HotViews Archive

Skip Navigation Links.
Collapse 2014 (39)2014 (39)
Collapse October (39)October (39)
NetSuite - deals and customers getting bigger
24 Oct 2014
Cloud and server products drive Microsoft Q1
24 Oct 2014
Cloud and ‘castles in the air’
24 Oct 2014
Idox back on the acquisition trail
23 Oct 2014
*NEW RESEARCH* A view on techUK’s Three Point Plan
23 Oct 2014
Colt makes structural progress but sees Q3 decline
23 Oct 2014
Citrix: losing its flavour
23 Oct 2014
EMC confirms VCE changes, cuts Q4 guidance
23 Oct 2014
Sanderson: more than one Iota of positivity
23 Oct 2014
IFS steady as she grows
23 Oct 2014
Xerox Q3 Services disappoints
23 Oct 2014
CA Technologies struggles on
23 Oct 2014
Earthport’s payments paying off
23 Oct 2014
NEW RESEARCH: Infrastructure Services Supplier Landscape
22 Oct 2014
Mastek picks up in Q2
22 Oct 2014
Europe drags Wipro’s growth
22 Oct 2014
A better Q3 for Unisys
22 Oct 2014
Computacenter sees dip in UK services growth
22 Oct 2014
BAE Systems finds 'Silver' in the US cyber 'Sky'
22 Oct 2014
Calling all ‘digerati’ – a chance to join TechMarketView
21 Oct 2014
ARM powers ahead with IoT
21 Oct 2014
CGI: Cyber securing entry level jobs in Wales
21 Oct 2014
TechCrunch disrupts London
21 Oct 2014
*NEW RESEARCH*: UK police SITS market trends and supplier landscape
21 Oct 2014
IBM’s Q3 pain
21 Oct 2014
ITSA InterQuest up for sale
21 Oct 2014
Sir John Hoskyns
20 Oct 2014
Cloud business accelerating at SAP
20 Oct 2014
WNS renews flagship deal with Aviva
20 Oct 2014
Daisy agrees £500m takeover offer
20 Oct 2014
GB Group indicates positive H1
20 Oct 2014
Octopus helps MailCloud get 'personal'
20 Oct 2014
Hong Kong’s TAL fits up Metail with $12m
20 Oct 2014
First Derivatives – securing its Big Data position
17 Oct 2014
Google disappoints
17 Oct 2014
Capgemini forms BPaaS partnership with Netsuite
17 Oct 2014
Colt appoints new CFO
17 Oct 2014
Slower start to HCL year
17 Oct 2014
TCS quickens the pace though not the profit
17 Oct 2014

UKHotViews©

 

Friday 24 October 2014

NetSuite - deals and customers getting bigger

LogoCloud pure-play NetSuite had a good Q3 (like Microsoft’s most recent quarter where cloud was an important factor – see here) and managed to beat market expectations but the patterns within the business were more interesting than the hard numbers. They show increasing traction of cloud-based ERP within bigger organisations, a sector that has been hard to crack so far (although UNIT4 is another vendor making crack in this hard nut – see here).

As far as the numbers are concerned, revenue was up a nice 34% to $29.3m. Widening losses - from $16.8m in the year ago quarter to $29.3m this year - were not so nice but neither were they unexpected (increasing losses are still the norm for cloud pure-plays, even teenage ones).

On the positive side, NetSuite did pull in a record number of $1m+ deals and the average selling price for NetSuite OneWorld, which caters for global/multinational businesses, was up. These are both signs of NetSuite and SaaS ERP attracting bigger customers. In addition, deferred revenue, which is an indicator of future performance, was $256.9m up from $211.7m.

If NetSuite could increase the proportion of its non-US business (c25% currently) it would see even better growth and build further credibility – but that would also deepen the losses.

Posted by Angela Eager at '10:05' - Tagged: results   cloud   software  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Friday 24 October 2014

Cloud and server products drive Microsoft Q1

LogoIt has been a bumper start to the year for Microsoft with Q115 topping street expectations on the whole, followed by a reward in the shape of a 4% lift in the share price in after-hours trading. What is particularly notable is that growth was due to demand for both cloud and on premise products. This indicates Microsoft is managing to keep momentum in its traditional business (which still contributes the vast bulk of its revenue) while growing its cloud business. Not everything was positive however, as the Nokia effect and restructuring costs following the June 2014 announcement of 18,000 lay-offs (14% of the workforce) incurred $1.14bn in costs, resulting in a 14% drop in net profit to $4.5bn.   

Total revenue was up an impressive 25% in Q1 to $23.2bn (see here for year ago analysis). $12.2bn of that came from the Commercial division (up 10%), which included double digit growth for on premise server products and services (up 13%) and Windows Volume Licences up a respectable 10%. But it was commercial cloud growth (Office 365, Azure, Dynamics CRM) that really impressed, with 128% revenue increase. However, cloud is still a small proportion of Microsoft’s overall revenue (as is the case with SAP and Oracle see here and here) - Microsoft’s “Other Commercial” line in its financial reports which includes Commercial Cloud revenue was just $2.4bn, c5% of its total revenue. Now there will be further cloud revenue from the Devices and Consumer segment (up 47% to $10.9bn including good Surface growth and only a 2% drop in Windows OEM sales as the dive in PC sales slowed), but even so cloud remains a small proportion of current overall revenue, although with deferred revenue looking attractive.     

Microsoft’s hybrid strategy is working to its benefit as evidenced by its ability to drive license sales (up 3% to $9.8bn) while growing cloud revenue. On premise strength comes from server products and services and this sector has longevity in the market, although at the end user side Office licences fell back by 7% as more customers opted for Office 365. With the Nadella effect i.e. his past and present commitment to cloud, and Azure attracting ISVs and customers, Microsoft is building out its cloud business confidently and appears to be managing the cloud transition well. If Windows 10 can deliver on its promises, Microsoft will be back in people’s good books. 

Posted by Angela Eager at '09:34' - Tagged: results   cloud   software  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Friday 24 October 2014

Cloud and ‘castles in the air’

A perceptive article by Richard Waters in the FT accompanying Microsoft’s results (see here) recognises the point about cloud profitability that TechMarketView has been hammering on about for years.

Waters explains that the change in revenue recognition when moving from a traditional on-premise tech supply model – with large upfront fees and ongoing support charges – to a periodic payment model, is not the real issue.

chartWhat is the real issue is that the tech industry has set the expectation that cloud computing will be cheaper for customers than on-premise computing and has set pricing accordingly. The problem is that, generally speaking, tech suppliers have yet to achieve a cost model for cloud computing that reflects this lower pricing. Hence profitability is compromised – and in some cases simply does not exist (e.g. see chart and also here).

This is not a transient situation – this is the enduring reality. Cloud suppliers will struggle to achieve a truly variable cost model that works in lock-step with customer demand as they must always have sufficient capacity instantly on tap to maintain service levels when demand peaks. The reality of cloud computing is that it is the supplier who carries the service level risk rather than the customer. I fear this has not been adequately factored into pricing models. Raising prices, on the other hand, would be tricky.

