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23 May 2019
Reasons to keep the faith with technology
22 May 2019
Tech Mahindra profits from communications revival
22 May 2019
Draper Esprit rides the UiPath wave
22 May 2019
Endava on track for another 30+% growth year
22 May 2019
Great British Scaleups: Gaining a Sixth Sense
22 May 2019
Lloyds looks north of the border for IT expertise
22 May 2019
How your tech business can improve customer satifaction
22 May 2019
TechnologyOne secures Chelmsford partnership
21 May 2019
Finastra embraces Open Banking
21 May 2019
InterSystems: healthcare specific data platform benefits
21 May 2019
IMImobile adds to roster of telco partners
21 May 2019
US dispute with Huawei hits global tech stocks
21 May 2019
Backers advance £40m to salary advance fintech Wagestream
21 May 2019
*UKHotViewsExtra* Arvato extends at DfT
21 May 2019
HOW YOUR TECH BUSINESS CAN IMPROVE CUSTOMER SATISFACTION
21 May 2019
Cerillion blames interim loss on timing issues
20 May 2019
Digital learning emerging from HCL/Manchester United partnership
20 May 2019
CentralNic acquires down under
20 May 2019
*UKHotViewsExtra* BearingPoint challenges to succeed
20 May 2019
Partnering pays-off for Actual Experience
20 May 2019
HPE goes Cray-fishing
20 May 2019
Encouraging signs from Sage in H119
17 May 2019
Moneysupermarket backs £11m Flagstone cash injection
17 May 2019
Investors show foresight backing Glasgow's Synaptec
17 May 2019
BrandHouse raises €4m to ply Asian trade
17 May 2019
Celebrating UK LawTech
17 May 2019
Maistro to blur out AIM listing
17 May 2019
Fujitsu takes action to return UK to growth
17 May 2019
Amazon Primes Deliveroo
17 May 2019
*UKHotViewsExtra* Expleo builds on its heritage
17 May 2019
*New Research*: Digital Enablement via Low Code Platforms
16 May 2019
LTI’s Syncordis strikes strategic partnership with Temenos
16 May 2019
LawTech networking event
16 May 2019
Important 'firsts' for Xero in FY19
16 May 2019
Sophos posts double digit FY19 revenue growth
16 May 2019
Probation services to be renationalised
16 May 2019
Police ICT Company halts £500m ICT partner contract
16 May 2019
New MD for Dynama
16 May 2019
Totvs finds hardware and software don’t mix – finally
16 May 2019

UKHotViews©

 

Wednesday 22 May 2019

Reasons to keep the faith with technology

Today I attended what will almost certainly be my last AGM of Allianz Technology Trust (#ATT) where I have been a director since Jan 2007. The search for my replacement has commenced - indeed, YOU might well have applied to be Holway 2.0!

ATTThe #ATT Fund Manager - Walter Price - gave his usual excellent presentation to the gathered shareholders. BTW - The biggest shareholder turnout I have witnessed.

Perhaps I am allowed to present to you one of the slides that Walter presented. The question I have been asked most often in 2019 so far is ‘Are we in another tech bubble - like that in 1999/2000?’ My answer every time is that, as far as the so-called unicorns currently seeking IPOs, I believe that to be the case. But, as far as the currently quoted tech companies are concerned, I think they are fairly priced. Indeed the recent great performance of tech shares has merely mirrored their earnings performance.

Walter presented a really great chart to illustrate this today. You will see that Price to Earnings (P/E) Ratios went haywire between 1998-2003. But since then - and particularly in the last 10 years -P/Es for tech stocks have merely mirrored the market in general.

I’ve argued for many years that tech is now mainstream. Almost every company is a tech company in some way. The ‘downside’ of this is that if there was a general downturn in the economy - be it local (ie the US) or global - then tech stocks would be affected too. But even that wouldn’t affect ALL tech stocks. Those in the ‘new’ areas (Cloud, SaaS etc) would suffer much less than those in a more vanilla-flavoured market. Indeed they might prosper as they offered greater cost savings to beleaguered companies.

Who knows what the future will bring. But there seems no reason not to keep the faith with technology.

Posted by Richard Holway at '17:22'

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Wednesday 22 May 2019

Tech Mahindra profits from communications revival

LogoAfter a slower start to the year, Mumbai-based offshore services major Tech Mahindra rallied to deliver a respectable, if not spectacular FY19. Revenue for the twelve months to 31st March was up 5.8% yoy to $4.97b in constant currency. Profitability improved significantly during the year with EBITDA increasing by 24.3% yoy to lift margin by 300bps to 18.2%.

The top line performance was supported by an uptick in the company’s fortunes in the communications industry vertical during the course of the year. This sector has long been Tech Mahindra’s primary revenue producer generating over 40% of total sales. The progressive slowdown in this area which began in Q218 started to bounce back midway through FY19 with Q4 achieving sequential sales growth of 4.3%.

Rotation to “the new” (digital, cloud and cyber security) continued apace. Turnover from these services was up 41% yoy in FY19 and now represents over a third of the company’s global revenue. From a regional perspective, Tech Mahindra found the going somewhat tougher in Europe. The top line in this geography increased by just 2.3% over the prior financial year. Given that the UK generates the lions share of these revenues, it is reasonable to assume that the performance here was of a similar order.

While Tech Mahindra ceded further ground to peer group rivals such as TCS, Infosys and HCL over the last twelve months, there were many positives to take from these latest results. The improvement in margin, the acceleration in the growth of digital services revenues and the revival of demand in the communications sector all bode well for the company in the coming year. We await with interest to see if this momentum carries forward through FY20.

Posted by Duncan Aitchison at '09:25' - Tagged: offshore   systems+integration   resullts  

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Wednesday 22 May 2019

Draper Esprit rides the UiPath wave

Draper EspiritLondon-headquartered pan-European tech investor Draper Esprit provided an update this morning on its portfolio.

In January, Draper Esprit acquired an underlying holding in UiPath when it increased its ties with German VC Earlybird, acquiring a 5% stake in its Digital East Fund (DEF) for $20m. At the time, UiPath was valued at $3bn (on the basis of its September funding round) and made up 85% of the DEF valuation. Draper’s stake in UiPath is now valued at over £30m given the RPA vendor’s recent $568m investment round was at a valuation of $7bn. Just by way of comparison UK RPA leader Blue Prism's market cap is approximately £1.4bn / $1.8bn.

Draper has also loyally backed London-based ‘employee experience platform’ Perkbox, most recently leading a £13.5m funding round to help support the platform’s worldwide expansion. The future of work is an area of particular interest for TMV and you can read our thoughts on the subject in our very latest report Digital Employee Experience and The Future of Work.

