Tuesday 24 May 2016 - One Great George Street, Westminster, London
The importance of innovative technology to support the transformation of adult social care is now widely accepted across the sector and up to the highest policy levels. The ADASS Informatics Network has been at the forefront of pushing informatics up the care and health agenda since its “Web of Support” vision back in 2012. This year’s London conference will again feature inspiring national speakers combined with very practical workshop sessions showcasing good local examples of the use of technology. There will be plenty of opportunities for discussion and networking to improve your effectiveness back in your organisations.
This year the keynote speakers are Rt. Hon Alistair Burt MP, Minister of State for Community and Social Care and Tim Donohoe, Director of Informatics, Department of Health.
For details of the other speakers please view the Draft Agenda.
As in the previous two high profile conferences, the key themes will be “Engaging Citizens Online for care” and “Enabling better working with health colleagues”.
If you are offering digital products or services to the adult social care sector, then this represents a unique opportunity to meet with over 200 decision-makers and influencers from local authorities and partner organisations. Sponsorship opportunities are also available.
For further information, please contact Tina Compton, tx2events on 020 3137 2541 or visit the website.
Posted by tx2 events at '00:00'
Now that the latest TechMarketView Little British Battlers is over, why don’t you apply for one of the 2016 WCIT Enterprise Awards? Indeed, many a LBB has gone on to win one of these awards. Our dear friend John O’Connell established these ‘Oscars for UK Tech Entrepreneurs’ some six years ago. TechMarketView – together with such notables as Sage, techUK, Smith &Williamson, Questers, Innovation Warehouse and ScaleUp Group – are sponsors. We – that is Anthony & I and other TMV Research Directors - will be there at the glittering Awards Ceremony on 30th June 16 at the Brewery. We’d love to see you there too.
The Award categories are as follows:
Email firstname.lastname@example.org for an Application Form. Or download Click Here. I am a judge (again). Not that I can be bribed of course…
Posted by Richard Holway at '17:10'
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A very mixed month.
NASDAQ fell 2.7% and is now down 5% YTD. Conversely the FTSE100 was up 1% and is now level pegging YTD. In the UK Tech sector, the FTSE IT index was down 6.2% mainly because ARM was down 7% (9.8% YTD) as sentiment turned against Apple (down 14% this month – 11% YTD) and its suppliers. Personally I think the market is being rather unfair about ARM given how much 'non-Apple' stuff ARM is now involved with. See my comment – ARM – Simply the Best of British. Mind you I think the reaction against Apple was a bit ‘knee jerk’ too. Headlines like ‘Rotten’ Apple? were rather unfair for a company making $10.9b profit in one quarter and adding more cash to their $233b hoard.
The UK FTSE SCS Index (which most closely maps the UK-HQed SITS stocks we cover) was down 3.2% reversing previous gains; now down 0.7% YTD.
In the UK it was the ‘Froth Stocks’, that we have written about so many times, that led the 'Wooden Spoon’ race to the bottom. Outsourcery (or Outsorcery as many now seem to call it) fell 56% - 73% YTD. It started with an announcement that Outsourcery was short of cash – again. The shares plunged – of course. Then Vodafone threw them a lifeline – again. Otherwise the 56% fall would have been much, much worse. One of our other ‘favourite’ Froth companies – Blur Group – also fell 25% - 35% YTD. See blur’s new model comes late into focus. Blinkx fell 23% - 3% YTD. See blinkx addresses costs but losses remain.
Conversely WANDisco rose 20% - up an amazing 156% YTD. See WANDisco – a minnow in the Big Data ocean. INSTEM was up 13% - 4% YTD. See Instem in fine fettle at full year.
On the Global front. Netsuite put on 18% (although still down 4.7% YTD). See – Netsuite sparking on top line cylinders. Amazon was up 11% (although still down 3% YTD). See – Amazon on ‘Fire’. Facebook put on 3% and is now up 12% YTD. See – Facebook soars. Conversely Microsoft was off 9.7% (10.3% YTD) – See Diversity across Microsoft’s moving parts in Q3 and Alphabet/Google fell 7% (minus 9.3% YTD) – See Alphabet disappoints and shares slide.
If there is a theme in this month’s results, I think I might have summed it up in High Growth. High Profits. Your day has come.. Hurrah!
Posted by Richard Holway at '17:41'
FY15 results out from Fujitsu show the Japanese firm’s top line revenue was essentially flat over 2014 at 4,739.2bn yen. The operating profit margin was 2.5%, down 1.3 percentage points on the prior year.
For the full year, the UK receives only one reference in the press release: “Revenue in the Services sub-segment outside Japan declined because it was a slow period for large-scale deals in the UK and due to weakness in the US.” From that we interpret that the UK services business declined in FY15. That’s quite a change on 2014 when the infrastructure services business (c80% of revenue) grew 5%, buoyed by an outstanding performance in the commercial sectors. We understand that much of the decline was due to one large contract (where Fujitsu chose not to renew) and the Public Sector.
For sure there are far fewer large deals in the UK market, and competition for those that do emerge is intense – to say the least. The infrastructure outsourcing market is set to decline mid-single digits for the foreseeable, due to pricing pressure and the shift to cloud delivered services.
Fujitsu has substantial business in UK Public Sector – and is of course part of the Aspire megadeal with HMRC, which is in the throes of being broken up. Indeed, it’s tough times for all of the big infrastructure services players. Those that are bucking the trend for growth include Computacenter (+7.7% in its FY15), which has picked up a range of larger deals, including the modernisation deal at the Post Office, the India-centric players (e.g. HCL), and of course the mighty Amazon Web Services – with its staggering double-digit growth.
More later for our subscribers in HotViewsExtra.
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Posted by Kate Hanaghan at '10:25'
Things don’t seem to be getting better at Symantec. It has announced it will miss its Q4 revenue target; and CEO Mike Brown is to leave (Symantec has now gone through four CEO’s in less than five years).
The company was expecting to deliver sales in the range $885m-$915m but has warned that it will be closer to $873m. This is at a time when security is uppermost in enterprises minds and Symantec is able to concentrate on security now that the work to carve out Veritas is over, following completion of the cut price sale in January (see here). But performing against the likes of FIreEye and Palo Alto Networks and more established providers like Sophos is an ongoing problem.
The company cites a faster than expected shift from licence to deferred revenue – basically the deflationary cloud effect. The full results will make for interesting reading when they are released in early May.
Posted by Angela Eager at '10:19'
Amazon Web Services has delivered a stunning set of Q1 results. Revenue was up to $2.57bn, representing growth of 64% over Q1 in the previous year. The top line number was also ahead of analysts expectations – which no doubt contributed to the 12% spike in shares experienced by parent company, Amazon.
But it doesn’t stop there. AWS accounted for more than half of Amazon’s total Q1 profit, and has become the most profitable business within Amazon.
The rest of the company is going great guns too, as Richard Holway explains here: Amazon on 'Fire'.
On the back of the AWS success story, there are many other associated success stories – i.e. the various AWS partners that are opening up the enterprise market for the company by selling its cloud and providing consulting services. For example, our very own Little British Battler, Lemongrass.
AWS is growing because it is taking parts of the traditional hosting market, but it is also growing from deals in its ‘natural habitat’ of cloud-centric start-ups and smaller businesses. AWS has much to do to truly crack the large enterprise market (i.e. most large business critical applications still remain in traditional hosting settings) but its innovative approach to products and markets will make it an incredible force to be reckoned with as time goes on.
Earlier this month, Jeff Bezos spoke about “inseparable twins”, failure and invention. He accused most large organisations of not being prepared to suffer the many failures typically required to eventually produce a big win. Likewise, the industry’s largest traditional IT services suppliers really have to consider whether they are doing enough not just to compete with AWS but also ensure their long-term survival.
Posted by Kate Hanaghan at '10:16'
For too many years now, supposed talented people have tried to tell us that the only thing that matters is GROWTH and that profits and cash generation from trading are for the dinosaurs. When your share price rises with increased losses and investment continues to flood in to fund those losses, you can understand what a lone voice we have often been.
