HotViews Archive

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Infosys misses, acquires and invests
24 Apr 2015
Cloud coming of age in Microsoft’s Q3
24 Apr 2015
GB Group beats expectations for FY15
24 Apr 2015
AWS numbers: A secret no more
24 Apr 2015
Unisys Q1: Services dips into losses, staff cuts ahead
24 Apr 2015
WNS revenues still under pressure
24 Apr 2015
Recognising the value in K3
24 Apr 2015
Canon snaps up photo sharing start-up Lifecake
24 Apr 2015
*NEW RESEARCH* Local Government: Is Northamptonshire’s Commissioning model the future?
24 Apr 2015
Amazon beats expectations thanks to AWS
24 Apr 2015
In The Press
24 Apr 2015
Google's Glory Days are over...
23 Apr 2015
Colin Black
23 Apr 2015
Trakm8 exceeds expectations
23 Apr 2015
EMC and VMware in Q1: Two different tales
23 Apr 2015
Computacenter UK Services hits 11% growth in Q1
23 Apr 2015
Possible sale of Sungard will spark interest
23 Apr 2015
Facebook Bulls and Bears
23 Apr 2015
Willow changes hands from Access to K3
23 Apr 2015
WANdisco bookings halve in Q1
23 Apr 2015
UK leads the way at Mastek
23 Apr 2015
Sir John Hoskyns - A man of Integrity
23 Apr 2015
Another great day for Little British Battlers!
23 Apr 2015
Today is Little British Battler Day!
22 Apr 2015
Another stonking quarter for Atos UK
22 Apr 2015
Sanderson continues solid performance
22 Apr 2015
Wipro shares Indian growth malaise
21 Apr 2015
Fujitsu UK to create 750 jobs for young people in next 5 years
21 Apr 2015
SAP Q1: All eyes on S/4HANA
21 Apr 2015
IBM supertanker beginning to make headway
21 Apr 2015
HCL growth shudders to a halt
21 Apr 2015
ARM exceeds expectations
21 Apr 2015
Queen’s Award for TestPlant
21 Apr 2015
TCS and UK entry-level IT jobs
21 Apr 2015
Accenture to take on another 40 apprentices
20 Apr 2015
Aveva looks to meet “market expectations”
20 Apr 2015
eServGlobal looks internally for new Exec Chairman
20 Apr 2015
Audioboom – KPIs moving in the right direction
20 Apr 2015
Accenture set to run 'NHSmail2'
20 Apr 2015
TCS replaces Diligenta CEO
20 Apr 2015
NEW RESEARCH: IndustryViews Corporate Activity – Q1 2015
20 Apr 2015

UKHotViews©

 

Friday 24 April 2015

Infosys misses, acquires and invests

logoGiven the subdued results of its peers, it came as little surprise that Bangalore-based Infosys missed the numbers as headline revenues went backwards in its final quarter. In fact, the 2.7% sequential revenue decline in Q4 (to 31st March) was its worst performance since the depths of the recession some six years ago. This pitched FY revenues at $8.71bn, just 5.6% higher than the prior year, below management’s 7-9% forecast, and way below the 13-15% offshore industry growth expected by Indian trade association Nasscom. Management is targeting 6.2-8.2% US dollar revenue growth in the FY to 31st March 2016, or 10-12% at constant currencies.

But at least management did a better job on profitability, lifting FY operating margins by nearly 2 points to 25.9%, for a change beating the 24.1% recorded by TCS (see TCS crawls over the finish line).

Infosys also announced it had acquired San Francisco-based retail industry digital consultancy Kallidus Inc, which trades as Skava, for $120m cash. Again for a change, this actually sounds like a good move compared to its recent acquisition of Panaya (see Infosys-Panaya: Big fanfare, low risk, little value).

Finally management also announced a $2m early-stage investment in Airviz, a ‘personal air quality monitoring start-up’ spun out from Carnegie Mellon University. Its product, ‘an affordable, fine particulate monitor’ can apparently ‘empower individuals and communities to understand and identify health hazards related to air quality’. Please, someone, tell me why?

I find little in these results to suggest that CEO Dr Vishal Sikka has really come to grips with the malaise facing Infosys – and indeed the entire Indian offshore services industry – let alone has a strategy to reassert the company’s long-since lost leadership.

Posted by Anthony Miller at '17:53' - Tagged: results   offshore  

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Friday 24 April 2015

Cloud coming of age in Microsoft’s Q3

logoMicrosoft’s Q3 figures were better than expected, despite the impact of soft PC demand and the decline in Windows revenue now that the XP refresh cycle has passed its peak. The headline figures showed revenue up more than expected by 6% on a reported basis (9% in constant currency) to US$21.7bn, with operating income being squeezed by 5% to US$5.5bn.

The big story is the continued, and accelerating, shift to cloud, as seen  in our Q2 results comment here. As we have reported many times in HotViews, the shift to cloud means a postponement of revenue and a squeezing of profit margins and Microsoft is no exception. Device and Consumer Licensing showed a 24% drop on the previous year and will remain at this level in the final quarter. Office Consumer revenue was down 41%, with two-thirds of this decline resulting from the shift to cloud-delivered Office 365 and the remainder due to a weak Japanese PC market. Total D&C revenue grew by 9% as Bing search revenue grew 21%, Surface sales grew 44% and Office 365 revenues advanced 35%.

Commercial cloud revenues more than doubled, with Office 365, Azure and Dynamics CRM Online moving to an annualised run rate of US$6.3bn.

The Microsoft Azure operation is certainly smaller than that of AWS, as discussed here, and talking to UK companies would suggest that AWS is in the ascendancy (indeed, in supporting the totally unrepresentative sample of Wednesday’s Little British Battlers, AWS was the clear leader). However, Azure is growing fast and Microsoft’s cloud ambitions will be fuelled by its installed base and increasing capability across mobile platforms. Continued transition towards cloud can be expected and Microsoft will be looking to Windows 10 and the Cortana productivity tools to build momentum further.

Posted by Peter Roe at '10:10' - Tagged: cloud   software  

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Friday 24 April 2015

GB Group beats expectations for FY15

GB Group logoGB Group, the identity data intelligence specialist, continues the flow of positive news in the run up to its annual results in early June. Earlier this month (see GB Group continues to grow) we highlighted that consensus forecasts, for the year to 31st March 2015, were for revenue growth of 33%. GB Group now expects revenue to have increased by approximately 37% to £57.3m (2014: £41.8m). Of course the acquisitions of DecTech and Transactis will bolster revenues but GB Group also expects revenue to grow organically by 15%.

In terms of individual divisions, the company highlighted that revenues in IDP (the Identity Proofing business) are expected to grow by approximately 66% while IDS (Identity Solutions business) will show growth of approximately 20% compared with FY14. 

Previously the company announced that adjusted operating profit will be “not less than £10.5m”. Today, GB Group expects to report a 50% increase in adjusted operating profit to £10.8m (2014: £7.2m), ahead of market expectations.

GB Group’s share price has risen by over 25% YTD. It will be interesting to see in June what its targets are for organic revenues and profitability in FY16 and beyond.