Draper Esprit also announced that it had offloaded some of its stake in TransferWise, the international money transfer platform at a very healthy return, following its $292m share sale at a $3.5bn valuation. TransferWise looks like another good bet with over five million people already using the platform which processes over £4bn in payments every month.

The company’s full year results are out on June 4thwhen we will report more. 

Posted by Marc Hardwick at '09:18' - Tagged: funding   RPA   UiPath  

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Wednesday 22 May 2019

Endava on track for another 30+% growth year

LogoLondon-based IT services company Endava continues to set a brisk pace. Announcing the company’s latest results, an understandably upbeat CEO, John Cotterell reported Q319 (the three months ended 31st March) turnover was up 23.2% yoy to £73.1m on a constant currency basis. This produced a profit before tax of £10.2m compared to £5.5m during the same period in the prior year. Endava now expects to deliver top line growth of c.31% in its first financial year since listing on the NYSE.

The company continues to build its roster of larger accounts. The number of Endava’s clients generating over £1 million in revenue on a rolling twelve months basis stood at 67 at the end Q319 compared to 60 at the end of the previous quarter and 42 at 31st March 2018. From an industry vertical perspective, payments and financial services sector remained the dominant source of revenue accounting for just over half of total turnover so far this year.

Overall, it was another impressive set of numbers from this provider of digital transformation, agile development and intelligent automation services. The only possible concern was the tail off in sequential growth.  Revenue increase qoq fell from 8% in Q2 to just 1.8% over the last three months. Furthermore, the slowdown in the company’s European business which we noted last quarter (see here) persisted with Q319 sales struggling to maintain the run rate of the prior period.

Looking ahead, Endava anticipates that Q4 turnover will be in the £75m - £76m range. This will bring FY19 constant currency revenue to over £286m, up nearly £70m on the previous year – not a bad way to mark your first birthday as a publicly quoted company.

Posted by Duncan Aitchison at '09:16' - Tagged: results   digital+transformation  

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Wednesday 22 May 2019

Great British Scaleups: Gaining a Sixth Sense

We are delighted to announce the names of the six fast-growing UK tech SMEs selected to participate in our sixth Great British Scaleup event today in London.

logosThey are:

  • Atlas Cloud
  • Glisser
  • Switchee
  • Tascomi
  • Wieldy Digital
  • Workbooks Online

Top executives of these companies will be joining TechMarketView research directors and ScaleUp Group advisors to gain an independent, constructive critique of their business plans and help identify the opportunities and obstacles to scaling up. We will be publishing brief profiles of the companies in coming weeks.  

Many congratulations to all of these Great British Scaleups!

The TechMarketView Great British Scaleup programme is generously sponsored by ScaleUp Group and proudly supported by techUK.

Posted by HotViews Editor at '08:00' - Tagged: gbs   scaleup  

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Wednesday 22 May 2019

Lloyds looks north of the border for IT expertise

lbgUK based, Lloyds Banking Group, has announced plans to set up a new technology centre in Scotland. The move is part of a major investment programme by the bank, which will see it spend around £3bn developing technology to improve the customer experience at its major high street brands (Lloyds Bank, Bank of Scotland, Halifax and Scottish Widows).

The new innovation hub will be based in Edinburgh and is expected to provide 500 new software jobs north of the border. The development will see Lloyds building on its established presence in the vibrant Scottish technology scene. The bank regularly hosts technology events in Edinburgh and has also formed partnerships with Fintech Scotland and HackerX

Customer experience is one of the key competitive battlegrounds in financial services and bank customers expect and desire a modern digital experience when interacting with service providers. Lloyds is hoping that its new Scottish development centre will help it to make further strides forward in its efforts to modernise its overall customer proposition.

As part of its wider moves to modernise the experience of its customers, Lloyds recently expanded its Open Banking programme (see: Lloyds expands Open Banking). Meanwhile, in November last year, the banking group invested £11m in cloud native, core banking startup, Thought Machine, see: (Lloyds puts thought and dosh into Thought Machine). Lloyds is understood to be preparing to start migrating some of its clients onto the company’s Vault platform by way of a pilot (see: Lloyds set to go live with new cloud-based core).

Posted by Jon C Davies at '07:13'

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Tuesday 21 May 2019

TechnologyOne secures Chelmsford partnership

TechnologyOne logoTechnologyOne has secured a two-year deal with Chelmsford City Council to implement its OneCouncil platform.

TechnologyOne’s SaaS solution will replace the council’s existing on-premise technology, which has been provided by Totalmobile since 2004. The council was looking to consolidate its technology stack and simplify its back-office systems. It wanted a financial platform that would provide a mobile solution to allow its employees to work remotely and with less reliance on the accountancy department.

Chelmsford City Council joins Mid Ulster District Council (see TechnologyOne wins first Northern Ireland contract), Horsham District Council and Dover District Council (see TechnologyOne wins in Dover) in using the OneCouncil solution. The Australian Securities Exchange listed business is building momentum in the UK local government market as more councils look to make the switch to cloud-delivered back office solutions.

Posted by Dale Peters at '20:10' - Tagged: localgovernment   erp   saas   software  

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Tuesday 21 May 2019

Finastra embraces Open Banking

FinastraGlobal financial services provider, Finastra, has revealed its latest strategic bet around Open Banking, which comes in the shape of its innovation platform FusionFabric.cloud. In recognition of the changing dynamic in banking technology, Finastra is aiming to drive innovation through collaboration, by providing access to its eleven core banking systems via the FusionFabric.cloud.

Finastra has leveraged its strategic alliance with Microsoft (which hosts the innovation platform on Azure), to build solutions utilising Power BI, PowerApps and Microsoft Dynamics. The FusionFabric.cloud platform currently provides 61 open APIs, across Finastra’s retail and corporate banking products and contains functionality for consumer lending, mortgage, payments and treasury and capital markets.

Open Banking is gaining momentum in the UK and globally and Finastra has another major partner on board to support its market push, in the shape of Accenture. Whilst there is still inertia amongst the major banks here, the benefits and appeal of the modern offerings and services that the concept has spawned are clear. In the longer term, the impact of Open Banking is likely to be just as significant on the established banking technology vendors as it will be on the banks.

Finastra has more than 8,500 clients utilising its systems and, whilst pricing models are not yet finalised, this client base should prove to be a sufficient lure to attract collaboration via its innovation platform. Meanwhile, Finastra further confirmed its collaborative, innovation credentials recently, via its R3 based, loans platform (see: Finastra’s blockchain initiative looks to transform syndicated loans). Finastra and its CEO, Simon Paris, have clearly recognised the changing market dynamics and the company is evolving its approach and business model in response.    

