Serco has hit its twice upwardly revised target for FY16, underlining the good progress it is making against its five-year turnaround strategy (see here and work back). Shares rose over 10% today.
Although headline FY16 revenues fell 13% to £3.05bn, and underlying trading profits fell 14% to £82m, a look under the covers shows things are heading in the right direction.
Revenue from continuing operations (which excludes £37m from what’s left of Serco’s Global Private Sector BPO business) was down 5.2% to £3.01bn. However, the operating profit from continuing operations was £42.2m vs. a £3.8m loss last time. If Serco is now able to stem further contract losses in the current year, the underlying revenue performance should start to level off. Indeed, CE Rupert Soames sees 2017 revenues being flat yoy, so that would be quite a turnaround from today.
There are also some encouraging signs on the order front, which was up 40% on last year at £2.5bn. This included the largest deal for IT-enabled support services with St Barts NHS Trust, worth £600m over ten years (see here). The other major deal worth an initial £450m over seven years, is to manage the design and build of the 'icebreaker' Antarctic Supply and Research Vessel for the Australian Department of the Environment. Both deals are very much in Serco’s swwet-spot for delivering end-to-end operational management and delivery at the front line.
Looking at Serco’s two main UK divisions however shows there’s still lots of work to be done. UK & Europe Local & Regional Government revenues fell 25% in constant currency to £696.5m, and returned a £6.5m loss vs. £4.7m profit last time. On a more positive note, LRG won £750m worth of deals, the largest number across the group, including St Barts, as well as renewal at the Anglia Support Partnership healthcare shared services; and a contact centre and digital support contract for Public Health England. The decline in Central Government meanwhile, was less severe, at 9% to £679m.
Encouragingly, recent wins will help both divisions to a low-to-mid single digit revenue decline in 2017.
We will be meeting Serco in the next week, and will provide a more detailed analysis of the performance and prospects for TMV subscribers then.
Posted by John O'Brien at '09:47'
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In September last year we reported on the formation of the PCI-PAL business as Ipswich-based IPPlus sold its call centre business and focused on secure payments.
The newly-named company (and AIM-listed) PCI-PAL Plc has now announced its half year results to the end December. These include revenue contributions from both its continuing and discontinued businesses. Overall reported revenue was down 30% to £2.8m with the sale of the call centre operations, but this transaction added £6.3m to the profit line (net of tax).
The continuing operations advanced revenue by 74%, to £975k, although after-tax losses from this activity grew by 65% to £611k. Following the sale, PCI-PAL has £2.9m of cash in the balance sheet as well as £3.4m of deferred consideration in the form of secured loan notes. The company’s shareholders received a £1m interim dividend as a result of the sale.
The secure payments business looks healthy as a loyal customer base with 100% renewals is supplemented by new contracts with a TCV of £1.8m. Recurring revenues grew 69% and now comprise 61% of the total. Transaction volumes carried by PCI-PAL’s cloud platform were up by 58% over the year. With a good pipeline the Board is confident of growth and an exciting next few years.
The strategic move to focus on secure payments is well-timed. Fraud, cyber-security and new regulations are front of mind across the financial and retail sectors. PCI-PAL is offering an outsourced solution that can protect data and provide management with an audit trail and a security blanket. As the focus on security and data gets even more intense with the launch of PSD2 and the next set of privacy regulations in the GDPR, the PCI-PAL team can expect to be very busy.
Posted by Peter Roe at '09:37'
Shares in robotic process automation (RPA) pioneer Blue Prism have shot up c10% today on a brief, but very positive, Q1 trading update (see Blue Prism ends first year since IPO on a high).
For the period to 31 January, Blue Prism secured 83 new software deals, of which 49 were new customers and 34 were upsells to existing customers. All new deals were secured indirectly via channel partners (see Accenture-Blue Prism partnership motoring along). As a result, revenue for the full year is expected to be 'materially ahead of existing market expectations'.
To put these figures in perspective, Blue Prism sold 81 licences alone in the whole of last year, and 47 of these were upsells to existing customers. So it has already beaten last year in the first quarter of 2017.
How much more of a clear a sign can there be that the speed of RPA adoption is outstripping expectations?
Posted by John O'Brien at '09:37'
To put these figures in perspective, Blue Prism sold 96 new licences last year and had 81 upsells – which were to 47 customers.
Atos’ UK business gets very little attention in the company’s FY16 results announcement. That’s because it wasn’t one of the drivers behind the “record results”. Indeed, it was one of two geographic areas (alongside Benelux & the Nordics) to suffer an organic revenue decline over the year – albeit marginal. The UK’s organic revenue decline was 0.4% (to €1,790m); moreover, the “organic” growth figure strips out the impact (2 months-worth) of the early termination of Atos’ Department for Work & Pensions’ Work Capability Assessment contract.
But it’s worth delving into the UK performance a little more, as there is a more positive picture to paint. It was a year of two halves. The expected decline in H1 (see Atos UK: Confident for full year) was followed by 4.5% organic growth in H2 (ramping up to 4.8% growth in Q4). This was thanks to strong activity in the public sector (see UK public sector SITS supplier landscape 2016-17). Moreover, the UK has made a strong contribution to the order book, particularly in the Business & Platform Solutions division (previously Consulting &SI). Contract wins like that with University College London Hospitals (UCLH - see Atos pushes further into UK health with UCLH) will have helped this picture. The UK also improved its operating margin from 10.9% to 13.3%, benefiting from acquisition-related synergies.
Looking at Group performance, Atos appears in an ebullient mood. Worldwide, total revenue growth was 9.7% to €11,717m, with growth at ccy of 12.8% and organic growth of 1.8%. The operating margin continued to improve: at 9.4%, up from 8.3% a year previously. Q4 metrics showed an upward trend (+1.9% organic revenue growth). Positive organic growth was achieved across all verticals in the year. Supporting Atos’ 2019 Ambition (see Atos: 2019 stakes in the ground), there appears to be strong momentum for Atos’ Digital Transformation Factory offerings. This is demonstrated by the 12.8% organic growth in “big data & cyber security” (to €666m) versus stable revenues in the more traditional/legacy areas of the business, which are managing the transition to new ways of working. Atos cites strong demand for high performance computing to support big data processing needs, as well as for “encryption, access management solutions, and intrusion testing solutions”. We’ll be talking to UK CEO, Adrian Gregory, later this week to learn more about how this trend is playing out in the UK business.
Posted by Georgina O'Toole at '09:14'
UK-headquartered cyber security consultancy and risk mitigation specialist NCC Group revised its expectations for the current financial year following poor third quarter performance and cancelled its capital markets event scheduled for today.
Management are now forecasting that the Group’s adjusted EBITDA for the year ending 31st May 2017 will fall approximately 20% short of the £45.5-£47.5m predicted last December. If those fears are realised, EBITDA would fall somewhere in the region £36.4-£38m, at least 13% down on the prior year’s figure of £43.7m.