Posted by Michael Larner at '10:09' - Tagged: tradingupdate  

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Friday 24 April 2015

AWS numbers: A secret no more

AWSAfter much speculation and estimation on the part of industry watchers, Amazon has finally revealed the revenue and profit numbers for its public cloud business, Amazon Web Services (AWS). We all knew it was big (confirmed to be $5bn) but perhaps we didn’t expect it to be quite so profitable (it was the most profitable Amazon division in Q1 with a 17% margin, see Amazon beats expectations thanks to AWS) – primarily due to its relentless prices drops. 

AWS caught the public cloud (Infrastructure-as-a-Service) wave early on, beating current rivals such as Azure to the market-leading spot. That early gain, combined with a very rapid rate of product innovation, has enabled AWS to maintain its position.

While a whole range of businesses use AWS, it is start-ups, smaller firms and companies born on the internet (e.g. Netflix) that have embraced extensive use of its services. Medium and larger firms have tended to use AWS for test and development purposes. Although we do see examples of production workloads of enterprise applications, such as ERP, running on AWS, the number is relatively small. Looking to the future, we have to question to what extent AWS can sustain such growth levels without moving deeper into enterprise accounts. Furthermore, to expand its share of spend by large companies, AWS will be reliant on partners to help it gain deeper access to those accounts (see the recent example of the Lemongrass AWS/SAP implementation) and to deliver the crucial supporting services around consultancy, integration and so on. The irony here is that many of these partners will have a background that is firmly in the ‘old world’ of IT services.

TechMarketView clients will see our UK-specific analysis of AWS in various upcoming reports. To become a client, please contact Deb Seth.

Posted by Kate Hanaghan at '09:35' - Tagged: results   PublicCloud  

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Friday 24 April 2015

Unisys Q1: Services dips into losses, staff cuts ahead

unisysFirst quarter results from Unisys reveal the top line grew 1% (constant currency) to $721m while operating losses deepened from $19.9m to $30m. The company intends to reduce its workforce by 8%, which will incur a restructuring charge of c$300m over the coming quarters. As a result, it expects to generate annualised savings of c$200m by the end of 2016.

The Services business (89% of revenue) produced flat revenue growth for the three months and lost its slender 1.5% operating margin from a year ago to move into losses (-1.3% margin).

In the UK, the company’s services business was sub-£250m in FY14 by our estimates. At that size, we think it could be doing a better job of leveraging the shift to the tower model, picking up business in the end user and infrastructure services space. Computacenter has shown just what is possible when you get the execution right (+11% in Q1). To our mind, Unisys needs to aim for a position where it is recognised for strong technology capabilities (its IP gems such as HOLMES/U-LEAF and Unisys Stealth remain too hidden) and where it can win more significantly sized deals. We believe new CEO, Peter Altabef, is taking the right approach with his focus on increasing industry expertise and making more of the company’s engineering talent. The theory looks sound, so let’s see if he can bring it to life this year.

Posted by Kate Hanaghan at '09:18' - Tagged: results   infrastructureservices   staffcuts  

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Friday 24 April 2015

WNS revenues still under pressure

lOffshore business process services (BPS) pure play WNS Global Services is still suffering the after-effects of losing an online travel business customer and renewing its largest customer UK insurer AVIVA (at reduced price). Currency headwinds were also blamed for the sluggish Q4 topline performance.

Revenue less repair payments (RLRP) was up 2.7% to £126.1m in Q4, but down 1.8% q-o-q. Excluding the negative impacts, underlying RLRP growth was 6.1% yoy, and just 0.7% q-o-q.

Profitability is WNS’ star metric, and clearly where a lot of the management emphasis has been placed this past year. In Q4, the adjusted net income (ANI) margin on RLRP reached 18.1% vs. 17% last time, and in the full year, reached 18.3% vs. 15.3%. This is despite global headcount growing 7% to almost 29k. Full year RLRP meanwhile was up 6.7% to $503m.

In the analyst call, WNS management reiterated their moves to invest in automation, with the focus on proprietary tools and technologies and strategic partnerships. They are also pushing SMAC/digital drivers to generate opportunities in transforming clients’ business processes. For now the boost is to WNS’ analytics business, which jumped 16% in the year, and now makes up 13% of revenue. This is encouraging, but we see far greater opportunities for companies like WNS embedding customer experience at the heart of the digital journey (see Why is Digital Customer Experience key to future BPS delivery?). 

Looking ahead to the current year, there is clearly some uncertainty on new business, with expectations for FY16 RLRP growth of between 4% and 10%. That's quite a wide spread even considering potential Forex uncertainties, and a very different prospect from larger rival Genpact, which expects FY15 growth of 10-12% following a sharp jump in new bookings (see here). 

Posted by John O'Brien at '08:58' - Tagged: results   offshore   bps  

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Friday 24 April 2015

Recognising the value in K3

logoIt’s a common problem for ‘buy and build’ plays: how do you make the ‘whole’ greater than the sum of the parts? And then, how do you make that work for the valuation too? This is the essence of the challenge facing David Bolton, CEO of AIM-listed, mid-market value-added reseller, K3 Business Technology Group.

I met up the other day with Bolton, along with CFO Brian Davis and Group Operations Director Andrew Hodges. In essence K3 is a ‘company of three halves’, with two vertically-oriented lines of business: Retail – increasingly K3 IP-led solutions based on the Microsoft AX and NAV platforms; and Manufacturing & Distribution – more traditional VAR solutions mainly supplied through Sage and Syspro. The ‘third half’ is a ‘horizontal’ managed services line of business that plays across the verticals. This latter was recently expanded by the acquisition of infrastructure services business Willow Starcom from Governance, Risk & Compliance software developer, Access Intelligence (see here).

But that rather simplifies things as each of the ‘three halves’ themselves comprise a number of companies acquired over the years. Bolton has made great strides in refocusing the Group to play to its strengths and to the market opportunity. While there is still much work to do to refine and integrate the propositions (including pruning the bits surplus to requirements), and building out the channel, I think the strategy is spot on.

The challenge will then be whether this will be reflected in the Group’s valuation (currently around £70-75m). The market likes simplicity in form and message. If Bolton can achieve both – and I think that is well within the bounds of possibility – I feel the market will find much more to like about K3.

Posted by Anthony Miller at '08:34'

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Friday 24 April 2015

Canon snaps up photo sharing start-up Lifecake

logoLife may be just a bowl of cherries but the memories are apparently a piece of cake! Such is the conclusion we draw from Japanese imaging giant Canon’s acquisition of London-based family-friendly photo-sharing start-up Lifecake. Terms were not disclosed.

Founded in 2012 by Nicholas Babaian, former head of Skype’s mobile product team, and Matthew Sheppard, who built mobile platforms for rich content delivery and payments at Qualcomm & Yahoo!, Lifecake had received $300k of seed funding in 2012 from Saber Growth Partners and EC1 Capital, and a further $1.1m in 2013 in a funding round led by Balderton Capital.