But in the last couple of years sentiment has changed. The cry of ‘show us how you can make money’ has grown louder and louder. This week’s results – and the market’s reaction to them - just proves that we really have won the day.
Amazon had been high growth but loss-making for many years. Investors got restless. In the last year, Amazon has shown that they can tweak the model and turn the profits on – much helped by AWS, of course. High growth AND High profits growth is a wicked combination and investors have rewarded the company richly (or is it the other way around?) Facebook (See Facebook soars) is another example of a superb High Growth and High Profit machine. Apple (See ‘Rotten’ Apple?) has known how to make profits for many a year. High Growth and High Profits provided rich returns for Apple shareholders too. Now the ‘Growth’ bit has disappeared and Apple is being valued more as a ‘mature’ company. If they can get the growth mojo working again, their loyal shareholders will get rich rewards too.
Conversely, Growth but no profits, has really hit the share price at the likes of LinkedIn (See Linkedin recovers), Twitter (See Twitter disappoints again), Netsuite (See Netsuite sparking on top line cylinders) and even Salesforce.com. Many other examples too numerous to mention.
The day when profits are celebrated once again has not come soon enough for us.
Posted by Richard Holway at '10:05'
Amazon’s AWS operations (see Amazon Web Services beats Q1 revenue estimates ) put in a stunning performance in Q1 contributing to a 12% rise in Amazon’s shares after the bell. But it looks as if all divisions of this huge, still mainly retailing, operation are rocking. Amazon sold $29.1b worth of stuff in Q1 – up 28% yoy. In particular, Amazon’s own ‘stuff’ – like the Fire TV stick and their tablets – are the best selling products on Amazon. But even more notable was reporting a profit of $513m compared to a loss of $57m in Q1 last year. Mind you Amazon is still piling on the costs/investments too. For example, shipping costs rose 42% as it rolled out Amazon Now (I can even get a two hour delivery in Farnham all included ‘for free’ in my Amazon Prime subscription. There is no way they can make money on that!)
Of course, many fear that Amazon is just too powerful. They can crush competition and disrupt markets (as they have done with books). They can operate globally with apparent disregard to local taxes. But as a company, as a share and as a business model, Amazon is now the one to beat
Posted by Richard Holway at '10:03'
Oracle has opened its wallet again, this time taking out $663m to acquire Textura, who provides cloud based solutions for the construction and engineering industry. The deal is expected to close later this year.
It will join another acquisition in this field – project management-based Primavera from 2008 – in the Engineering and Construction Global Business unit, increasing Oracle’s vertical footprint and bringing capabilities such as online contracts and payment services. It indicates renewed activity from Oracle to buy its way into a position in the construction and engineering vertical, so further investments will no doubt be on the cards.
It is also interesting because it tackles the business networking aspects of operations, which SAP is heavily committed to with its business network-based Ariba, Concur and Fieldglass services (see here). Textura processes 3.4bn worth of payments across 6000 projects per month and has 8500 contractors and sub contractors connected so Oracle’s name and solutions will spread through the sector once the deal has been completed and it will have the scope to explore this go to market and revenue channel.
Textura has just reported Q1 results: revenue was up 28% to $24.7m, beating market expectations, while the loss narrowed from $3.1m to $1.5m.
Posted by Angela Eager at '09:56'
London-based ‘video-recruitment’ platform startup, LaunchPad Recruits, has secured £2m of seed funding from investors including Sussex Place Ventures and Edenred Capital Partners. Founded in 2011, LaunchPad’s platform lets employers do video interviewing and screening for prospective hires. I guess I may be missing something here as why can’t you just use Skype? Anyway, there’s clearly a very good answer – one worth £2m I assume – so jolly good luck to them.
Posted by Anthony Miller at '09:45'
Offshore centric business process services (BPS) provider EXL Services is attempting to show it is paying more than lip-service to business process automation (BPA), with a new partnership with robotic process automation (RPA) player Automation Anywhere.
EXL has been slower than many of its peers to move forwards with automation technologies. But we understand that this reluctance is now changing and there is a concerted effort to form new partnerships. EXL said Automation Anywhere’s platform will complement EXL’s proprietary technology, simplify integrations with clients, foster outcome-based engagement models and create differentiated, industry-specific solutions.
As we pointed out in our recent report Business Process Automation – opportunities in the Robotic Revolution, software robots are capable of providing a far wider set of services, not just automating routine rules-based back office tasks, but also doing away with the need for traditional ERP integration that aims to get systems ‘talking to one another’.
EXL also released its Q1, which showed sharp growth of 18.4% in constant currency (ccy) to $167m. Analytics revenues were the star of the show – almost doubling to $19.7m, meanwhile the traditional operations management (BPO) business grew a more subdued 5.6% ccy. Operating margins are some way off those of peers like WNS however (see here) at 9.8% vs.9.4% - something it will want to rectify with its new RPA partnership.
RPA should help drive up BPS supplier margins as the cost of managing and maintaining client operations is reduced. It will also have the effect of driving down total contract values. Therein is the challenge of automation for BPS providers - and why some providers have been more reluctant than others to jump in.
Posted by John O'Brien at '09:43'
India HQ’d business process services (BPS) provider WNS has seen its largest UK market decline 7% in FY15/16 to $234m (net revenue) as a result of recent delays from its largest insurance customer Aviva (see here and work back). Revenue from WNS’ largest customers declined 14% in the year overall.
In the investor call, WNS’ CEO Keshav Murugesh said that even though there had been delays, WNS has recently won some new contracts with Aviva, and ‘the bigger opportunity is still out there’, which is likely in relation to the recent acquisition of Friends Life (see here).
While there remains uncertainty in the UK, the rest of the business continues to perform well, driven by double-digit growth in all other geographies, including the second largest market North America, which was up 12% to $155m.
In total, WNS achieved FY organic growth in constant currency of 11% to $531m (net revenue), and up 5.6% at the reported level. Adjusted net income margins also nudged up a point to 19.4% vs. 18.3%. It’s expected to remain stable at this level in the current year too. Meanwhile, there’s quite a spread with revenue expectations – reflecting some of this uncertainty with top clients – of between 8% and 14% (ccy).
The current year will also have more inorganic growth following last month’s $17.5m acquisition of India-based Value Edge Research Services, which provides commercial research and analytics services to clients in the pharmaceutical sector. Meanwhile, WNS is moving faster than some of its peers into disruptor areas like robotic process automation (RPA), which should ensure it keeps the momentum going through 2016 (see Business Process Automation – opportunities in the Robotic Revolution).
Posted by John O'Brien at '09:25'
As if reiterating the point that it is back on form after its challenging FY15 (see here) Scisys has announced a new contract win.
Its Media and Broadcast unit has signed up the South African Broadcasting Corp (SABC), in a 2.5 year deal worth c€2m for dira! – Scisys’ next generation cloud enterprise radio production and playout system. This follows the announcement of a similar radio contract in February (see here). These deals may by modest in size but are important signposts to where the company is going, indeed CEO Klaus Heidrich described the SABC contract as a landmark win.
One of the goals for the division is international expansion, where the company has both public and private radio stations in its sights, particularly multi site broadcasters because of the scope to spread through their networks. The SABC contract is an excellent example – dira! will be used six Johannesburg radio networks plus 10 larger and 5 smaller regional sites. It is also an exemplar of Scisys beginning to execute on its geographical expansion plans: at a recent briefing management team identified Africa, Middle East and Europe as geographies of opportunity.
With the overall market move to cloud, plus eyes on new geographies, SciSys Media and Broadcast (c20% of the overall business) is becoming a hive of activity.
Posted by Angela Eager at '09:25'
Q1 can be a tricky period but NetSuite is sparking, pulling in 30%+ growth across key metrics. At $216m, revenue was up 31%, with the subscription/support component up 30% to $173m and services moving up 36% to $43m.
The services figure is indicative of larger deals and more complex implementations and indeed management said the number of $1m+ deals was up on the year ago figure, although there were no further details. One World is coming into its own here, attracting new business and increasing the average deal size. As we noted in our analysis of NetSuite (see here), its deep functionality and process capability are pushing it further up the value chain and into larger enterprises.