The Group's previously strong performance has funded a lot of expansion activity but the firm was hit by the cancellation of three large contracts and the deferral of a fourth worth £14-18m in H1. Sales activity for security consulting, software vulnerability testing and web performance across the UK, Europe and North America does not appear to have picked up in Q3 as NCC struggles to execute on new cyber security contracts.
The company said that its Escrow business (which represents roughly half of the group’s revenue) continues to perform “in line with expectations” and will initiate a strategic review of its operations in a bid to halt further problems.
We think public and private sector demand for cyber security software and services will remain strong in 2017 and NCC Group is well placed to capitalise. However some organisations may be putting consultancy projects on hold until the regulatory uncertainty caused by Brexit, the EU’s forthcoming general data protection regulation (GDPR) and Network and Information Security (NIS) directives, whatever “equivalent” UK legislation will eventually look like, and EU-US data sovereignty issues dissipates.
Market dynamics may also be impacting NCC’s performance, with business lost to other consultancies like PwC, and large SITS suppliers such as BT, HPE and IBM combining advisory projects with product implementation and service delivery.
Posted by Martin Courtney at '09:08'
The results headline screams ’18 ALL-TIME RECORD COUNTRY PERFORMANCES’. Unfortunately, UK was not one of them!
As presaged in its Q2 trading update in January (see Down, down, down for Hays UK), performance in the UK (& Ireland) at UK-headquartered international staffing giant Hays was pretty woeful in first-half (to 31st Dec. ’16), with net fee income (NFI, or gross profit) down 10% to £126.1m and operating profit even worse, down 28% to £18.2m.
It was just as well, then, that Hays’ international businesses were in fine form as total NFI rose 17% to £465.5m (+3% like-for-like), and operating profit rose by 16% to £100.1m, though this was a 1% decline on a like-for-like basis. Headline turnover rose 22% to £2.48b (+7% LFL), implying a group operating margin of 4.0%, down 20bps yoy.
Hays CEO, Alistair Cox, alluded to the ‘marked step-down in (UK) Perm activity levels immediately after the EU Referendum’, though this has since stabilised. UK IT recruitment, once the star of the show, was down 13%. Cox reported ‘early signs of improvement in the private sector market’, however, ‘public sector market remains tough’.
Hays is not the only recruitment firm suffering in the UK. IT-focused SThree has also been struggling (see SThree nears £1b revs as restructures UK operations), as has PageGroup (see PageGroup UK deeper in the mire). These are in stark contrast to the more specialised Robert Walters, for which UK remained its best performing region (see Robert Walters ends year on high note).
However, we expect the real star in the UK recruitment firmament will be employed contractor model-based FDM Group, which will report its FY results early next month.
Posted by Anthony Miller at '08:13'
George O'Connor joins Stifel and initiates coverage of Sage and Micro Focus
We’ve known George O’Connor for longer than we would care to remember and his morning note - PGTips - when he was at Panmure Gordon was a joy. One of a rare breed of analysts that both understood tech and could write in a really interesting - often amusing - style. Indeed we quoted him quite often. We missed him when he went on gardening leave before joining Stifel a few months back.
Yesterday, George issued what we believe was his first note from Stifel. Entitled ‘Spice up your life” George started with a BUY for Sage. The note was widely given as reason for the 2.1% rise in Sage shares yesterday. “Stephen Kelly has reinvigorated Sage from top to toe”. We’d agree with that one! With quarterly accounting for SMEs still on the cards for next year, the 70% of SMEs currently not using any accounting software clearly provides an exciting market opportunity.
Today, George has issued his second note. This time entitled “Old Iron, New Edge”, George initiated coverage on Micro Focus with another BUY. “Cobol’s out of ‘Old Iron’, its latest deal with HPE Software will make Micro Focus one of the world’s largest software providers”. “Micro Focus is a highly cash-generative software business that returns cash to its shareholder - it is committed to 15-20% annual total shareholder return”. Indeed, as a Micro Focus shareholder of well over a decade, I can attest to its superior value!
Anyway, Welcome back George. We missed you.
Posted by Richard Holway at '07:49'
Only a few days after their annual report hailed 15 years of unbroken, profitable growth (see 15 years of growth for Civica), Civica is celebrating securing another significant contract. Leeds City Council has awarded it a ten-year deal to supply the software to manage the 57,000 social housing properties run by Housing Leeds. The £2m deal represents Civica’s first housing management system win since it acquired Abritas in December last year (see Civica houses Abritas).
The housing sector represents a strong niche for Civica. In FY16 it added 28 new customers and improved revenues by 13% compared to the previous year. The acquisition of Abritas, which took place just after the end of their financial year, has helped Civica build on this position and it now provides housing systems for approximately 400 organisations.
The Government’s decision to reduce social housing rents by 1% each year from April 2016 has put significant pressure on local authorities and housing associations to deliver efficiency savings. The ‘Fixing Our Broken Housing Market’ whitepaper, which was published by the Government earlier this month, has confirmed local authority fears that this rent reduction will remain in place until 2020. This policy, coupled with an increasing awareness of the role digital solutions can play in meeting efficiency targets (see UK public sector SITS market trends and forecasts 2016-17), means that we can expect more housing sector deals for SITS suppliers in 2017.
Posted by Dale Peters at '07:25'
There’s a change of leadership at software test automation and digital service assurance provider TestPlant Software as founder and long term CEO George Mackintosh moves to a NED position on the board and Dr John Bates joins to take the CEO role with a remit to lead the company into “the next phase of growth and global expansion.”
Mackintosh has been a keen proponent of ‘scaling up’ and the company has grown as a result. In January 2016 PE Carlyle Group took a majority holding in the company to assist with the expansion effort. At the time, Mackintosh said he wanted TestPlant to become “the British-based global leader in our market”, a growth ambition that is still firmly in place.
The new CEO is well known to Carlyle Group: a previous fund backed his first business, streaming analytics company Apama, acquired by Progress Software which was itself acquired by Software AG. Bates has held positions including of EVP of Corporate Strategy and CTO at Progress Software and CTO of Big Data, Head of Industry Solutions and CMO at Software AG. His most recent position was CEO of Plat.One, a provider of application enablement platforms for the Internet of Things, which was snapped up by SAP in September 2016, so he is experienced in driving change and progress. We look forward to hearing about the next stage in TestPlant’s journey at a time when automated testing is becoming even more crucial due to the demands of fast moving digital business initiatives and DevOps and Continuous Delivery operations that call for the combination of speed and quality.