The world is not short of photo sharing apps, and I guess it makes a change for a UK start-up being acquired by a Japanese company, so good luck and happy snapping to one and all.

Posted by Anthony Miller at '07:50' - Tagged: acquisition   funding  

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Friday 24 April 2015

*NEW RESEARCH* Local Government: Is Northamptonshire’s Commissioning model the future?

Northamptonshire County Council (NCC) has voted to no longer deliver services directly to citizens. The council’s ‘Next Generation Model’ means that over the next five years NCC will reduce its in-house workforce from 4,000 to a core staff of 150 referred to as the ‘NCC Group’. In this PublicSectorViews research, Michael Larner, considers what the commissioning model means for the council, what it means for the broader public sector, and the potential implications for suppliers.

PublicSectorViews subscribers can download the research note - Local Government: Is Northamptonshire’s Commissioning model the future? - now. If you are not yet a subscriber, please contact Deb Seth.

Posted by Michael Larner at '07:22' - Tagged: localgovernment   outsourcing  

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Friday 24 April 2015

Amazon beats expectations thanks to AWS

AThe really important news from Amazon’s Q1 results last night was not only that Amazon Web Services (AWS) was now a $5b revenue business ($1.6b in Q1) but that it was the most profitable division within Amazon with a 17% margin. AWS is biggest public cloud provider and a division which might one day be Amazon’s biggest revenue and profit earner. See AWS numbers: A secret no more.

Although Amazon overall beat expectations with a 15% revenue rise yoy to $22.7b, the story outside AWS was not too rosy. Despite the AWS profit, overall Amazon reported a $57m loss after reporting a profit in last year’s Q1. Amazon continues to invest in a host of new initiatives including a new travel booking servicA Be, a service to help you hire people to complete those pesky household projects, Amazon Echo (a bluetooth speaker), Amazon Dash, new content for Amazon Prime Instant Video. Give Jeff Bezos his due, he does start lots of hares running and, unlike Google, many make it big time as the Kindle shows only too well and, indeed, AWS being but the latest example.

The latest Amazon initiative is delivering parcels direct to your car boot. This ‘hare’ might at first seem ‘hare-brained’ but I think it really has legs. Connected cars will be a huge market. Forget the motor – it’s the computing gizmos that will be the important differentiators. The bane of online delivery is the waiting in for the van to arrive. How much easier to deliver to your car boot with Amazon tracking where your car is parked and having a ‘one time’ access to your boot. Not quite sure how they do that when you driving in the fast lane of the M4 though…

Posted by Richard Holway at '07:15'

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Friday 24 April 2015

In The Press

It’s been a while since we’ve brought you an update of TechMarketView coverage in the press but with all the reports and election coverage it’s been a busy time here for our team of analysts. Here’s a snapshot of just some of the recent highlights:

In the Financial Times TechMarketView’s managing partner, Anthony Miller, is quoted on ‘Blur Group’s shares plunge on ‘substantially lower’ revenues. While FinancialServicesViews research director, Peter Roe, provides his expert opinion in Monitise rules out sale as founder Alastair Lukies moves on.  Also in the FT company chairman, Richard Holway, is quoted in Arm first-quarter profits buoyed by strong iPhone sales.

In The Times Anthony is quoted again but this time on Micro Focus job cuts in Micro Focus culls jobs after takeover.

In ComputerworldUK PublicSectorViews (PSV) principal analyst, Michael Larner, talks about the latest CGI deal win in MoD awards CGI support deal for artillery fire control app. Covering the Health Sector fellow PSV research director, Tola Sargeant, is quoted in Accenture wins £350 million 'NHSmail2' contract. While Peter is quoted in Banco Sabadell faces tough test separating TSB IT systems despite £450 million ‘dowry’ fund.

The Budget 2015 garnered plenty of coverage for our other PSV research director, Georgina O’Toole. Highlights include CRN article Budget: Channel wary of digital tax IT project and in Local Government News Budget 2015: Government commits to digital collaboration with councilsIT Pro is another to quote Georgina’s opinion on the local government digital debate in GDS tasked with helping local government go digital.

Elsewhere InfrastructureViews research director, Kate Hanaghan, offers her opinion on recent Redcentric purchases in The Channel article Redcentric swoops on Calyx Managed Services in £12m breakup deal. While ESASViews research director, Angela Eager, is quoted in Computer Weekly’s report on Oracle talks up cloud revenue growth in the face of flat Q3 sales.

Again with CRN Anthony gives his opinion on the sale of Accumuli to NCC Group in Accumli snapped up by IT services player NCC Group. In this period of high profile deals Kate is quoted on SCC’s stake in Fluidata in The Register article Reseller SCC buys a slice of Fluidata. Kate also covers the HP cloud migration deal in Cloud Pro piece HP to deliver $100m Helion migration for logistics firm TNT.

This is just a snapshot of the coverage by our highly regarded team of analysts here at TechMarketView. For further updates on our press coverage visit our In The Press webpage which gives a full listing of news and quotes from the TechMarketView team.

Posted by HotViews Editor at '00:00'

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Thursday 23 April 2015

Google's Glory Days are over...

GGoogle’s Q1 revenues rose 12% to $17.26b with Net income up 4% at $3.59b. Both were less than analysts had expected. Although the number of paid ‘clicks’ increased by 13% yoy, the average price of online ads – the so-called ‘cost per click’ – also continued to decline by 7%. The comparison with Facebook is ‘interesting’. Little doubt that Facebook is winning market share with its 46% rise in revenues. Particularly the case in the mobile advertising stakes. See Facebook Bulls and Bears. People just don’t search so much on their mobiles - preferring to look for stuff inside apps like Amazon instead. As I said in my post yesterday, with embedded targeted ads in your news feed, Facebook really has an effective advertising delivery model on mobile. You might find it irritating – but it really works for advertisers. So Google’s suffering will just increase as mobile takes over from the desktop.

The other issue is that Google is still a ‘one trick pony’ - reliant on paid for search. It has invested hugely in new innovations – like Glass and driverless cars. But none have made any commercial headway as yet. Unlike NASDAQ which has been steaming ahead in the last year – Google shares have flat-lined. On top of that global sentiment has turned against the ‘Do no evil’ company. From its arrogant attitude, the non payment of local taxes through to EU accusations that it has violated competition law in the way its search algorisms operate, Google isn’t getting much love from any quarter.

But with $63.4b cash, Google could afford to buy its way out of its malaise – except it hasn’t shown any willingness to go down that route either.

Regular readers of Hotviews will know that I went negative on Google a few years back. Nothing I have heard since makes me change my mind that Google’s glory days are over.

Posted by Richard Holway at '22:44'

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Thursday 23 April 2015

Colin Black

Sad to learn of the death of Colin Black at the young age of 62. Black

Many will know of Colin from his sterling work with the Worshipful Company of Information Technologists where he had served as the Treasurer.

But also his work in the industry as an adviser and NED and, before that, as Jt MD at System Team and FD at Maxima.

