On Monday night I had the pleasure of being involved in the Prince’s Trust Corporate Employee Awards. Only a few years back the Trust raised only limited funds from employee fundraising. But in the last year a massive £2.3m has been raised from this source. Over £1m of that comes from the Million Makers scheme (think Dragon’s Den) and the rest from active stuff like the Palace to Palace (P2P) cycle event or the London marathon.
I’ve found that these activities are ‘WIN WIN’. The Trust wins not only because it raises much needed funds to help its work with disadvantaged young people but also because it greatly increases retention of its corporate supporters who have embedded these activities into their employee infrastructure. The corporates themselves gain because of the team-building this engenders (eg the CEO ‘s often lead their teams in P2P) and the now well evidenced finding that employees are both attracted to and will stay longer with companies that have a strong social ethic.
So let me applaud Monday’s winners; particularly those from thetech sector. Although everyone who raises funds for the Prince’s Trust is a winner!
Zero to Hero – Winner NatWest, #’2 Samsung, #3 Ricoh
Million Makers – Winner EMC, #2 ATOS, #3 Admiral
Active Challenge – Winner VMware, #2 NCP, #3 Cognizant
Road Runners – Winner Morgan Stanley, #2 Qatalyst, #3 Bloomberg
Blazing Saddles <5000 employees - Winner Xerox, #2 Zoopla, #3 Xerox
Blazing Saddles >5000 employees – Winner Accenture, #2 HP, #3 ISS. Accenture raised £82,000 for the Trust at P2P.
Going for Gold – Winner Capita, #2 Costain, #CGI. Indeed worth mentioning that Capita has raised a staggering £300,000 for the Prince’s Trust in its first year as a partner.
Volunteering <5000 employees – Winner BGL group, #2 SDL, #3 ARM
Volunteering >5000 employees – Joint Winners Accenture & Barclays, #3 Natwest
All Round Hero <5000 employees – Winner Samsung, #2 Commerzbank, #3 Ricoh
All Round Hero >5000 employees – Winner Barclays, #2 Accenture, #3 Natwest
Well Done to everyone. If you’d like to get involved next year – the Prince’s Trust 40 Anniversary – then please drop me an email at firstname.lastname@example.org.
Photo - Me with Ben Marson and Jo Passington from the Prince's Trust. The presenters last night
Posted by Richard Holway at '12:21'
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My ‘hearty’ support (See – Tesla My heart ruled my head) for Tesla – which only grew after my factory tour last week – allows me to post a photo of the new Model X falcon-winged SUV which goes on general sale today at a ‘knock down’ (?) price of $80,000 (although you could easily add another $40,000 for extras). The original Model X was only available to the rich, early adopters at a price of $132,000. Mind, will have to wait until late 2016 for delivery.
Tesla is not without its ‘issues’. They had to issue a voluntary recall for the entire Model S range last week amongst mounting reliability concerns. Tesla is also burning cash and reporting increasing losses. Will they have to tap investors once again?
Of course, even as Elon Musk has ‘admitted’, becoming a volume car manufacturer is a whole lot more difficult than building almost any tech product. But this is the first new volume car manufacturer to be established in the US since the 1920s. The Model X is essentially two years late already. As Forbes says “To say that a repeat of this performance with the upcoming Model 3 [the people’s Tesla priced at c$30,000], which Tesla is counting on to push much higher volumes by decade’s end, would be a disaster isn’t an understatement’.
But as I said, I went into my (modest) Tesla investment with my heart not my head! I just hope Musk succeeds against the odds
Posted by Richard Holway at '12:01'
There has been a mixture of bad and good news for the UK Challenger banks in recent days.
On the negative side, the Treasury rules are making life difficult for the Challengers in that they have to hold much more capital than the established banks with long lending histories for the same class of loans. As a result, for the “safe bet” loans in the corporate sector which would be an important part of their growth potential, they are priced out of the market. This is likely to be a serious drag on their development
Good news is focused on the recent flow of money into these new organisations. The most significant deal is the injection of £45m into digital bank Atom by the Spanish giant BBVA. The history and style of these two banks could not be more different, with branch-less Atom founded by the iconoclastic Anthony Thomson who had earlier established Metro Bank, while BBVA was created by a series of mega-mergers in the 1980s and like all the large Spanish banks has more branches than you could shake a stick at! BBVA has digital aspirations though, having already bought US Simple Bank.
The BBVA investment in Atom highlights an important aspect of the banking market, that the new Challengers can enable larger competitors to put their toe in the UK water with little risk, and at the same time try out new digital banking models. The larger banks, like BBVA and Banco Sabadell (the buyer of TSB) will have the scale, capital and lending experience to mitigate the issue of the Treasury rules. Consequently, it may well be that the Challenger bank sector becomes an incubation lab of new high-tech banking models for the world’s banking and alternative finance giants.
Posted by Peter Roe at '09:25'
Target Group, the privately-owned provider of software and outsourcing services to the lending and insurance markets, has added another provider of alternative finance to its growing list of customers. This time it is Hope Capital, a five-year old provider of short-term bridging loans, that has signed up to use Target’s Bluechip software solutions aimed at the finance broker and short term lending community.
Target’s approach is to have a consistent end-to-end service platform from which it offers BPaaS (Business Process as a Service) to its customers so that they can benefit from the Group’s scale and experience. This approach is particularly attractive to start-ups and smaller companies, with little up-front costs or capex required. The growth of this business in the lending space, fuelled by the proliferation of new alternative finance providers, supplements the Group’s progress in the provision of platform-based services for the insurance market and other notable successes, such as in supporting the DVLA in its move away from tax discs to a digital approach.
Target is benefiting from being out of the spotlight that a market listing would bring. It has re-organised its top management team, see here, and brought in a number of seasoned executives to strengthen its customer relationships and growth credentials. Its disciplined approach looks as if it will continue to drive good performance and after a good 2014, the current year should show further substantive progress.
Posted by Peter Roe at '09:21'
CEO Mike Lawrie is continuing to make an acquisitive mark on the new-look CSC, this time acquiring UXC, ‘Australia’s largest independent and publicly owned IT services company’.
CSC is acquiring a 100% of UXC for $308m in shares, after completing the due diligence commenced back in October. UXC employs nearly 3,000 people, and made 2015 revenues of A$686m (US$493.9m). The company claims to be a regional leader in enterprise application capabilities, including Microsoft Dynamics, SAP, Oracle and ServiceNow implementations.
As Hot Views readers will also know, Lawrie has also thrown his hat in the ring to acquire UK-based insurance software and business process services (BPS) rival Xchanging (see CSC enters bidding war for Xchanging). CSC has until December 9 to make a firm offer.
Posted by John O'Brien at '09:13'
Meg Whitman, president and CEO of the recently launched Hewlett Packard Enterprise (HPE) (see here) said the business has got off to a ‘very strong start’, with a second quarter of constant currency (ccy) revenue growth in Q4. Whitman expects that momentum to continue into FY16.
Overall HPE’s Q4 revenue grew 3% (ccy) to $14.1bn (although down 4% at the headline level). This was a much better result than in the consumer-focused HP Inc. (printers and personal systems), which fell 14% at the headline level to $12.7bn.
Q415 (ended 31 October) is actually the last set of HP results prior to the split on 1 November. We will get a true picture of HPE (and HP Inc.) as fully independent companies from Q116 onwards.
While the HPE headlines sound encouraging, a look under the covers shows a very mixed picture.
HPE’s growth was entirely driven by the Enterprise Group (servers, storage and networking) – up 9% (ccy) to $7.4bn. Enterprise Services (ES) is still in decline – down 2% (ccy) (-9% headline) to $5bn. However, cost cutting and restructuring has had a big impact on the bottom line, with non-GAAP operating margin now running at 8.2%.
Across ES, ITO revenue was the big faller, down 11%, while application and business services (ABS) revenues were down 5%, and software was down 7% to $958m. The shift to cloud and everything as-a-service is deflationary to HPE's legacy business.
We recently met up with the senior management of HPE’s business process services business, to see how this impact is being turned around. HP has clearly been working hard, and now has some strong new propositions in areas like business process automation, analytics and customer experience. It’s clear this is still a work in progress, but management believes the worst is now behind them - something that is echoed from the top by Whitman. We look forward to 2016 with interest.