Posted by Angela Eager at '09:10'
Digital marketing SaaS and managed service provider dotdigital Group released confident interim results but as we noted last month it has gone through some necessary sales structure rejigging within the UK and US to improve its operations and while it continues to deliver double digit revenue growth, the rate of growth has been shrinking over the past year or more (see here). Although revenue was up 17% to £15m in the six months to December 31 2016, H1 continued that trend. PBT was up 30% to £4.3m.
International expansion should help the situation. The US business saw an improvement in Q2 (and H1 overall was up 11% yoy), dotdigital is expanding its relationships in the early stage Asia-Pacific region (revenue up 139%) and it opened up a hub in South Africa. EMEA (countries outside the UK) saw 50% revenue growth. Reassuringly, it appears to be making progress on bringing higher value clients on board and is investing to retain customers and increase the level of recurring spend from its existing base, which is the bedrock of any business. Average monthly billing across all clients increased 24% to £650m. With marketing spend potentially variable within organisations, recurring revenue is an important metric for dotdigital and it has risen from 78% to 81% of group revenue.
As we have commented previously, dotdigital has work to do but several levers to pull to help it along.
Posted by Angela Eager at '09:02'
Capita is now planning to write off £50m of assets in FY16, following ‘a comprehensive review across its major contracts’ undertaken since its recent profits warnings (see here and work back).
It means income of around £40m will be written down as a charge to the full year results, which are due out on 2 March.
While clearly another sign of how tough life is right now for the UK SITS market leader, Capita is right to be taking decisive action now, moving fast to restore confidence (see also Capita resolves dispute with Co-Op Bank). These deals mostly relate to the 2012 -2014 period, but some date back to 2009 – so all pretty much from the former management, before Andy Parker took over as CEO in March 2014.
Posted by John O'Brien at '08:23'
Trakm8 has released a trading update for its financial year to the end of March citing a “disappointing year”. The issues had already started to emerge when the H1 results were announced – see Strong TrakM8 H1 sales but profits down 77%. The AIM-listed telematics and data insight provider seems to have suffered on two fronts. Firstly, from external market forces, for example, the impact of delays to new revenues being booked, such that the growth in the installed base of units reporting to its servers has been lower than anticipated. And secondly, from internal disruption caused by its “evolving” business model. The shift in the revenue model towards more SaaS and rental revenue is impacting short term revenues, cash generation and profitability. This, at the same time, as the company has been bold in bumping up the proportion of revenues invested in R&D, in the hope of short-term pain for long-term gain.
The result is a reduction in its FY17 expectations: “revenues are now expected to be only modestly ahead of FY2016 with adjusted operating profit significantly below FY2016, with a consequent impact on cash flow and indebtedness”. In the short-term, the company has acted to reduce its annualised overheads. But the longer-term outlook is more positive. The order book looks strong (new orders up 24% compared to the previous year), the pipeline of potential new orders is up, and new products, though taking longer to come to market, are being positively received by clients. The company’s fleet management, telematics insurance, connected car and vehicle/driver tracking solutions are well placed to exploit emerging demand for IoT oriented solutions. However, with rising debt as a result of recent acquisitions and the shift in the revenue model, the sooner the business gets back on track, the better.
Posted by Georgina O'Toole at '08:10'
What TV ads are you watching? Edinburgh-based startup, TVSquared, aims to answer this question pretty much same day.
Despite the rise of social media, TV advertising is still a fast-growing marketing channel, closely tracked by brands and media agencies. TVSquared aims to optimise TV advertising spend using its proprietary analytics tools – and seems to have done so with considerable success; the company claims to have ‘hundreds of brands, agencies and networks’ as clients, in more than 50 countries.
Founded in 2012, and with offices also in London, New York and Los Angeles, TVSquared has raised a further $6.5m in a funding round led by West Coast Capital, with matched funding from the Scottish Investment Bank (SIB), Scottish Enterprise’s investment arm, along with existing investors. This followed a $3m round in August 2016, and brings the total raised so far to $12m.
Sounds like a great Scottish success story.
Posted by Anthony Miller at '08:07'
Customer engagement software provider Netcall is delivering on most fronts as its ongoing transition to the cloud continues (see Netcall FY16 sluggish, but next year...).
It has seen significant growth in its cloud business during H1, with 4 out of the ten largest orders for cloud-based contracts, including its largest to date, worth £1.4m five-year deal for its next-generation Liberty platform. This acceleration to the cloud is good news for Netcall, in terms of growth opportunity and recurring revenues – a key metric which rose 7% and now account for 68% of revenues. The order book meanwhile, also increased by 14% to over £16.6m. So very encouraging for H2.
The underlying business remains in transition though, as the legacy Movieline business continues to run off. This dented H1 headline revenue, down 0.5% to £8.09m, albeit better than the 3.5% drop in FY16. Profit before tax meanwhile was up 17% to £0.92m – an impressive result given the increasing investment in R&D in recent months.
We are speaking to management later this week.
Posted by John O'Brien at '07:52'
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Posted by UK Cloud at '00:00'
An interview with Quartz media website where Bill Gates said businesses should pay robo taxes is generating plenty of attention. His view is in essence that humans are paid and taxed for the work they do; when a robot replaces that human, then the same level of taxes ought to be paid.
It is not quite as stark as that but he is suggesting measures to slow down the rate of adoption while economic and societal issues are addressed. Robots drive up productivity but also mean job losses, which cut down the taxes used to fund public services. Robo taxes could maintain taxation levels and be used to fund retraining. Gates is not putting forward a solution but is drawing attention to some of the wider issues that need to be considered as automation in its many forms develops, from robotic automation, to robotic processes automation and intelligent applications. He is not the only one thinking along these lines. Various academic, government and commercial groups are exploring the question of how to deal with the impact of automation. The EU has been considering a robo tax too, using the proceeds to pay for retraining, although the proposal was rejected earlier this month.
The debate about the economic and social impact has become more prominent over the past 6-12 months and rightly so because it has to take place before problems become apparent on mass scale. There is no shortage of questions and dilemma’s. Looking at the situation from a tech perspective, one of the questions will be how do you define a robot/intelligent robot? Perhaps we will have to devise a counterpart to the Turing test.
Posted by Angela Eager at '09:52'
Capgemini has signed a three-year IT Services deal with Horizon Nuclear Power to support the development of the new Wyfla Newydd power station in North Wales. This power station is expected to start generating electricity in the first half of the next decade, generating over 2,700MW. Horizon Nuclear Power is a UK subsidiary of Hitachi Ltd which is developing a new generation of nuclear power stations, with a further site in Oldbury in South Gloucestershire.
The deal with Capgemini looks to drive innovative project solutions, with targeted initiatives including the building of a fully scalable cloud platform, a new security operations centre (which will leverage Capgemini’s existing SOC in Inverness) and a multi-channel service desk to support the Horizon team. This contract will lay the foundations for the supply of digital services as the Wyfla Newydd project moves from development through construction and into operation.