Which prompts me to remind all cloud suppliers of another of ‘Miller’s Maxims’: If you spend more than you earn you will – eventually – run out of cash.

Have a nice day.

Posted by Anthony Miller at '09:12'

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Thursday 23 October 2014

Idox back on the acquisition trail

Idox logoIdox plc, the supplier of specialist document management collaboration solutions and services, has acquired Digital Spirit GMBH. Digital Spirit provides compliance software and content to corporate, public and commercial customers across Europe. For the year ended Dec 2013 the company reported revenues of €6.5m and an underlying operating loss of €0.6m.

Digital Spirits will fall under the Public Sector Software Division and be merged with to Idox's e-learning software business, Interactive Dialogues, which it acquired in November 2011. The merged businesses will be known as Idox Compliance. 

In ‘Idox: pulling through a year of change’ we outlined the firm’s focus on reducing complexity in their business by reorganising from 4 divisions into 2 (Public Sector Software and Engineering Information Management (EIM)) and selling off the non-core TFPL recruitment business. Furthermore, eligible TechMarketView subscribers will have read about the firm’s strategy going forward regarding domain expertise, managed services and business process.

In this morning’s announcement CEO Richard Kellett-Clarke says "This acquisition is an important step to further strengthen our solutions outside the UK and to penetrate more of Europe.”

Growing a compliance business across the continent will be challenging enough given the lack of uniformity of policies and implementations across nation states. Although Idox Compliance will expand the firm’s domain expertise, we think attempting to productise compliance software and e-learning platforms across Europe could be a huge drain on management.

Posted by Michael Larner at '10:05' - Tagged: acquisition   compliance  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Thursday 23 October 2014

*NEW RESEARCH* A view on techUK’s Three Point Plan

techUK logoLast week, techUK launched its ‘Three Point Plan’ on Public Services Transformation. It has been developed by techUK’s Public Services Board (PSB) and builds on the launch of techUK’s recently published ‘Securing our Digital Future’ Manifesto.

The aim of the Three Point Plan is to identify how industry will work with Government at a departmental level and across Government “to help ministers and officials experiment and innovate more successfully with technology”.

The three points are: Better Engagement, Better Information and More Innovation. There is no doubt that positive movement in the direction indicated is to be welcomed. But is it enough and what will it achieve? In this latest PublicSectorViews note we give our views on the objectives, the hurdles that will be faced in the plan’s implementation and its chances of success.

TechMarketView PublicSectorViews subscribers can download the research note – ‘techUK Three Point Plan: Targeting toughest UK Government ICT issues’ – now. If you are not yet a subscriber, please contact Deb Seth to find out more.

Posted by Georgina O'Toole at '09:52' - Tagged: public+sector  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Thursday 23 October 2014

Colt makes structural progress but sees Q3 decline

coltColt’s Q3 revenue decline of 8.4% (to €354m) reflects its decision to withdraw from certain low margin carrier voice contracts. Indeed, Voice Services revenue declined 31.6% to €93.4m year-over-year. There was, however, growth elsewhere. Its Network Services business, which accounts for a large chunk of the top line, managed marginal growth of 0.8% (to €209.5m). Data Centre Services revenue increased 15.5% (to €33.2m). IT Services revenue slumped 15.1% (to €18.1m) primarily due to “a fall in equipment sales” – which suggests to us that this is not a pure services business.

At the profit level, Group EBITDA was €73.7m, down 5.5% on the comparable period last year - mainly as a result of “margin compression” and non-recurring benefits registered back in Q3 of last year.

Colt’s aim is to get to a point where it can generate consistent profitable growth. Recent progress has been made in the guise of exiting low margin carrier voice contracts, making certain workforce reductions and bringing in more sales people. However, it does feel like there is still some way to go.

Colt is not altering its FY14 EBITDA guidance issued in Q1 (see Colt warns on 2014 profits) when it said it expected EBITDA (before restructuring charges) to be c5%-10% below the consensus estimates of €325m.

Posted by Kate Hanaghan at '09:45' - Tagged: results   colocation   network   datacentreservices  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Thursday 23 October 2014

Citrix: losing its flavour

LogoIt was a set of vanilla results from Citrix in Q3 with the odd sour note as the rate of revenue growth that has slowed across the year (see here), slowed again.  It is still growing – revenue was up 6% to $759m – but its challenge is to increase the pace of product development in mobile, cloud and virtualisation because despite benefitting previously from being an early mover, the competition has stepped up and Citrix is under pressure as a result.

The sour note came on the net income front which dropped from $77m to $48m, although that did include a $21m patent lawsuit charge and $3m restructuring costs.

As always it is the story underneath the numbers that is revealing and that makes for uncomfortable reading because product and licence revenue fell by 4%, while updates and maintenance grew 9%. It would not be so uncomfortable if SaaS revenue was soaring but that only registered 12% growth, with deferred revenue up a modest 11% to $1.4m. The group operating margin was a very low 8%.     

CEO Mark Templeton could only point to execution in areas such as product releases, go to market investments and partnership initiatives as improvement indicators during the quarter. It is continuing to restructure and maintaining a programme of small acquisitions (Virtual last month and RightSignature this week) but is starting to look bland at best.   

Posted by Angela Eager at '09:35' - Tagged: results   software  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Thursday 23 October 2014

EMC confirms VCE changes, cuts Q4 guidance

emcAlongside announcing its Q3 results, EMC has said that Cisco will reduce its stake in their joint venture, VCE, from 35% to 10%. It’s a move that makes strategic sense. As the market for cloud evolves, and as vendors refine their offerings (e.g. see EMC buys Cloudscaling and Cisco acquires Metacloud), players such as EMC and Cisco are becoming increasingly competitive with each other. VCE therefore now looks less attractive as a joint undertaking.

Of course, there have been many other recent discussions by industry watchers regarding possible structural changes at EMC. A rumoured merger with HP looks to be off, but could there be merit in EMC linking up with another giant player? Should it spin off VMware?

We keep coming back to our Race for Change theme and our view that large IT companies with substantial legacy revenue streams need to think incredibly carefully about what type of firm they need to become to be agile and/or relevant enough to play more competitively. Recently we have seen HP divide itself into two, and IBM offload its chip business (and sell its x86 server business) - all good moves. The challenge is making the changes quickly enough without unsettling shareholders too much. We expect to see more of the same going forward, and also more consolidation of small firms playing at the heart of emerging SMAC-based technologies.

As for EMC’s latest set of results, Q3 didn’t look all that bad. Its core Information Infrastructure business increased revenue 6% year-on-year, while Pivotal was +24% and VMware +17%. That produced overall top line revenue growth of 9% to $6bn. Growth in EMEA was strong at 15%. Non-GAAP EPS was +10% to $0.44.

EMC has cut its full-year adjusted profit forecast marginally from $1.91 to $1.90 a share. The revenue forecast has been reduced to $24.5bn from $24.58bn, due to expected currency headwinds in Q4.