Posted by John O'Brien at '08:52'
PwC and Google have teamed up to form an Innovation Lab in Belfast to spread the digital word. Known as the Google Innovation Lab and based in PwC’s Northern Ireland HQ, it reflects similar set-ups in New York and Sydney but is the first in Europe. It comes out of a partnership the two formed last year to encourage more businesses to use Google’s software products.
For Google, that is the crux of if it because it is on a mission to boost its enterprise credentials and drive adoption of software products such as Google for Work and Google Apps as well as its cloud platform (see here). But Amazon Web Services and Microsoft Azure are doing much the same. PwC will benefit from the high profile partnership and the ability to showcase digital innovations.
In our view, digital transformation needs suppliers to demonstrate ‘the art of the possible’ so innovation labs have an important role to play. The Google/PwC lab follows the creation of innovation labs by various suppliers. No new jobs are being created as yet, but PwC expects they will be as the workload ramps up. The Innovation Lab could be important in attracting new and different types of talent, which is another contributor to digital transformation - and supplier's digital credibility.
Posted by Angela Eager at '08:13'
Our latest InfrastructureViews research outlines our thinking on HPE’s Cloud28+ cloud services initiative, which was presented at the recent EMEA Cloud Analyst Day/Cloud28+ Symposium.
Cloud28+ was launched in March 2015 with the aim of fuelling the adoption of off-premise technologies across Europe; 28+ refers to the twenty eight members of the European Union. So far over 150 organisations have become members. Cloud28+ is a worthy initiative and demonstrates how an EU wide digital market place might be created.
Subscribers to InfrastructureViews can access the report here. If you do not subscribe to this research stream, please contact Deb Seth to find out more.
Posted by Michael Larner at '19:15'
TechMarketView’s PublicSectorViews team has just published its annual review of the software and IT services (SITS) landscape in the UK public sector – UK public sector SITS supplier landscape 2015-16. Following a detailed analysis of the company performance of the leading suppliers, the report provides our latest ranking of the Top 20 players in public sector SITS and reveals how those suppliers have performed compared to their peers and to the market as a whole. In a vertical where the larger SITS suppliers are perceived to be struggling, the rankings may provide some surprises!
In the report, we define the market environment in which the top-ranked suppliers are operating and consider some of the approaches they are taking as they react to changing market conditions. Subscribers can access in-depth profiles of the leading 20 suppliers to the market, which include a thorough analysis of the recent performance of those businesses, their UK public sector strategies and our view of their prospects.
We also look at some of the ’challengers’ to the market—those that are challenging the status quo and offering a different proposition to the leading suppliers in areas like infrastructure services, network services and software.
If that wasn’t enough, the PublicSectorViews team also provides additional detail compared to previous years; the report includes Top 10 rankings for each of the six subsectors as defined by TechMarketView - central government, local (& regional) government, education, health, police and defence (& security) – along with our view of what is driving the success of the leading players in those markets.
Subscribers to TechMarketView’s PublicSectorViews research stream shouldn’t hesitate to download their copy of the report – here. If you are not yet a subscriber and are frustrated that you can’t get hold of this detailed piece of analysis, please contact Deb Seth and she will look to rectify the situation for you.
Posted by Georgina O'Toole at '17:48'
Yesterday the UK Government published its National Security Strategy and Strategic Defence & Security Review (NSS & SDSR). The key message is that the UK will invest more in equipment and people over the course of this Parliament for the country’s national security – as a country we will simultaneously meet the NATO target of spending 2% of our GDP on defence and the UN target of spending 0.7% of our GNI (gross national income) on development, while increasing investment in our security and intelligence agencies and in counter-terrorism. The Government has committed to a real increase in the defence budget year on year.
Despite the defence, national security and intelligence agencies, and counter-terrorist organisations, being under the same pressure to find efficiency savings (more than £11b has been identified), that money is set to be invested back into national security priorities. In UKHotViewsExtra – Defence & National Security: An important role for ICT innovation – Georgina O’Toole considers the role that ICT will play in the UK’s national security in the years ahead - in both achieving the efficiency savings and making defence & security orgnaistions more effective - and the likely opportunities for software and IT services suppliers.
Posted by Georgina O'Toole at '12:15'
The government’s priorities for investment over the next five years are already clearer today, a day ahead of the full Spending Review announcement tomorrow. Following the boost for defence and security spending yesterday (see Defence & National Security: Important role for ICT innovation), Chancellor George Osborne today announced an above-inflation injection of cash for front-line NHS services in England.
NHS England will get an additional £3.8bn of funding next year, a rise of 3.7% on its £101bn front-line budget once inflation is taken into account. By 2020-21, NHS England’s budget is set to be nearly £120bn meaning the government will have kept its manifesto promise to increase front-line NHS spending by c£8bn after inflation. Coupled with the extra £1.8bn that the NHS received this year, it means that the government can claim to have increased spending by over £10bn, with c£6bn front-loaded by the first year of the Spending Review.
TechMarketView subscription service clients can read our analysis of the implications for SITS suppliers in the latest UKHotViewsExtra article: SITS suppliers should give cautious welcome to front-line NHS funding boost.
Posted by Tola Sargeant at '11:13'
It was good to see some positive noises among a mixed bag of comments from Luis Alvarez in eurocomms.com as he gave an overview of BT Global Services’ trading.
As we have seen, the decline in UK public sector contracts has had a serious impact on top-line figures, but the worst appears to be over. That said, the latest rumblings from the Chancellor give few grounds for optimism here. Luis was talking positively about double-digit growth in AMEA and good progress in the US and together these operations now account for >25% of divisional revenue.
The company is also emphasising its security credentials, particularly as more customers increase their dependence on Cloud. BT GS has benefited from the Group-wide security operation being moved into this division in June 2014 and as we stated in our recent Public Sector Opportunities Bulletin, companies have been able to maintain revenues and contract sizes by attracting new spend in the area of cyber security.
Security is an intrinsic feature of BTGS’s Cloud of Clouds proposition, see here and work back, and capability here should be a major selling point. We remain convinced that the CoC proposition can be a substantial generator of revenue and profit for the Group, but also that the market is already competitive and becoming more so. BT probably needs to pick up the pace here, invest more and celebrate some successes or it could jeopardise its longer-term market position.
Unsurprisingly, Luis was not forthcoming about the prospects for revenue growth, repeating the forecast of improved earnings in the second half. Nevertheless, top line growth and investment in capabilities to drive long-term margin are fundamental components of a value-creating strategy. BT Group need to ensure that BTGS has the wherewithal to fulfil its potential.
Posted by Peter Roe at '09:58'
Our interest was piqued by sentiment from the UK & Ireland SAP User Group conference this week on the whole ‘digital business’ theme. Basically, 80% of members surveyed are skeptical about digital buzzwords from suppliers but do believe in the concept and that suppliers can add value.
What they really want, according to User Group chairman Philip Adams, is for suppliers to work with them in practical ways to help define the digital business case, understand the process design, and provide hands-off transformation advice so enterprises can define their own strategy and start project implementation. Furthermore, the User Group survey found that 30% of SAP customers already have a digital strategy in place, and 36% without one are still embarking on digital projects. Of those 69% consider digital transformation as a priority, while 87% per cent are focusing on modernising back or front-end part of the business.
Clearly, the digital appetite is there and activity levels are evident and rising. As we have said before (see ESAS Market Trends & Forecasts 2015), the onus is on suppliers to assist on the business case to demonstrate the value. We also take the view that outside the retail area, many digital examples have been uninspiring because they have tended to be ‘faster’ rather than ‘different’ and better of course. However, recent briefings with suppliers such as CSC and NIIT Technologies (see here), which included insight into several digital case studies, shows the level of innovation across live projects is increasing. This heartening in terms of demonstrations of digital business value.
Posted by Angela Eager at '09:21'
London-based food delivery start-up Deliveroo is really motoring, has just received a further $100m cash injection in a Series D funding round led by DST Global and Greenoaks Capital, along with existing investors Accel, Hummingbird Ventures and Index Ventures. This brings total funding so far to a few dollars short of $200m and follows a $70m Series C round last July. The funds will be used to further expansion – Deliveroo already operates in 50 cities across 12 countries.