Posted by Jon C Davies at '09:41' - Tagged: OpenBanking  

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Tuesday 21 May 2019

InterSystems: healthcare specific data platform benefits

logoWe’ve previously highlighted the scope for greater take-up of latter day data platforms as part of MDM scenarios, AI/ML deployments and as supporting plays in accelerated application development (see Enterprise Software Predictions 2019) but also cautioned that simple aggregation offerings would not cut the mustard. Today’s data platforms need to deal with data relevance and quality as well as aggregation and transactions, along with analytics to generate insight.

That combination points to industry specific offerings, so it was good to see data platform provider InterSystems contribute to the movement with the latest release of its unified healthcare information system, InterSystems TrakCare. The release adds a mobile interface across all clinical workflows to improve the user experience but what stands out is that it has been built on the new IRIS for Health data platform, which in turn has been specifically engineered for healthcare. As well as combining analytical and transaction processing and native interoperability for all data types, it provides healthcare-specific big data capabilities. Where data is the source of insight and value, sector specificity matters.

Posted by Angela Eager at '08:56' - Tagged: software   healthcare   datamanagement  

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Tuesday 21 May 2019

IMImobile adds to roster of telco partners

logoA new partnership agreement with Telia Norway should add to UK HQ’d IMImobile’s upward trajectory. The agreement will see the Scandinavian telco resell IMImobile’s cPaaS (Communications Platform-as-a-Service) and other IMImobile cloud products to its enterprise clients. Telia Norway will also use the cPaaS platform itself.

The cloud based communications software and solution provider is making inroads into the telco sector and already partners with mobile operators such as EE, MTN, O2 and Vodafone so Telia Norway will fit in and benefit from IMImobile’s existing expertise. If all goes well, the agreement could extend to the wider Telia Company.

IMImobile ended its most recent financial year (to 31 March 2019) with 28% revenue growth to £142m, of which18% was organic, on several growth drivers including new channels for WhatsApp for Business and Apple Business Chat for the cPaaS product, plus commercial and technical progress with partners such as BT, KCOM, Salesforce and NICE inContact. Geographic expansion also contributed to growth. Telia Norway adds to the roster of drivers and opportunities. With products and services enabling businesses to launch and orchestrate two-way, trigger-based customer communications, across 10+ channels, for more personalised, real time interactions, IMImobile is well placed and succeeding within a growth market.  

Posted by Angela Eager at '08:10' - Tagged: cloud   partnership   software   customerexperience  

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Tuesday 21 May 2019

US dispute with Huawei hits global tech stocks

HuaweiI’ve watched the Huawei dispute with great interest but from the side-lines. Without going into detail (but many of you know of what I speak) you can get into an awful lot of hot water if you dare criticise Huawei. It was a classic lesson in how not to undertake a PR exercise with one of the UK’s leading tech analysts. It only served to alienate me against them...

However, yesterday the dispute with Huawei had a direct effect on many of the companies I cover - indeed on the stocks I hold. Google announced that it couldn’t supply its Android operating system (and everything that went around it) to new Huawei smartphones and, maybe, couldn’t provide things like updates to existing users. Given that Huawei is 2nd only to Samsung in the smartphone volume market, this was a big hit. Who on earth would now buy a new Huawei?

The ‘problem’ is that we live in a very global and interconnected world. Huawei doesn’t just rely on Google. It uses chips and other components from many non-Chinese companies. So not surprising that Qualcomm (down 6%), Intel (down 3%) Dialog (down 4%) and Broadcom all suffered.

Apple not only has a big market for its products in China but manufacturers many of its products there. It fell over 3%.

Huawei vehemently believes that the current US emergency measures are far more to do with President Trump’s trade wars than with security. But the ownership of Huawei is opaque. Their management gives all the promises in the world that they would never provide backdoors for the Chinese authorities to spy on users. But would that really apply if there were hostilities between China and the US? Bit late when Huawei is embedded in the very backbone of your nation’s comms infrastructure.

Posted by Richard Holway at '07:51'

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Tuesday 21 May 2019

Backers advance £40m to salary advance fintech Wagestream

logoI admit to getting the wrong end of the stick when I wrote about London-based Fintech Wagestream’s £4.5m raise last September (see Wagestream gets dosh for new take on pay-day loans). Indeed I published founding CEO Peter Briffet’s comment and spoke to him a few days later. Briffet was insistent that in fact Wagestream’s aim was actually to eradicate payday loans.

The way the platform works is to allow employees to get an advance on a pre-agreed proportion of their monthly salaries for a flat fee of £1.75 via an app. Originally free to employers, Wagestream was charging 50p per employee per month at the time I spoke to Briffet.

This is all in prelude to the news that Wagestream has raised a further £40m in a debt/equity Series A funding round. The equity portion, £15m, was led by Balderton and Northzone, with savings bank Shawbrook backing a £25m loan.

When I spoke to Briffet, Wagestream’s platform was then servicing some 20,000 employees, with an ambition to lift this to “hundreds of thousands” in six months. Media reports (Source: alt-fi) set the current number at ‘over 120,000’, with well known employer organisations such as David Lloyd, Rentokil, Camden Town Brewery, Slug & Lettuce and Carluccio’s.

Wagestream has pitched its tent under the ‘financial wellness’ banner, proclaiming bold mission statements: “The complete eradication of payday loans”; “Every household has £250 in savings”; and, “End overdraft fees forever”. Noble causes, but I rather think the messaging is just a bit OTT.

Let’s be clear. Wagestream is a commercial financial services business, albeit with links with social impact charities. The pitch is attractive, but somewhere along the line, like all good businesses, they will need to make money.

Posted by Anthony Miller at '07:33' - Tagged: funding   startup   FinTech  

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Tuesday 21 May 2019

*UKHotViewsExtra* Arvato extends at DfT

Arvtato logoWhen Arvato won its shared services contract with the Department for Transport in 2013 (see Arvato confirmed as DfT share services provider), the option to extend the seven-year contract for a further three years was included. Today, Arvato have confirmed that the department has exercised that option, meaning the arrangement will run until 2023. The contract has been one of Arvato’s key business relationships in the UK since it was signed.

Under the terms of the extension, Arvato will continue to provide back office shared services (HR, procurement, payroll and finance services) to DfT and its executive agencies (Driving and Vehicle Licensing Agency (DVLA), the Maritime and Coastguard Agency (MCA), the Vehicle Certification Agency (VCA) and the Driver and Vehicle Standards Agency (DVSA).

HV Premium logoIt’s worth highlighting that the arrangement looks very different to that which was originally envisaged... Read more.

If you would like to read this UKHotViewsExtra article but are not a TechMarketView subscriber, please contact Deb Seth to find out how to access this and a whole host of other research from the TechMarketView analyst team.