Posted by Kate Hanaghan at '09:30' - Tagged: results   corporateactivity;  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Thursday 23 October 2014

Sanderson: more than one Iota of positivity

Sanderson Group logoIt appears that everything’s rosy for Sanderson Group. Aside from a statement that customers and prospects remain “cautious in their outlook”, the Group’s pre-close trading update (for the year to 30th September 2014) is full of positives. Revenue up 16% to £16m; order intake up over 10%; value of contracts signed up more than 15%; order book at year end up 20%; adjusted operating profit up by 20% to £2.7m; and a year-end cash balance of just over £6m (2013: £5.07m).

The growth appears to be both organic and acquisitive for the provider of SITS to the multi-channel retail and manufacturing markets. Organically, growth is being driven by demand for mobile applications (the acquisition of One iota strengthened Sanderson’s position here - see Sanderson cares more than One iota about multichannel retail) as well as the signing of new customers. It is also pleasing to read  of strong demand for warehouse automation solutions, particularly as the Manufacturing side of the business was the weaker area in H1 (see Positive first half from Sanderson).

In addition, the acquisition of One iota in October last year appears to be contributing well. The business was already growing strongly at the time of acquisition and that has continued – revenue and profits have more than doubled compared to the company’s last full financial year before acquisition (when revenues were £0.66m and pre-tax profit was £0.195m). One iota has also signed its biggest order to date worth £400K.

All in all, Sanderson continues to look like a solid and steady SITS business, defined by the cautious approach taken by management to investing in its products and services and in selective acquisitions.

Posted by Georgina O'Toole at '09:14' - Tagged: software   mobile   tradingupdate  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Thursday 23 October 2014

IFS steady as she grows

logoI’m not sure it’s entirely right to treat Swedish ERP vendor IFS as a software company on account of the fact that almost half its revenues derive from ‘consulting’, as a result of which its operating margins – now just 8.7% - look more like those of a European SI.

But I guess they don’t care much about that as management seems to have a good handle on the growth levers, with the three key parts of its business (Licences, Consulting, Maintenance & Support) all growing pretty much in lock-step resulting in 17% headline growth in Q3 (to 30th Sept) to SKr728 (c.£63m), or some 11% at constant currencies (and see IFS continues to outpace the market).

However, operating profit fell by 3% in the quarter to SKr63, and this looks mainly due to a near four-point decline in Consulting gross margin to 17.9%. But the 9-month YTD picture was much better, with EBIT margins recovering to 10.4% from 2.1% for the same period the prior year.

IFS is only a small player in Europe (and very small here in the UK) but is nonetheless an interesting indicator of what’s happening in mid-tier ERP.

Posted by Anthony Miller at '09:10' - Tagged: results  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Thursday 23 October 2014

Xerox Q3 Services disappoints

lAfter preparing the market for a 3% decline in services revenue this year (see here), Xerox has delivered Q3 services revenue and margins ‘lower than planned’, suggesting more pain to come.

Services revenues were up a modest 1% to $2.9bn, although flat in constant currency (ccy), and down 1% qoq. The miss was down to the recent high profile Texas Medicaid BPO contract termination in May (see here), which trimmed 3.6% off the BPO top line and 2.1% off the services top line. Xerox is now being sued by the Texas Attorney General due to alleged overcharging on that contract.

The services split looks decidedly underwhelming. BPO was up 2%, document outsourcing flat, and ITO was down 3% as Xerox lost business and attempts to focus on higher margin deals.

In the concall with investors, CFO Kathy Mikells explained that Xerox is ‘managing ITO as a niche business’, and looking to deliver ITO with BPO, rather than continuing to pursue large standalone commoditised ITO deals. This makes sense, but should have been the plan all along. It is clear that different parts of the business have been pulling in different directions.

As for the rest of 2014, services top line will remain ‘constrained’ due to deferrals and delays. Mikells said that 2015 will see more restructuring, which will be weighted towards Services to drive better productivity.

Xerox has clearly failed to get the best out of a move into Services since its acquisition of ACS (see Xerox copies Dell – buys ACS). Xerox has some really good practice and innovation within Services, although this is largely hidden from view. Separating Services may be the answer to the conundrum, and allow Xerox to release value for customers and shareholders. Rival HP of course is hoping to do just that right now (see HP confirms split).

Posted by John O'Brien at '09:06' - Tagged: infrastructure   bps  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Thursday 23 October 2014

CA Technologies struggles on

LogoCA Technologies is on a mission to revive its fortunes but despite CEO Mike Gregoire stating in his Q215 results comments that the company is starting to see traction in the market as a result of its efforts, with Enterprise Solutions new sales up for the second consecutive quarter for example, he also noted the need to “remain focused on the work needed to drive sustained revenue growth.”

The numbers show the struggle, with all key metrics down or flat. At $1.07bn revenue declined 2%, with income from continuing operations also down 2% to $235m (see here for the year ago comparative). The operating margin fell by one percentage point to 27%. The 2015 outlook provided little reassurance - the revenue outlook remains unchanged but earnings have been revised downwards to 30% from 31%.

Looking for the positives, although Enterprise Solutions revenue was down 2% to $378m, new sales within the section were up quarter on quarter. The background story is that revenue from mature products is dropping but acquired and new product developments are growing - the rate of grow is the key issue for CA but it is too early to determine their trajectory. There are more negatives than positives, as Mainframe Solutions revenue was also down 2%. At $610m this traditional area of the business remains the largest part but has the least amount of prospects and it is declining faster than the newer areas are growing. Professional Services also saw a drop with revenue down 6% to $91m.   

CA is still working through its plan to change its product and business mix but it is a slow process and confidence levels remain low - the share price fell 1.3% in after-hours trading - and CA has not managed to reposition itself as an advisor to its customers rather than a pure technology provider.   

Posted by Angela Eager at '08:47' - Tagged: results   software  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Thursday 23 October 2014

Earthport’s payments paying off

logoWe (or to be more precise, my learned colleague, Peter Roe) have been waxing lyrical about London-headquartered, AIM-listed cross-border payments service provider, Earthport, and it seems with very good cause.

While I don’t quite understand why it has taken management almost four months to get the numbers out, performance for the year to 30th June was pretty much as presaged in the July trading update (see Acceleration from Earthport), with headline revenues more than doubling to £10.8m, pre-tax losses 22% lower at £6.3m, and net operating cash outflow down 26% to £4.4m

And this is really the point. In stark contrast to many ultra-high growth ‘tech’ companies (and I use the term a little loosely here), Earthport is becoming more profitable (as in less loss-making) as it grows. This makes management’s target to achieve run-rate breakeven by June next year (see Earthport – playing its cards right) at least not beyond the realms of credibility, though I can’t seem to find this target confirmed in today’s results.

So before I sink even further out of my depth in the shark-infested waters of payments processing, I will leave further commentary to the currently chillaxing Mr. Roe when he returns next week.

Meanwhile, feel free to educate yourselves on this topic with Peter’s insightful report, Finding the winners in UK payments. Ah – but you have to subscribe to our FinancialServicesViews research stream, first, of course. Drop us an email to find out how.