Here in the UK Deliveroo competes against the likes of take-away delivery services Just Eat and hungryhouse. It differs by having its own fleet of drivers, and by delivering food from ‘quality’ restaurants that do not offer their own take-away service (see Deliveroo, Just Eat – battle of the business models). Deliveroo charges £2.50 per delivery and, I assume, also takes a cut from the restaurant.
If you think of Deliveroo as an ‘express logistics’ play rather than a fast-food business (i.e. pick up from location A and deliver within 30-60 minutes to location B) then maybe we can use the likes of DHL Express and Fedex Express to give a first cut on a ‘mature’ profitability model – in which case we’re looking at high single-digit operating margins. If so, when?
By the way, my first (and only) experience with Deliveroo was a bit of a catastrophe (over 90 minutes to get our Thai chicken curry) – though that was more because the restaurant apparently couldn’t cope with running a take-away side-line (which is why I assume they didn’t offer the service themselves). Let’s hope that was a rare exception.
Posted by Anthony Miller at '09:20'
We would like to welcome Clearvision as a banner advertising client. Award-winning software development company Clearvision are presenting The Future of Team Collaboration, a one day event at Kings Place, London, on December 2nd. Keynote speakers include Professor Brian Cox, Chris Ryan, senior Atlassian figures and software experts. To book your ticket for this event or find out more information, click here.
If you are interested in placing a banner advert or sponsored post to promote your event, white paper, webinar, product launch etc., please contact Helen McTeer for more information.
Posted by HotViews Editor at '09:09'
At the half year results in September, SQS, the software testing specialist, raised the spectre of margin pressure in its Regular Testing business and warned of full-year profits being “slightly below the Board’s previous expectations” (see here). Unsurprisingly there was a sharp mark-down, of 15% in the share price. However, the share has now recovered most of this loss and today the management talks more positively about trading and the impact of their action to stem the problem.
The key to the improvement is the continued push into Managed Services and Specialist Consulting business, which has been boosted by the company’s quick-fire acquisition policy, boosting its US operation (see here) building on the landmark Thinksoft move in late 2013. The three acquisitions this year, of BitMedia (now SQS Italy) Trissential and Galmont Consulting have all improved the company’s international footprint and consulting credentials. New contract wins in the US; in healthcare, software re-selling and financial services, support the company’s belief that the US will reach its target of US$100m annualised revenue. European contract wins in defence, the IoT and a global engagement with a Spanish retail bank all reinforce the company’s medium term confidence.
Cost cutting and a more selective approach to new customer acquisition has improved the situation in the commodity, Regular Testing operation. As customer companies try to accelerate the introduction of new “digital” services, integrating them with legacy systems, their need for testing increases significantly (for example in financial services). However, the “bulk testing” market is very competitive with Indian Pure-Plays being particularly active and SQS is clearly following the right strategy by shifting “up-market”.
Posted by Angela Eager at '08:48'
IS Solutions (ISS), the integrator of portals, analytics and enterprise content management (ECM), said it has now successfully transitioned itself into a 'data solutions' business for the financial services, retail and airlines sectors. With over 70% of its revenue now coming from analytics, it’s a claim IS Solutions can justifiably make.
The business itself is in storming health, after its ‘excellent’ start to FY15 (see here). Revenue for the six months to 30 September more than doubled to £7.04m, and underlying pre-tax profits were £1.54m (22% margin) vs. a £350k loss last time. ISS is now sitting on £2.09m in cash.
The transformation has really been driven by a combination of the underlying business and the acquisition of the big data analytics player Celebrus bought earlier this year (see here). From the continuing business, Analytics activities now generate £4.6m, meanwhile, the addition of Celebrus’ £1.43m of analytics revenue, brings Analytics to some 72% of total ISS revenue. Celebrus in particular has benefitted being part of the larger group, with revenue up 49% on this time last year.
ISS is now introducing a new senior management team to take it through the next stage as a data solutions business. MD and co-founder John Lythall is stepping down from April 2016, and will hand over to co-founder and current sales director Peter Kear. Meanwhile, Carmel Warren, former CFO of Celebrus will become ISS’ new CFO, and Mark Boxall, former senior manager at EMC, re-joins the business as operations director.
With the ground-work in place to become a pure data analytics business, ISS will enter a high growth and dynamic market. Where that leaves the enterprise content management and portals businesses however, is unclear. There was no mention of these sides of ISS’ business. They look increasingly superfluous to the future vision.
Posted by John O'Brien at '08:40'
Hot on the scent of an expanding market, NCC Group is making a step change in its security footprint with the very strategic acquisition of Netherlands-HQ’d Fox-IT Holdings. An agreement is in place to purchase the company for €133m/£93.5m, with NCC raising most the purchase funds via a combination of firm and open placings.
This follows the acquisition of managed security services provider Accumuli in March this year (see here), which increased NCC’s security footprint and created a fourth arm to the NCC business. Previously NCC’s security assets had consisted of a security consulting business within the Assurance division. By adding Accumuli and the planned Fox-IT assets to its security consulting interests, NCC has rapidly increased in security capability and now declares that it wants to be a leading player in the cyber security sector.
With its background in escrow, assurance and nascent domain services, it has the right credentials to move into the adjacent area of cyber security but the competition is diverse and fierce, with everyone from Microsoft ramping up security (see here), to Rackspace entering into managed security services earlier this year, and BT highighing it as a growth sector. Not to mention up and coming security pure plays such as Sophos, Palo Alto, FireEye and many others contending for market share alongside stalwarts such as Symantec.
Fox-IT does bring valuable assets however, including managed security services, advanced threat intelligence, forensics and incident response, plus ‘Sovereign Cryptography’ and professional services. These capabilities and a focus on threat intelligence and security analytics take it beyond traditional information security and event management and into the high value end of security. Add 250 security experts and a client base that includes government security departments and global enterprises and NCC looks like it is buying real value. Its challenge is orchestrating its increasingly its diverse business.
Posted by Angela Eager at '08:40'
Mobile software platform developer, 365 Agile, has made its first acquisition since listing on AIM (see 365 Agile mobilises on AIM), that of ‘smart’ internet based heating and hot water controller start-up, Easytherm. Founded in 2013 and based in former code-breakers home – and now ‘science and innovation centre’ – Bletchley Park, Easytherm competes with the likes of British Gas-owned Hive and Alphabet (nee Google) Nest and, according to its website, comes with ringing endorsements from Dorset Customer ‘Megs’ and Oxfordshire Installer ‘Justin’.
365 Agile – a portfolio company of tech merchant bank (and TechMarketView Little British Battler programme sponsor) MXC Capital, will pay £2.15m for Easytherm through a combination of new shares priced at 82p and convertible 5% loan notes. 365 Agile will also pay out an outstanding loan of £350k with about a third in cash and the rest in new shares and loan notes. 365 Agile listed on AIM at 75p and its shares closed yesterday at 79.5p.
Sounds like a smart buy on smart terms to me!
Posted by Anthony Miller at '07:50'
Kainos’ interim results – its first results as a listed company after its IPO in July – show continued strong growth in revenue and bookings, but a slight dip in pre-tax profits largely as a result of IPO costs. Turnover for the six months to end September increased by 29% to £37.2m, whilst gross profit climbed by 17% to £18.3m and sales bookings (excluding third party sales) soared by 55% to £34.8m. However, pre-tax profits declined slightly to £5.2m (H1FY15: £5.7m). Shares in the newly-listed company dipped by 5% in early trading to 264p as a result – that’s down from a high of 294p early in November but still a healthy return on July’s IPO price of 139p. Shareholders also have an interim dividend of 1.8p per share to look forward to.
Kainos operates with three divisions the largest of which is Digital Services, which develops digital systems principally in the UK public sector. Digital Services revenue increased by 18% in the period to £24.4m but its gross margin decreased by 9% to 46%. This reflected a dip in utilisation as the UK general election caused a hiatus in decision making in most central government departments and the scaling back of the team at one of Kainos’ large programmes as it reached the end of its development phase.