Smaller and mid sized businesses have been NetSuite’s historical bread and butter and it is not leaving them behind. CEO Zach Nelson highlighted strength in the mid-market business from organisations buying standalone single entity versions. With evidence of a “very strong average selling price,“ he sounded confident about the mid-market, citing strength geographically and vertically. In fact, there was all round confidence, enough to edge up forward guidance, including taking revenue expectations for the year from $950m-$970m to $955m-$975m. However, losses were slightly higher yoy, at $29.7m vs. $22.7m.
The takeaway for competitor Sage is that the mid market is buoyant, that there is growing acceptance of cloud in more complex back office areas, and that there is growth to be made and market share to be claimed if it can be fleet enough of foot. Its global user conference later this year will be all important for its modernisation and cloud credentials.
Posted by Angela Eager at '08:41'
LinkedIN - Like the Business model NOT the Losses.
If you read my comments about LinkedIn over the past many years, I’ve been pretty consistent in saying that I like the business model. It knew what its market was and how to monetise it right from the start. Many of my business friends – in particular those in the recruitment business – swear by it.
It has been a tough period for LinkedIn – See LinkedIn plunges – again. The latest plunge in Feb 16 was caused by a lowered outlook. But last night’s Q1 results exceeded these lowered expectation and LinkedIn’s shares surged 8% in after hours trading – although in no way making up for the 40%+ plunge in 2016 to date.
Q1 revenues rose 35% to $861m. Although losses of $46m were recorded, this was better than expected. All the metrics looked good. People using LinkedIn increased 19% yoy to 433m. Growth in users from China was a major contributor to this. Even so, about 60% of users are in the US and the upturn reflected a better jobs outlook there. Talent Solutions – the bit that recruiters use to connect to job seekers and the bit responsible for two-thirds of LinkedIn’s revenues– surged 41% in Q1 yoy. Advertising was up 29% yoy at $154m.
Having said all that, after all these years (Reid Hoffman founded the company around 16 years ago) and with a decent business model, LinkedIn should have been trading profitably for some time. Even now costs are rising faster than revenues – never a good sign. As Facebook and Amazon have demonstrated, tech companies that grow fast AND make profits get richly rewarded. That now is LinkedIn’s #1 priority in my view.
Posted by Richard Holway at '08:25'
New Jersey-headquartered Indian pure-play Cognizant has taken a 49% stake in 70-strong Copenhagen- and New York-based ‘human sciences’ consultancy, ReD Associates. Terms were not disclosed.
ReD will work alongside Cognizant’s ‘digital’ unit, badged Cognizant Digital Works (get the pun?). CDW EVP Gajen Kandiah commented that ‘"While it may sound counterintuitive, 'being digital' also means being more human," – so that explains everything.
Posted by Anthony Miller at '08:01'
Valueworks, one of our second brigade of Little British Battlers (see Little British Battlers – the Second Coming), is going through some big changes, having brought in new management to transform it into a pure SaaS player to social landlords and their contractors.
Private equity owners HgCapital are backing former SAP and EDS public sector exec Matthew Trimming (executive chairman) and management accountant Nick Southwell (FD), who has held positions at global firms like DuPont, and International Paper. Alongside them, Kashflow founder and entrepreneur Duane Jackson will be Valueworks’ technology coach, supporting the new CTO Philip Moss. The new team started on 15th February.
Just over 2 months in we spoke with Trimming to understand the details behind the change. At the root of it all is the need to become a SaaS business driven by product development and with consistent recurring revenues. The strategy is to drive adoption via a modular product set that is closely aligned to the needs of social landlords and their maintenance contractors. Already, there are new PlanWorks and ServiceWorks modules to assist landlords and their contractors better manage the processes and costs associated with planned and cyclical maintenance. Other modules ReactWorks, focused on day-to-day repairs and BuildWorks, to support social landlords to build many more affordable homes, are in the pipeline.
Historically, Valueworks developed a strong offering providing direct procurement services for social landlords in the North West of England. However, this narrow focus has limited its potential to scale. Trimming and the new team are aiming to build a leaner, more robust business that can support a wider customer base on a recurring basis, driving out costs and managing their assets more effectively. Getting there will require a new culture built around co-creation with its customers and partners to inform product development and deliver value. Jackson’s input will be highly valuable here. Opportunities should come through new partnerships not least Valueworks evolving ISV relationship with Microsoft’s Dynamics channel.
We wish them all the best in this next phase.
Posted by John O'Brien at '07:00'
The Annual Analytics Summit brings together experts from government, journalism, industry and academia to help you turn data into decisions. Filled with case studies, innovations and strategies, the summit is one day of learning and networking for anyone involved in organisational decision-making – analysts and decision-makers alike.
New for 2016 To help you make an impact in your organisation, the technologies and techniques used in the morning’s case studies will be fully unpacked and explored in the afternoon sessions.
Plenary Speaker - Megan Lucero, Data Journalism Editor at The Times and Sunday Times
“Data v insight: How computing and data analysis can advance accountability in journalism and society”
Megan’s team’s data mining and analysis has brought many issues into the public discourse, such as blood doping in athletics and gender gap in income equality. She also spearheaded the Times’ political data unit that rejected polling data ahead of the UK’s last general election. Her latest work includes data analysis relating to the Brexit Referendum.
Case Studies and Sessions:
“The Analytics of Hunger” - Andy Hamflett and Giles Hindle with Simon Raper and Richard Vidgen, for the Trussell Trust
“Managing Risk in the Education Sector using Data Science” - David Goody, Department for Education
“Embedding Analytics at the Heart of M&S” - Pete Williams, Marks and Spencer
“Insights into People Movement from Location Data” - Emily Digges La Touche and Alina Marin, Movement Strategies
21 June 2016
BMA House, Tavistock Square, Kings Cross, London WC1H 9JP
£100 + VAT early bird (£150 + VAT full price)
Book tickets now
Posted by The OR Society at '00:00'
In Q216 (to end March), CGI’s results once again benefited from foreign exchange fluctuations. Headline revenues increased by 5.7% to CAN$2.8b but, at constant current, the decline was 1%. For the six-month period, the growth was 5.7% to CAN$5.4b, but down 1.3% at constant currency. The quarterly decline in revenues (at constant currency) has been a consistent picture since Q413. While for some time the decline was put down to the run off of low margin business, that process is now essentially over. And to be fair, the decline is now substantially less steep than it was (the lowest decline over that period). This time, the decline is mainly put down to the non-renewal of contracts in the US federal defence market and lower work volumes in the Nordics segment. Adjusted EBIT, meanwhile, continued to rise – up 7.6% to CAN$390.6m for the quarter (a margin of 14.2%).
In the UK, the picture for the quarter was positive. For the quarter, revenue was up 8% to CAN$360.5m, or up 3.5% at constant currency. This followed an equally positive performance in Q1 (see UK is CGI’s Q115 star). Indeed, for the six-month period, revenues increased by 12.6% to CAN$725.8m, or 3.9% at constant currency. In Q1, the star of the show was the Government vertical. This time around, CGI highlights a higher work volume in the telco & utilities market and new business wins in the financial services market. And the EBIT margin has improved too despite the end of the run-off of low margin business. This time the improvement in margin – in H116 standing at 12.1% - has been down to productivity improvements in the infrastructure outsourcing business.
Like its peers, CGI is battling to fill the gap in revenues as legacy infrastructure and application outsourcing contracts shrink or change shape. We have spoken positively in a couple of recent reports about CGI’s investment in its digital and security-related capabilities, and its positioning in the market – see CGI simplifying digital complexities and Digital transitions: supplier progress – CGI. But while its buy and build investment strategy stands it in good stead, this set of results goes to highlight that much will come down to the timing of the end of legacy contracts and the maturity of clients to embark on complex digital transformation programmes. We are bound to continue to see different rates of growth across geographies and verticals as a result.
Posted by Georgina O'Toole at '09:54'
CloudTrade is one of our latest Little British Battlers (LBBs) – and a true disruptor to the incumbent e-invoicing sector. We really liked the simplicity and pragmatism of the solution - a cloud-based system that converts any type of supplier invoice (electronic and paper) into a validated e-invoice format for straight through processing.