Posted by Richard Holway at '12:53'

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Thursday 23 April 2015

Trakm8 exceeds expectations

Trakm8 logoIn its latest trading update for (FY ended 31st March 2015) Trakm8, the AIM-listed telematics and data provider, reports that both revenues and profits grew year on year. Revenues were 73% higher than the previous year while orders received during the period were up 38%, again on a like for like basis. The comparisons did not include the BOX business (see Trakm8: expanding out of the BOX) as this was owned for just five months of the period.

Trakm8 provides hardware devices (that can be integrated into 3rd party telematics or Internet of Things (loT) solutions), applications (such as vehicle tracking and driver behaviour monitoring) plus bespoke work to help clients integrate telematics and all derived data into a customer’s management system.

The company has had success in insurance and fleet management markets. In January the company won the BusinessCar Award for Fleet Software 2015. While in February Trakm8 announced that it had won a contract worth £1m with Marmalade, the specialist provider of cars and insurance for young drivers. Trakm8 reported in December that they have ‘over 30 significant trials in progress’.

With the contract wins and now 100,000 units reporting data to their servers, the company is confident that both profits and revenues in FY16 will be ahead of previous expectations. With this in mind the company is ramping up internal resources with investments in manufacturing, design, development and data analysis. Furthermore on the commercial side Trakm8 is strengthening its sales and marketing capabilities plus the customer support team.

John Watkins, Executive Chairman of Trakm8 commented “The investment in resources to capitalise on the opportunities in the M2M and Big Data space is paying off “ and the stock market agrees with Trakm8 shares up by 33% YTD.

Posted by Michael Larner at '10:14'

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Thursday 23 April 2015

EMC and VMware in Q1: Two different tales

emcFirst quarter results from EMC and VMware show the companies continue to follow quite different patterns in terms of top line growth. VMware is of course part of the EMC federation of companies and has long been subject to rumours of a spin-off.

At the top line (i.e. including both VMware and Pivotal) EMC’s performance was “mixed”, in the words of CEO Joe Tucci. Revenue increased 6% (constant currency) to $5.6bn, with EMEA slightly underperforming that (+5%). The core Information Infrastructure business grew 3% to $4bn. However, EMC missed its own revenue target by $75m due to the performance of the storage business. Of concern is that Tucci says some of this was down do EMC’s failure to “execute as crisply as we normally do”. As we’ve said many times, established infrastructure and infrastructure services firms cannot afford to poorly deliver in their core ‘bread and butter’ areas; the market growth is just not there to ‘buoy’ weak performances.

VMware, meanwhile, saw Q1 revenue increase 13% to $1.51bn over 2014 (note that 62% of revenue is derived from services and the remainder from licences). Non-GAAP operating income increased 7% to $451m (producing a margin of a tad under 30%). When FY14 results were released, VMware highlighted that FY15 revenue growth would slow from 16% in FY14 to 10-12% this year (partly due to the impact of its increasing growth in SaaS and hybrid cloud where less revenue can be recognised upfront). Q1, therefore, looks robust within that context. Pivotal revenue increased 8% year-over-year.

EMC has revised its outlook for FY15. It now expects revenue to hit $25.7bn (down from $26.1bn) blaming currency exchange rates. We maintain that FY15 could turn out to be rather interesting given the pressure there has been to spin-off the VMware business and the lack of clarity around just how long Tucci will delay his retirement.

Posted by Kate Hanaghan at '10:02' - Tagged: results   cloud   virtualisation   storage  

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Thursday 23 April 2015

Computacenter UK Services hits 11% growth in Q1

cccComputacenter has closed a robust Q1 in the UK with revenue growth of 7% to £361.4m. That translates into 5% growth in Supply Chain (to £232.6m) and 11% growth in Services (to £128.8m). With regards to the latter, Computacenter is enjoying the flow-through from some very decent wins/renewals last year, including AstraZeneca, Transport for London, the Post Office and the Royal Mail Group. And even taking account of the end of a significant part of a long-term contract at the start of Q2, Computacenter says the new wins will more than compensate for this. In FY14, the UK services business grew 8.6% to £497.6m – outperforming many of the other established providers of infrastructure services in the market.

At the Group level (i.e. including France and Germany), Q1 revenue increased 3% to £715.9m, with Services up 6% and Supply Chain (resale) revenue up 2%. The Group faces a few challenges this year, such as bringing on those new UK Services contracts and addressing the performance in France. However, we believe the UK Services business will continue to perform well versus both the market and competitors.

Posted by Kate Hanaghan at '09:53' - Tagged: results   infrastructureservices   resale  

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Thursday 23 April 2015

Possible sale of Sungard will spark interest

logoRumours are building that following an approach, the Private Equity owners of Sungard, the software and technology services provider, are putting the company up for sale, looking for bids around the US$10bn mark. At 3.6x revenue and 13x EBITDA, along with US$4.2bn of net debt, this price looks well in excess of recent deals (see our recent Industry Views, Corporate Activity, here) but this is obviously only the start of a negotiation process.

Sungard has not shown exciting growth recently, handicapped by dollar strength and some small disposals, with 2014 revenue advancing by 2%and EBITDA shading by 1%. The EBITDA margin gave up 60 ppts to a fairly unimpressive 28.6%. Nevertheless, there are a number of areas where Sungard offers substantial scale and there is scope for faster growth and improved margins as companies deal with risk and compliance issues, automate to drive efficiencies and look to move to use industry-standard software.

The business has been focused on services and industry-focused solutions since the spin-out of its disaster recovery unit last year and generates over 90% of its revenue in the Financial Services sector. Any major player wanting to scale up its current position in this sector and strengthen its portfolio of software and services will be giving Sungard the once-over. Sungard has also been pushing forward in the provision of utility services, cloud-delivery and BPaaS in the sector – key growth vectors as highlighted in FinancialServicesViews recent report on Evolving Delivery Models in the FS sector, available to subscribers of this research stream, here.

As a consequence, there are likely to be several large SITS players interested in Sungard, although not necessarily at the sticker price. More to follow.

Posted by Peter Roe at '09:05' - Tagged: acquisition   saas   bpo   software   bpaas  

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Thursday 23 April 2015

Facebook Bulls and Bears

FBFacebook’s Q1 results can be viewed in two ways.

The Bulls will refer you to the 46% growth in revenues to $3.54b, the 13% rise in user numbers to 1.44b (936m who log in everyday!), the incredible success Facebook has achieved in moving (and monitising) its mobile users – up 24% yoy to 1.25b (ie the vast majority of users) and now representing 73% of advertising (Eat your heart out Google)

But the Bears will point to the 20% drop in profits yoy to $512m as costs surged 83%. Even on revenue, this missed analyst expectations for the first time in yonks. Although we applaud Facebook’s efforts to build a ‘Facebook Family’ including WhatsApp, Instagram and the VR app Oculus Rift, these are still to make a financial impact. These new family members are vital. Facebook’s growth in users is slowing. It’s the oldies that are now embracing Facebook much to the chagrin of the young. Many youngsters are maintaining their Facebook accounts for their Mums and Dads – but doing all their ‘real’ social media on other platforms – away from the prying eyes of us oldies. Facebook hopes those other platforms will be within the Facebook Family.