Kainos’ other two divisions are Evolve (its proprietary software for the digitisation of patient records) and Workday Implementation Services, the only boutique Workday Inc partner headquartered in the UK. Evolve increased revenue by 115% to £5.8m and gross profit by 176% to £5.1m. Workday revenues were flat at £4.1m.
Kainos’ digital projects are now more evenly spread across central government departments and it is making inroads in local government – revenue from regional and local government clients increased by 57% in the first half to £3.0m. Like other public sector-focused players, Kainos will be watching the result of the Government’s Spending Review this week with interest. But the broader adoption of digital technologies looks set to remain high on the agenda and Kainos continues to be viewed as a disruptive force, winning business against much larger rivals.
Posted by Tola Sargeant at '10:01'
Networking hardware and software specialist Cisco is to spend $700m acquiring London-based Acano as it looks to expand its conferencing and collaboration capabilities (see Richard Holway's post Cisco snaps up UK Acano for $700m for our view on its impact on the UK IT scene).
Founded in 2012 Acano is a privately held company that specialises in audio, web and video conferencing with offices in Australia, Norway, the UK and the US.
Cisco’s conferencing and collaboration portfolio is already well defined, including its corporate focussed TelePresence solutions, WebEx web conferencing tools, and Jabber unified communications applications. Its business is also growing, with 17% YOY growth in the first quarter of FY16 and Cisco is keen not to leave any stone unturned in the quest for new customers.
What Acano’s dual homed conferencing technology brings is tighter focus on remote workers and multi-vendor support for other conferencing applications - particularly interoperability and performance guarantees for participants using Microsoft’s Skype for Business platform (formerly Lync), an integral part of the software company’s cloud based Office 365 proposition.
Posted by HotViews Editor at '09:35'
The half time report for telematics and data provider Trakm8 continues to illustrate that it is an example of a company with the right products in the right place at the right time (see Trakm8 on track for greater things).
For the six months to 30 September revenues grew 38% in the period to £11.7m with 58% growth in Trakm8's core solutions business (£7.9m) while products sales increased by 10% to £3.8m. Adjusted EBITDA increased by 70% to £1.9m.
The solutions business focusses on delivering data and analytics to the fleet management, insurance and vehicle services markets. Building the installed base of devices reporting to Trakm8 servers is essential for delivering recurring revenues. At the end of September the installed base stood at over 135,000 units, an increase of 74% in twelve months. Recurring revenues from this base have grown by 66% to £4.0m.
As a result of acquiring DCS Systems Ltd (who design and distribute camera systems for the automotive, bicycle and security market) in June, Trakm8 has scaled up its ability to integrate video content with its telematics data services.
New propositions include algorithms for driver risk scoring and FNOL (first notification of loss) plus a suite of Apps for deeper customer interaction for both the B2B and B2C markets. Trakm8 is also working on a system architecture to improve its device and data management capabilities.
The company reports that a large number of trials are in progress and management is confident that they will again modestly exceed the market's current expectations in FY16.Trakm8 will be one to watch as the Internet of Things evolves.
Posted by Michael Larner at '09:29'
Google has appointed board member Diane Greene to head up its enterprise cloud business, simultaneously bringing the ex-VMware chief executive’s enterprise app development start-up Bebop Technologies under its wing.
An internal re-organisation sees Google for Work, Cloud Platform and Google Apps now combined into a single business unit which will share product, engineering, marketing and sales resources.
Details of the Bebop acquisition were not disclosed, but the start-up is billed as a development platform that makes it easy to build and maintain enterprise applications. Google chief executive Sundar Pichai highlighted the company’s commitment to providing integrated cloud products at ‘every level’, spanning infrastructure and services, mobile focussed Android and Chromebook devices, mobile/enterprise developer frameworks, and end user applications. A strategy we think is not unlike Microsoft’s ambition for the Windows 10 ecosystem as Google looks for more ways to pinch its rival’s customers.
Like Microsoft and Amazon Web Services, Google is pushing hard to expand its capabilities and reputation beyond public cloud services. All three want to convince more corporate buyers that their Infrastructure- (IaaS), Software- (SaaS) and Platform as a Service (PaaS) propositions provide the security, reliability, performance they need to confidently migrate more of their current workloads off-premise. The strategy looks a sound one. We estimate that cloud service provision is the fastest growing element of the flagging UK Infrastructure Services (IS) market as businesses look to minimise costs by shifting application and services to the cloud (see UK Infrastructure Services Market Trends & Forecasts 2015).
As always execution will be everything. But if AWS, Microsoft and Google all start competing tooth and nail for enterprise customers, the fallout for rival cloud service providers targeting the same corporate user base could be severe.
Posted by HotViews Editor at '09:29'
Returning from my visit to Tesla in California last week, (see Tales from the Valley Part One) I am now even more excited by the prospect of hearing Elon Musk being interviewed by Jon Snow at the Prince’s Trust and EMC Leadership Dinner on 28th January 2016.
This special dinner is a key event in the UK business calendar, bringing together 600 business leaders from a range of industries. Taking place at the Hilton on Park Lane, tables of 10 are priced at £7,500 with some VIP packages also available. This high-profile dinner will kick-start a year of events marking The Prince’s Trust 40th anniversary and celebrating nearly 1million disadvantaged young people having been helped. The evening will also feature a champagne reception, sumptuous three-course meal, exclusive silent auction and the chance to hear from a Prince’s Trust Young Ambassador.
The Prince’s Trust and EMC Leadership Dinner is usually reserved for corporate partners of The Trust. However given my involvement I am able to offer this exclusive invitation and encourage you to purchase a table at this great event!
To secure a place at this exciting dinner please email Becca Saunders for a booking form - email@example.com
Hope to see you there.
Posted by Richard Holway at '09:23'
Capita has won a £38m lift-and-shift BPO deal with Rabobank-owned ACCLM, to take over and run its loan book activities and legacy banking services over the next five years.
Capita will take on 180 people from ACCLM when the deal starts on 1 February 2016, and assume responsibility for managing 17,500 loans with a value of approximately €4bn. It will take Capita’s headcount in Ireland to over 1,700 people, and said it will build on its existing commercial debt-servicing capabilities in Ireland. Meanwhile, it will seek further opportunities for financial services and banking across all sectors and asset classes.
ACCBank ceased trading last May, and restructured to focus solely on debt recovery. So there’s unlikely to be any opportunity for Capita to take on more loan business for the client. Meanwhile running legacy operations means growth there will be limited too.
This looks to be the same model as that in the closed book life and pensions (L&P) space, where providers administer legacy L&P claims, and the volumes actually run-off over time. The lift and shift model helps build scale and capability, but the risks are failing to win new ‘open book’ growth business, while volumes in the core decline.
This is a problem both Capita and TCS/Diligenta are now facing in the mature L&P space (see UK Business Process Services Supplier Landscape 2015). For now at least, running closed loan book and legacy banking services is a growth space.
Posted by John O'Brien at '08:26'
Is it ‘tech’? No. it isn’t – it’s an online sports goods retailer. But it’s as good an example as any of a business using technology to tailor its marketing campaigns to the individual punter.
I’m referring to London-based ‘sport-specific flash sale’ website SportPursuit, which has just raised a further £9.5m in a Series C funding round from Scottish Equity Partners (SEP), Grafton Capital, and existing backer Draper Esprit. SportsPursuit has raised c. £16m since its launch in 2012.
It seems that SportPursuit runs fulfilment from its own warehouses, so this is certainly not an ‘asset light’ venture. As such, inventory control and logistics will surely be determining factors on profitability, should such there be.
I can’t say I’m keen on an online business where you can’t even get into the website without handing over your email address, so I for one will not be buying my bargain-basement snooker accessories (if such they have) from SportPursuit. However, I doubt they will shed many tears over missing my custom.
Posted by Anthony Miller at '08:23'
Award-winning software development company Clearvision is pleased to present The Future of Team Collaboration, a one day event at Kings Place, London, on December 2nd.
The ability to be agile and adapt to fast-evolving technology is essential to the success of any business. By focusing on the very latest in collaboration tools and trends, attendees will leave the event perfectly positioned to transform their teams and boost productivity through groundbreaking collaborative techniques.
Network with tech industry thought leaders, get exclusive product demos of cutting edge collaborative tools, and take inspiration from keynote speeches by Professor Brian Cox, SAS veteran Chris Ryan, and Head of Collaboration at Atlassian Spencer Frasher.