CloudTrade was launched in 2011 by CEO and founder David Cocks, and director Richard Mason, whose 25-years experience in the procure to pay (P2P) market gave them a first-hand perspective on flaws within the current e-invoice technologies, from costly EDI (electronic data interchange) at the large enterprise end, to manual invoice portals for micro-businesses. Driving out paper from the invoicing space is key to reducing costs and manual effort. However, these two approaches still result in significant amounts of printing and/or rekeying.
CloudTrade does things differently, by providing a utility e-invoicing solution for the ‘mass-middle’. Its approach is non-invasive in that suppliers can continue sending invoices in their chosen format, and CloudTrade will transfer it in to the buyer’s preferred electronic invoicing format. Validated invoices are then transferred into the buyers’ system for matching, processing and paying. Simples!
Of course the tech to get there is more complex. CloudTrade uses machine learning techniques to improve the matching of invoice formats, so that straight through processing of data documents is fully automated.
It’s an approach that is becoming increasingly popular among partner software providers like ACS, Taulia and Elcom who want to offer this capability to their customers. CloudTrade also has OEM agreements in place with two global BPS names, where the potential to scale is very significant. It is also the ‘backbone’ to e-trading services such as supply chain finance, dynamic discounting and spend analytics. So there are plenty of opportunities for CloudTrade to move up the value chain.
Posted by John O'Brien at '09:39'
Being small hasn’t prevented Arcus Global from thinking big and tackling the large but slow moving public sector market. There again, with a modernisation and digital transformation go to market agenda, the pressured public sector presents a broad market opportunity. This combination, alongside the public sector push to work with SMEs, has been beneficial for Arcus - double digit growth, G-Cloud successes and customers who have stayed loyal since initial contracts in 2009 - earning it a place on the Little British Battler programme.
The Cambridge based company provides cloud based advisory services, managed services and applications. It is surfing the cloud wave into the public sector but taking the smart decision to ride Salesforce and AWS rather than bring in a proprietary platform. It is also building its own line of business applications (e.g. planning, waste management, social care) built on the Salesforce platform. This combination enables it to differentiate with its own IP while offering the stability and scalability of established cloud services to run them.
It currently has c100 customers, most of which are UK local government councils, but its remit includes central government, as well as education, NHS, and wider public sector areas like Not for Profit and quangos. In terms of expansion it is casting its eye over Commonwealth countries because of their similarity to the UK. This type of thinking typifies its savvy approach to business: it picks it battles carefully (e.g. it doesn’t go head to head with the major suppliers), is prepared to tackle the difficult but opportunity rich cloud back office, and selects best of breed cloud services thereby containing its costs while reducing perceived risk on the part of its customers.
Posted by Angela Eager at '09:28'
NCC Group styles itself as “the independent global cyber security and risk mitigation expert”, reflecting its escrow roots, security ambitions and sidelining the domain services business which is under threat of a strategic review.
The domain services business aside, NCC Group has been a powerhouse of performance during the first 10 months of its year, with revenue up 60% to £166m. Part of this is due to its Accumuli (see here) and Fox-IT (see here) acquisitions which enabled a step change in its security business. There appears to be more to come given group chief executive Rob Cotton’s comments regarding plans to start the global roll out of some of Fox-IT’s offerings.
Even on an organic basis revenue was up 21% (vs. 14%) and the company says it is firmly on course to meet current FY expectations: double digit organic growth, supplemented by acquisitions. In terms of the bottom line, net debt is down to £18.5m, benefitting from the £126m that was raised around the Fox-IT acquisition.
The cornerstone Escrow division was up 8% (an in line 6% in the UK) but the Assurance division (home to the security assets) soared 74%; 24% on an organic basis. The Domain Services Division continued to disappoint due to ICANN delays and “poor consumer understanding and lower than expected demand for domains.” Revenue rose 127% but only to £6m. Management is confident that it will peg losses to £1.7m in the current year and break even next year but if it fails to break even its days may be numbered as it will be subject to a strategic review.
NCC took an early and expensive decision to pursue a top level domain business, which so far has not paid off. However, its several other business divisions appear to be comprehensively compensating.
Posted by Angela Eager at '09:20'
Little British Battler (LBB) Managed 24/7 has turned the art of managed service provision on its head, reversing the traditional ‘break/fix’ approach to IT and telecoms support by using analytics to predict and remediate its customers’ problems before they occur.
Headquartered in Milton Keynes, this well-established LBB was founded in 2009 by John Pepper who previously built and sold value added reseller and network integrator Minx Technology to Insight Enterprises for £1m in 2008.
Managed 24/7’s revenue growth and profitability is impressive, driven by a strong foundation of private sector customers - including Manchester City Football Group, Birketts, Autoglass and Hypnos Beds. It is now actively targeting healthcare organisations, regional police forces and local country councils.
Current network monitoring and analytics activity is being extended into a managed Internet of Things (IoT) service. The more information which can be extracted from sensors and other devices in data centres and other mission critical environments, the more proactive Managed 24/7 support can be.
Plans to grow headcount from 22 to 48 employees are underway but it will need to quickly build and scale its architecture to handle additional accounts. Encouragingly, Managed 24/7 is innovating to stay well ahead of the 1980s competition.
Posted by Martin Courtney at '09:10'
Atos reported on its Q116 results on a very busy day for the TechMarketView team – our Little British Battler (LBB) Day. As a result, we kept our initial write-up short and sweet (see Atos: Currencies take sheen off strong start), but there is much more to add, particularly from a UK perspective.
As we previously highlighted, it was currency effects that dragged down growth at the global level… from a 15% increase at constant currency to a 1.6% organic revenue increase. At the UK level, the organic decline was 7.7% (from €485m to €447m) but was a deeper 9.6% at constant exchange rates. But this decline did not come as a surprise. We had always expected this dip in Q1 due to a number of one offs in the comparable period. Indeed, if we take the growth between Q114 ad Q16, it stands at 6%.
In UKHotViewsExtra, Georgina O'Toole delves into the factors impacting the Q1 results and highlights why we should see an improvement in the UK results in future quarters. TechMarketView subscribers can read the note - Atos Q1: UK revenue dip as expected - now. If you are not yet a subscriber, please contact Deb Seth to find out how to access the research.
Posted by Georgina O'Toole at '08:55'
It goes without saying that uncertainty over ‘Brexit’ got a mention as a contributing factor to a muted performance in the UK arm of London-headquartered international recruitment firm Harvey Nash, but to that add ‘global uncertainty in relation to China’, and a downturn in the energy market. Nonetheless, UK & Ireland revenues still grew by 1.8% to £233.4m in the FY to 31st Jan., though operating profit dipped by 3% to £3.5m.
Across the Group it was good to see gross margins and operating margins both edging up, with GM gaining nearly a point to 13.3% and OM up from 1.3% to a still somewhat undernourished 1.5%. Harvey Nash took a substantial £14.4m hit in the disposal of its loss-making German outsourcing business (see here) which rendered a £7.6m net loss. Headline group revenues were essentially flat at £677m, though 5% higher in constant currencies.
Harvey Nash chairman Julie Baddeley noted that ‘the caution in the UK is likely to continue until the referendum on Europe concludes’ and that visibility was limited ‘whilst global economic and UK political volatility persist’. However, performance so far this FY is ‘in line’.
Eligible TechMarketView subscription service clients can see our views on the Brexit debate in Peter Roe’s provocative report, The EU Referendum - In the balance.
Posted by Anthony Miller at '08:05'
And that is probably the good news given a rather muted offshore services market, with Noida-based IT services major HCL Technologies turning in a respectable set of Q3 results (to 31st March). Headline revenues grew by 6.5% yoy to $1.59b, 1.3% up on the prior quarter – the latter much in line with most major peers. Operating margins, at 20.7%, were a tad down yoy and a tad up qoq, so really it’s a wash.