But, overall, one cannot fail to be impressed. Facebook is certainly an integral part of my life – in the main for the good. We may sometimes be annoyed by the ads but they are much more effective on Facebook than any other genre. They remind me of the old ITV ad breaks – they were difficult to avoid too!

Facebook shares dropped 2% in after-hours trading but are still up over 40% in the last 12 months,

BTW – Facebook was yet another company to major on the detrimental effect of a strong dollar on their results. Perfectly acceptable. Except I never heard that being put forward for boosted results when the dollar was weak!

Posted by Richard Holway at '08:59'

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Thursday 23 April 2015

Willow changes hands from Access to K3

logoManchester-based infrastructure services business Willow Starcom has a new owner in the shape and form of AIM-listed, mid-market value-added reseller K3 Business Technology Group. K3 acquired Willow from AIM-listed GRC (governance, risk & compliance) software developer, Access Intelligence, for £1.75m cash. Established in 1990, Willow turned over £2.66m in FY14 and recorded £100k pre-tax profit on £370k of EBITDA. Net assets stood at £0.9m.

On the face of it this looks like a good move for all parties concerned, allowing Access to stick to its SaaS knitting (see here), and providing a useful boost to K3’s hosting and managed services activities.

As it happens, I am meeting the K3 top team later today to catch up again with this ‘business of many halves’ (see here) and I may well be minded to share my impressions at some later date.

Posted by Anthony Miller at '08:47' - Tagged: acquisition   disposal  

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Thursday 23 April 2015

WANdisco bookings halve in Q1

lSheffield and California co-headquartered big data software developer, WANdisco is going through some growing pains as it moves to a dedicated sales force for its largest application lifecycle management (ALM) division.

WANdisco's Q1 bookings halved from $4m to $2m because of a 60% slump in ALM bookings - and it is already expecting full year losses here (see WANdisco ‘not focused on profit’). Although ALM revenue was actually up 8% in Q1, due to deferred deals coming through, the new direct sales force clearly has some work to do over the coming months. 

WANdisco’s future is really the smaller but high growth part of the business, Big Data software. And good news here - Q1 bookings doubled to $400k on the back of four new wins, including a global retail bank, a global undersea cables operator, and now, Comparethemarket.com as the first customer for its next generation Fusion product. This helped WANdisco overall grow Q1 revenue 20% to $3m.

Fusion is critical for WANdisco. It is now part of the Hadoop open data platform 'providing, for the first time common and seamless access to data across all Hadoop-compatible data storage providers’. This should expand WANdiscos’ addressable market, beyond Hadoop distributors into the wider storage market dominated by global vendors like Oracle, EMC, Teradata, IBM and Amazon. The next challenge will be making headway with these behemoths.

Posted by John O'Brien at '08:24' - Tagged: software   big+data  

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Thursday 23 April 2015

UK leads the way at Mastek

logoThere’s still work to do at Mumbai-based, mid-tier services firm, Mastek, in terms of splitting off its US operations (see Mastek to become two companies of one half) which are providing a drag on the company.

Indeed, Mastek finished the FY (to 31st March) with revenues of Rs10.13bn (c. $165m), nearly 10% higher at the headline level and some 8% higher in constant currency terms. However, this growth belied a 2% decline in US revenues vs a 16% increase in the UK, now 52% of the total.

Group operating margins fell dramatically in the FY, from an already meagre 7.5% to just 2.4%, with the US business (about 40% of revenues) losing money. Mastek UK’s operating margins were also squeezed, losing over 5 points to 16.3%.

The sooner the split is complete, the better. Mastek has traditionally addressed the UK market with partners and is keen to build up its presence in its own right, especially in UK public sector (see Mastek: Targeting UK public sector business). This needs management’s single-minded focus, undistracted by happenings across the pond.

Posted by Anthony Miller at '08:21' - Tagged: offshore   resullts  

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Thursday 23 April 2015

Sir John Hoskyns - A man of Integrity

HSir John Hoskyns died on 20th Oct 2014. See – Sir John Hoskyns. This was soon after we celebrated the 50th Anniversary of the founding of the Hoskyns Group - at one time the #1 SITS supplier to the UK market and now Capgemini.  At that time I wrote of the many achievements of Hoskyns in the very earliest days of the UK SITS industry. Segmented-level programming, Methodologies, Standard application packages, FM/outsourcing – all things pioneered by Hoskyns in the 1960s that we now take for granted.

Yesterday I attended a Celebration Memorial Service for Sir John. Geoff Unwin gave a tribute for the computing bit of John’s life and Charles Moore – Margaret Thatcher’s authorised biographer – for his political life.

There was a common theme. “A man of integrity’. ‘Integrity’ ran throughout Hoskyns during the many years I worked there under John (and Geoff). That integrity carried through to Downing Street where John was one of the few who stood up to Maggie (and lived!) He wrote her a memo telling her she was a poor manager!

I, like many others, took the principles we learned from John and applied them in new roles and, sometimes, new companies. I have always said I would never punish a person for bringing bad news or even making an honest mistake. What I hate is dishonesty and those people who tell me what they think I want to hear regardless of the actuality. Running a business is hard enough – but when your own people don’t have the guts to tell you the truth it becomes impossible.

Geoff reminded us all of the Hoskyns unofficial motto “Often in error. Never in doubt’. It rather summed up the company and indeed an age when we were allowed to take risks and make mistakes. But all done with huge passion, collective responsibility and integrity.

If I am referred to at my Memorial Service as ‘A Man of Integrity’, I will rest easy in my grave.

Posted by Richard Holway at '08:17'

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Thursday 23 April 2015

Another great day for Little British Battlers!

logoMany thanks again to the CEOs of the companies who participated in yesterday’s sixth Little British Battler Day (see Little British Battlers - The Sixth Sense) at industry association techUK headquarters in London (for whose support we are very grateful).

As always, we were delighted to hear how innovative and ambitious these companies are, and how some are providing stiff competition for companies many times their size.

We will be writing about these Little British Battlers soon on UKHotViews, and TechMarketView Foundation Service subscription clients will also be able to read our more detailed analysis in the forthcoming Little British Battler Report.

But don’t worry if you missed the boat this time. We will be running another Little British Battler Day later this year. Keep your eyes peeled on UKHotViews for the announcement.

Want to know more? Deb Seth on our client services team will be happy to oblige.

Posted by HotViews Editor at '07:44'

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Wednesday 22 April 2015

Today is Little British Battler Day!

logoToday, CEOs from the twelve companies selected to participate in our sixth Little British Battler Day (see Little British Battlers - The Sixth Sense) are coming to London to meet the TechMarketView team and senior partners from MXC Capital, the tech focused, AIM quoted merchant bank that actively invests in and advises companies in the UK tech sector. During their individual one hour sessions, the CEOs will have the chance to discuss and get valuable feedback on their business plans and aspirations.