The day’s agenda offers a more detailed breakdown of what you can expect. Click HERE for more details.
Throughout the day there will be additional talks from collaborative experts. Each session will be followed by an interactive Q&A panel, where attendees will benefit from real time collaboration thanks to the event’s iPad conferencing, featuring Clearvision’s purpose built app.
With under a month until the event, the Future of Team Collaboration is expected to be a sell out day. Don’t miss this opportunity to hear exclusive talks from the leading voices in the tech world, just five minutes from King’s Cross Station at the iconic Kings Place venue. Book tickets to secure your place today.
Visit www.teamwork.life for more information and tickets.
Posted by Clearvision at '08:01'
Just heard from our good friend Guy Mucklow, founding CEO of UK SME software firm PCA Predict (formerly Postcode Anywhere) about a nasty ‘bot’ attack that knocked out their systems on Friday and had customers deluging them with phone calls.
Although their IT systems had not actually been breached (and are now back online), there are some significant lessons to be learned around the lack of basic security measures with business email. You can see the full screed on PCA’s website here. Be warned!
Posted by Anthony Miller at '07:51'
The Sunday papers are full of predictions of the contents of George Osborne’s Autumn Budget Statement this week. The most ‘popular’ is a reduction in Entrepreneur's Relief which, at the moment, limits CGT on the sale of your business to 10% for the first £10m gain.
I have told the tale many times of my Campaign to get this tax concession introduced. It started back in 1997 with Gordon Brown who (surprisingly) eventually introduced the tax concession. Before that many of my friends left the country when they sold their businesses to avoid the punitive CGT which was then imposed.
Only those that have worked decades to build a business, often risking all, ploughing huge amounts of one’s own money (plus blood, sweat and tears) into a venture, only to sell it and find that the tax is payable is at your highest rate in just one year will understand. Even more annoyingly, a CGT rate that also applied to short term speculators.
On top of that, the variations in the tax applied when selling your own business have been extreme – ranging from over 80% in the 1980s to 10% today. I fully realise that you don’t really think about tax when you set up your business. But you soon do. It’s then that we risk the best companies/best entrepreneurs moving away from the UK.
So Mr Chancellor, PLEASE do not tamper with the Entrepreneur Relief. The fact that it ‘costs’ £3b a year is a testimony to its success not failure. The UK has created a great Entrepreneur Culture of which this tax concession is an important part. Better 10% tax than nothing at all. Anyway, think of all the other benefits to UK jobs etc that these companies have created. Don’t throw that away.
Posted by Richard Holway at '14:58'
When HMGovt measures inward investment it includes acquisitions of UK companies by overseas investors. When Cisco’s John Chambers committed a few years back to ‘investing in British technology’, he actually meant buying up UK businesses. Whether this is a good or bad thing is debatable. I am sure will elicit different responses from our readers.
Cisco has concluded a number of UK tech acquisitions in the last few years. NDS (pay TV encryption) in 2009 for £3.2b and Ubiquisys (small cell networks) in 2013 for $310m.
Now it has acquired the UK’s Acano which has developed software allowing video calls between different systems/hardware. The sum paid is rumoured to be $700m. People say that ownership doesn’t matter. But if a company is HQed in the UK it tends to build a ecosystem of accountants, brokers, advisers, legal bods, PR etc – even analysts! - around it here in the UK. Those roles tend to migrate abroad on acquisition.
Finally, I remember the CEO of Ovum, Julian Hewett, when asked what Ovum’s biggest prediction mistake had been, replying ‘predicting back in the 1980s that video conferencing would take off’. For most companies it STILL hasn’t taken off. Indeed I can get much better video on Facetime than I can achieve in any corporate video conference system I have seen. Anyway, there is still nothing that can beat a f2f meeting.
Posted by Richard Holway at '14:54'
HP’s newly formed enterprise hardware, software and services business, HP Enterprise, is ramping up its Windows 10 activity partnering Microsoft to create ‘transformational’ consulting services around cloud and mobility for the new operating system.
Microsoft is pushing Windows 10 hard, looking to tempt business users with an integrated, cross platform operating system that supports a mixture of on-premise and cloud hosted applications inhabiting a range of devices from desktop PCs to tablets and smartphones.
But the software company has also released its own range of hardware which now competes with equivalent products from long term business partners HP, IBM, Dell and others. To avoid ruffling their feathers, Microsoft is turning the spotlight on consultancy opportunities around business software and security. Earlier this week the company’s CEO, Satya Nadella, trumpeted the enhanced security Windows 10 provides in a perimeter-less environment.
As well as the cloud and mobility aspects which will appeal to corporate Social media, Mobile, Analytics and Cloud (SMAC) digital transformation ambitions, HPE consultants will push Microsoft’s Enterprise Mobility Suite, Dynamics Customer Relationship Management (CRM), Office 365, and Skype for Business. HPE said it would also extend its vertically focussed business applications to the retail, energy and transportation industries.
As most of us have been finding out in the last few months, Windows 10 is available as a free (scheduled) upgrade. But many IT departments prefer to introduce new software with hardware refreshes. The benefits associated with Windows 10 cross-platform application and service integration, and the improved customer experience/engagement it is intended to support, may take some explaining. In large scale business environments, we think this is precisely where HPE consultants can make a difference.
Posted by HotViews Editor at '09:58'
Intuit seems to be handling the cloud transition fairly well judging by its Q116 results, despite the up and downs of the last year (see here). Shares were up over 8% in after hours trading.
For the period to October 31, it exceeded financial and subscription targets. It delivered a 17% uplift in revenue to $713m. More impressively operating losses reduced from $109m to $29m and this is at a time when QuickBooks Online subscriptions are soaring. They were up 57% yoy across the group and more more than doubled outside the US, to 215k.
Although this affirms that cloud-shifting Intuit remains a competitive force in the accounting market, Sage can take some comfort from the evidence that demand for cloud based solutions is strong and growing – as indicated by Xero’s progress too. But it makes it all the more imperative that Sage rapidly capitalises on Sage Live and its broader cloud propositions too.
Posted by Angela Eager at '09:58'
Sopra Steria has announced the completion of an IT separation and migration programme for the Co-operative Group, moving its Life & Savings business to Royal London following its sale in July 2013. This two-year deal required the separation and transfer of IT and business assets and the sorting out of complex system stacks, inter-linked processes and multiple databases.
Sopra Steria sees significant opportunity in the financial services sector given the amount of change required in the industry and the need to tie digital approaches into core systems. In addition, the turbulent history of the sector, where IT estates have not been rationalised or integrated following the many acquisitions and restructurings, has left institutions with a complex mesh of systems which will need to be migrated and modernised. Sopra Steria considers that this provides lots of scope for it to leverage its expertise in delivery and legacy transformation and then to enable the safe transition to digital services, particularly with respect to testing and analytics.
The growing Financial Services team within Sopra Steria is pulling in expertise from the Group’s European operations and taking a consultancy-led approach, blending the skill sets from the two component parts of the recently merged operation. On a group-wide basis, the banking software business has been the star performer in the Group’s recent results, see here, and there are opportunities for this operation in the UK, both with the Challengers and also with the more established players as they try to pick up speed.
Posted by Peter Roe at '09:56'
Partnering will be an essentially element of software security supplier’s strategy in the rapidly changing security landscape. Cyber security software company and Little British Battler Deep-Secure (who was part of our 2013 programme – see here), is doing just that. It has announced an OEM agreement with Sophos, the fast growing provider of cloud-enabled end suer and network security solutions.
The agreement continues the partnership between the firms. Deep-Secure will now be able to provide its clients with enhanced support for Sophos antivirus integration within its range of Guard products. Until now customers needed to decide for themselves how best to conduct the integration. Making the integration of security components as painless as possible will be key for all suppliers in the market.
While Deep-Secure extends its capabilities, for Sophos the announcement backs up the company’s principles of “security made simple” and being “channel first” (See Sophos raises full year guidance). Competition in the security market is set to intensify with the announcement that Microsoft has launched an Enterprise Cyber Security Group (see here). Security needs to be layered and integrated and no-one can do it all so suppliers need to cement partnerships and forge integrations to provide the best security they can for clients.