It’s been a hectic quarter for HCL, notably here in the UK, with a deal at Greater Manchester Police (see here), and an ‘acquisition of two halves’ (see HCL gets to the point – twice - with Point to Point). But HCL had even greater success on the Continent, with deals at French transport firm Alstom (see here), and most significantly, a mooted $1.75b megadeal at Volvo (see here). The effect of these deals has yet to appear in the numbers – for that we will have to wait and see.
Posted by Anthony Miller at '07:40'
There were no great revelations as the management of Earthport held their investor day yesterday, just a straightforward exposition of how things are. The story remains much the same as before, as Earthport builds a simpler, more efficient and cheaper system for cross-border payments, opening up a huge market opportunity, albeit longer term.
The central issue and the reason for a disappointing set of interim results as well as a further long wait for profits is the time it is taking to gain real traction within the banks who have signed up as customers. Realising the full potential from any one of these customers would transform Earthport’s P&L, but the reality is that only minuscule proportions of their activity have thus far been shifted onto Earthport's platform.
The blame can be fairly laid at the door of the banks, with their ultra-complex systems, conservative structures and competing priorities. A wholesale shift to use Earthport would require significant changes to the banks’ core systems which would be a significant undertaking and not without risk. Earthport is however not completely without fault, admitting to lessons learned re the time and effort taken to educate customers and finalise contracts. To provide a faster route to volume, Earthport is looking to other customers in remittances and ecommerce, but increasing penetration within the banks is central to the five-year vision it presented of a c.£100-150m business with a 30-35% EBITDA margin.
We would look to the extended management team to explore ways to accelerate the development of its key customer relationships, but it looks like persistence and patience will be key requirements going forward.
Posted by Peter Roe at '00:12'
Acuity Business Solutions is an SME management consultancy working with public sector clients to deliver reform, supporting the Government's Digital Agenda. Currently celebrating our tenth birthday, having delivered over 16,000 days across 190 assignments, we have been reflecting on the principles which overcome common mistakes often made in the delivery of successful ICT transformation programmes.
1. Setting goals and strategy to articulate your transformation aspirations in a clear, concise and strategic manner. When have you been able to plan your journey without knowing the destination?
2. Establishing your baseline to understand where you are now, where you want to be and what the gap between the two is. Every journey has a start and an end point.
3. Establishing your delivery framework through which you are going to deliver transformation. Make sure everyone is clear on who does what, when and why. Each individual needs to be clear on their contribution in delivering the bigger picture.
4. Picking the right team
If people haven’t been involved in successful transformation previously it is very difficult for them to understand how well or not the programme is going. Any team needs to include experienced individuals who are aware when things are on or off-track.
These four steps crystalise thinking on the transformation and support development of a robust delivery plan.
See more detail on our approach in Acuity’s Quick Guide to Successful Transformation or contact Sarah or Becky on 01392 826035 to discuss how we may support you with your transformation needs.
Posted by Acuity Business Solutions at '00:00'
In the current reporting season, I have had to use the word ‘disappointing’ or worse to describe many one time stars – Apple, Google, Twitter and others. But tonight the 'star' mantle has been handed to Facebook. Their Q1 results busted all expectations and their shares soared nearly 10% to $118 in after-hours trading.
Q1 revenues rose 54% to $5.4b and profits tripled from $509m to $1.5b yoy. User growth in Q1 was 15% to 1.65b from last year. 989m now access via mobiles – up 24%. Unlike Google (and the rest) Facebook has been able to sell more mobile ads at higher prices. Facebook is now the giant in display ads. eMarketer estimates Facebook will garner 31% of ALL display ad revenue in the US in 2016. It all seems just the beginning too with Facebook rolling out its video ads and other new formats. In Jan Facebook said users viewed 100m hours of video every day!
As I have said many, many times the magic of Facebook is that it has social media for every age group. Sure Facebook itself is now for oldies like me where the youngsters put sanitised versions of their lives for consumption by parents and grandparents. But Facebook also owns Instagram which is a great hit with millennials. Instagram now has 400m active user and is expected to carry $1.53b of ads in 2016. Then there is WhatsApp which also now has in excess of 1b active users. Recently Facebook split out Messenger which now has 900m active users. WhatsApp and Messenger carry 60b messages a day. Users create 1b Facebook posts a day. These figures are pretty mind-blowing!
The only note of caution I can think of is to remind you of the other stars that have shot to fame and fortune only to come crashing down to earth. No suggestion or likelihood of that happening to Facebook anytime soon. But the ‘star cycle time’ is certainly getting shorter and shorter as so many are finding out to their cost.
Posted by Richard Holway at '22:36'
Now that the campaigning for the EU referendum at the end of June has started in earnest, we are more able to assess the quality, breadth and depth of the arguments for both sides of the debate. It is clear however that the decision will be made based on a multitude of different factors and that this important vote will be a close run thing.
The uncertainty surrounding the decision is already having an impact on the economy and a vote to Leave would result in the renegotiation of Britain’s trading agreements and its position in the world. Opinions vary markedly as to the impact of a “Brexit” on the economy and other issues such as migration in the longer term.
In The EU Referendum – In the balance, we examine the facts and test the hyperbole of this crucial debate and present our expectations of the impact of the referendum and a decision to “Leave” on the UK market for Software and IT Services. The impact will probably be most severely felt in the Financial Services sector where investment decisions could be postponed and in the public sector where Central Government departments will be distracted by the repercussions of a Brexit decision. This would result in additional pressure on market growth, in many cases being likely to slow initiatives to modernise and embrace digital transformation.
This report is available to TechMarketView subscribers, here.
Posted by Peter Roe at '21:52'
As readers have pointed out, the 140 character limit to Twitter DMs, that I referred to in my Twitter disappoints post earlier today, was removed a few months ago. Just shows how rarely I use that feature. I'm still unsure why I would use DMs rather than other messaging services.
Perhaps I should send a tweet to apologise.
Posted by Richard Holway at '11:53'
At first glance there seems little to get excited about in the interim figures from PROACTIS, the Wetherby-based provider of spend control and eProcurement solutions. However, a deeper look reveals an interesting strategy to exploit the potential in transaction and procurement networks.
The figures showed organic revenue from spend control solutions up just 4% (down from 18% in H1 last year), with EBITDA a smidgeon higher at £2.4m. Headline growth rates were depressed by the move to multi-year SaaS deals, echoing the story seen many times elsewhere. Nevertheless, there were some positive trends concerning cross-sell and upsell opportunities, boosted by the company’s recent acquisition spree which has brought in new capabilities and services in document scanning, marketplaces and e-auctions which can build share of wallet. Since the year end, Proactis has added Due North to its stable of companies, see here. There is also a solid increase in the rate of adding new customers, further supporting the management’s confidence about the software business.
We are intrigued about PROACTIS’s plans in building a Supplier Network, leveraging its unique position with its existing customer base of buying organisations across the public and private sector. The buyers can enlist their supplier communities onto the group’s nascent network, providing opportunities for e-invoicing, accelerated payments, dynamic discounting, etc. Both supplier and buyer would benefit from lower costs, faster transaction times and slicker reporting. This side of the business may well take time to develop, with nominal revenue currently included in analyst forecasts and lots of competition in a fragmented market, but it could be a significant driver of value.
Cash at year end had risen to £4.6m which will support the organic business, but the management are on the lookout for more acquisitions to accelerate the group’s development. Worth watching.
Posted by Peter Roe at '10:02'
Earlier this month we reported that First Derivatives, the provider of Big, Fast Data solutions, was in bullish mood, see Pushing expectations higher, as it benefited from a strong consulting business, record software sales and a flurry of M&A activity.
The company’s confidence will be further boosted with today’s announcement that Thomson Reuters will use FD’s Kx database technology to drive its financial Data as a Service platform, Velocity Analytics. This is a major endorsement of First Derivatives’ solution and could provide significant scale for its cloud-delivered offering. Users will be able to deploy high-speed analytics to mine the extensive real-time and reference data generated and collected across Thomson Reuters to support trading strategies, risk management and regulatory compliance. First Derivatives had already with introduced a hosted/cloud offering thus extending its customer reach beyond the large investment houses where it has numerous strong and valuable relationships, but the TR deal should provide a new channel to a much broader range of customers and speed geographical expansion. The service will be delivered over the Thomson Reuters Elektron Network.
