Partner Programme shortlist announced

logoWe are delighted to announce the names of the exciting tech SMEs selected by Civica for its Innovation Partners Programme who will be taking part in in the pre-qualification stage of the TechMarketView Innovation Partner Programme.

logoEach company will attend an in-depth session with the Civica Innovation Partners team and TechMarketView research directors at Civica’s Southbank global headquarters today to discuss their partnership proposition.

The shortlisted companies are:

  • Ampliphae
  • Eyequant
  • Fiscal Technologies
  • Microshare.io
  • Service Robotics
  • Switchee

You will be able to read about these companies in coming weeks on UKHotViews, where you will also find announcements of future TechMarketView SME programmes.

You can find out more about the TechMarketView Innovation Partner Programme here and about Civica Innovation Partners here.

Posted by HotViews Editor at '06:00' - Tagged: tipp  

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