Posted by Michael Larner at '09:44'
HR and financial management cloud pure play Workday skittered following the release of its Q316 results, on the back of larger losses and a Q4 outlook that was slightly below consensus. Shares were down c5% in after hours trading. Coming the day after bright Salesforce results that delivered high revenues, lower losses and raised guidance (see here), the timing and comparison did nothing to help Workday.
Although revenue was up 42% to $305m, the net loss deepened - $70m vs. $51.5m. At $375m, total costs rose by 41%. It is obvious where some of the increased costs are going – it added to the product mix with the release of Workday Learning, and opened a new office for its European HQ in Dublin (it will create 200 “highly skilled” jobs in Dublin over the next three years) as it invests in global expansion. Global expansion is very much on its mind as its international business is underweight.
It continues to pull the all important large customers in, including AON Plc from the insurance sector. AON was already a HR customer but has expanded its Workday committment to take the financial management offering too. Commenting on Q3, Workday CEO Aneel Bhusri said the company had “welcomed our largest financial management and HCM customers to date," and “delivered its best performance in new annual contract value for Workday Financial Management”.
The market seems to have reacted to Q4 guidance. At $317m-$320m it was slightly below consensus – as it has been for all three quarters in the current year (see here). Comparison with Salesforce did not help even though the propositions of the companies are very different. Salesforce is prominent in the high volume, high growth customer-facing applications area while Workday is largely back office which has lower volume and is slower moving.
Posted by Angela Eager at '08:40'
BT has taken another step forward in its Cloud of Clouds strategy through the partnership with Volante Technologies, the provider of financial data integration and processing software, so that the financial markets community can access the Volante capability over the Radianz extranet.
This partnership will add a useful capability to the portfolio of applications and data services already available over Radianz, providing the ability to translate financial messages automatically between the different messaging protocols used across the sector. It thus enables seamless communication between systems, improving efficiency, transaction speed and cost management across the orchestrated, multi-technology infrastructure that underlies the Cloud of Clouds proposition.
This is good move in the right direction as BT works to build its credibility as the glue that sticks the financial services sector and by extension the IT world together. However, we have to remark on the modest pace at which BT Global Services (BTGS) is realising its Cloud of Clouds vision, particularly when this division appears to be in the shadow of the Group’s Consumer activities, see Consumer again the star at BT H1.
Given its breadth of activities and international reach, BT Global Services has a unique opportunity to capitalise on the consistent move to Cloud, (where momentum in UK Financial Services has been increased by the FCA’s announcement earlier this week, see here). The Cloud of Clouds propositions seems to play to all of BTGS’s strengths, see our HotViewsExtra here, but there needs to be a regular drumbeat of partner announcements like the Volante deal and also of significant contract successes to reinforce the position of BT Global Services in the wider scheme of things.
Posted by Peter Roe at '08:22'
I did check that this wasn’t an April Fool’s release that got lost in the post but I can assure you it isn’t. Kerala, India-based Eram Scientific Solutions has launched an eToilet mobile app to tie in with the celebration of yesterday’s World Toilet Day (!). R&D social enterprise Eram Scientific is part of billion dollar Saudi industrial conglomerate, Eram Group, and was first to market with an electronic public toilet in ‘God’s Own Country’ (Eram's view).
Once I’d stopped tittering and looked at their website I realised that this was actually a noble attempt to address the challenge of urban sanitation in India. Eram Scientific’s product portfolio also includes sewage treatment plants, and boasts the country’s first Connected eToilet infrastructure.
The eToilet app (Beta Version available on Android only) locates the nearest eToilets in India and provides instructions for use. This is one app that many foreign tourists to India will be ever grateful for (though I guess iPhone users will just have to cross their legs and pray).
Posted by Anthony Miller at '07:47'
UKFast offers independently owned UK data centres and enterprise-grade cloud computing with no questions over data sovereignty.
Safe Harbour, the 15-year-old framework which allowed businesses to transfer personal data from inside the European Economic Area (EEA) to other areas of the world, under questionable security guidelines, has been removed by the European Court.
The rise of cloud has led to more data processing occurring in remote locations, and supply chains and data centres being spread across the globe to meet cloud demand. If your cloud service is outsourced to a third party then there is no guarantee that your data is in an appropriately controlled environment, as required by the Data Protection Act.
From a hosting point of view, those who have rigorous control over their supply chain and wholly UK-based data centre infrastructure are at an advantage under the new legislation. The rule changes will cause little disruption to those companies.
Not all companies can afford to regulate each of their distant partners, and supply chains often stretch further than you would imagine. This can lead to major issues further down the line if you’re using a cloud service which is outsourced far and wide.
But not all cloud providers are created equal. UKFast’s eCloud range is hosted in independently owned, ISO-accredited UK data centres, meaning no Safe Harbour headaches.
Guarantee your data sovereignty: click HERE or call us on 0800 923 0605.
Posted by UKFast at '00:00'
I’ve just returned from a really interesting few days in San Francisco. Readers will know that I am a director of the Allianz Technology Trust (#ATT.L). Blowing our own trumpet, ATT has been about the best performing UK-quoted tech trust in that period with a c180% gain since we appointed the new fund manager in 2007 and I was appointed to the board. The team is based in SF so we had our regular Board meeting there for the first time. The first couple of days were spent on ATT matters which, of course, would be rather improper for me to report here! But the final day was spent on a whistle-stop tour of some of the more interesting companies in Silicon Valley.
Tesla – The Tesla factory is vast. I mean one vast hangar-type building after another that just goes on forever. The staff cycle around. But the really amazing sight is the 1100+ robots – mainly made by KUKA – constructing every part of the Tesla Model S and now the new gull-winged SUV – the Model X. Their movements were almost balletic. Afterwards I tried out the Model S on Tesla’s private road. I have never in my life experienced acceleration like this. 0-60 in about 3 seconds. This is literally breath-taking. Then you take your hands off the wheel and it parks itself.
But Tesla is not all cars. It’s all about batteries really. There was a Powerwall on display which allows power to be stored in the home. Also Tesla is building a massive battery ‘Gigafactory’ in Nevada to support both these activities. Personally I think that Tesla might be even more successful with batteries than their cars. See Ed Crooks excellent article in the FT – Fall in battery costs offers hope for grids.
I’ve written many times about Tesla and Elon Musk. To conceive the first mass produced car in the US since the 1920s AND take that conception to fruition is awe-inspiring. Of course, the next year will really test whether Tesla can meet its production targets and the cars themselves are not without their ‘issues’ over trim and reliability. But, this is one investment where in my personal case ‘my heart rules my head’. I’d just really like to see this succeed.
Palo Alto Networks – PANW is a network security firm with about the fastest growth in the sector with revenue and billings growing at 59% and 69% respectively. Revenues in the region of $1.1b are expected in current FY. It is clearly taking share off the market leaders – Checkpoint and Cisco. Its subscription model, with ‘cash upfront’, produces healthy cashflow. Indeed, the SaaS bit of the business (c25% of revenues) is growing at an even higher rate of 75% yoy.
I asked PANW about the market size and growth and was told $20b with 7-11% pa growth. I was surprised at that. Security, as we know from the recent TalkTalk debacle, is top agenda right now. I happen to think that, whereas a few years back boards would spend the minimum they could on security, the attitudes have changed to ‘spend what it takes to protect us from the front page, reputation damaging attacks others have seen of late’.
I just can’t see why PANW shouldn’t be a major benefactor if that shift in sentiment materialises.
Posted by Richard Holway at '23:11'
Facebook – The visit to Facebook was a bit different as we didn’t really get to talk about ‘Facebook – The Business’. It was more a campus tour.
I expected a laid back university style campus. But it is actually more like a holiday resort with shops and loads of outdoor restaurants set around a long boulevard under the trees. Some 6500 people work here (well I assume they actually work as most of the people I saw seemed to be engaged in ‘social intercourse’). The average age is 29 and I have to say I felt decidedly old!