Capgemini will be looking to build a new Nuclear Centre of Excellence in the UK, benefiting from the Group’s experience and expertise in France, with the prospect of further engagements as the UK’s investment in nuclear power increases.
Capgemini published its full year results last week, showing that the UK and Ireland operations achieved 4% growth during the year.
Posted by Peter Roe at '09:40'
Very few companies can claim 15 years of unbroken, profitable growth but that’s exactly what Civica is celebrating with the publication of its audited results for the year to end of September 2016. Group revenue at privately-held Civica was £267.7m in FY16, 14% up on the previous year, with EBITDA at £55.1m, up from £46.8m in FY15, a margin of 20.6%. Other KPIs also bode well – recurring revenue increased by 16% to £132.6m and the closing order book was 10% higher at £815m. The rise in employee numbers also provides a clear illustration of how much the business has grown and evolved over recent years. At the end of FY14 Civica had 2,367 employees worldwide, by the end of September 2016 that figure was 37% higher at 3,231 and now it’s over 3,650.
As we predicted in the UK Public Sector SITS Supplier Landscape report last year, the UK business, which accounts for 81% of group turnover, put in a particularly strong performance. UK & Ireland revenue was £217.6m in FY16, 16% higher than FY15. Most of that growth was organic since the acquisitions fell in the last quarter of the year, in other words, Civica is clearly taking market share in the UK. There was growth across the business though, including internationally – Asia Pac revenue increased by 6% to £44.7m and the nascent USA division grew by 13% to £5.4m.
The last year has been a transformational one for Civica with the launch of its Civica Digital division accompanying a strong push into the UK central government market, and the signing of its largest ever contract amongst the highlights. Over the coming year we expect more of the same as Chairman Simon Downing and CEO Wayne Story continue to execute on a clear strategy. In particular, we can expect a continued mix of organic and acquisitive growth. Civica has now completed 11 acquisitions since 2013 with the support of its private equity backers, OMERS. It has a clear focus on IP-based businesses that extend its capabilities and increase the scale of its involvement with its customers, and we wouldn’t be at all surprised to see further strategic acquisitions in 2017.
PublicSectorViews subscribers can read our profile of Civica in the UK Public Sector SITS Supplier Landscape Report 2016-17. If you don’t yet subscribe to PublicSectorViews and you’d like further details please email Deborah Seth in our Client Services team.
Posted by Tola Sargeant at '09:16'
It looks like the half-year to the end of January has gone according to plan for this Wetherby-based provider of spend control and eProcurement solutions. Today’s trading update from PROACTIS informs us that six-month revenues were up 36%, to almost £12m, with solid organic growth of 13.4%.
The Group is extending its network of connected customers and their suppliers, having added 27 new customer names over the period and reports that contract values and pipeline remain “encouraging”.
The company’s latest acquisition, that of Millstream Associates, is now completed and the company is trading in line with expectations. This follows the Due North acquisition of February 2016.
PROACTIS is introducing its customers to slicker and more sophisticated ways of managing their supply chains and we can expect continued growth and potentially some additional acquisitions. This market sector is fragmented and extremely competitive, so adding scale is likely to remain a priority for Tim Sykes as he moves from the CFO role to CEO when Rod Jones hands over the top job.
Posted by Peter Roe at '08:24'
The new Trump administration has rather set the cat amongst the pigeons with proposals to tighten up the rules for skilled workers to enter the US on an H1-B visa. Nevertheless, management at the leading Indian pure-plays (IPPs) seem sanguine about the potential impact on their business should the proposals be enacted – but even so, current financial performance trends look ominous.
Subscribers to the TechMarketView Foundation Service can read our analysis of these developments in the new edition of OffshoreViews, along with our views on recent traumatic events at Cognizant and Infosys. Plus there’s our graphical snapshots of all the Top 6 IPPs and results summaries of six mid-tier players.
It’s the best way to keep up with the Indian offshore services scene. Press the link to download OffshoreViews Q4 2016 Review, or contact our Client Services team (firstname.lastname@example.org) for further information.
Posted by HotViews Editor at '06:00'
Reading The Sunday Times today, you would think that the main problem facing tech firms both here in the UK and in the US, was the fear that restrictions would be put on immigration. The Coalition for a Digital Economy (Coadec) is to publish a report on Tuesday saying that a third of the first 10 staff recruited by start-ups are from outside the UK. “Current immigration rules will leave a 800,000 shortfall in digital talent by 2020”. The ‘solution’, according to Coadec, is to allow anyone with any tech experience to come here to work. Indeed ‘to give skilled people from overseas a 6 month visa in order to find work in the UK’.
My views on this have been made abundantly clear over the last 15+ years. We MUST train more of our own tech people. It is all very good introducing a better Computing GCSE, all very good encouraging people to study STEM type subjects at A level and University. But this is no good if there are no Entry-Level jobs on offer in UK Tech.
From what we have heard, the introduction of the Apprenticeship Levy in Apr 17 actually deterred such recruitment in the current year. On top of that, it looks like the current redundancies hitting several of the larger tech employers will hit newly recruited graduates hard.
UK tech companies have ducked this issue since 1999. It was always easier and cheaper to get a person with a couple of years IT experience from offshore (whether working in the UK on a visa or working offshore) than employ a school-leaver or graduate and put them through a couple of years of training. The current IT skills shortage in the UK is down to this short-sighted policy and companies only have themselves to blame.
Let me be clear, I am all for allowing - indeed encouraging - those with real experience and talent to come to work or setup companies in the UK. But we must 1) Discourage those with little (eg <5 years?) tech experience coming here or being used offshore and 2) Encourage the creation of Entry level jobs (eg by making it a part of the selection criteria in all Public Sector procurement. Also providing significant tax and other incentives for those companies that do offer entry-level jobs etc.)
For too long we have avoided this issue. We will never narrow the skills gap if the only solution every time is more and more people from overseas.
We really must Grow our Own.
Posted by Richard Holway at '17:25'
Notebook in The Times on Saturday 18th Feb 17 by Daniel Finkelstein.
My son is doing some holiday work in the same place I was employed some 30 years ago. I told him that my job had been scanning old papers to keep them safely on microfiche that would last forever. What was he doing?
“I’m scanning old microfiche to keep it safe on digital media so that it will last forever”.
Long-term readers of HotViews will know that this is a particular 'beef' of mine. I really am worried that most of my ‘output’ has been lost forever. It is not that I think I should be immortalised. But, having had my 70th Birthday this month, I realise how important photos and memories are. It was very easy to scan the photos I had. A bit more difficult to scan the 35mm slides. And I could only include the digital photos that I myself had taken and saved. Even my Facebook photos were difficult to access.