Thomson Reuters is probably not the easiest of partners to deal with and the cultures of the two organisations will be radically different, but the deal should provide another avenue for substantial growth.
Posted by Peter Roe at '10:00'
Founded by a charismatic duo, Hellen Bowey and Alexandra Eavis, Alcove is a Little British Battler (LBB) in the true sense of the term, a start-up punching well above its weight that promises to disrupt an established market in some style. Alcove provides an Internet-of-Things (IoT) powered ‘telecare’ system that supports independent living by combining real-time data from wireless sensors with that from other in-home and wearable consumer devices, such as a smart watch that acts as a panic alarm and a tablet that can be used for video calls.
The SME has a software-led approach, adapting, integrating and aggregating the best consumer hardware and developing its own bespoke software wrapper. Data is analysed and displayed simply in a web-based application and used to send real-time personalized alerts to help keep older and disabled adults living independently in their own homes and out of residential care. For the time being, Alcove is focused on telecare rather than telehealth – the team are passionate about replacing hard-wired pull cords and pendant alarms with a data-driven service that enables preventative care and saves care and support providers money.
Although Alcove was only founded in 2014 and its products didn’t hit the market until Q4 2015, it is already proving itself in the domiciliary care market with customers such as East Thames Group, a housing association with nearly 14,000 homes, and Sheffield City Council, as well as some heavy-hitting partners. Clearly it is early days for Alcove and like all our LBBs it will face challenges as it scales, but with a strong pipeline, compelling product and driven team we have high hopes for its future.
Posted by Tola Sargeant at '09:49'
Capgemini’s Q1 results announcement is strong with management remaining confident of the outlook. At the headline level, the Group achieved revenues of €3,092m, an increase of 11.8% year on year and 13.9% at constant exchange rates. Organically (predominantly taking out the impact of the iGate acquisition effective from 1st July 2015), revenue growth was a still solid 2.9%.
As we stated at the time of the full year results – see Capgemini bets on cloud and digital for growth – the management team’s confidence is founded on its belief that it has positioned effectively to attract significant cloud and digital business. Indeed, following 23% growth in ‘cloud’ and ‘digital’ in FY15, growth in Q1 was 27%. It can be easy to just take these figures with a pinch of salt, as much depends on the definition of digital used. However, having spoken to Capgemini recently, my understanding is that the company’s definition of digital is pretty tight and essentially focused around the implementation of Systems of Engagement (SoE) and the associated integration services. We have seen far broader definitions than that being used! And looking at the Q1 results presentation, example wins in the period span a diverse range of industries. The consulting and application services businesses, in particular, are benefitting from Capgemini’s success in this area.
The UK is highlighted as one of the regions that has driven a strong start to the year for consulting. Overall, the UK&I, which makes up 17% of global revenues, had a good start to the year: the region reported an 8.1% increase in revenues (constant currency), driven by double digit organic growth in the private sector. The UK organic percentage increase is not given in the Q1 results announcement, but, by our calculations, organic (constant currency) growth was likely in the low to mid-single digit percentage area. Of course, the HMRC Aspire contract remains an important factor in the UK. Recently, the good news was that the company has signed a new three-year contract with HMRC through to 2020 (see HMRC begins Aspire megadeal breakup). In FY15, the UK business declined by 14% organically due to the novation of Aspire subcontractor revenues. Under the new arrangement, we will see some elements of the contract re-let over the next couple of years (tender documents have been published for some), so there is likely to be a negative impact on the FY16 and FY17 results. However, like in the global business, we sense a significant amount of confidence in the UK when it comes to winning new digital and cloud business, in both the public and private sectors, to soften (or indeed balance out) the Aspire effect.
Posted by Georgina O'Toole at '09:42'
Further to my (much quoted) post on Monday (see Outsourcery short on cash – again), AIM-listed cloud services minnow Outsourcery has just announced that key partner (and principal secured lender) Vodafone is bailing them out again with a new funding facility. Voda first came to Outsourcery’s rescue last July with a 48 month, £4m loan at 7.5% p.a. in exchange for a warrant over 3m of Outsourcery’s shares at 30p a share (see Outsourcery rings up £4m loan with Vodafone).
Outsourcery’s shares slumped to 3.6p after Monday’s news but have rocketed up to a mighty 6p as I write. Its shares listed on AIM in May 2013 at 110p.
Outsourcery has never made a profit. IMHO it never will.
Posted by Anthony Miller at '08:57'
CSC has received some welcome good news with approval from the Financial Conduct Authority (FCA) for its takeover of Xchanging.
The FCA was looking into the impact of the change in control of Xchanging Broking Services (XTB), the former joint venture enterprise partnership with Aon, which Xchanging took full control over in 2011 (see Xchanging buys out Aon from enterprise partnership).
The only hold up now is getting written approval from the German regulator over the change in ownership of Fondsdepot Bank GmbH – the former banking JV with Allianz Global Investors, which Xchanging acquired in 2014 (see Xchanging takes full control over German banking JV).
The clock is ticking. CSC now needs to tie up these remaining loose ends prior to the 16 May deadline.
Posted by John O'Brien at '08:52'
Berkshire-based INOVEM popped up on our radar following its win at the Ministry of Defence earlier this year. Its successful application to become a TechMarketView Little British Battler came partly as a result of this win and others via G-Cloud.
The company’s product is a SaaS-based collaboration tool called Kahootz. It allows users to create online workspaces where they can collaborate with other employees and/or with external users, such as customers and partners. It could be for specific projects that last a finite period of time, for example to share bid information or for tender management. Or, it could be on an ongoing basis - for example, the MoD is using it to communicate with companies in its supply chain.
Importantly, the tool can be customised by the end user organisation itself (i.e. by whomever is running the project), thus negating the need to pay for an external consultant as per some other collaboration tools. Furthermore, minimal training is required to get up and running with the tool, which helps Kahootz build adoption numbers. The Kahootz active user licence means customers only pay for active users (rather than paying for all potential users from the start) meaning start-up costs are relatively low.
Currently, most of the Kahootz business is coming via the G-cloud, demonstrating how well the system can work for very small providers. Other customers include the Health and Safety Executive and RICS (Royal Institute of Chartered Surveyors). The public sector is the key focus area for Kahootz, but we may well see it diversify into commercial sectors in time.
Posted by Kate Hanaghan at '08:44'
I have not had a good word to say about Twitter for some time. Read #RIPTwitter and work back. I find Twitter hugely complicated. My Twitter feeds are a jumble of trash in the main. Last night Twitter shares ‘crashed’ by 12% after hours as they missed revenue targets as advertisers remain unconvinced of the effectiveness of the channel. But actually there were some small encouraging signs. Twitter has stopped losing users which rose 3% yoy to 310m.
Losses reduced from $162.4 to $79.7m yoy. Twitter has NEVER made a profit in its 12 year life and its shares have halved in value since their IPO.
Twitter now sees the future in live events/video. Indeed, it’s about the only time I now use Twitter. Ie following a football game or, sadly, a specific disaster/ terrorist attack.
In an interesting announcement, Twitter reported a 50% increase in DMs (Direct Messaging) Of course there are many competitors in the messaging arena eg Facebook and Apple. But Personally I find the increase in the number of message sources I have to check – from Facebook, Linkedin, iPhone and now Twitter – highly annoying. If you want my attention, please send me an email.
Note - This post has been changed since original publication to remove reference to 140 character limit on DMs.
Posted by Richard Holway at '08:26'
Finally, they’ve ‘got it’! But is it too late? Pretty much ever since (now) Exeter-headquartered, services marketplace, blur Group launched on AIM back in October 2012 I have been hammering on about its flawed business model (start with Blur loses focus on revenues and work way, way back). The flaw was that blur’s commission fee (i.e. revenue) was contingent on clients achieving certain project milestones, which of course were frequently extended or missed altogether. In effect, blur was taking the risk on the client’s project but had no influence on the outcome – all for a 20% gross margin. They lost tons of money.
blur’s charismatic CEO and founder, Philip Letts, finally saw the light (‘helped’ with an FRC inquiry on revenue recognition, now satisfactorily resolved) and spent last year fundamentally changing blur’s business model, eschewing contingent, low-value projects with SMEs in favour of focusing on indirect services spend in large enterprises.