Posted by Anthony Miller at '08:11' - Tagged: results   payments  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Wednesday 22 October 2014

NEW RESEARCH: Infrastructure Services Supplier Landscape

The UK Infrastructure Services supplier landscape continues to show a diversity of performance as large, established players struggle to grow and as smaller, faster-growing firms take market share. The competitive landscape, however, is intensifying further in the Race for Change. The pace of technology change has quickened to its fastest rate ever, creating significant challenges for established vendors who must keep pace with both new competitors and the growing expectations of buyers.sl

Today we launch the latest Infrastructure Services Supplier Landscape report, available exclusively for subscribers to our very popular InfrastructureViews research stream. The report assesses the performance of the UK’s Top 20 Infrastructure Services players, and examines the key challenges they face.

It is a MUST READ for any supplier looking to understand the suppliers and their performances, and includes our TOP 20 PLAYER RANKINGS, and PROFILES of the key players.

Read the report HERE.

If you don’t already subscribe to InfrastructureViews but would like to, please contact Deb Seth.

Posted by HotViews Editor at '18:41' - Tagged: rankings   infrastructureservices   supplierlandscape  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Wednesday 22 October 2014

Mastek picks up in Q2

logoAfter a rather disappointing start to its new FY (see Mastek borders on losses), Mumbai-based, mid-tier offshore services firm, Mastek, recovered a little in Q2 (to 30th Sept.) with headline operating revenues 4.3% higher yoy at Rs2.47bn (c.$40m). Operating margins improved from 4.1% in the prior quarter to 6.4%, though still vastly underperforming India-based peers.

Management attention is now firmly fixed on the disaggregation of the company into essentially a UK-focused traditional offshore services business and a US-focused insurance software business (see Mastek to become two companies of one half). A year ago, Mastek UK, which represents about half the company’s revenues,  was running only a little shy of a 20% EBIT margin but this has since fallen to just over 13%. Mastek’s US business has been losing money so far the FY, so the split makes sense. But time, I would think, is rather of the essence.

Posted by Anthony Miller at '17:55' - Tagged: results   offshore  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Wednesday 22 October 2014

Europe drags Wipro’s growth

logoAfter five consecutive quarters of accelerating headline revenue growth, poor performance in Europe broke the trend at Bangalore-based offshore services major, Wipro. Worldwide revenues in Q2 (to 30th Sept.) grew by 8.6% yoy (8.3% constant currency) to $1.77bn, a point slower than the prior quarter. However, headline revenue growth in Europe was 4.6% yoy (2.6% constant currency), representing a 4.3% decline (-1.7% constant currency) compared to the prior quarter. This was despite contract renewals with BP and with “a leading UK-based telecom provider” (sorry, no prizes for guessing whom). Wipro also scored a ‘digital transformation’ design contract with “a leading UK insurance firm”, though typically these tend not to move the revenue needle by much.

Operating margins held reasonably steady at 22.0%, though off 50bps yoy and 80bps on the prior quarter, as management pulled harder on the utilisation lever, now at its highest level in three years.

My feeling is that ‘it is where it is’ with Wipro, and unless it can consistently score more megadeals as it did recently at Canadian ATCO (see Wipro’s biggest deal kicks off quarter) then it will struggle to keep up even this modest rate of growth.

As usual, we'll have much 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 '17:20' - Tagged: results   offshore  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Wednesday 22 October 2014

A better Q3 for Unisys

unisysAn improved performance for Unisys in Q3 has helped the company to recover from the challenges of H1 and turn in a flat year-to-date (YTD) performance. Q3 revenue in technology was +66% (65% constant currency) in Q3, but only 2% YTD. Services increased 6% (4% constant currency) to $763m in the third quarter, but revenue declined 1% in the YTD due to a tough H1. The same pattern is evident in most parts of the services portfolio. Its biggest segments are ITO and SI. ITO grew 9% in Q3, but is up just 1% YTD. SI grew 16% in Q3, yet a weak H1 has dragged that back to a YTD growth of just 2%. The company recorded net income of $47.8m - a reversal of last year’s net loss of $11.6m. None of these numbers are quoted in constant currency, so we can assume they are all a little worse when taking currency into account. Shares climbed nearly 19% in after hours trading.

We are well used to tracking the ups and down of Unisys’ performance; just last quarter it was in the red and shares were knocked. It is this inconsistency that is the company’s core challenge and the likely undoing of CEO Ed Coleman who is to depart in December. On Coleman’s watch, the company has frequently dipped in and out of quarterly losses – but has always managed to close each year since 2009 with a net profit. The services business in the UK has certainly shrunk considerably in Coleman’s time, while at the global level revenue from new products (namely Stealth and Forward!) is taking longer than anticipated to flow through.

There’s no news yet about who will replace Coleman. However, whoever it is will have to think long and hard about a strategy to make Unisys a more consistent performer and a supplier that can survive in the Race for Change.

Posted by Kate Hanaghan at '09:53' - Tagged: results   Q3  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Wednesday 22 October 2014

Computacenter sees dip in UK services growth

CCC logo Enabling UsersComputacenter has updated the market on its performance since the close of the first half. Third quarter revenue is flat but year-to-date growth is up 3%. Services increased 2%, while product declined 2%. Shares were down c0.5% at time of writing.

Down at the UK level, total revenue increased 5% to £314m, meaning year-to-date is up 11%. The services business grew 5% in the quarter and 7% in the YTD – both of these figures being below the 8.2% achieved in H1. There is no particular reason give for this dip. Meanwhile, the product business grew by 5% in Q3, and by 14% in the year-to-date period.

Computacenter’s real pain remains in Germany, where Q3 revenue declined 8%. France faired much better with 5% overall growth and 15% growth in services.

The fourth quarter is always Computacenter’s most crucial. France and Germany are expected to perform better than in the comparable period last year. Along with what is expected to be a sustained performance in the UK, this means management is maintaining its outlook for the close of FY14.

Posted by Kate Hanaghan at '09:49' - Tagged: tradingupdate   Q3  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Wednesday 22 October 2014

BAE Systems finds 'Silver' in the US cyber 'Sky'

BAE Systems logoUK headquartered defence contractor, BAE Systems, has announced that it is set to acquire US-based company SilverSky for $232.5 million (c£144.4m).  SilverSky is the trading name of Perimeter Internetworking Corp. The acquisition will be funded from existing cash resources and is expected to close at the end of 2014.

For us the acquisition is interesting as it is another sign of the defence contractor boosting it cyber security capabilities. SilverSky provides cloud-based managed security services including email protection, network security and managed applications. It has c5,500 clients in commercial sectors such as financial services, retail, healthcare, energy, critical infrastructure and manufacturing. Currently it predominantly operates in the US market but the company has also been expanding its presence in Europe and Asia.