In the 1970s and 1980s, I wrote a lot of articles - did a lot of research. I now have an interview scheduled next week for Archives of IT who want to preserve this stuff for generations to come. But I really can’t provide any of the archive material they want because it only exists on media that I have no means of access. 8inch floppies/5.25inch floppies/diskettes etc. All the stuff I had on my old Apple Macs is unreadable.
The only permanent record of my ‘work’ in the 1970s-1990s exists only in print. I guess I could scan it all. But that is a massive task.
Call that progress?
Posted by Richard Holway at '17:20'
County Down-based Little British Battler (LBB) Tascomi Ltd has been awarded another local government deal. Weymouth & Portland Borough Council, West Dorset District Council, North Dorset District Council and Purbeck District Council formed a partnership to conduct a shared procurement exercise to identify a cloud-based platform for the delivery of environmental health services across these communities in Dorset. The contract will see Tascomi’s Public Protection platform employed across a wide variety of environmental health areas, including: food safety, health and safety, public protection, environmental quality, housing improvement and licensing.
The Dorset council partnership was looking for a provider that could demonstrate “innovative, forward thinking”; just the sort of approach that we look for in our LBBs.
As local government finances have become stretched we’ve seen more and more councils sharing services. This is a trend that we expect to accelerate as councils seek to make savings by integrating IT systems and improving procurement practice.
Posted by Dale Peters at '10:11'
Blackstone is to become a majority shareholder in Cloudreach, the cloud software and migration company headquartered in the UK. Terms have not been disclosed.
Cloudreach uses the tag line “Not if. When.”, which we think applies nicely to its position as an acquisition target. We have no doubt the company has been approached many times by interested trade buyers, but our sense is that CEO Pontus Noren was not about to sell out to another player.
With the Blackstone backing, Cloudreach intends to accelerate its growth. Indeed, the company acknowledges that “to play a significant role in this next stage of market maturity requires significant financial resources”.
In FY15 (the latest set of publicly available data), revenue exploded from £8.4m in the previous year to £24.5m. This came on the back of an investment made by a “third party” in May 2014 ($3.5m of convertible loans). It’s not clear who that investor was, but the injection of cash looks to have been critical.
Cloudreach’s competitive landscape is interesting. There are of course the large SIs that partner with AWS, Azure and Google, but also various other smaller players. Indeed, KCOM is often mentioned in the same breath as Cloudreach as the ‘front runners’ of AWS migration in the UK. But even these two combined have revenue that we estimate is way under £50m - a drop in the ocean in the grand scheme of IT spend in the UK. There is not only a lack of acquisition targets with significant revenue in the UK, but also a lack of professionals with the appropriate cloud/digital skills. Indeed, this is something AWS has looked to address via its re:Start programme, see: AWS re:Start programme: A force for good for UK digital skills?
Posted by Kate Hanaghan at '09:56'
The acquisitions of Telecity and Bit-isle pushed Equinix’ FY16 revenue up 33% yoy to US$3.6bn as the data centre operator capped off a busy year of further expansion. Income from continuing operations was up 9% to US$619m but currency headwinds and interest charges drove net income down 32% yoy to US$127m.
Though Telecity contributed US$400m and Bit-isle US$149m, Equinix still managed to grow by around 14% organically. We think that’s a strong performance for a company whose traditional data centre hosting and colocation business model is being impacted by the continued growth of cloud service providers (CSPs).
As well as hosting some of those CSPs' infrastructure, Equinix is looking to cement its position by controlling more of the network interconnects and data traffic that links them and their enterprise customers. That strategy paid some early dividends in 2016, notably a hybrid contract win that connects a private cloud owned by Dutch manufacturer Philips with public clouds from Amazon Web Services, Microsoft Azure and IBM SoftLayer in multiple locations. As a result, Equinix’ EMEA interconnect revenue grew 47% to US$86m (up 23% to US$543m globally), though still dwarfed by turnover from colocation activities which increased 67% yoy to US$942m in the EMEA region and 31% to US$2.6bn globally.
The company now plans to broaden Cloud Exchange’s appeal to enterprise buyers by adding major SaaS providers, having recently signed Salesforce.com. It will also continue to expand geographically, with a “transformative” purchase of 29 data centres located in North and South America from US telco Verizon, the assimilation of IO UK’s Slough facility, and a build-out of additional hosting facilities in both the EMEA and Americas.
Already a market giant, Equinix’ ambitions are unlikely to stop there as it rides the wave of cloud transformation rather than fights it and further global acquisitions are almost certainly on the cards.
Posted by Martin Courtney at '09:37'
Mid market SaaS HR specialist Fairsail has been racking up the accolades over the past year, including inclusion in the Deloitte UK Tech Fast 50 for the third year in row, entry into The Sunday Times Tech Track at number 21 and winner of the ‘Scale Up of the Year’ title at the WCIT Enterprise Awards. And of course it is one of our own Little British Battlers, having taken part in the programme back in 2014. FY16 performance provides a glimpse into why it is being recognised as it reveals revenue hit double figures, coming in at £10m ($12.5m). That’s quite something considering 2013 revenue was just £1m. All credit to the team led by Adam Hale, while growth and current performance will certainly give investor/partner/customer Sage Group much to be pleased with too.
The company is racing on other metrics too, having created 120 new jobs in three years, expanded its US operations, added 60 new customers taking its user tally to over 120k users.
Fairsail is capitalising on the conjunction of four trends: ongoing SaaS demand, credibility and visibility raising relationships with Sage and Salesforce, the growing willingness of organisations to engage with up and coming providers, and HR’s rolling shift towards a strategic role. With many of these drivers still gaining momentum, Fairsail is well positioned. Now is the time to make the biggest moves, which will require ongoing investment, particularly in the analytics area, as businesses seek to “Unlock the Intelligence” held within their data and organisations. Its ability to tap into Salesforce’s developments in the analytics and machine intelligence area is something that should be exploited to the max especially given the demand for talent acquisiton, retention and development. Sage is also starting to talk about its machine intelligence activiies, including its first chatbot. The relationship between HR and data heavy accounting, benefits and payroll is also a fruitful area for Fairsail to develop.
Posted by Angela Eager at '08:58'
I pressed the button on the website that said ‘View all cars’ and there appeared to be only 41. Actually, 36, if you exclude those already flagged ‘Reserved’. So I do wonder how London-based startup, Hellocar, intends to disrupt the (reported) £45b UK used car market in any meaningful way.
Founded last year, Hellocar has recently raised £1m in a seed funding round led by JamJar Investments, the Innocent Drinks founders’ venture capital fund, and Alex Chesterman, founder and CEO of Zoopla Property Group. The ubiquitous Henry Lane Fox (see SmartUp finds smart money to gamify ‘communion’), will join the Hellocar board.