But all of this has come at a price. Revenues in 2015 (to 31st Dec.) almost halved to $2.7m (blur, bless, reports in USD) but, even so, they managed to trim net losses ever so slightly to $10.1m (2014: $10.5m). There’s still $7.1m cash left in the bank (2014: $17.4m) and operating cash burn declined by 15% to $8.2m.
But here’s the real crunch. Lett’s made the obvious point that sales cycles in enterprise prospects are much longer than for low-value, SME projects: “(W)e expect the cycle between initial meetings and the placement of higher volumes of project spend … to extend over several quarters”.
Let me say again; there’s nothing wrong with a services marketplace if it has the right business model. Letts should have realised this sooner!
Posted by Anthony Miller at '08:25'
There are few companies – let alone tech companies – whose results make it from the business pages to the front pages of the media. Apple is one of the few. In the past, the reports have been up there at the ecstatic end of the scale. Today, you might be led to believe it was the end of Apple. One report was headlined ‘Rotten Apple’.
It is an undeniable fact that last night Apple reported its first sales decline in 13 years as Q1 sales dropped 13% to $50.56b yoy. The Times reported ‘Profits plunged 22%’. But they still managed $10.5b profits in just one quarter. It seems strange to ascribe such doom to a company that increased its cash mountain to $233b! In after-hours trading, Apple shares were down some 8%.
All this was pretty much as expected so surely could have taken nobody by surprise. The ‘problem’ with Apple was that the Apple 6, with its larger screen, was such a runaway success that repeating it has proven very difficult. Although the 51.2m iPhones sold (down 16%/10m from this quarter last year) was ahead of expectations, they were at a lower unit price. It was China ‘wot done it’ as sales there were down 26%. Conversely iPhone sales to the enormous Indian market were up 56%. Sales to Europe ‘only’ fell 5%. iPad sales were down 19% at $10.25b and Mac sales by 12% at $4b. But revenues from stuff like Apple Pay and Apple Music rose 20% to $6b – welcome good news. The strong dollar also hit results. The fall in revenues would have been 4% better (only down 9%) in constant currency.
What Apple needs is a ‘Next Big Thing’. The Apple Watch has so far proved not to be it. The long promised revolution with Apple TV seems elusive. The iPhone, iPad and Mac markets are all in maturity and it really is difficult to forecast a reversal in the current trend. Even increased volume would probably be countered by lower selling prices from, say, the new smaller/cheaper iPhone SE. Apple itself is predicting continued falls in the current quarter.
Maybe the Apple iCar (Apple’s worst kept secret) is the long-awaited answer?
Posted by Richard Holway at '08:03'
Concentra caught our eye due to its focus on business analytics. The firm was established eight years ago, following a merger between a group of consultants and technology business. Concentra now has 100 people based in central London (with satellite offices in the Netherlands and Toronto).
It is an interesting story. As a group of operations consultants, do you continue slaving away over spreadsheets, and other frustrating tools, into the early hours of the morning. Or do you find a better way of doing things? CEO Rupert Morrison and his cohorts chose the latter and decided to merge their operations knowledge with the technology of Concentra.”
The calibre of the management team is notable. Morrison has 20 years’ experience in operations consulting, supply chain optimisation and organisation design, at A.T. Kearney before Concentra. CFO, Patrick Gracey has twenty years’ experience in the computer service sector, growing companies to their full potential.
Concentra offers a mix of products and services, but the big success story of late has been the company’s product portfolio. The company continues to invest heavily in R&D. The result has been strong licence growth over the last three years. Focusing on niche markets such as healthcare, pharmaceuticals and financial services, the main product is OrgVue. OrgVue transforms how organisations manage and use data for HR analytics, organisation design, workforce planning and transition management. Concentra includes some of the large strategy consulting firms as clients (as well as numerous other big name corporates); those firms claim they can complete assignments 3x faster with the use of OrgVue’s functionality.
Concentra’s aim is to get to a point where anyone charged with organisational design insists they need OrgVue to get the job done. Giving confidence they can achieve that goal, the churn rate with existing clients is very low. In addition, Concentra has bold ambitions to significantly expand its customer base, notably in the North American market. And OrgVue is not the end of the story. Concentra has just launched a new product too: SupplyVue for supply chain analytics. This is only the beginning of the story for Concentra. We can expect to see much more from this Little British Battler.
Posted by Georgina O'Toole at '21:31'
The fourth annual ‘Evening with TechMarketView’ will take place on Thursday 8 September 2016 and tickets are selling fast! Following the success of the sell-out 2015 TechMarketView Presentation & Dinner, this year’s event will once again be held in the magnificent premises of the Royal Institute of British Architects (RIBA) in Portland Place, London, from 6.30pm.
The evening, which will be centred around our 2016 research theme ‘Surfing the Waves of Disruption’, will commence with short, insightful presentations from the TechMarketView analyst team highlighting key trends in the UK software and IT services market. This will be followed by plenty of time for networking over drinks and a sumptuous three course dinner with your peers.
We’re expecting a similar audience to the previous three years with around 250 ‘movers and shakers’ from the UK tech scene, for what has been described by previous C-level attendees as “the best networking event in the industry”.
Tickets do sell quickly, so we’d advise you to book early to avoid disappointment! We’ve held the prices at the same level as last year - £395+VAT per person for TechMarketView research subscription clients and £495+VAT per person for everyone else. There are also a limited number of tables of ten available at £3,950+VAT.
To secure your place, please click here to book or email tx2 events who are organising the event for us on email@example.com.
We also have a couple of sponsorship packages available for the event - to express interest or request further details, please email Tola Sargeant in our Client Services team.
Posted by HotViews Editor at '17:19'
Slough-based Cortex is one of our 8th brigade of Little British Battlers (LBBs), which is breaking new ground in one of the emerging areas of business process services – Intelligent Automation.
Operating as a separate business within privately-held UK workforce management software firm Innovise, Cortex, is led by CEO Mike Taylor, whose team has built an industrial scale IT and process orchestration platform over the past decade via deep relationships in the network/hosting sector. This platform is now being taken to market and already used by big name brands like BT, Vodafone, Thomson Reuters and outsourcing partner Capgemini.
Cortex’s aim is to both lower the cost of delivery and improve the customer experience in IT and process operations through the use ‘smart autonomous operations’ – in much the same way as flying a plane today on autopilot. The pilot only needs to take control at certain times, such as take-off, landing and at the point of escalation.
It sounds quite sci-fi to think of totally autonomous IT and business process orchestration. In truth there will always be people needed to manage the process and handle and respond to exceptions – the pilots, the cabin crew and the support team – to stretch the analogy further.
Orchestration platforms have real advantages in managing workloads, people resources and in accelerating deployment of new applications and services. We think there are also real opportunities for Cortex alongside robotic process automation (RPA), which can further automate rules-based activities. This makes the applications quite varied, from automating HR requests within an outsourced call centre, to customer order automation, to helping redeploy technicians within self-healing and self-managing networks.
Big name customers and partners are key to building Cortex’s reputation, and will become increasingly important as the business scales. On that front, we expect to hear some more exciting news in the near future.
Posted by John O'Brien at '09:45'
Hard on the announcement of its proposed rebranding to reflect its repositioning as a data first company (see here), IS Solutions (to rebrand as D4t4) has created a Data Insight practice. This is a tangible sign that its repositioning has some real change behind it.
The Data Insight unit plans to tackle the elephant in the room: identifying areas where organisations can do things differently, using automation of data delivery and driving better insight for example. While there is a lot of noise about how digital transformation is about doing things differently (within which data is core), organisations are struggling with this aspect, finding it easier to focus on process optimisation and operational efficiency. This is something Fujitsu identified in its “Walking the digital tightrope” report.