SilverSky will be taken into UK-headquartered BAE Systems’ Applied Intelligence business (previously BAE Systems Detica – see BAE Systems Applied Intelligence to drop Detica brand), which covers secure government, and commercial and financial security activities (rather than the US-based Intelligence & Security business). BAE Systems acquired Detica in 2008 as part of its aim to diversify its business and create a global security arm. But the Detica name did not play so well globally and the Detica name was dropped earlier this year. At the same time, Applied Intelligence was reorganised into regional hubs (UK, North America & Canada, and Asia Pac) in line with the BAE Systems business.  

In BAE Systems’ H1 results it was revealed that sales fell back 13% in the ‘Cyber & Intelligence’ unit (to $883m or £529m), which incorporates the US Intelligence & Security and the UK Applied Intelligence businesses. However, this was due to a decline of 22% in the US business, which suffered due to its heavy reliance on US Government clients; Applied Intelligence reported a sales increase of 7%. Moreover the order backlog for AI had increased by 25% over the six months. This latest acquisition will add significant revenues: in the 12 months to 31st December 2014, SilverSky is expected to generate sales of c$75m (£46.6m). It will also diversify the US cyber & intelligence business into the commercial sector. However, SilverSky will only be accretive to earnings in the third year following closing; in H114, ‘cyber & intelligence’ reported margins of 8.9%.

Posted by Georgina O'Toole at '09:08' - Tagged: acquisition   defence   security   cyber   M&A  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Tuesday 21 October 2014

Calling all ‘digerati’ – a chance to join TechMarketView

logoAre you a guru in ‘all things digital’? We are looking to recruit a principal analyst to join TechMarketView to boost our research in the ‘digital space’.

The role will involve working across all of our research streams (see our website) to support our research into ‘digital transformation’ and related trends. As such, the ideal candidate will have at least three years’ experience researching the UK IT industry and have deep insight into trends in SMAC (social media, mobile, analytics/big data, cloud) and related areas such as ‘Internet of Things’.

Ideally you are already an experienced industry analyst, but your background could also be in market intelligence for an IT supplier, or as a tech journalist.

You must have proven skills communicating an informed opinion based on your research, both in writing and face-to-face with our clients. Our extensive client list includes top executives in the IT industry, government officials and investors. We hold a privileged position with many of our clients as advisors as much as analysts.

This is a very demanding but highly stimulating role. You must be self-motivated, confident, disciplined, and deadline-focused. We all work from our own homes but this is not just a ‘work at home’ job as you will be spending much of your time out in the market meeting clients and attending company briefings, as well as talking to the media. This means you should ideally live within an hour’s commute of central London.

TechMarketView is the very definition of ‘small but perfectly formed’! The compensation is competitive, the working hours are flexible, and there is plenty of opportunity for the right candidate to take on greater responsibility if they prove their worth. But perhaps the most significant reward is the recognition you get from being part of the most respected brand in the UK IT research industry.

If you think you might fit the bill, please email your CV with covering note to TechMarketView Managing Partner, Anthony Miller.

Posted by HotViews Editor at '14:37'

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Tuesday 21 October 2014

ARM powers ahead with IoT

ARM Holdings logoARM reported revenues up 6% year on year for Q314 to £195.5m with normalised profit before tax of £101.2m (£92.6 million in Q3 2013). In dollar terms revenues rose by 12% compared to Q3 13 to $320.2m and YTD revenues of $935m were up by 15%.

Licence revenues increased by 16% to $142.5m.  Last month we commented (here) about the firm’s focus on the Internet of Things (IoT). During the quarter 22 of the 43 processor licences signed were for the firm’s Cortex-M class processors which are designed for use in Wearable devices and the IoT: microcontrollers, smart sensors and low-power wireless communication chips.

Royalty revenue grew by 9% to $150.2m with shipments of 3 billion ARM processor-based chips including more than 1.1 billion ARM-based microcontrollers and smartcards. The company outlined that mobile accounts for 40% of processor unit shipments followed by embedded (38%), enterprise (17%) and home (5%).

With ARM’s chips used extensively in Apple’s products, news of record iPhone sales of 39.3m will bolster ARM’s revenues. However with iPad sales slipping (down to 12.3m units from 13.1m a year earlier), ARM is wise not to tie its future prospects exclusively to those of Apple’s and the expanding footprint in IoT should ensure diverse revenue streams going forward.

Posted by Michael Larner at '10:26' - Tagged: internetofthings   chips  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Tuesday 21 October 2014

CGI: Cyber securing entry level jobs in Wales

CGI logoAs UKHotViews’ readers will be aware, we are always pleased to report on good news stories related to the creation of entry level jobs in the UK (start at ‘More good news on the IT entry level jobs front’ and work back). So it’s great to receive the announcement that CGI is committed to creating 620 new jobs in South Wales over the next five years.

According to CGI UK President, Tim Gregory, 40% of these new roles will be aimed at new entry level roles through CGI’s Apprenticeship and Graduate schemes (the rest will be skilled roles). CGI will receive £3.2m in funding from the Welsh Government to help support the job creation; with 900 employees in Bridgend the company is already the largest IT employer in South Wales.

It’s been ten years since LogicaCMG as-was initially decided to establish operations in Waterton, Bridgend, with financial support from the Welsh Assembly Government in order to expand in Wales. And this summer its contribution to South Wales was recognised when the company was awarded ‘Anchor Company’ status receiving significant funding from the Welsh Government’s Skills Growth Wales programme.

entry level jobs placardCGI is in recruitment mode as it seeks to support its growth plans in Secure Government and Commercial Cloud technology – areas where CGI has had particular success of late (see CGI beats UK group margin and UK public sector SITS supplier landscape 2014-15). Indeed, just last week CGI announced that it had opened a “state of the art” UK Security Operations Centre (SOC) in South Wales to provide 24/7 real-time protective monitoring for clients (this alongside the opening of a new cyber security centre in Reading for advanced threat investigation). As we highlighted in ‘UK Public Sector suppliers: cyber security offerings’, the UK SOC will complement CGI’s capabilities in the US and Canada. CGI has also seen a 20% increase in demand for its data centre operations in the UK.

CGI also adds that it will be introducing a new testing service for delivery of products and services, and will be continuing its work to develop mobility solutions, healthcare and smart metering technology.

Posted by Georgina O'Toole at '09:59' - Tagged: recruitment   apprentice  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Tuesday 21 October 2014

TechCrunch disrupts London

picI whiled away an interesting couple of hours at the TechCrunch Disrupt European conference which was held in London for the first time (and only the second time in Europe). I must admit I did doze gently through many of the presentations from excitable entrepreneurs extolling the virtues of their ‘sliced bread’ (‘best thing since’ … geddit?), with bold claims such as “makes central database servers obsolete” (Crate), “bring excellence to our users” (Oscadi), and even “save one million lives every year” (DDG).

Besides the firms showcased in the ‘Startup Battlefield’, there were well over 100 entrepreneurs exhibiting in ‘Startup Alley’, with products rejoicing in names such as LokLok (“connected lock screen”), La-La (“chat with music instead of words”), LeeLuu Nightlights (“interactive textile nightlights”), Mr. Banana (“Airbnb for cleaning”) and Blockstrap (“the complete crypto-currency stack”) (why would you pick a name that rhymes with … oh, never mind).