You can’t actually see a car before you buy it from Hellocar, though you can view ‘high resolution photos and a detailed report of the 168-point mechanical and cosmetic inspection carried out by the AA’. You can buy in cash (£250 deposit) or on terms through car finance site Zuto. And in case you don’t understand how the finance thing works on a first reading, Hellocar thoughtfully repeated the text in the same paragraph on the website.
Prices are not negotiable but Hellocar offers a money-back guarantee if you return the car within 7 days. Beyond 7 days, ‘all cars sold on Hellocar are still covered by a manufacturer's warranty. If you experience any problems that are covered under the terms of the warranty, please contact us and we'll direct you to the appropriate place’ (!)
I am not sure how Hellocar sources its vehicles but on a quick tally, it is showing about £500k worth of stock on the website. I’m curious about the business model.
You know what? If I were buying a car from a used car merchant, I think I’d rather take my chances with CarGiant.
Posted by Anthony Miller at '08:23'
European PE Vitruvian Partners has just put up the funds to acquire Luton-based OAG Aviation Holdings Ltd via an MBO from AXIO Group. Why is this important? It’s because it is a data play, combined with the analytics tools to make use of the data.
OAG provides aviation information such as flight information on schedules and status, on a subscription basis. It has an extensive database containing future and historical flight details for over 900 airlines and more than 4,000 airports. This is the basis for valuable insight into scheduling and planning, flight status and day-of-travel updates, post-journey analysis and on-time performance. As regular HotViews readers know, we put great store in ownership of, or secured access to valuable sources of relevant data and believe data services will one of the ways suppliers will be able to differentiate and build new high value revenue streams (this was one of the strands of our TechMarketView Evening).
The takeaways from this move are 1) expect more data-driven investments – and SITS suppliers should be making them themselves; and 2) consider the network effect when data is a core part of a go-to-market proposition. OAG Aviation, for example, has a broad reach across the travel sector: airlines, airports and airport services providers, travel distribution players, government agencies, aircraft manufacturers, consultancies and corporate customers.
Posted by Angela Eager at '15:30'
Three important strands come together in the SAP HANA-heavy Deloitte/Amazon Web Services collaboration: analytics, public cloud for production workloads and rising AWS enterprise credentials.
The collaboration will see Deloitte set up a 2500-strong dedicated AWS cloud practice with a remit to accelerate digital transformation initiatives within enterprises. As part of that, it will work with AWS to build and host 20 pre-configured industry specific analytics solutions on the HANA platform and push these to joint Deloitte/SAP customers.
The move shines a light on the ascent of AWS and its growing influence deeper inside enterprises. The rise and growing strategic importance of AWS is something we have been tracking in InfrastructureViews. Our most recent Infrastructure Services Supplier Landscape report shows AWS entering the UK top 20 for the first time, underlining that it is a disruptive force to be reckoned with – and aligned with.
The Deloitte/AWS combo could help lower the barrier to cloud adoption for production systems, which is where the SAP HANA element is significant too, providing Deloitte with a platform to accelerate the execution of digital transformation within its customers’ operations. We expect many initiatives across the SITS market this year to go heavy on digital execution to accelerate digital revenue flows. As for SAP, this is an opportunity to demonstrate its ‘Run Simple’ approach to the digital agenda and accelerate HANA adoption. It complements its announcement last week when it unveiled plans for public cloud versions of S/4HANA ERP (that will be rich in intelligence or Intelligent ERP as SAP has tagged it). These public cloud multi tenant versions of S4/HANA Cloud will be hosted at SAP data centres but are also likely to run on AWS, Microsoft Azure and other public clouds.
The emphasis of the collaboration on analytics to provide insight should not be overlooked – this is about Unlocking the Intelligence.
Posted by Angela Eager at '09:42'
There’s no dearth of telephony analytics startups in the market, but London-based IOVOX seems to go several stages further than mere inbound call analysis with its broader ‘data driven’ telephony services. Such has attracted marquee brands such as Zoopla, AutoTrader, Pizza Express, OpenTable and BT as clients.
Founded in 2007, IOVOX has raised $9m in Series A funding from Octopus Ventures (also an investor in Zoopla) and SF Capital, and a further $1m in debt funding from Silicon Valley Bank, in order to expand its presence in the US, currently based in a sales office in Mill Valley, 14 miles from San Francisco. Octopus has been seeding IOVOX since 2012.
From what I can see, IOVOX provides more holistic approach to call tracking than ‘vanilla’ call analysis, with the ability, for example, to integrate with online and telephone-based table reservation systems. That sounds different.
Posted by Anthony Miller at '09:34'
Capgemini is the first of the major European HQ’d services firms to release its FY16. After the usual swings and roundabouts during the year (see here), UK&I actually achieved 4.1% growth at constant exchange rates, thanks to double-digit growth in the private sector. Public sector revenues however were down as anticipated.
UK&I revenues came in at €1.99bn euros, down 7.3% on a reported basis. Brexit appears to have had a neutral impact, however the depreciation of the Pound has reduced the UK’s share of group revenues by 2 points to 16%. Good news is that the UK&I operating margin has risen to 14.6% (vs. 13.4% last time).
It's very difficult to get a sense of the underlying organic performance within UK&I. FY16 will have included a full year of iGate (see here and work back) – which we estimate generated revenues of c£60m in the UK – mostly in the private sector too. Excluding iGate, we suspect UK&I organic growth still just remained positive at constant rates.
At the group level, revenues hit €12.5bn, up 5.2% yoy, and up 7.9% at constant exchange rates. The operating margin also nudged up to 9.2% vs. 8.6% las time. The move to Digital and Cloud is showing real progress, with growth apparently at 29%, and now making up 30% of group revenues.
There were also two US acquisitions, of Palo Alto-based digital design firm Idean, and life and property software and services business TCube Solutions. Idean employs 150 people in the US, Germany and Finland, providing ‘user-centred and digital-first experience design and strategy’ for clients like LG, Mercedes-Benz, Sony, Volkswagen, Ericsson, IBM, Intel, and Kesko. TCube meanwhile employs 300 people and specialises in Duck Creek insurance software for clients in the US and UK. It's an area we see having significant potential over the next few years - see our report The role of BPS in transforming the London insurance market.
Both deals show an intent to build up Capgemini’s digital transformation expertise inorganically. But it’s smaller scale to rival Accenture, which is setting the pace with $1bn to spend in FY17 alone (see Accenture buys Ten companies in Q1).
Posted by John O'Brien at '09:22'
Another expected drop in revenue from sales of its core switches and routers pushed Cisco’s Q217 revenue down 2% yoy to US$11.6bn, though continued growth in its services business suggests the company’s ongoing transformation is largely on track.
Net GAAP income fell 25% yoy to US$2.3bn with diluted earnings per share dropping 24% to 47 cents (both were flat on a non-GAAP basis). Product revenue (switches, routers etc) still accounted for 73% (US$8.5bn) of Cisco’s revenue in Q217 but sales of software and services grew 5% yoy to US$3.1bn.