The challenge awaits for Matthew Tod who will head the unit, but with a background that includes MathSoft, Publicis Group and PwC building its digital transformation strategy capabilities, he does bring a combination of data science and digital data experience to the role.
Posted by Angela Eager at '09:38'
So far, 2016 trading has been as expected for UK healthcare software and services provider EMIS. In general, EMIS continues to benefit from its fit with the UK’s connected/integrated healthcare agenda reporting strong revenue visibility and good momentum in its order books and pipelines.
The Secondary Care division has been the weakest link of late (see Healthy growth for EMIS as connected care gathers momentum) but recent changes to that part of the business seem to be having the desired effect. The cost reduction programme, principally in Secondary Care, is largely complete and is expected to benefit EMIS’ results in the second half. Encouragingly, EMIS also reports a ‘strong flow of mid to smaller sized software and services orders’ from Secondary Care in the first quarter. These deals will begin to contribute to results in the second half, as will contract wins from the other divisions in the period – including four contracts for community, child and clinical services and deals for EMIS Care for the provision of diabetic eye screening programmes for Central & East Lancashire, North Lancashire and the Fylde coast.
Overall, EMIS Health, with its strong footprint in the UK primary care software market and loyal GP customer base, remains very well positioned to capitalise on the trend towards integrated digital care in England. But with activity in the broader market ramping up and a variety of other SITS suppliers eying the space, EMIS will need to stay on its toes if it’s to maximise its potential.
Posted by Tola Sargeant at '09:35'
After notching up 7% organic growth in FY15 (see Equiniti’s encouraging maiden year), business process services (BPS) provider Equiniti said it is on track to hit a its lower organic growth target of 5% in FY16. It said this will be supplemented by acquisitions such as its recent deals for workflow software provider KYCnet and credit decisioning and risk profiling software RiskFactor.
Equiniti now calls itself a ‘specialist technology outsourcer providing non-discretionary payment and administration services’, although this doesn’t really capture what differentiates their offerings in this competitive space. So far this year it has renewed or extended key relationships with Barclays, Tesco, MBNA, Lloyds, Royal Dutch Shell and Cemex.
Equiniti also announced a new first generation life and pensions (L&P) outsourcing contract with Retirement Advantage, worth c£40m over 10 years. This is the first new L&P deal we have seen since Serco’s £170m 10-year award at Aegon in 2012 (see here). It's a market being disrupted by recent pension reforms and BPaaS alternatives (see Genpact signs BPaaS deal with NFU Mutual). It's an area we will explore in a future TMV research note.
Posted by John O'Brien at '09:30'
Digital Retail continues to perform at Sanderson Group and is on form to deliver strong full year performance, according to the latest trading update, which comes prior to the release of its interim results. There is follow through from the good start to the year in Q1 (see here), with the business as a whole also looking strong in H2 (to March 31 2016).
As a result of both sales order intake and the order book looking good, the company is expecting to report revenue just shy of £10m (vs. £9m) and operating profit just under £1.5m (vs. £1.37m).
What really stands out is that of the £6+m sales order intake (up from £4.94m), over £2m was from new customers. This figure also exceeded the total value of business from new customers during the whole of FY15, which shows Sanderson has its finger on the pulse of its targeted segments. We are used to seeing Digital Retail do well, but £1m of the new business was from the Enterprise business, which houses the slower moving manufacturing segment.
The other point of note is that while Digital Retail is doing well in its frantically changing market segment and is set to increase revenue, short term profitability was impacted in H2 due to investment in management, and sales and delivery capacity. This underlines the need for continual adaptation in the digital retail market, something BHS has not managed. While the markets are nervous about the retail sector, as a provider of solutions to help deliver digital retail Sanderson is in a good position, but it will need to keep its own work rate high, and continue to invest organically and in acquisitions.
Posted by Angela Eager at '08:59'
Corero's slow march to profitability continues with another contract win for its SmartWall Threat Defense System (TDS) DDoS solution, the latest with a German regional service provider worth $300k.
The deal includes multiple SmartWall products for different sites and a one year contract for Corero's SecureWatch services, which gives the German provider the option of offering DDoS protection as a service to its own enterprise customers.
As elsewhere in Europe the volume and intensity of DDoS attacks in Germany continues to rise. Hacking groups including RedDoor are regularly engaged in ransomware scams to extort money from retailers and other companies by threatening to bring down ecommerce servers and websites - attacks which have serious reputational and financial impact on the victims.
We think Corero is doing a fine job of tapping into increased demand for DDoS protection and attracting new customers to SmartWall as a result. But its revenue may have to grow at a faster rate if it is to balance the $6.4m loss it posted for FY15 anytime soon.
Posted by Martin Courtney at '08:39'
Having the right information is fundamental for success, particularly if you’re co-ordinating several agencies to protect vulnerable children or keeping tabs on criminals with multiple aliases. Here’s where Kingston-upon-Thames based Little British Battler Infoshare comes in.
Multiple data bases with different standards and the unavoidable data entry errors are generally consolidated using probabilities and algorithms, but Infoshare offers an evidence-based system to analyse the data and extract definite and auditable results by focusing on verifiable data points such as addresses. Historically, >90% of revenue has been from the public sector, serving multiple police forces, local councils and regional agencies. Success here has been through referrals, but the company is now increasing its marketing effort to generate new leads.
The private sector now offers significant upside. Last year, Infoshare won a game-changing deal with Royal Mail Group, competing against the much larger incumbent supplier. Infoshare’s ClearCore technology will help this landmark customer transform its business as it can now generate an accurate view of its end-customer interactions. Infoshare is looking to larger System Integrators to act as channel partners to access the private sector potential. It is already working closely with Atos, CGI and Civica.
Infoshare uses short consultancy engagements to help customers extract trustworthy information from multiple databases. This discovery process is getting shorter as Infoshare’s experience grows and as it moves to a more product-based approach. At the same time, existing customers are deploying ClearCore across broader sections of their activity, analysing additional datafeeds, thus securing ongoing revenue for Infoshare and deep customer relationships.
15-strong Infoshare is looking to grow through direct sales and marketing as well as through partners. Double digit percentage growth and improving profitability should be the result as the company exploits its unique approach to data.
TechMarketView customers will be able to read more about Infoshare in our next Little British Battler report, out in May.
Posted by Peter Roe at '08:03'
ExactTrak, one of the April 2016 cohort of Little British Battlers, tackles the problem of mobile data loss head on with its USB-based Security Guardian. While USB sticks can be a byword for compromised and lost data, ExactTrak uses the USB format to its advantage, embedding security into the hardware.
Hardware based security has several advantages, including eliminating the operating system weak link, and is something Intel/McAfee for example, is invested in. ExactTrak is on the leading edge with an available product, and UK designed and manufactured to boot.
It is not just hardware – management software provides a range of sophisticated capabilities including location tracking, turning data access on or off according to tightly defined geographical zones (an individual building for example) using GPS and GSM, as well as specified networks, devices, and encryption. There is even an element of “Mission Impossible” because if the USB is lost, an electric pulse can be remotely triggered to physically destroy the memory card (without harming the human carrier).
There is obvious appeal for this type of secure mobile solution where it is necessary to move highly sensitive data (e.g. healthcare, legal, defence) and with the EU General Data Protection Regulation due to come into force in two years, the appeal will become more widespread.
CEO and founder Norman Shaw has ambitious plans in action, including agreements to embed the core technology into AMD processors to be seen in products from Dell, HP and Lenovo. This has the potential to turn it into a high volume product with recurring subscription revenue – with potentially impressive impact on ExactTrak’s currently modest revenue. Major players committing to emerging ExactTrak, rather than more established suppliers, is a tangible sign that it is punching above it weight, which is the epitome of an LBB.
Posted by Angela Eager at '08:01'
Subscribers to the TechMarketView Foundation Service can download the latest edition of IndustryViews Quoted Sector to see our latest analysis of how the stock performance of UK software and IT services companies listed on the London Stock Exchange compares with their international peers.
For further information please contact our Client Services team.
Posted by HotViews Editor at '07:59'
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