But, as a big interactive display showed, 70% of people with internet access in the UK are Facebook users. Again as my previous reports have indicated, Facebook is cleaning up in the mobile advertising space where its ‘videos within status reports’ really do seem to work without irritating users too much. As we know, whereas Facebook was designed for 18 year olds trying to pick up pretty girls at their colleges, it is now used by granddads, sons and grandsons (other genders are available). They seem to coexist very well! But the youngsters do their more racy communications on other platforms like Messenger, Instagram and WhatsAPP – which, of course, Facebook also own! Clever stuff!
Zendesk – The final stop on the tour was back in San Francisco to see Zendesk which, I admit, was not previously on my radar. Zendesk is a SaaS-based provider of Customer Service software. Say you send an email, Facebook comment, Tweet or engage in Live chat with a company about the non delivery of an order or product fault, Zandesk software will power the subsequent interactions between customer and supplier and, of course, produce the all-important analytics.
They have 64,000 clients including Airbnb and most recently Tesco and the HMGovt Digital Service in the UK. They are particularly strong in airlines and telcos. Within the SMB arena they are considered the market leader.
Another ‘high growth, no profits’ SaaS provider. Revenues are expected to grow from c$60m in FY14 to c$200m in FY15 with non GAAP losses of c$25m.
Given that the customer service marketplace is estimated at upwards of $10b, Zendesk is certainly ‘one to watch’. I’ll be particularly interested when they demonstrate that the model can produce profits!
There is ‘vision’ and there is ‘VISION’
Sometimes the ‘Vision bit’ can become a bit mundane. But what struck me on my whistle stop tour was that I needed to recalibrate my ‘Vision’ metrics.
Elon Musk at Tesla vision is not to build electric cars or home power storage packs. His vision is to end the use of fossil fuels and save the world from climate change. The cars are there to generate the funds needed to achieve the vision.
Elon Musk at SpaceX vision is not to build rockets to put satellites into earth orbit. His vision is to colonise Mars. The satellite launches are there to pay to achieve that vision.
Mark Zuckerberg at Facebook vision is not to be the World’s #1 advertising revenue generator on social network. His vision is to ‘Connect the World’. He’s about halfway there but he needs to bring the internet to every remote place on earth and to every person regardless of income and education. Facebook just produces the massive profits needed to achieve the vision.
If there is just one consequence for me from my Silicon Valley trip, it is that from now on all other Vision statements will look decidedly mundane!
Posted by Richard Holway at '22:55'
Q3 was another success story for Salesforce with revenue ahead of estimates and all sorts of other goodies but there was also evidence that it is into the next wave of major activity.
The value of large deals increased significantly during the quarter to October 31 2015, which is a significant metric, including an 8 figure deal with a global high tech company. But the company was also able to point to other large deals with big brand names, across all regions including an impressive group from Europe (NetSuite is also seeing business in Europe soar - see here - indicating the market continues to blossom). Its customer relationships are becoming deeper, broader and more strategic. SI’s such as Accenture, Deloitte, PwC, and Capgemini are building up their Salesforce practices. On the product front Salesforce has launched its first vertical solutions, in healthcare and financial services. It is also gradually building up its analytics capability with Wave and machine learning with SalesforceIQ. It has also nabbed the impressive Bob Stutz, corporate VP and head of Microsoft Dynamics to run its analytics business.
This all points to the Salesforce powerhouse continuing to gain and the means to continue. This is reflected in the numbers which saw revenue increase 24% to $1.71bn, with deferred revenue up 28% to $2.85bn. FY17 guidance of $8bn to $8.1bn revenue was initiated. What was equally welcome was a reduction in the net loss from $38m to $25m, following a similar situation in Q2 (see here). In our view Salesforce is nowhere near finished with growth and innovation and if it can continue to reduce losses that would be the perfect combo.
Posted by Angela Eager at '09:57'
According to Computer Weekly (and various other news sources), Unisys has extended its Command & Control system contract with the Metropolitan Police Service (MPS) for another three years. The contract was due to expire in November; in September a contract extension was signed. Unisys’ system has been in use by MPS for the last 30 years. But in 2013, the force signed a contract to replace the core application with Northrop Grumman’s CommandPoint application. It also signed a £90m contract with Lockheed Martin to provide systems integration for the project (alongside Capita and KPMG) – see Lockheed Martin selected to help Met Police enter 21st century. But it appears the implementation of the system, which was due to go live last month, has been delayed.
This news has various implications. For Unisys, another three years of revenue from the contract will be welcomed. The next few years are likely to see Unisys’ UK police revenues suffer as it seeks to transition police force clients from its on-premise HOLMES (Home Office Large Major Enquiry System) to its next-generation SaaS-based offering. The MPS contract extension will help keep revenues more stable. Meanwhile, US-HQ’ed Northrop Grumman has ambitions to drive a significant proportion of its growth from the international space. There is much speculation as to why there have been delays to this contract but, regardless of the reasons; problems on high profile contracts will not instil confidence in its prospects. And finally, the issues will add to MPS’ woes. At a time when it is looking to save £60m from its technology budget by 2015-16, having to keep two Command & Control contracts running in parallel will not help its cause.
Posted by Georgina O'Toole at '09:48'
Not surprisingly, a whole new ecosystem of start-ups is springing up around the success of homestay marketplace, Airbnb. London-based Hostmaker is one such, offering a range of services from house cleaning to a full-on managed host service.
Launched in July 2014 on the back of $400k seed funding, Hostmaker has just raised a further $2m in a seed funding round led by DN Capital, along with Avala Capital, DSG Consumer Partners, Delivery Hero co-founder Nikita Fahrenholz and former MD of Airbnb India and Middle East Mohit Srivastava.
The business model has many moving parts. You can engage Hostmaker’s cleaning services starting at £24, their linen services at £12 per bed, and a round-the-clock check-in service from £35. Hostmaker also offers a property management service starting at 20% commission per booking. I would think you’d need to be running a top-end B&B if you wanted anything left over for yourself after paying their charges!
Anyway, Hostmaker founder Nakul Sharma said last year that they were doubling revenues every second month and expected to break even within a year. Well, I wonder if they made it?
Posted by Anthony Miller at '09:32'
India based IT services provider HCL expanded its relationship with Deutsche Bank (DB) signing a new contract to deliver digital solutions, systems integration and implementation, and application design, build and test services to the bank.
The value and duration of the deal were not disclosed, but the move into a deeper digital transformation and application/service innovation relationship is significant.
HCL already provides application maintenance and support services to DB under a five year agreement dating back to 2011. But the new contract gives the service provider a prime opportunity to showcase its capabilities in corporate banking and securities, global transactions, asset and wealth management, and risk, finance and back-office operations for one of the biggest players in the financial services market.
DB is heavily focussed on improving the digital customer experience (DCX), and HCL is one of three partners (alongside Microsoft and IBM) with which the bank is collaborating to launch three technology innovation labs in London, Berlin and the US by the end of this year. DB is of course, also going through a major infrastructure transformation programme at the same time with HP (HP signs mega-deal with Deutsche Bank). So the pieces of DB’s digital jigsaw puzzle are coming together.
HCL moved into TechMarketView’s top ten table of UK Infrastructure Service suppliers for the first time in 2014. But like its rivals in the IS market, we think its ongoing success will depend to a large extent on its ability to secure large digital transformation contracts which deliver more value than underlying IS elements. The latest win with DB is certainly a step in the right direction.
Posted by HotViews Editor at '09:30'
It looks like we’ll be seeing a lot more of Vancouver-headquartered hosting services firm Cogeco Peer 1 in future, having just announced the appointment of Susan Bowen as EMEA General Manager. Bowen is currently chief of staff to Hewlett Packard Enterprise UK&I chief, Andy Isherwood, having started her 'HP' career some 20 years ago at Digital. She starts the new role in January.
One may recall that the erstwhile Peer 1 acquired NetBenefit, the managed hosting division of Group NBT, back in June 2012 (see here). Group NBT had been taken private from AIM by HG Capital in September 2011. Peer 1 was itself acquired by cable giant Cogeco in December 2012. At the time, Peer 1 had revenues of US$134m though operating profit was in decline, at US$2.5m and the business ran a US$5m net loss.
Cogeco Peer 1 is now part of Cogeco’s Enterprise Data Services segment, which recorded revenues of C$314m in the year to 31st August 2015, with an ‘adjusted EBITDA’ margin of 35%. Toronto-listed parent Cogeco Cable Inc. turned over C$2b in FY15 with a C$258 net profit.