We will be presenting highlights of each company here in UKHotViews in coming weeks and we will publish a more detailed analysis of the companies in our next Little British Battler report in the next few weeks.

Because today’s event sees the entire TechMarketView research team out from the crack of dawn, there will be a limited UKHotViews service this morning. But fear not - we will be back tomorrow as usual talking about the things that really matter in the UK IT scene.

Posted by HotViews Editor at '06:45'

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Wednesday 22 April 2015

Another stonking quarter for Atos UK

logoYet again Ursula Morgenstern led her team at Atos UK on the road to glory, recording a 15.3% organic uplift in revenues to €511m in Q1 (to 31st March), whereas every other geo market went backwards. This outstanding performance was attributed to managed services and especially BPO.

Just as well as, net net, Atos’ worldwide IT Services revenues (organic) stood stock still at €2.15bn, though this represented nearly 20% headline growth including the acquisition of veteran infrastructure hardware and support services firm (I’m sorry, I mean ‘living legend in cloud, cybersecurity and big data’) Bull (see Atos takes Bull by the horns).

Atos Worldline, the now separately listed transaction processing business, saw revenues rise by 1.6% to €275m, representing 4% organic growth.

Atos’ other big gamble (I’m sorry, I mean ‘strategic acquisition’), the $1bn cash purchase of Xerox’s IT outsourcing activities (see Atos zeroes in on Xerox ITO), closes in Q2.

We may have more for you later.

Posted by Anthony Miller at '06:40' - Tagged: trading  

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Wednesday 22 April 2015

Sanderson continues solid performance

SandersonIn their pre-close trading update, Sanderson has continued its steady progress we reported a month back. Revenues have grown 10% to £9m with a similar growth in profits in 6 months to 31st Mar 15. Sales order intake was £4.9m (£4.3m) and the order book at 31st Mar 15 was ‘very strong at £2.8m (£2.5m)’. Proteus (warehouse management systems) acquired in Dec. 14 (See Sanderson snaps up bargain Proteus)  has ‘made a steady start and made a positive contribution’. But Sanderson’s manufacturing business ‘delivered a flat performance’.

All in all, a very solid performance – the kind we have lead to expect from Sanderson of late.

Note – Richard Holway has been a Sanderson shareholder since their 2004 IPO at 50p. I’ve kept the faith through good times – and some really bad times too! But Sanderson shares closed yesterday at 65p so I am now ‘in the money’. I invested initially because of my regard for my friend Chairman Chris Winn – one of the world’s gentlemen and fellow Archers fan. But we are of the same vintage and surely even he can’t go ‘on and on and on’ forever. At some point Sanderson will get acquired. But I have been forecasting that outcome for many years now!

Posted by Richard Holway at '06:37'

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Tuesday 21 April 2015

Wipro shares Indian growth malaise

logoIt’s all been going horribly wrong for the India-based IT services firms that have so far reported, with Wipro the latest to record a sequential quarterly revenue decline. Headline revenues in Wipro’s final quarter (to 31st March) fell by 1.2% qoq to $1.77bn, just over 3% higher yoy. This took FY revenues to $7.08bn, 7% higher than the prior year, well below industry association Nasscom’s 13-15% forecast and less than half the growth rate of market leader TCS (see TCS crawls over the finish line).

Management did a creditable job, though, of working the margin levers, with IT services operating margins only 40 bps down yoy at 22.2%.

And in a totally unsurprising move, Wipro announced that Rashid Premji, son of founding executive chairman (and 73% shareholder), Azim Premji, will join the Wipro board on 1st May. Premji the Younger is currently Wipro Chief Strategy Officer. It looks like most, if not all, of the pieces are now in place for him to eventually take over the reins of the business from CEO TK Kurien (see Is Wipro CEO TK Kurien throwing in the towel?) in the fullness (or perhaps shortness) of time.

But this is purely speculation on my part (and the Indian IT media too, as it happens) of which I may be soundly disabused next week when I meet the Wipro top team for two days of intensive therapy.

We now await the results of Wipro’s Bangalore Blues Brother Infosys, due on Friday – itself an oddity, as Infosys has traditionally been the first of the ‘majors’ to report quarterly results ever since I first started tracking the pack. Read into that whatever you will.

Posted by Anthony Miller at '17:17' - Tagged: offshore   resullts  

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Tuesday 21 April 2015

Fujitsu UK to create 750 jobs for young people in next 5 years

FWFurther to my posts this morning about Accenture creating another 40 apprenticeships and, surprise, surprise, TCS creating 10 IT apprenticeships I see some even greater news from Fujitsu on the apprentices front too. I have given Fujitsu full credit before for their entry-level jobs programme – See Apprentices – Some good news stories. They have created some 600 entry-level jobs for young people in the last four years alone. From Sept 15, they will be offering the new degree apprenticeships too.

Now Fujitsu is pledged to create some 750 entry-level jobs for youngsters under the age of 25 over the next five years. That’s a pretty impressive figure.

All credit to Fujitsu.

Posted by Richard Holway at '14:34'

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Tuesday 21 April 2015

SAP Q1: All eyes on S/4HANA

SAP logoAll eyes are on the adoption rate for SAP’s S/4HANA in its Q1 results (to end March 2015). SAP launched its new flagship product, which is Business Suite recoded to make the most of HANA’s capabilities and deliver zero latency performance across analytics and transactions (see SAP goes cloud first with S4/HANA) in February this year. Today, the company is reporting “over 370 customers”. This also boosted growth in customers for the HANA platform, which doubled customers to 6,400 over the twelve months. The company also claims that SAP HANA continues to evolve as a development platform, with the new offering attracting 1,400 customers over a short period of time.  

Overall, SAP’s Q1 total revenues increased by 22% (or 10% at constant currency) to €4.50b, boosted by the acquisition of Concur (now part of the Business Network division, along with Ariba and Fieldglass). Non-IFRS cloud and software revenue was up 24% to €3.66b (up 12% at constant currency), with all regions reporting double digit percentage increases. Looking at cloud subscriptions and support revenues specifically, they were up 95% (ccy) to €509m. Growth in new cloud bookings grew 121%. Notably, the 114% increase in cloud subscriptions and support revenues in EMEA was “driven by a strong performance in the UK”. Total EMEA cloud and software revenue growth was 13%.

SAP has a cloud subscription goal of €3.5-3.6b by 2017, and an ambitious $7.5bn-$8bn for 2020. It’s early days, but so far take-up of its new S4/HANA offering appears positive as it aims for these goals. Current SAP forecasts are for non-IFRS cloud subscription and support revenue to be in the range of €1.95b to €2.05b in FY15 (up from €1.1 in FY14). However, as expected, profit margins are being squeezed. In this period, operating profit increased by 15% to €1.06b (and a decrease of 2% at ccy) pushing the non IFRS operating margin down from 24.8% to 23.5%.  