Cisco's chief executive Chuck Robbins focussed on the company's efforts to drive “security, automation and intelligence across the network and into the cloud” coinciding nicely wtih security-related revenue which expanded 14% yoy to US$528m. Other software-orientated aspects of Cisco's business are growing too - including wireless (based around Meraki) up 3% to US$623m, and collaboration (mainly conferencing) up 4% to US$1.1bn.
The good news stopped there as Cisco’s dominant position in the global switch and router markets continues to be eroded by rivals including Arista Networks, Huawei and Juniper Networks. Cisco’s Q217 switching revenue fell 5% to US$3.1bn with routing down 10% to US1.8bn and data centre system sales down 4% to US$790m.
Cisco’s Q217 revenue was in line with previous guidance and Q317 forecasts suggest another 2% yoy fall with non-GAAP EPS in the range of 57-59 cents. Cisco is implementing initiatives to trim its opex having announced last year that it would cut 5,500 jobs, or 7% of its workforce starting this year.
Last month also saw it agree to pay US$3.7bn for AppDynamics, highlighting the ongoing drive to build a strong software portfolio which can offset falling network hardware sales whilst addressing what promise to be high growth areas of the market like the Internet of Things (IoT).
Posted by Martin Courtney at '09:06'
London-based gamified, community-based knowledge management and ‘micro-learning’ platform developer, SmartUp, has raised $5.5m in a Series A funding round, led by prolific tech investor Notion Capital – the VC firm founded by ex-MessageLab entrepreneurs Jos and Ben White – and Hong Leong Group. SmartUp was born of entrepreneur network Founders Forum in 2014, and its co-founders include Henry Lane Fox (as in brother of) and Brent Hobermann.
SmartUp is free to join a public open community (there’s a startup community for ‘entrepreneurs and innovators’ and an innovation community for ‘visionaries and mavericks in mature businesses’) and from $5 per user per month (there’s that US dollar pricing thing again) to create an internal private community for up to 1,000 people.
I must admit I am struggling a bit to work out SmartUp’s USP vs the many other knowledge-sharing social app-style startups in the market, but they claim to have ‘more than 150,000 happy customers’ so that’s all jolly good I suppose.
Posted by Anthony Miller at '08:58'
So now we know. The merged CSC and HPE Enterprise Services businesses will be known as DXC Technology. With c6000 clients in 70 countries, the company will have global revenue of c$26bn.
We’ve written extensively about how the merger will impact the various parts of the UK Software and IT Services market, including: HPE ES/CSC spin-merge: Impact on Infrastructure Services, CSC/HPE-ES merger: Application Services Impact, CSC/HPE-ES merger: the UK BPS implications, and CSC & HPE-ES merger: the UK public sector effect.
DXC Technology will be listed on the New York Stock Exchange under the ticker symbol DXC. So what does the "DXC" stand for? That has not been made explicit at this point, but we are likely to learn more after the official launch of the firm in April (Siegel+Gale is the brand strategy/design firm helping DXC Technology).
Brand names come and go (we’ve just lost the Attenda brand following its acquisition by Ensono, for example), and one eventually gets used to rebrandings (remember when Accenture was Andersen Consulting?). What will really matter is the business behind the brand. Mike Lawrie (who will be Chairman, President and CEO at DXC Technology) says the company will be recognised as a “force multiplier”, helping clients take advantage of the opportunities in “rapidly changing technologies”. Certainly both CSC and HPE (primarily via its acquisitions of EDS) have a rich heritage in outsourcing and an extensive amount of combined experience/expertise between them. DXC must now endeavour to position itself as the first port of call for digital transformation programmes, and that could well be far more challenging than any rebranding exercise.
Until the 3rd April, watch this space: http://dxc.com!
Posted by Kate Hanaghan at '08:49'
TechMarketView Little British Battler auction and trading platform developer, Perfect Channel, is marching onwards and upwards, raising a further £2m in a funding round led by existing investor, Beringea, and new backer, UIL.
We met Perfect Channel founding CEO, Phil Bird, at our seventh Little British Battler event in November 2015 (see LBB Perfect Channel – maximising profits from auctions and trades) and we called out then its potential to scale quickly. The new funding, which builds on two prior rounds which raised £3m in aggregate (Source: TechCrunch) aims to accelerate that growth.
Congratulations to Bird and his team.
Posted by Anthony Miller at '08:05'
Openreach, the division of BT Group plc that is responsible for the UK’s main telecoms network, has appointed Liz Benison as a non-executive director. Benison is CEO of Serco UK & Europe’s Local and Regional Government division, the largest division of Serco Group plc, representing 26% of revenue in 2015. She joined Serco in 2014 from CSC (see Liz Benison appointed Serco CEO UK&E), where she was UK VP and General Manager.
She joins Chairman Mike McTighe, Sir Brendan Barber and Edward Astle as non-executives on the seven-member board. Despite her wealth of local and central government SITS experience, Benison’s appointment appears to be more focused on her customer service skills. Commenting on the appointment, McTighe said, “Liz will play a key role in helping us to work more closely with all of our communication provider customers”.
The new board is part of BT’s plan to make Openreach “a more transparent and autonomous business” in an attempt to appease Ofcom’s concerns about competition and independence. We’re sure that Benison’s skills and experience will prove extremely valuable to Openreach. More broady, BT needs to do more to address Ofcom’s requirements and this appointment will not, in itself, halt their moves to force BT to legally separate the division.
Posted by Dale Peters at '09:51'
Today’s H1 trading update from AIM-listed traffic and transport data services provider, Tracsis, shows the company has pushed up both revenue and profits over last year – with the top line growing 18% to £15.5m. However, shares dropped almost 14% (at time of writing) as Tracsis revealed that pricing pressure was being felt in its Traffic & Data Services business. On a positive note, it expects to see the benefits of its SEP acquisition (September 2015) felt more strongly as we head into summer.
In its Rail Technology & Services business, the company saw “high renewal rates” on its existing product range. Here Tracsis provides consulting services but also remote monitoring services to help with preventative maintenance on assets. The acquired On-trac (Dec 2015) made a “good contribution” to overall Group performance during the period.
Revenue was up 29% (including acquisitions) in the full year 2015 and while there’s no detail yet on FY16, the second half this year is expected to be “significantly stronger” than H1.
Posted by Kate Hanaghan at '09:42'
My article - VR Headsets - What do you think - on Monday produced the usual weighty inbox. Generally your views were pretty much the same as mine. But there were a few who had used VR headsets and been bowled over by the immersive experience. Although everyone said that it was something you could only use for a short period of time. One reader said “For the first time I tried the Playstation VR Headset on Saturday. I can certainly attest to it being fun, a little scary (depending on what game you’re playing) and fully immersive. I even managed to knock over a few glasses with the controllers and had no idea – which really brought home how ‘in’ the game you are. However, you can’t play with the headset on for too long and certainly not before bedtime anymore – it has already given my son VR nightmares and has disturbed his sleep”.