Posted by Georgina O'Toole at '07:15'

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Monday 20 May 2019

Cerillion blames interim loss on timing issues

CerillionAIM listed, billing and CRM software solutions provider, Cerillion, has announced interim results reflecting a loss making period and weaker revenues. Cerillion blamed the timing of contracts for its dip in fortunes, as financials for the six-month period, ended 31st March 2019, saw the company report a statutory pre-tax loss of £0.75m. This compared with a profit of £0.47m a year earlier and was coupled with a dip in revenue to £7m from £8.4m during the same period last year.

Cerillion was originally spun off from Logica in 1999, via a MBO of the firm’s customer care and billing product arm, led by CEO, Louis Hall. In 2006, Cerillion was named one of Britain’ fastest-growing private technology companies in the Sunday Times Microsoft Tech Track 100. Cerillion subsequently launched on the AIM in 2016 (see: IndustryViews Quoted Sector). However, progress seems to have been relatively slow and the latest numbers and the firm's vulnerability to "timing" issues, appear to reflect an over reliance on a small number of larger contracts.

Cerillion’s order book appears healthy at £15.4m and remains on par with last year. Despite the latest setback, management remains bullish about the firm's prospects and its ability to deliver on its full year targets. Cerillion highlighted the February signing of an $8.3m contract as one of its largest wins to date. Meanwhile, Cerillion's management has indicated that it expected a stronger close to the year and that the second half has already started well. 

Posted by Jon C Davies at '09:28' - Tagged: interims  

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Monday 20 May 2019

Digital learning emerging from HCL/Manchester United partnership

logoAs we noted when HCL Technologies released full year results earlier this month, headline growth was higher than those of its larger offshore services peers, which no doubt made management smile. Its partnership with Manchester United is another reason to smile, as we observed during a recent event at the team’s training complex.

logoThe HCL/Manchester United relationship dates back to 2015 when they announced a global partnership to work together on digital initiatives to transform the experience of the club’s 659m global followers. Milestones have included revamping the club website, launching MUTV and, in August 2018, the Manchester United Official mobile app. These are all components of Manchester United’s ongoing digital transformation programme - delivered via HCL services and HCL IP including the Digital Experience Platform.

The mobile app is designed to provide a real-time, engaging, personalised, and unified experience to the fanbase but it also supports the club’s strategy to become a Digital Sports Enterprise. When it comes to content, including the important area of real time notifications during matches where the club is in competition with providers like Sky and the BBC, its ability to deliver compelling digital content in ultra-fast real time though the mobile app - enabled by the underlying platform - is key. Manchester United is much more than a football club and what stands out from the transformation programme is its cross-over into the digital media sector where it is facing new types of competitors and new opportunities - and the extent of the committment to  do so. 

As for HCL, it has been building its transformation credentials with Manchester United and several other big brand clients, providing digital foundations via cloud migrations, addressing the workplace experience, as well as positioning the Digital Experience Platform as a means of connecting people, organisations and resources in an nteractive way. Its task now is taking the platform, and what it has learnt from Manchester United in particular, and applying it across other verticals with large consumer bases and digital touchpoints. 

Posted by Angela Eager at '09:20' - Tagged: ApplicationServices   enduser   digitaltransformation  

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Monday 20 May 2019

CentralNic acquires down under

CentralNicLondon-based CentralNic Group, the AIM-listed provider of internet domains has agreed to acquire Sydney-based TPP Wholesale, another reseller of domain names and hosting across Australasia for $24m AUD (approx. £13m) continuing its industry consolidation strategy and expansion into key markets globally.

Last week’s FY 2018 results showed that CentralNic had doubled revenues last year to £42.7m (2017 £21.4) principally off the back of a series acquisitions as it looks to build a global business and access growth markets. 

This represents CentralNic’s third acquisition of the last twelve months, having acquired KeyDrive in July 2018, a move that doubled its customer numbers overnight, as well as Romania and Brazil-focused registrar and domain hosting provider GlobeHosting last September. 

TTP Wholesale is a carve out from ARQ Group Limited, a company listed on the Australian Securities Exchange and will give CenytralNic a significant presence in Australisia adding 14,000 reseller customers and 840,000 domains under management, some 19% of all .com.au registrations. Stand-alone revenues and adjusted EBITDA for TTP in FY 2018 were $17m AUD and $3.9m AUD respectively. The timing of this deal will also allow CentralNic to participate fully in the proposed launch of the new .au domain extension.

The acquisition is still dependent on conditional financing with CentralNic in advanced talks with debt providers hoping to be finalised by the end of June. 

Posted by Marc Hardwick at '09:17' - Tagged: acquisition   domainservices  

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Monday 20 May 2019

*UKHotViewsExtra* BearingPoint challenges to succeed

LogoEffectively a start-up business a decade ago, the UK arm of Europe-centric management and technology consultancy BearingPoint has made significant headway over the last ten years. Today it employs more than 150 people and generates an estimated turnover of c. £21m pa. The UK & Ireland (UKI) business was a stand-out performer within the firm in FY18 achieving “far above” market growth (see here). Our most recent analysis showed that demand for UK SITS consulting services increased by 5.6% last year, suggesting that BearingPoint UKI expanded by north of 15% yoy in 2018.

We recently caught up with James Rodger, Partner and Regional Leader UKI at BearingPoint to take a closer look at this ambitious and increasingly significant UK consulting operation. TechMarketView clients, including UKHotViews Premium subscribers can learn more via, UKHotViewsExtra (see: BearingPoint challenges to succeed).

Posted by Duncan Aitchison at '09:04' - Tagged: consultancy  

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Monday 20 May 2019

Partnering pays-off for Actual Experience

LogoBath-based Analytics-as-a-Service provider Actual Experience plc has built on the momentum generated during the latter part of FY19 (see here) to deliver a promising set of interim results for the first half of the current financial year. Revenue for the six months ended 31st March increased by 260% yoy to £953K, while the operating loss reduced to £3.46m from £3.83m in H118. Over the period, Annual Recurring Revenue (ARR) increased to £1.8m from £1.6m at the end of September 2018.

We have long held the view that Actual Experience has a good offering – technology to understand the correlation between a user's experience of a digital journey and bad behaviour amongst the businesses, technologies, networks, data centres and applications involved in the delivery of that digital journey. The switch to a channel partner-led go-to-market strategy a few years ago, which has entailed significant investment in automation and support to make it easier for partners to integrate the company’s technology into their offerings, now appears to be paying dividends. The relationships with Accenture, Verizon, Vodafone and Cisco are reported to be adding regularly to the sales pipeline with well qualified opportunities.