Posted by Georgina O'Toole at '09:41' - Tagged: results   erp   saas   cloud  

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Tuesday 21 April 2015

IBM supertanker beginning to make headway

logoHeadline numbers for IBM’s Q1 showed revenue down 12% to US$19.6bn, but adjusting for an 8% appreciation of the dollar and four percentage points worth of divestments the comparison shows a flat year-on-year performance. Growth of 2% in the Americas offset declines of 2% in Europe and Asia Pac (at constant currencies whereas reported figures show declines in the high teens in these regions). Japan did well however, with revenue up 4%. UK revenue was up with declines in Continental Europe (cc basis).

Positive news is centred on IBM’s strategic imperative areas. Cloud revenue accelerated, to 75% year on year, totalling US$7.7bn on a trailing 12-month basis. Although we are concerned about the need for further investment, this growth, and that of as-a-Service revenues (now a US$3.8bn run-rate) is welcome. See our report on IBM’s recent wins, here. We expect IBM’s Strategic Outsourcing business to outpace that of its larger competitors.

Top end hardware is also accelerating, with System z revenues more than doubling and Power Systems returning to growth. Analytics is also growing strongly, led by Watson and supporting IBM’s drive into Health, see here, and IoT.

Elsewhere, Services revenue continued to decline, by 2%, although backlog was maintained (cc) at US$121bn. Medium term revenue appears better as 2014 contracts roll out, but progress will be slow. Consulting was down which is disappointing given IBM’s value-driven approach.

Divestment of low margin businesses and higher volumes at the top end resulted in an improvement in gross margin, up 80 basis points to 49.3% and Operating EPS was up 9%. Currency effects and low economic growth will continue to hinder top line growth, but the portfolio shift should support both the margin and revenue lines. IBM still has a lot to do, but progress is discernible.

Posted by Peter Roe at '09:00' - Tagged: cloud   divestment   servers   analytics  

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Tuesday 21 April 2015

HCL growth shudders to a halt

logoFor the first time since I have been tracking them (and that’s been well over a decade) headline revenues at Chennai-based IT/BP services firm HCL edged off a tiny bit quarter-on-quarter in USD terms. However, the $1.49bn recorded in Q3 (to 31st March) was 9.5% higher on a yoy basis.

HCL also struggled with profitability, recording a 5% yoy drop in EBIT to $318m, 10% lower than the prior quarter. This set operating margins to 21.3%, over 3 points down yoy and 250 bps lower qoq.

While this must be considered a disappointing outcome for management, given the company’s performance in the prior quarter (see HCL sets the pace), it simply echoes similar results at India-centric services market leader TCS (see TCS crawls over the finish line) and Bangalore-based mid-tier player Mindtree (see Mindtree pedalling hard to stand still).

The three other India-centric ‘majors’ are soon to report. I suspect that the Bangalore Blues Brothers (Wipro, Infosys) will share the same malaise, with only Cognizant looking like bucking the trend if it achieves its target sequential revenue growth of 2.1%.

We’ll report the numbers on UKHotViews as they come out and, as usual, we'll have more to say about the India-centric IT services players – including their UK performance – in the next edition of OffshoreViews.

Posted by Anthony Miller at '08:04' - Tagged: offshore   resullts  

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Tuesday 21 April 2015

ARM exceeds expectations

ARMARM is one of the main recipients of those bumper iPhone6 sales in Apple’s Q4. ARM’s Q1 results just released show revenues up 14% at $348m yoy and profits up 24% yoy at $128m. ARM’s revenues from its royalties on processor designs was up 31% at $168m.

These results were easily ahead of analyst expectations.

ARM really has been a mega success story. Sometime ago I was impressed that ARM only really got there because, back 15 years ago, they didn’t have the resources to compete against Intel in producing high-end PC chips. PC chips really don’t have to worry overly about power consumption. So they coARMncentrated on chips requiring low power instead. Indeed, just the kind that were to be needed in mobiles and even more so, in smartphones. So Intel have seen its main PC market (and now with cloud, maybe its server market too) decline. But ARM designs are now used in 95% of the world’s smartphones, tablets and other mobile devices. Low powered chips are exactly what you need in the IoTs too. A rather pleasant place to be,

Oh, and they are British and UK-HQed and have their development centre in Cambridge (that’s Cambridge, England). Just thought I should point that out.

Footnote - ARM shares are up 5% this morning making a 21% gain YTD. ARM shares are up 400%+ in the last 5 years. I also declare that I have owned ARM shares for that period...

Posted by Richard Holway at '07:44'

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Tuesday 21 April 2015

Queen’s Award for TestPlant

logologoMany congratulations to CEO George Mackintosh and the team at London-headquartered software testing tools developer TestPlant, who have won a Queen’s Award for Enterprise in the International Trade category – the UK’s most prestigious award recognizing outstanding achievement in overseas sales.

Privately-owned TestPlant has operations on the US West Coast and in Shanghai. They are also setting up in Berlin to access the opportunities in Continental Europe {see TestPlant preparing for European growth).

This is a great achievement for a small but very nicely formed British tech company. Well done them!

Posted by Anthony Miller at '07:25' - Tagged: award  

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Tuesday 21 April 2015

TCS and UK entry-level IT jobs

TCSWTCS was the first Indian HQed company to enter the Top Ten of our SITS listings with UK revenues in excess of £1.5b. See TCS growth shudders to a halt and TCS UK: ‘remains weak’.

I have oft been critical that the Indian HQed SITS companies do little to create entry-level IT jobs in the UK – relying on their own operations in India to train hundreds of thousands of students. Indeed, I have long argued that the current shortages of young, skilled IT personnel in the UK with <10 years experience is a direct consequence of the rise in the use of offshoring that really started to take a hold post 2000.

Yesterday, TCS put out a press release about a new initiative they had launched in conjunction with techPartnership and MyKindaCrowd with TCS volunteers going into schools giving careers advice on jobs in the IT sector. For more details Click here. But, of course, such advice is worse than useless if there are no entry-level jobs for those youngsters to do.

So I approached Shankar Narayanan, UK CEO of TCS, about their record creating entry-level IT roles in the UK. Narayanan replied with the following stats:

- TCS have inducted 55 Entry level graduates and 11 Apprentices so far.
- TCS will be adding 20 Entry level graduates and 10 Apprentices in FY16.
- TCS offer c25 internships each year and c25 Research based projects across universities each year which TCS will continue.

It is a start and one that we applaud. But should be put in the context that TCS employs over 300,000 staff worldwide and takes on 70,000 new staff each year; the vast majority in India. Apart from the numbers given above, practically all of TCS’ entry level creation is in India. It employs 10,000 in the UK. I have long asked for such Indian HQed companies to tell us about their job creation in the UK. TCS is amongst the first. Please let me know if you have similar stories.

Posted by Richard Holway at '06:51'

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Monday 20 April 2015

Accenture to take on another 40 apprentices

aWAs readers know, I am pretty passionate about the creation of more entry level IT jobs in the UK. There are a load of reasons given by companies for NOT doing it but, I have to say, if Accenture can find really valuable places for apprentices in their ‘elite’ organisation, then surely anyone can?

I have written many times before about Accenture taking on 92 apprentices in the last two years – indeed 15 of these from the kind of youngsters that the Prince’s Trust helps. See my most recent post - Apprentices, unemployed youngsters and some real progress - and work backwards.