We certainly wish Ms Bowen all the very best in her new career.
Posted by Anthony Miller at '09:03'
Control F1 is a Little British Battler (LBB) that is punching above its weight in the world of software development. Founded in 2010, the fast-growing SME prides itself on building strategic partnerships with blue chip clients that require an agile technology partner to devise, develop and support their business-critical applications. With particular expertise in hot areas such as enterprise cloud applications, Internet of Things (IoT) & telematics and analytics & Big Data, it’s no surprise that Control F1’s services are in demand.
We were particularly impressed with Control F1’s track record with large blue chip clients. It is, for example, the RAC’s technology partner providing the motoring organisation’s new enterprise telematics solution for insurance and fleet’s RAC Advance offering. Over the last year the SME has also signed deals with high calibre clients Travis Perkins - to develop a Health & Safety incident reporting system that’s used across the Group’s 18 companies – and Johnson & Johnson.
Something else that sets Control F1 apart is its ambition to generate its own IP and spin off resulting products as separate companies. Its founders and investors hope that Control F1 will become an engine room generating new commercial ventures; the Goose that lays the Golden Egg. The first real test of this ambition will be the planned launch of its first spin-off, the incident reporting system, under the Notify brand in 2016.
But the field that we feel holds the most promise for Control F1 is IoT and telematics. With its expertise, track record and agility, the SME is well-placed to capitalise on opportunities in the burgeoning market for Connected and Autonomous vehicles. Mind you, Control F1 is not short of opportunities in the market more broadly and, as with other of our LBBs, its biggest challenge in the year ahead is likely to be retaining focus to conserve limited management bandwidth.
Posted by Tola Sargeant at '09:00'
The annual 2-day Technology Fest of the Fujitsu Forum in Munich is in full swing, with 12,000 visitors each day sharing Fujitsu’s vision of Human-Centric Innovation. As in previous years, the balance is shifting yet further towards services and solutions.
The Keynote speech from main board member Duncan Tait highlighted the opportunity for its hybrid IT approach to blend the “robust IT” of past generations with the agile, or “fast IT” necessary for the era of digitalisation, generating a faster rate of change and at the same leveraging the technology to create business value and differentiation. Fujitsu is already enjoying some success, as seen by its growing UK customer base (for example, the Financial Services operation has expanded its customer list from around 20 to over 30 in the past year). With innovations as diverse as the Connected Cow we can expect further progress in sectors like agriculture (see here).
The Forum is given particular momentum by this week’s launch of the MetaArc “digital business platform” to enable legacy IT systems to inter-work with agile cloud environments. Fujitsu reckons that it will save US$300m themselves by migrating internal systems onto MetaArc. The acquisition of uShareSoft, announced on Monday, is also a key move to complete the palette of competitive infrastructure capabilities (see here).
The size and breadth of the Forum emphasises the potential of Fujitsu with the tide of digitalisation. Much will depend on how quickly the company can build domain expertise and track record in solutions and move up the stack in terms of providing business insights. The recently announced moves to re-align sales and business development resources more onto vertical and pan-European lines should provide some additional impetus.
Posted by Peter Roe at '08:54'
Things are motoring along nicely at private equity-held ICT services group, Getronics. Having recently announced the acquisition of Colt’s managed cloud hosting activities in 10 countries (see here), we now understand that the company has scored a significant contract extension with UK motoring organisation, RAC.
Getronics had won a three-year infrastructure services deal with RAC in 2012. The new contract, which runs for five years, also includes various cloud services. Financial details were not disclosed but we estimate that the new deal is around twice the size of the original. If we’re right, that could be worth around £20m. Well done them!
Posted by Anthony Miller at '08:54'
NGA Human Resources, the global payroll and HR software and business process services provider, has found a new home with Goldman Sachs’ merchant banking division and leveraged buy-out specialist Park Square Capital.
Although specific details about the transaction haven’t been released, Goldman Sachs and Park Square Capital will now be majority shareholders in Northgate Information Solutions, the holding company of NGA HR (together owning 95% of the business). Meanwhile NIS’ former owner private equity firm KKR will retain a 5% stake.
For now, KKR will technically still hold its 100% stake in NGA HR until the transaction is approved, which NGA expects to take place in early 2016 (Jan or Feb).
The deal is being structured as a debt-for-equity swap, which includes a pay down of NIS' existing senior debt, using the proceeds from the sale of Northgate Public Services in December 2014 to PE provider Cinven (see Northgate: and then there was one). It will also involve £320m of new senior debt underwritten by Goldman Sachs and RBS.
CE Adel al Saleh said the new capital structure will significantly reduce indebtedness and help further accelerate the growth of the company. This financing comes at a good time, since we pointed out in our recent visit to NGA HR in Paris, al Saleh is planning a major shift to automation over the next few years. This will require more investments in platforms, standardisation and integration solutions with its cloud-based partners (see NGA HR CEO planning major automation shift).
Posted by John O'Brien at '08:49'
Ideagen (a supplier of information management software to highly regulated organisations) commented in May (see Ideagen bedding in future success) that it was in a position to ‘accelerate the integration of Gael into the Group’. This morning’s trading update, for the six months ended 31 October 2015, showed evidence of the successful integration with the expectation that underlying organic core revenue growth will be approximately 6% during the period.
New business wins include a five-year contract with a public sector organisation worth £4.9m for Enlighten, Ideagen’s recently launched SaaS based GRC (Enterprise Governance, Risk and Compliance) platform.
Having integrated the sales and marketing functions into a single team (see Ideagen structured for success), Ideagen has launched a new corporate website reinforcing the integration of the acquired businesses.
Growing rapidly via acquisition is one thing however integrating the acquired businesses into a coherent whole requires a deft touch; it appears Chief Executive David Hornsby and his management team have it.
Posted by Michael Larner at '08:38'
It looks like it may be a race against time for Exeter-headquartered, AIM-listed services marketplace, blur Group, for it to see material positive effects from its transition to an ‘enterprise focused’ model.
The company has just warned that H2 revenues will be down due to cancellation fees, though founding CEO Philip Letts reported that project ‘quality’ on the platform is on the rise. However, cash balances in Q3 (to 30th Sept.) have declined to $8.8m (they report in US$) having halved to $12.4m in H1 (see Blurred beyond all recognition?).
As I’ve said before, it’s not that a services marketplace isn’t a ‘good thing’ – it is. But running one on a 'milestoned' commission basis, in effect taking the risk on the projects, will make it very difficult to turn a profit. Blur recorded net losses of $10.5m in 2014, on revenues of $4.7m (see Blurring the bounds of credibility). That’s the challenge!
Posted by Anthony Miller at '08:32'
Web Services Integration (WSI), our Little British Battler focused on the financial services sector, punches well above its weight in a highly competitive global market, which MD and founder Peter Madigan puts down to a combination of its software, long-lasting customer relationships, and ability to deliver on its promises.
Set up and run by Madigan since 2003, WSI has grown steadily to employ 30 people today across offices in London, New York and Sydney. In this time it has quietly built up an enviable list of relationships with global FS providers like HSBC, ANZ, Citi, JP Morgan, Deutsche Bank, Lloyds Banking Group, and BNY Mellon.
WSI’s sweetspot is in back and mid-office automation for global investment banks and custodians, helping to reduce costs, improve productivity and reduce operational risk. For well over a decade WSI has been providing web services integration for clients, and has since developed its own IP to sell pre-packaged integration solutions.
This IP is the key to the next stage of WSI’s growth - built around Xceptor, a scalable and configurable business process automation (BPA) platform, delivered either on-premise or via the cloud. Xceptor connects with the back and mid-office systems to automate manual rule-based activities involved in transacting business and trades, such as data capture and collection, contract notices and reconciliations. The BPA platform approach gives internal operations control over their processing requirements, rather than relying on the IT department or outsourced services providers.
Madigan sees Xceptor significantly increasing WSI's reach into new areas of the mid and back-office. The technology is also well placed to act as a hub, enabling some of the new developments emerging around financial services utilities and Business Process as-a-Service (BPaaS).
Posted by John O'Brien at '07:36'
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Posted by The Business Lounge at '00:00'
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