More good news came post period end. The company’s AaaS platform has been successfully evaluated by Vodafone to be 'built in' to Universal Customer Premises Equipment (uCPE). This equipment is typically deployed to customer sites by a service provider and will help generate recurring revenue at scale with minimal set-up costs.

Commenting on the outlook, the board of Actual experience remains confident about the future. Evidence of the company’s ability to convert its growing number of new business opportunities into material firm revenue during the second half of FY19 will be important to support this optimism.

Posted by Duncan Aitchison at '08:48' - Tagged: results   saas   analytics  

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Monday 20 May 2019

HPE goes Cray-fishing

logologoI used to be among the supercomputing cognoscenti (not a lot of people know that, as they say). There was a time in my distant past that I was responsible for IBM’s supercomputer product marketing strategy in the Asia-Pacific region. It was a thankless task – this was very much pre-Watson, by the way. But I did get to meet a man from IBM Japan who had a supercomputer data centre in the back garden of his home in Tokyo – I kid you not!

I tell you this for two reasons.

Firstly, to explain why I was somewhat bemused when, almost five years ago to the day, Paris-based IT services giant Atos announced it was to acquire compatriot Bull in order to get its hands on its supercomputers (see Atos takes Bull by the horns). You can argue that this was actually not a rescue but a prescient move into what has become (under the covers, at least) just about the hottest thing in tech – AI and all that jazz. Bull is now part of Atos’ Big Data & Cybersecurity division, which generated revenues of €895m last year, just over 7% of Atos’ total revenues, with a 15.4% operating margin. The hardware element was not disclosed.

Secondly, to express only mild surprise at Friday’s news that HPE (Hewlett Packard Enterprise) is to acquire Cray, arguably the best-known name in the world of supercomputing. HPE is to pay $35 cash per share– a 17.4% premium – in a transaction that values Cray at some $1.3b net of cash. Cray – which has undergone many transformations over the years – had revenues of $456m last year, up 16%, though ran a net loss of $72m, just under half the prior year’s loss.

We’ll be picking the bones out of this one once we have studied the detail.

Posted by Anthony Miller at '08:01' - Tagged: acquisition  

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Friday 17 May 2019

Encouraging signs from Sage in H119

logoSage Group CEO Steve Hare said he was “encouraged by the strong start to FY19” as the company released interim results for the six months to 31 March 2019 that delivered a 6.2% increase in organic revenue to £941m and a 10.2% increase to £779m in the important area of organic recurring revenue growth. It follows signs of improved performance in the second half of FY18. However, the share price dropped during early trading, suggesting investors wanted more.

Guidance for the year is encouraging. Previously disclosed full year total revenue growth expectations were in the 8%-9% range. Sage is expecting revenue growth to be at the top end or exceed the range. The driver seems to be recurring revenue growth resurgence. However, Software and Software Related Services (SSRS) and Processing revenue are expected to be at the lower end or below guidance of flat to mid-single digit percentage decline, which reflects the transition to SaaS and subscriptions.

With organic revenue of £197m, 4% growth, the performance of UK/Ireland lagged the group as a whole, however the troublesome area of recurring revenue showed a distinct improvement with 14% growth, largely from cloud connected products and subscriptions. The region benefitted from the Making Tax Digital deadline too, which also helped challenger Xero (see Important ‘firsts’ for Xero in FY19).

Sage is deep in its ongoing battle to make the shift to a SaaS company, via its current strategy that focusses on customers, colleagues and innovation and it was able to demonstrate execution examples during H1. In terms of the innovation play, it is working on the internationalisation of SaaS Intacct and plans releases in the UK and Australia later this year. A lot is riding on Intacct – and the SaaS experts that came with the acquisition – so Sage has to ensure it doesn’t become overly reliant on it. Investment in Sage Business Cloud, cloud native and cloud connected applications is continuing, with additions to Sage Enterprise Management, Sage Payroll cloud and Sage cloud connected accounts solutions.

The technology and commercial model shift is vital of course, but so is the having the right people. To reinforce its focus on innovation and SaaS, Sage has been building up the executive committee from the ranks of its internal and ’acquired’ execs (see Sage rejigs leadership team). Now it has looked outside its walls for additional input and has announced that John Bates, CEO of AI/machine learning leaning software testing provider Eggplant, is to join the board as a NED. Bates has a background rich in tech innovation that Sage will be hoping to benefit from as its tries once more to accellerate its SaaS transition.

Posted by Angela Eager at '10:06' - Tagged: results   cloud   software   leadership  

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Friday 17 May 2019

Moneysupermarket backs £11m Flagstone cash injection

FlagstoneUK-based Flagstone, a provider of an innovative cash deposit platform, has raised £11m in growth funding from a number of investors including Moneysupermarket.com. The cash injection was also backed by Kindred Capital and VentureFounders as well as a number of individual investors.

Flagstone was founded in 2013, by the firm’s Managing Partner, Andrew Thatcher, who previously had a 15-year career in banking and hedge funds with the likes of Merrill Lynch, Citigroup and MAN Group. Flagstone's online technology provides access to hundreds of deposit accounts from 30 banks through a single application enabling users to take advantage of the most favourable rates and terms.

Flagstone has an interesting proposition that appears to sit somewhere between the aggregators, price comparison sites and treasury management. The firm is authorized and regulated by the Financial Conduct Authority and the minimum deposit required to open an account is £250k. Clients currently include wealth management firms such as, St. James’s Place, Quilter Cheviot and Tilney Group. Flagstone is looking to use the new funds to help support its growth ambitions. As well as the wealth management industry, the firm is looking to expand its presence amongst corporates, charities and wealthy individuals.

Posted by Jon C Davies at '09:33' - Tagged: funding   startups  

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Friday 17 May 2019

Investors show foresight backing Glasgow's Synaptec

logoLondon-headquartered, infrastructure-focused private equity firm Foresight Group has been backing a number of interesting startups recently. Late last year, Foresight backed North Wales-based cabling software developer Cimteq (see Cabling software developer Cimteq connects to funding). And, keeping with the cabling theme, Foresight has recently invested £2m through the Foresight Williams Technology EIS Fund, as part of a £2.9m raise for Glasgow-based energy tech startup, Synaptec.

Other backers included the newly created Foresight Scottish Growth Fund, which invested £100k, and existing shareholders, including The Scottish Investment Bank, the investment arm of Scottish Enterprise, Equity Gap and the University of Strathclyde, from which Synaptec spun out, which invested £800k. The Foresight Williams Technology EIS Fund was formed in collaboration with Williams Advanced Engineering, the technology and engineering services business of Formula 1 racing team Williams Group.

Founded in 2015, Synaptec’s USP is that it can measure voltage, current, temperature, and vibration in a complex electricity power grid over long distances, at multiple locations, without power supplies, and using only a single standard optical fibre.