Today Accenture has announced another 40 apprentices across its London and Newcastle locations to start this Sept. they will work towards a Higher Apprenticeship in IT, a Level 4 BTEC Diploma and a Foundation Degree over three years. The aim is that they will be offered full time posts with Accenture on completion.

Great stuff.

Posted by Richard Holway at '16:38'

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Monday 20 April 2015

Aveva looks to meet “market expectations”

logoAVEVA, the provider of engineering data and design software will announce results on 19th May which are expected to be in line with market expectations. This translates to revenue of c. £208m and £61.5m PBT according to house broker, Numis. This compares with £237m revenue and £78m PBT in the year to March 2014, the decline reflecting the sharp fall in activity levels as the oil price has plummeted along with growth rates in emerging markets. See “AVEVA – macro-issues still prevailing”.

These are certainly trying times for the company that has been described as the best performing share this millennium, see here. However, the management is actively cutting costs, cross-selling into its customer base and targeting growth through acquisition, having bought the 8over8 contract risk management software business.

Longer term expectations however are largely dependent on the revival of the oil and gas markets and the return to growth (or at least investment) in the emerging markets. Could be a long wait.

Posted by Peter Roe at '10:05' - Tagged: acquisition   software   risk  

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Monday 20 April 2015

eServGlobal looks internally for new Exec Chairman

esgDespite expressing confidence in its Annual Report about the long term opportunities for its mobile money platform in emerging markets, see here, the management of eServGlobal have had to watch as the company’s shares tumbled a further 40% over the past month.

Giving up on the task of recruiting a new CEO to replace Paolo Montessori, they have promoted NED John Conoley to Executive Chairman. He will work with the COO, Stephen Blundell. At least he will be familiar with the company’s operations, as well as having had CEO experience with Psion plc. Duncan Lewis, who in his brief reign of Chairman presided over a very turbulent time in terms of top management, see “Duncan Lewis shuffles the deck…” and “CEO Montessori quits eServGlobal”, will continue as a Non-Executive-Director.

The company has not generated any momentum since the sale of its majority stake in the HomeSend operation to MasterCard almost a year ago. New ventures centred on its mobile platform appear to be coming through, but these are longer term and will be loss making until volumes rise. As we stated in our March comment, shareholders will have to be patient, but they will also be looking to the new combination of Executive Chairman and COO to arrest the decline and to improve news flow and the trading outlook. 

Posted by Peter Roe at '10:02' - Tagged: mcommerce   payments  

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Monday 20 April 2015

Audioboom – KPIs moving in the right direction

logoAIM-listed Audioboom (Ticker: BOOM), the spoken-word, audio on demand mobile platform has updated the market on its recent progress, which shows a rapidly increasing interest in its approach to accessing audio content. App downloads are up dramatically and the numbers of unique users and content providers appear to be progressing well. There are now over 3.6m registered users and 2,400 active content providers. Traffic to the website increased by 75%in March over February.

As we mentioned in “Audioboom turns up the volume for 2015” this is a key year for the company to prove its concept, having raised £8m last year, strengthening management and building up sales and production capabilities.

Much needs to be done, curating such a diverse range of content needs careful thought to ensure good user experience and the App needs to evolve (it only gets one star on the iTunes AppStore). Monetising the content will be the most difficult task as so much content is available for free via other channels. Revenue was “minimal” last year and costs are rising. Adverts permeate the audio clips and there are partnerships with Audible (Amazon audio-books) and Nobex (working with US radio stations) which should give long term revenue streams. We will listen with interest as progress continues, but this will be a long term play.

Posted by Peter Roe at '10:00' - Tagged: media   cloud  

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Monday 20 April 2015

Accenture set to run 'NHSmail2'

Accenture logoAccenture has been confirmed as the preferred supplier for the ‘NHSmail2’ contract, beating rival BT to the high profile deal at the final hurdle. Accenture will replace Vodafone, which, via acquisition Cable & Wireless, has run the national secure email and directory service for the NHS since it took over from EDS in 2004.

The terms of the deal have not been announced, but the framework through which it was let – the managed email framework run by the Crown Commercial Service – is valued at between £120m and £350m and Cable & Wireless’ original contract was worth £50-£90m over nine years (depending on the number of users connected). Accenture and BT were down-selected from the suppliers on the CCS framework, which also includes Vodafone, CSC and GDIT, using a further competition last year.

The win will be a significant one for Accenture - which currently sits at #13 in TechMarketView’s UK Healthcare SITS rankings (see the UK Healthcare SITS Supplier Landscape 2014-15 report) - and provide a welcome boost to its UK healthcare revenues. Accenture still derives much of its UK healthcare revenue from the remnants of its National Programme for IT in the NHS (NPfIT) contracts but has also had success with its consultancy business in the NHS recently, e.g. at Cambridge University Hospitals. Conversely, failing to secure the NHSmail2 deal will be a disappointment for BT as it continues to look for ways to fill the holes in its healthcare revenue that will be left by the end of its various NPfIT contracts from this year.

Posted by Tola Sargeant at '09:57' - Tagged: contract   healthcare  

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Monday 20 April 2015

TCS replaces Diligenta CEO

lTCS has appointed a new CEO for its ailing UK life and pensions BPS division Diligenta after several quarters of disappointing results (see here and work back).

Long-time CEO Suresh Menon has been replaced by Daniel Praveen, the director of operations for TCS’ UK Public Sector business, which itself went through big change last month, with the departure of Public Sector head Damien Venkatasamy to CSC (see here). Praveen is a chartered pensions consultant and IFA, and was involved in building TCS’ insurance business in the UK, and actually led it between 2006 and 2010.

Diligenta's actual FY14/15 numbers won’t be known till TCS releases its full year report in the coming weeks. Based on last year, we know that it grew 27%. However Diligenta 2, the former Unisys Insurance Services business that TCS acquired in 2010, is in decline (in line with the nature of closed book L&P business), and making losses (see UK Business Process Services Supplier Landscape, 2014).

l

This wouldn't pose a major problem so long as the rest of Diligenta grows and makes money. However, the operation has failed to win any major UK BPS deals since the £1.4bn Friends Life deal in 2011 (see here).

TCS isn’t alone in seeing the L&P BPS market slowdown. Market leader Capita hasn’t won any new deals for some time either. SaaS platform alternatives are one reason. But insurers are facing uncertainty and change following UK pensions reforms that came into force in March. This could have profound implications for L&P demand if people decide to cash-in their pensions and opt out of annuities (see Hot topics in the insurance sector).

Posted by John O'Brien at '09:18' - Tagged: bps   insurance  

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Monday 20 April 2015

NEW RESEARCH: IndustryViews Corporate Activity – Q1 2015

TechMarketView Foundation Service subscription clients can download the latest edition of IndustryViews Corporate Activity to read our quarterly summary of the UK software and IT services corporate activity scene, including significant trade acquisitions and private equity deals.

Posted by HotViews Editor at '08:15' - Tagged: acquisition  

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