But the real point is that there is no shortage of tech innovation to be found in the UK and in Europe. OK, most of these startups will not last the distance, but hats off to the excellent TechCrunch for bringing them to the attention of the market.

By the way, many thanks to all those UKHotViews readers who tipped me off about email system add-ons after my post yesterday (Octopus helps MailCloud get 'personal'). There’s a lot of these sorts of products out there!

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

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Tuesday 21 October 2014

*NEW RESEARCH*: UK police SITS market trends and supplier landscape

Modern policing photoThis latest report from TechMarketViews’ PublicSectorViews team – UK police SITS: market trends & supplier landscape 2014-15 – is one of a series of reports taking a deeper dive into the supplier landscape of one of the six UK public sector subsectors that TechMarketView’s public sector team tracks.  The report can be read in conjunction with our update to the UK public sector SITS supplier landscape rankings (see UK public sector SITS supplier landscape 2014-15), published in August.

We consider the state of the market in which police sector SITS suppliers are operating, and how the market environment may change over the next few years. We also reveal the Top 10 SITS suppliers to the sector and consider how they are competitively positioned. For each of the Top 10 providers we give our view of their recent performance and prospects in the sector. Moreover, we highlight some of the more interesting players that sit outside the Top 10. Several of these players have the opportunity to make waves in the market as legacy contracts come to an end, legacy technologies are retired, and police forces look to new digital technologies to transform police forces. We will be publishing our detailed market forecasts for the UK public sector SITS market, including the police sector, in the coming weeks.

Posted by Georgina O'Toole at '09:15' - Tagged: public+sector   market+trends   police   supplierlandscape  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Tuesday 21 October 2014

IBM’s Q3 pain

IBMIBM’s Q3 results make for uncomfortable reading with top line revenue down 2% (constant currency) to $22.4bn and net income (from continuing operations) down 17% to $3.5bn.

The squeeze on revenue was attributable to weaker-than-expected software revenue, productivity issues in the services business, and other external factors - including currency. By business segment, IBM saw software decline 2%, services come in flat (with pretax profit down 13%), and systems and technology revenue decline 15%. Equally unsettling (though not wholly unexpected) was IBM’s statement that it no longer expects to hit its $20 EPS target for 2015 – set by previous CEO, Sam Palmisano.

IBM’s predicament characterises perfectly our Race for Change theme; indeed CEO Ginni Rometty refered to the “unprecedented pace of change” that is occurring. The company’s strategy is to move deeper into higher growth SMAC areas – like many other SITS firms. At the same time, it is hiving off the legacy businesses that are low growth and low profit. Along with the release of yesterday’s Q3 financial results, IBM also announced a deal that will see Globalfoundries takeover its loss-making chip arm. The move enables IBM to get out of a capital-intensive business that is a drag on profits. In January, IBM sold its x86 server business to Lenovo, which was a $4bn business with “effectively no annual profit” in FY13. Both divestitures make very good sense – strategically and financially. Indeed, IBM’s divestitures this year represent c$7bn of revenue and pretax losses of c$500m.

One therefore can’t accuse IBM of failing to ‘put its money where its mouth is’. However, the sheer pace at which change is happening in the technology industry means that even Big Blue – which moved sooner and faster than many of its peers – is feeling the pain. Furthermore, there will undoubtedly be more of the same to come.

Posted by Kate Hanaghan at '09:01' - Tagged: results  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Tuesday 21 October 2014

ITSA InterQuest up for sale

Management at AIM-listed, UK ITSA (IT staff agency) InterQuest has in effect logothrown in the towel and put the business up for sale.

It’s been a difficult few years for InterQuest, which has seen itself morph from a sort of multibrand  ‘SThreee-lite’ with built-in incubator (see InterQuest five years on) to a more traditional, single-brand ITSA.

The business never came within cooee of former CEO Gary Ashford’s aspiration to turn InterQuest into a £10m EBIT play (2013: £1.5m), but nevertheless over the past five years the stock valuation has quadrupled to around £37m, which is certainly a result for investors.

The UK IT recruitment market is in reasonable shape, though still ferociously competitive. InterQuest’s £115m revenues (probably higher this year) could be a handy bulk-up for the usual suspect large-scale players (e.g. SThree, Hays, Adecco) or, who knows, perhaps could have been transformative for legacy ITSA Parity had management focus (and cash) not been diverted towards the wonderful world of digital marketing.

Posted by Anthony Miller at '08:38' - Tagged: recruitment   upforsale  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Monday 20 October 2014

Sir John Hoskyns

picI was very sad to learn the news that Sir John Hoskyns died on Monday 20th Oct. Of course, the newspapers are full of obituaries about Sir John's political achievements. But I, and many of our readers, will know him as the founder in 1964 of what was to become the Hoskyns Group. Indeed, only a few months ago we celebrated the company's 50th Anniversary Hoskyns Group became what we now know as Capgemini.

I joined the Hoskyns Group in 1968 and, indeed, owe much to the opportunities that this provided to me.  Indeed, Sir John gave me much advice and personal encouragement. I remember the bottle of champagne on my desk for my first major sale. I remember him asking me on my first 'M' Review as a profit centre manager, who would I promote into my position? I couldn't give him an answer. He told he couldn't promote me unless i had a successor in the wings. Anyone who knows me will tell of the importance I have since given to 'succession planning'!

Sir John was in his 30's when he founded Hoskyns. He was one of many great UK entrepreneurs who built truly great UK SITS companies - all of which have since been acquired.

Posted by Richard Holway at '22:29' - Tagged: obituary  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Monday 20 October 2014

Cloud business accelerating at SAP

LogoIts Q3 numbers show that SAP’s cloud business is accelerating, with a growth rate in the same sort of area as pure plays like Salesforce.com and Workday but the cost of the cloud transition is apparent too as the company cut its full year operating profit outlook from €5.8bn to €6bn, to €5.6bn to €5.8bn.

In a way that is healthy because it is a sign that SAP is taking hold of the cloud in a determined way, although it also increases the questions about its margins as the business shifts away from up front revenue and a rich and cash generative maintenance revenue stream. Spiralling costs around areas like data centre provision (not to mention sales & marketing) are a problem for cloud companies so it was reassuring to see SAP address the data centre issue last week, with an agreement whereby IBM will manage some of SAP’s software in the cloud.   

The actual numbers may be small, but another positive cloud indicator is that the growth in cloud revenue (up 45% to €277m) in Q3 more than compensated for the decline in new licence on premise sales (down 2% to €951m), as licence revenue dropped by around €24m while cloud revenue rose by around €86m. The relative sizes of the two types of revenue streams show how far SAP has to go despite an annual cloud run rate forecast of €1.3bn, and the majority of the cloud growth is from acquired businesses – with more to come when the Concur purchase completes (see here).  

Total revenue for the quarter was up 5% to €4.2bn with net profit up 16% to €881m. This steady state masks major transition within the business but we expect things will get choppy sooner rather than later.  