Sounds exciting.

Posted by Anthony Miller at '09:28' - Tagged: funding   startup  

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Friday 17 May 2019

BrandHouse raises €4m to ply Asian trade

logoIt looks to me like the nominal London headquarters of ecommerce platform developer BrandHouse Holding Ltd is really just a front for a China-based international set of ‘trade-enabling’ businesses that cover the whole gamut from logistics, ecommerce and licencing.

Indeed BrandHouse’s recently announced €4m Series A funding round was led by China Renaissance Capital Investment, along with investors in China, America, Europe, Singapore and Australia and existing backers.

It’s very unclear what BrandHouse does, how it does it and who it does it with.

‘Nuff said.

Posted by Anthony Miller at '08:55' - Tagged: funding   startup  

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Friday 17 May 2019

Celebrating UK LawTech

networkingMany thanks to everyone who attended last night’s LawTech adoption networking drinks, it was great to see so many people there from both the tech sector and the legal profession really engaged in what is an extremely vibrant area. The UK’s LawTech cluster truly is a world leader in so many areas.

ConduentTechMarketView would like to express particular appreciation to Conduent for the sponsorship of this event. Conduent has been engaged, responsive, easy to work with and truly supportive. We thank you.

Last year The Law Society commissioned TechMarketView to undertake a major review of the UK’s lawtech market, looking at barriers and drivers to adoption, the maturity of the market by legal segment and the implications for the future of the law. We ran through some of the key findings at the event. 

The output of the research was published by the Law Society back in February and its available to everyone to download in full or summary format from its website – for access to a copy please click here.

Posted by Marc Hardwick at '08:50' - Tagged: networking   event   lawtech  

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Friday 17 May 2019

Maistro to blur out AIM listing

logoIt really does look like the end is finally drawing nigh for deeply troubled Exeter-based B2B services and product marketplace, Maistro (the erstwhile blur Group). Maistro is to delist from AIM at the end of June.

After reporting an inglorious set of numbers in March (see The worrying truth in Maistro’s numbers), Maistro was awarded the Holway Wooden Spoon for the worst performing share of the month (see Share indices for March 2019).

As we said at the time, ‘new brand, same problems’.

Posted by Anthony Miller at '08:24' - Tagged: delisting  

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Friday 17 May 2019

Fujitsu takes action to return UK to growth

fujFujitsu’s FY18 results were recently announced, showing a 3.6% decline in headline revenue to 3,952.4bn Yen (including the impact of restructuring in the PC and mobile phone businesses). The firm’s IT services business grew well in Japan, although Fujitsu is currently forecasting this revenue performance to be flat in FY19.

Indeed, it’s the German business where Fujitsu holds its highest expectations for growth in the current year, with particular target areas including cloud services in “niche markets”.

In the UK, which is Fujitsu’s largest business outside of Japan, our initial estimates suggest Services revenue has slipped into a decline from a flat performance in FY17. An important set of activities is currently being undertaken to strengthen the footings of the business, including operational changes to significantly swing the attention of the EMEIA leadership team to the UK – see Fujitsu seeks to accelerate UK business.

In mid-April (i.e. after the close of Fujitsu’s financial year) the States of Guernsey announced Agilisys as the preferred bidder for its Future Digital Services, beating off Fujitsu in the final stages (DXC had also been involved in the bidding at an earlier stage). This would’ve been a real disappointment for the Fujitsu team, but there have been successes elsewhere in the Public Sector and wins at the Department for Education and the Northern Ireland Driver & Vehicle Agency highlight that Fujitsu remains committed to Public Sector and is finding its digital groove in the market. The company’s win at Lowell was also notable (see Fast moving Lowell signs broad-ranging deal with Fujitsu) and another demonstration that clients increasingly understand Fujitsu’s potential to initiate and drive digital change.

The firm also saw growth in strategically important areas, including cyber security where it has been increasing its capability.

We’ll be catching up with UK management in due course to understand more about plans for the current year.

Posted by Kate Hanaghan at '08:20' - Tagged: results   publicsector  

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Friday 17 May 2019

Amazon Primes Deliveroo

logoIt has just been announced that Amazon is set to be the largest investor in UK-headquartered but very much international food delivery service Deliveroo's $575m Series G funding round. Existing investors T. Rowe Price, Fidelity Management and Research Company, and Greenoaks are also in the mix, which takes the startup’s funding to date to $1.53b. The investment is expected to complete in coming months. Amazon closed down its own London-based food delivery service, Amazon Restaurants, late last year.

So now the race in the UK comes down to homegrown,and once again profitable Just Eat (see Just Eat back to black as rivals lift the stakes), heavily loss-making – but now Amazon-primed – Deliveroo (see Deliveroo's divergent top and bottom lines), and also loss-making Uber Eats (see Uber warns it might never turn a profit). Then there’s the ‘fifth-column’ entry of Uber’s ex-CEO Travis Kalanick, who acquired London-based ‘dark kitchen’ startup Foodstars early last year to extend his CloudKitchens venture into the UK (see Kalanick’s UK ‘dark kitchens’ see the light of day (and night)).

Amazon’s investment in Deliveroo has clearly lifted the stakes in the UK (and international) food delivery market. The move will surely unsettle Just Eat’s investors, with the implied threat that Amazon will literally eat their lunch.

Posted by Anthony Miller at '08:00' - Tagged: funding   startup  

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Friday 17 May 2019

*UKHotViewsExtra* Expleo builds on its heritage

ExpleoI caught up recently with the folks at quality assurance cum transformation specialist, Expleo, and spent some time with Head of Financial Services, Ross Hignett and his team at their Moorgate offices in London.

sqsExpleo as it is now, was formed in 2018 when Assystem Technologies acquired specialist, German quality assurance provider, SQS, (Software Quality Systems AG) (see: Assystem Technologies and SQS acquisition: bridging digital and physical). The company subsequently enhanced its transformation capabilities with the acquisition of management consulting firm, Moorhouse, (see: SQS gets physical with Moorhouse).

hvpTechMarketView clients, including UKHotViews Premium subscribers can learn more via, UKHotViewsExtra (see: Expleo builds on its heritage).

Posted by Jon C Davies at '07:00'

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Thursday 16 May 2019

*New Research*: Digital Enablement via Low Code Platforms

imageSuppliers and end user organisations looking for tools to provide practical assistance and accelerants around transformation change programmes should be exploring the low code development sector.

The TechMarketView report ‘Digital Enablement via Low Code Platforms: understanding the position, uncovering the prospects’ provides critical insight into this fast growing technology  area that will play a key part in making 2019 and beyond the age of digital activism it ought to be. The report explores the positions of leading providers like OutSystems, Mendix and Appian, UK participants like Netcall and specialist low code services providers such as Green Lemon Company, as well as the approach to low code taken by software providers, from Microsoft to Unit4.