My grandson is fast becoming the ‘go to tech guru’ of the family. He said that VR Headsets were great when you were playing with other friends - but not on your own. He’s very much a multitasker. He said that ‘I want to see when the cats and dogs come into my room’. In other words he wanted to be aware of stuff around him rather than being immersed and cut off. Interestingly, another reader said how great VR would be to cut himself off from everyone else in his office!
But the largest number of comments related to ensuring that VR was not confused with AR - which, BTW, I did not do! AR - Augmented Reality - is considered by many - including Apple’s Tim Cook - to be a major new genre. It was Pokémon Go that introduced AR to the masses. AR is clearly going to be huge in gaming. As one reader said “Having glasses or large displays that overlay information on real vistas will revolutionise the user interface for most real time applications” It has many practical uses. Heads up displays in cars is one such implementation where Sat Nav, infra red cameras to spot hazards ahead and vehicle details (like speed) are merged into your view ahead and projected onto the car windscreen is one such.
Thanks for all your comments/feedback.
Posted by Richard Holway at '09:25'
Expanding through acquisition brings risk as well as reward as Eckoh, the AIM-listed provider of contact centre and secure payment solutions can testify. In September last year, problems in the non-core operations of the Product Support Solutions (“PSS”) business they acquired in November 2015 led to a 20% share price fall, dragging the division into loss and fostering doubts about Eckoh’s US strategy, see Eckoh hit by mixed fortunes in US.
The more positive side of acquisitions has however been evidenced recently with the launch of the capability to take a secure payment directly via live web chat. This was made possible by the purchase of Klick2Contact EU Ltd (“K2C”) in July 2016 and is a major plank in Eckoh’s strategy of enabling co-ordinated customer contact over multiple channels. Eckoh now affirms that it is the first PCI DSS compliant service provider able to offer secure omni-channel payment solutions – over phone, web, mobile app, SMS and Live Chat. The management considers that this will be a further advance in the prevention of Card-not-present fraud, currently the fastest growing form of credit card fraud. Live Chat is gaining popularity among both customers and suppliers, in terms of access to information and (in the case of the supplier) more cost-effective service, and the ability to move directly to a payment, without having to revert to email or a phone call, should provide a better customer experience.
Notwithstanding the US wobble caused by a part of PSS, which they probably didn’t want anyway, Eckoh seems to be making solid progress. More benefits are accruing from its developing portfolio of partnerships, particularly with Capita, the wider US operation now represents 31% of the Group and the company appears to be gaining momentum with larger customers.
Posted by Peter Roe at '09:25'
In the SMB business sector, anything that makes the lives of those running their businesses easier is likely to pique attention from customers and suppliers, and that’s the case with the latest development in Intuit’s ProAdvisor programme, which has been updated with the ‘Find-A-ProAdvisor’ online marketplace. The 20-year old ProAdvisor programme has always been about connecting accounting practices with businesses. The latest development brings an updated means by which SMBs can search for certified QuickBooks ProAdvisors and in theory ProAdvisors receive better qualified leads. The marketplace is now available in the UK along with the US, Australia, Canada and India.
The premise of connecting users and service providers is not new but the means have to be modernised and this is what Intuit is doing, which will help visibility and enhance its route to market, especially in the light of Xero’s growth. Intuit will also be looking at it as a counterpoint to its recent Q2 warning that revenue, operating income and diluted EPS will be lower than expected “due to the tax season forming more slowly than usual”. As regular HotView readers know, Intuit’s performance has been inconsistent (see here). The UK tax return deadline has passed; in the US it is April 18. It remains to be seen whether returns are completed using Intuit or competitive solutions.
Intuit’s traditional competitor Sage also works closely with providers via the Sage Accountants’ Market, offers advise to embryonic as well as growing SMBs and provides an online search facility to connect accountants to users. In today’s SMB market, and against rising cloud competitors, suppliers have to capitalise on their critical mass and extensive resources to provide cradle to grave technology and surrounding services.
Posted by Angela Eager at '09:19'
Given the acres of comment, you are probably already aware that Apple shares hit an all-time closing high of Monday. Indeed they continued the upward path yesterday closing at $135 and valued at $708b.
Although I bought a few Apple shares back in 2004 for a few dollars each, my biggest purchase was in Jan 07 at the time of the iPhone pre announcement. I bought those shares at $12 - so they are now in the Hallowed Holway ranks of a ‘Ten-bagger’ - even higher in £ sterling terms. My biggest regret is that I wasn’t bold enough to mortgage the house to buy more! But, even so Apple now represents about 15% - by value - of my tech portfolio. Interestingly, about the same weighting they get in most of the Tech Indices. Apple is the ultimate bellwether of tech.
I am also a ‘Buy and Keep’ investor. I keep until I decide to give up hope on a stock. I have never given up on Apple!
But the ‘problem’ with Apple is ‘Expectations’. After a couple of years when expectations were lowered and nobody really expected anything too exciting from Apple, now expectations are running at fever pitch. Indeed if the iPhone 8 doesn’t come with an App to cure cancer, a battery that lasts a year, 15 different cameras, surround sound etc - well the pundits will be greatly disappointed!
Expectations run high for Apple’s other product lines - the Mac is in desperate need of a major overhaul and the iPad range needs a mid-life kicker (eg the stylus from the iPad Pro).
But what Apple really needs is a new genre - a NBT. I am still of the view that this will be in the autoTech sector. I still believe that Apple and Tesla would be a great coupling. But suspect Apple autoTech will be more an in-car technology to be adopted by multiple manufacturers.
Whatever, 2017 will be a significant year for Apple and high expectations are already being built into the price with Goldman Sachs setting a price target of $150 yesterday.
Note - Please don’t take any of this as financial advice!
Posted by Richard Holway at '08:58'
The buzz across the banking sector is all about Open Banking and APIs, enabling innovative apps to offer new services and business models to customers and to established banks alike. In yesterday’s report on Finovate we highlighted a number of Fintechs that are getting in on the act.
Today we learn that London-based TrueLayer has raised US$1.3m to continue its development of a platform for app developers and Fintechs to connect with banks and other established financial services companies. New regulation such as Payment Services Directive II (PSD2) and the general move to Open Banking requires the sharing of data by the banks, when the customer permissions such access to a new service provider. This TrueLayer platform sets out to provide a structured way for the developers to access such customer data so that they can build new applications in a compliant and collaborative environment.
This looks like an interesting step forward, providing a useful tool for the many Fintech Start-ups. TrueLayer is looking to expand to cover other markets in Continental Europe later this year.
Posted by Peter Roe at '08:29'
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