Posted by Angela Eager at '09:57' - Tagged: results   cloud   software  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Monday 20 October 2014

WNS renews flagship deal with Aviva

lOffshore BPS pure play WNS has secured a five year renewal to its flagship BPO contract with UK insurer Aviva (see WNS wins 8 year $1bn BPO contract with Aviva).

WNS will now provide business process services to Aviva through to 31 March, 2022, after the current deal ends in November 2016. It covers all of Aviva’s lines (property & casualty, life, pensions, annuities and health), with support from WNS in sales, policy administration, claims, finance & accounting, actuarial and research & analytics.

Although management called the new terms ‘mutually acceptable’, as WNS’ largest customer, accounting for around a quarter of its total revenue, any terms would arguably have had to be ‘acceptable’. It’s clear WNS will now make far less than the c$125m per annum achieved when the original deal was struck in 2008. Service contractions since then have also caused the annual contract value to drop (see Aviva brings back calls from WNS).

In Q214, WNS blamed ‘pricing and productivity headwinds’ from the Aviva renewal, and the loss of a large online travel agency (OTA) client, for revenue growth being held back 6%. Fortunately this was offset by revenue growth elsewhere and an appreciation in the British Pound against the US Dollar.

The underlying WNS business looks in good health. In the September quarter, revenue less repair payments was up 9.7% to $122.1m, and up 3.7% qoq. Meanwhile, adjusted net income was up 39% to $23.9m – giving WNS an ANI margin of 20% vs. 15% last time. This was driven by 5 new client additions and the company’s third ‘large deal’ of the year.

Other providers are knocking at Aviva’s door too. Rival The Innovation Group now handles Aviva’s subsidence claims (see TIG signs £75m UK subsidence contract), and provides mobile claims services via its Innovation Symbility partnership (see here). WNS will have to keep on its toes to keep the revenue streams flowing in the right direction.

Posted by John O'Brien at '09:32' - Tagged: results   contract   bpo   bps  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Monday 20 October 2014

Daisy agrees £500m takeover offer

daisyAfter a period of almost two months, Daisy Group has finalised a deal with a consortium of buyers consisting of Toscafund Asset Management, Penta Capital and Matthew Riley (Daisy’s CEO and founder). The offer of 185p per share (cash) equates to £494m. Daisy Group was created in 2009 via the reverse takeover of Freedom4 Group by Daisy Communications Ltd and Vialtus Ltd. At Admission, shares were valued at 80p each.

Since it listed, Daisy has spent c£280m buying 22 businesses – which has not only expanded its range of products and services, but has helped to buoy the top line too. Nevertheless, times have been challenging, and in the last full-year financials (to end March 2014) revenue was more or less flat at £352.7m, but operating loss had widened to £17.9m from £16.8m.

Once Daisy has de-listed, we would expect some quite ‘major surgery’ to happen behind the scenes, with management indicating it will pursue larger acquisitions than it has undertaken in the past. With this will come the need to raise more debt, and a probable increase in pressure on cash generation - both of which would not be welcomed by shareholders if Daisy were still a public company.

However, Daisy is going to have to do more than just get bigger and bigger. To survive the Race for Change, it is going to have to find a solution for countering the areas of decline in its legacy businesses (e.g. voice). And doing that is going to take guts and time; this is not a quick fix.

Posted by Kate Hanaghan at '09:27' - Tagged: M&A  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Monday 20 October 2014

GB Group indicates positive H1

GB group logoIn a short - and also pretty sweet - trading update, ‘identity intelligence’ company GB Group has confirmed a strong first half (to end September 2014). It is citing both organic and acquisitive growth as it continues to invest in its capabilities and integrate recent acquisitions, such as Australian DecTech, a provider of detection, credit risk and customer management solutions (acquired in April – see GB Group goes global). Moreover, adjusted operating profit is expected to leap 40% to over £3.7m.

We can expect more of the same from GB Group – just last week, we reported on the proposed acquisition of Transactis, see GB Group buys more consumer data, which is set to further add to the Group’s portfolio in intelligence technology to support payments, risk, management, fraud detection and compliance. All the signs are that GB Group continues to successfully ride the wave as demand grows for identity verification services.

Posted by Georgina O'Toole at '09:08' - Tagged: trading   software   security   identity  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Monday 20 October 2014

Octopus helps MailCloud get 'personal'

logoI guess when you are one of a gazillion tech startups you have to ‘big yourself up’ big time. So who knows, maybe London-based Mailcloud really is building “the world’s first universal communication service for teams to work easier and faster in real time on all their devices”. At least Octopus Investments thinks so, having led a $2.5m seed funding round along with Bessemer Ventures and other investors.

Founded barely a year ago, Mailcloud purportedly organises all your email into folders sorted by person. Their website is of little help in understanding how, as you need to enter your email address to get in and all you get back is an email telling you that they’ve started building your Mailcloud. How they can do that without your email password (would you give that out?) I have no idea, so I assume Octopus et al have had a peek under the covers and like what they see.

Personally, what I actually want from my email system is a way to keyword tag all my emails and use the tags to create dynamic virtual folders. You know the address.

Posted by Anthony Miller at '08:47' - Tagged: funding   startup  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Monday 20 October 2014

Hong Kong’s TAL fits up Metail with $12m

logoSelf-styled ‘Innofacturer’, TAL Group, the Hong Kong-based clothing manufacturer, has led a $12m investment in London-headquartered ‘virtual fitting room’ (VFR) startup, Metail, bringing total funding raised since its founding in 2008 by Cambridge graduate Tom Adeyoola to $20m. Metail sells its 3D modelling technology to fashion retailers to allow customers to ‘try on’ their clothes online. Metail’s first live customer was Clothing at Tesco in 2012, and has since added a number of international retail brands to its client list. The additional funding will be used to develop a mobile app.

According to an interview with TechCrunch, Adeyoola eschewed UK VC funding in favour of a strategic investor, reasoning that “The big UK tech business successes weren’t founded on VC money,” oddly citing the ‘success’ of internet and tech stocks such as ASOS, Blinkx and Monitise as examples – all of which are having a rather tough time at the moment.

Unsurprisingly Metail is not alone in the VFR market, with tech startups such as CLO Virtual Fashion Inc. and Fitnect (among others) also in the frame. There’s undoubtedly room for a number of VFR players to make a success of things by focusing on different segments of the retail fashion market. Metail has rather hammered a stake into that ground with its ‘value statement’ that “The Customer is Queen”.

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

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Friday 17 October 2014

First Derivatives – securing its Big Data position

logoFirst Derivatives, provider of software and consulting to capital markets, is making strides. It has built a strong position in forex with 15 customers among the big traders in that very competitive market and has won two important orders in the growing area of Market Surveillance, with the Australian SIC and the US IEX (the subject of “Flash Boys”, see here). It is now moving to secure a major component of its success and thus open up more opportunities in “Big Data” and the “Internet of Things”.

First Derivatives Capital Markets propositions are driven from its Delta Platform which is powered by the kdb+ database from Californian Kx Systems. This is a high performance in-memory database that is well suited to fast moving time series data (“up to 8x faster than the previous best” Source: US Securities Technology Analysis Center). First Derivatives has worked with Kx since 2002.