For all the positives that stem from this declarative, model driven approach to application development – which include the ability to deal with continuous change, cope with filled-to-bursting software and process development pipelines, enablement of core system modernisation and addressing skills shortages – the low code movement also represents a threat to application services providers. As low code-using end user organisations are able to do more in terms of self-service development, to shorter timescales and with lower costs, they are using their knowledge to pressure suppliers into upping their game. Suppliers need to build low code capabilities for their own sakes as well as on behalf of clients.

Low code platforms are perceived as only being suitable for lightweight, mobile and web applications. While they aren’t the solution for every development task and should only form part of a broader development toolkit, they  can tackle sophisticated business critical application and process requirements. 

If you're interested in this report but don’t have a TechMarketView subscription, you can contact Deb Seth to find out how to access our research services.

Posted by Angela Eager at '09:51' - Tagged: cloud   software   digitaltransformation   development  

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Thursday 16 May 2019

LTI’s Syncordis strikes strategic partnership with Temenos

SyncordisSyncordis, the Luxembourg based, banking technology consultancy, owned by Indian technology vendor, LTI, has announced a new strategic partnership with Swiss core banking specialist, Temenos. Syncordis, which was acquired by LTI in 2017, (see: LTI leaps ahead) is already an established Temenos specialist and will use the newly signed, strategic global alliance, to provide Temenos certified services to banks around the world.

Syncordis has established a reputation for delivering smooth and efficient implementations of Temenos solutions. The new alliance will boost its standing amongst Temenos clients, as a trusted partner for enhancements, platform upgrades, and end-to-end implementations.

LTI has been enhancing its financial services credentials of late. In February, the firm further strengthened its banking transformation capabilities, with the acquisition of another Temenos expert. German based, banking technology consultancy, Nielsen+Partner, for €28m, (see: LTI strengthens its banking credentials).

LTI has recognised the potential of working more closely with Temenos and the widespread transformation opportunities arising from the Swiss vendor’s installed base. LTI is also well positioned to benefit from the recent launch of Temenos’ cloud native, core banking solution T24 Transact which has established the vendor as a global leader in the space (see: Temenos addresses banking industry imperatives).

Posted by Jon C Davies at '09:45' - Tagged: partnerships   cloud+native   core+banking  

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Thursday 16 May 2019

LawTech networking event

ConduentWe’re looking forward to welcoming our guests to our LawTech event, in London, this evening. The weather is set to be great and we’ll be taking full advantage of the venue’s beautiful garden terrace. 

NetworkingThere is a handful of spaces left for legal professionals and if you wish to be part of this networking event, please drop Deb Seth a line. We’d love to see you there.

Lawtech has seen a huge amount of start-up activity in the UK in recent years with law firms under increasing pressure to embrace new technologies but it remains less mature than other fields of digital disruption (such as Fintech) where there is more funding and regulatory alignment.

To help promote and celebrate the sector we are hosting (in conjunction with event sponsor Conduent) networking event – ‘Driving LawTech Adoption’. The event will offer fantastic networking opportunities amongst the legal/legal tech community and will be held on Tonight from 6:30pm in Central London.

Posted by Marc Hardwick at '09:28' - Tagged: networking   legaltech   lawtech  

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Thursday 16 May 2019

Important 'firsts' for Xero in FY19

logoWith strong FY19 results that delivered some important ‘firsts’, Xero continued to live up to its position as a challenger within the SME accounting software market. Those ‘firsts’ included maiden net profit, albeit of just $1.4m and in H2 only, and at $6.4m its first positive free cash inflow (vs. the $28.5m cash outflow of the prior year).

As TechMarketView highlighted in Xero scopes the transformation opportunity, the New Zealand founded company is going from strength to strength in a market segment where regulatory changes, such as the UK’s Making Tax Digital, and demand for easier to use, cloud based software are creating opportunities for technology providers. With 36% revenue growth to $552.8m in the year to 31 March 2019, Xero is taking full advantage of the environment.

While the company saw impressive growth in all the regions it operates in, the UK continues to be a major growth market. Boosted by the April 2019 Making Tax Digital deadline, UK revenue expanded 50% yoy to $120m and added 151k subscribers (a 48% yoy increase), taking the UK total to 463k. The worldwide subscriber number hit 1.82m, a 31% increase.

Xero is still a small company compared to those it is challenging - Sage, Intuit and even re- emerging UK provider Iris Software Group - which is a contributor to those high growth levels. And it is still in growth mode so the bottom line is not as comfortable as it is for the larger competitors. Although EBITDA improved (from $48.2, to $73.2m), Xero’s net loss deepened to $27.1m from $24.9m. The challenge will be growing on that slim $1.4m H2 profit to show it was not a blip.

FY19 saw some acquisitions – Hubdoc in the data capture area, and tax filing and compliance software provider Instafile in the UK – and these present further opportunities to build top and bottom lines. As does Xero’s platform ambition; with 128% platform revenue growth in FY19 this is a revenue line that is expanding, providing services with the scope to embed Xero deeper into the operational fabric of its customers. 

Posted by Angela Eager at '09:24' - Tagged: results   saas   cloud   software  

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Thursday 16 May 2019

Sophos posts double digit FY19 revenue growth

Sophos posts double digit FY19 revenue growthWhen looked at from the perspective of turnover and operating profit, Sophos’ FY19 performance doesn’t look half bad.

The Abingdon-headquartered cyber security supplier grew its revenue 12% yoy in constant currency to US$711m and adjusted operating profit was up 87% to US$109m. Pre-tax profits too were healthy, reversing a US$41m loss a year ago into a US$54m gain this time around.

What Sophos isn’t too happy about is the flatlining of its billings growth, down 1% yoy to US$760m. The 35k net increase in Sophos’ SME customer numbers (the total client base now counts 382k) saw fewer larger deals signed while weaker network hardware billings were a result of extended refresh cycles. The company has now broken with the tradition of previous years by de-emphasising billings as a metric.

Billings calculates the value of products and services invoiced to customers following a purchase order, for which there is no right to a refund – nominally the guarantee of revenue not yet received. Sophos is gradually moving more of its products into cloud-hosted “as a service” subscriptions and adopting the role of managed security service provider (MSSP) for its customers. That transition - coupled with short term variations in renewal rates and the timing of product releases - renders billings “less indicative of the medium-term growth in our business” said management.

The alternative view of the its financial performance certainly makes for better reading from an investor perspective. Although any impact on the value of its shares was minimal at the time of writing – good news compared to the steep decline following publication of Sophos Q3 results.

We agree with Sophos that demand for cyber security solutions remains robust (read our Cyber Security Market Trends and Forecasts to 2021 here). The healthy FY19 revenue growth already seen from competitive suppliers including Fortinet, FireEye, Check Point and Palo Alto Networks (though not Symantec) appears to confirm that trend.

Competition is strong but with a strong portfolio of subscription security products now established backed by an army of resellers, Sophos has a good chance of gaining even more traction in the SME market in FY20.

Posted by Martin Courtney at '09:22' - Tagged: results   cybersecurity   Sophos  

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Thursday 16 May 2019

Probation services to be renationalised

MoJToday’s announcement that the supervision of low and medium-risk offenders will return to the public sector was not unexpected (see here) and brings to an end one of the most ambitious examples of private sector public service delivery.

Private sector delivery of probation services was probably the highest risk outsourcing of government services undertaken by the coalition government. Realistically, with the benefit of 20:20 hindsight it probably required all the ‘stars to be aligned’ if it was ever going to deliver the financial benefits, drive down reoffending rates whilst at the same time maintaining public trust in what is a highly complex and stretched service.

It was also a complete commercial failure, where payment-by-results (outcome measures) yet again failed to deliver the financial returns once the theory was tested in the ‘real world’. This was yet another example of how HMG had been transferring too much risk to the private sector. Bringing the service back in house will of course be expensive, not only will staff have to be TUPE’d across but the MoJ will now likely have to invest in more staff and facilities.

There will still be a future (smaller) role for the private and voluntary sectors where they will be able to compete for work in services such as training, preparing offenders for work, and alcohol and drug treatment.

This contract is a good indicator and to some degree bellweather for how the public services market has changed over the last few years. However, it shouldn’t be forgotten that whilst the service has always been controversial and a ‘poster-boy’ for those who hate outsourcing, it intentions were good, being designed to assist the 40,000 offenders serving 12 months or less that prior to the reforms were being released with no supervision at all.

Posted by Marc Hardwick at '09:18' - Tagged: outsourcing   insourcing  

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Thursday 16 May 2019

Police ICT Company halts £500m ICT partner contract

Police ICT Company logoMuch has changed at the Police ICT Company since Ian Bell took the reins at the start of last year (see Ian Bell appointed new CEO of Police ICT Company). Further changes are now taking place, which has resulted in the organisation deciding to discontinue the procurement process for a Police ICT Partner.

The organisation was founded to “create a bridge between the policing, technological and commercial worlds”. In the past, whilst most suppliers thought the aims of the Company were sound, they had serious doubts about whether they were achievable. Things have certainly changed for the better over the last 18 months.

Bell, who was already known to police forces and suppliers through his role as Programme Director for the National Enabling Programmes, embarked on a re-set of the Company among its policing and supplier partners and the Government. The three pillars of the Company are now: 1) Helping set the direction for how policing and its partners can use technology; 2) Negotiating and managing contracts, achieving efficiencies and value for money; and 3) Assuring the delivery of the major national policing technology programmes.

It published its contract notice for a Police ICT Partner in November 2018. The intention was to appoint a supplier to establish, operate and manage a network of resellers, manufacturers and software vendors for policing. The contract was worth up to £500m and was set to run for 10 years. However, the Company published an update earlier this week to say that it was discontinuing the procurement process.

Speaking to TechMarketView, the Company said it had determined further work is needed to reflect on the large volume of change happening in policing and positive changes within the Company itself. It has now begun developing an alternative model, together with its policing and national partners.

Halting the procurement programme will obviously be a disappointment to interested suppliers, but it sounds like the new approach is being implemented for the right reasons and in a way that will allow policing to procure technology more efficiently.

Posted by Dale Peters at '09:07' - Tagged: contract   police   police   police   police   police  

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Thursday 16 May 2019

New MD for Dynama

Dynama logoAllocate Software Group company Dynama has appointed Andrew Lloyd as Managing Director. The company provides workforce and resource management solutions primarily for the defence and maritime industries.

Andrew joins Dynama from Corero Network Security where he was President and Executive Vice President Sales and Marketing. Prior to that he was Chief Customer Officer for Workplace Systems and held senior positions at CA Technologies and Oracle. He replaces Andrew Carwardine at Dynama, who left the business in January this year.

Despite contributing a relatively small proportion of Allocate Software Group’s revenues compared its healthcare business, Dynama remains an important part of the Group. It has a loyal customer base in the defence and maritime industries and good potential for growth. Andrew is a solid addition to the business, bringing experience of leading companies in the workforce management sector.

Posted by Dale Peters at '08:28' - Tagged: software   appointment   workforce  

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Thursday 16 May 2019

Totvs finds hardware and software don’t mix – finally

logoBrazilian ERP market leader Totvs (pronounce the ‘v’ as ‘u’) has finally backtracked on what has been labelled in the Brazilian media (with thanks to Angelica Mari at Brazil Tech) as “one of the wors(t) deals ever seen in the Brazilian IT sector”, selling off its retail industry POS hardware business Bematech for just R$25m (c.USD6.2m). Founding CEO Laércio Cosentino announced the acquisition of Bematech in August 2015 for R$550m (see Major POS acquisition for Brazilian Totvs).

I had always been extremely sceptical (moi?) about this deal (see Acquisitions Brazilian style) mainly on the basis that it’s hard to find a successful acquisition of a hardware player by a software firm anywhere in the world (you know the address to write to if you find one). I was also concerned about the distraction this would cause to both businesses and indeed my worries came to pass pretty much straight away when Bematech’s profits crashed (see Totvs: the cost of buying market share), followed a few months later by Totvs’ (see Bematech drags Totvs).

Current CEO Dennis Herszkowicz was philosophical about the decision to ditch Bematach: “We have a long history of successful M&As, with a lot of value created over the years, but clearly we did not get it right in 100% of the occasions – and the purchase of Bematech hardware was one such case.” Herszkowicz joined Totvs in November 2018 in a second attempt by Cosetino (now chairman) to hand over the reins of the business.

Cosetino’s first attempt was just months before the ill-fated Bematech acquisition, when he hired ex-IBM Brazil CEO Rodrigo Kede Lima as President and CEO-in-waiting (see New man at Totvs looks to upset Sage’s LatAm plans). Barely six months later Lima returned to IBM (see Kede goes back to Blue) where he is now General Manager - IBM Global Technology Services - North America (and some would say, destined for greater things). I had always assumed his impromptu departure from Totvs was on account of differences of opinion with Cosetino over the Bematech deal. Whether or not the case, this was clearly the wrong deal.

Posted by Anthony Miller at '07:58' - Tagged: disposal   brazil  

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