First Derivatives is to take a majority stake in Kx, acquiring a short 50% for £36m, taking its holding to 65%. In 2013 Kx generated revenues of $13.6m and pre-tax profit of $8.8m. The co-founders of Kx will remain in charge of the operation with one of them joining the First Derivatives board.

First Derivatives (now 1000+ people) will provide extra resources as the expanded group moves to exploit additional verticals (e.g. pharmaceuticals, energy and utilities), driving additional database and consulting revenue. However, First Derivatives must avoid being distracted from realising the substantial potential it has within Financial Markets.

Following good financial performance last year, First Derivatives is winning key orders in growth areas of capital markets. Securing a key component of its success adds to the likely upside as Big Data grows in importance. It looks like First Derivatives is on a roll.

Posted by Peter Roe at '10:04' - Tagged: trading   big+data   iot  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Friday 17 October 2014

Google disappoints

LogoAfter a positive Q2 the market had expectations of Google in Q3 and when they weren’t met it meted out punishment in the form of a 3% drop in the share price in after-hours trading.

Although revenue for the quarter ending September 30 2014 was up 20% to $16.5bn it was below expectations while profit showed a 5% drop to $2.8bn as operating costs rose from 33% of revenue to 37%. Management said costs will rise again as it continues to pump investment into data centre infrastructure.

The cost per click metric continues to fall but the 2% yoy decline in Q3 was better than expected (it was down 9% yoy in Q1 and 6% in Q2) as Google continues to experiment with the mobile channel. For Q3 the company improved mobile pricing but this had an impact on lower quality clicks, and there were geography and product changes too which impacted the metric. How it will master mobile remains one of the big questions for Google. eMarketer forecasts Google will account for a 37.7% of US mobile advertising this year, down from 38.6% in 2013 and 47.2% in 2012. Its global mobile ad share is estimated to decline nearly 4% to 44.6%, while Facebook will rise nearly 23% to 20.4%.

Other questions include the potential impact of Apple Pay, and what areas of the business Google will invest in – “Other” business (i.e. non-advertising) saw 50% revenue growth and is 11% of total revenue.  For the record, revenue from UK was $1.63bn but still 10% of total revenue (see Google Powerhouse), so growth here is slowing.   

The wrestle with mobile is being played out in a very public forum, which is a painful experience for a company the size of Google and one that so many people have so many expectations of.

Posted by Angela Eager at '09:42' - Tagged: results   cloud  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Friday 17 October 2014

Capgemini forms BPaaS partnership with Netsuite

lCapgemini is the latest major IT and business process services player to form a Business Process-as-a-Service (BPaaS) partnership with cloud ERP vendor NetSuite. Earlier this year, India-based rival Wipro announced its own BPaaS tie-up with NetSuite for F&A services (see here).l

Capgemini’s partnership appears broader in scope, focusing on both F&A and HR processing, aimed at delivering an ‘integrated back office in the cloud’ – effectively a standardised pre-configured platform using Netsuite’s cloud-based software and Capgemini’s global delivery network for the IT and business processing services.

Capgemini is calling this offering ‘the virtual company’, because it is being aimed squarely at organisations wanting to quickly exploit new growth opportunities either via entry into new markets, M&A or through new product launches. The intention is to overcome some of the bottlenecks integrating systems and processes, which are also costly and laden with bureaucracy and administrative burden. Capgemini and Netsuite’s BPaaS offering aims to do away with that – plugging into existing systems and providing in-built governance risk and compliance. Apparently, several multi-nationals are already interested.

This is exactly how we see the BPaaS market emerging. It is dependent on partnering with best of breed cloud technology/software/platform providers, and providing access to infrastructure, applications, people and processes in one bundled offering, on a consumption basis.

We expect BPaaS to evolve over the next few years, from small add-on programmes like this that support growth, innovation and address capacity and capability issues. Going from here to mainstream use however is going to take a lot more work. It will depend on how successful early programmes are at achieving their stated outcome objectives, and how BPaaS offerings can actively address concerns around data security, compliance and service scalability/reslience.

Posted by John O'Brien at '09:27' - Tagged: cloud   bpaas   bps  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Friday 17 October 2014

Colt appoints new CFO

coltColt has said Hugo Eales will become the company’s new CFO. Eales' appointment follows Mark Ferrari's decision to return to Fidelity (Colt’s largest shareholder) having completed his secondment.

Eales is something of a telco and IT services veteran, and most recently was CFO for BT Global Services where “he drove significant cost transformation, managed positive cash flow and profitability across the organisation and drove cultural transformation within the finance teams”. Prior to that he had various financial roles in CSC, including a stint as CFO for UK and EMEA.

No doubt Colt is hoping this experience will play a role in the improvement of its own finances. The latest set of numbers weren’t inspiring, with H1 revenue (to end June 2014) down 3.3% to €770m. Indeed, the results were red across all business segments, with IT services hit hardest with a 7.6% decline (see Colt H1: IT services takes biggest hit).

Eales will have his feet under the desk from November 1st.

Posted by Kate Hanaghan at '09:22' - Tagged: appointment   management   CFO  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Friday 17 October 2014

Slower start to HCL year

logoNoida-based offshore services major, HCL, kicked off its new FY (to 30th Sept.) at a slightly slower pace than the prior year, though the near-13% headline growth (to $1.43bn) could hardly be called slovenly. On the other hand, unlike the offshore services market leader (see TCS quickens the pace though not the profit), HCL management kept a firm hand on the margin levers, with operating profitability up slightly yoy at 23.9%, though 30bps lighter on the prior (final) quarter.

As expected, HCL kept up its onslaught on the infrastructure service market, which still accounts for over one-third of the company’s worldwide revenues, a materially higher proportion than any of its peers.

More to come in the next edition of OffshoreViews.

Posted by Anthony Miller at '08:36' - Tagged: results   offshore  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link


Friday 17 October 2014

TCS quickens the pace though not the profit

logoAfter a lightning start to its new FY (see TCS starts as it means to go on), Indian offshore services market leader TCS quickened the pace in Q2 (to 30th Sept.) with headline revenues up by nearly 18% to $3.93bn, over 6% higher than the prior quarter.

However, operating profits were only little better than flat yoy, setting margins at 26.8%, over three points off the 30.2% high the year prior, though 50bps better than the previous quarter. The yoy hit was pretty much due to a drop in gross margin from 48.0% to 44.4% despite the fact that utilisation was higher, perhaps suggesting fiercer pricing pressure than a year ago.

Quarterly revenue growth in TCS’ UK business has been in gradual decline over the past year, falling below double-digits (in local currency) for the first time since 2010. However, TCS UK revenues over the trailing 12 months totalled £1.54bn, still 12% up yoy, all organic.

As usual, we'll have much 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 '08:10' - Tagged: results   offshore  

Add a comment Add a comment Twitter   Facebook   LinkedIn   Email article link




© TechMarketView LLP 2007-2014: Unauthorised reproduction prohibited see full Terms and Conditions.