Up, up and away!

Our regular quarterly review of the UK software and IT services quoted sector is now available for download for TechMarketView subscription service clients. Valuation increases have been absolutely eye-watering - even including IT staff agencies (ITSAs), usually the ‘poor relations’ of the industry. But we lost four more AIM-listed players in the quarter - some of their stories make grim reading.

European, US and Indian IT services stocks also did well - and news today that the US is now out of recession should likely bring even more joy to the markets. But to find out the detail, you’ll have to read IndustryViews Quoted Sector Q3 2009 Review.

Posted by Anthony Miller at '08:10'

UK Public Sector 2010: Threats and opportunities

Today we launch not one but two AnalystViews research notes crafted by Tola Sargeant, widely recognised as one of the top analysts on the UK public sector software and IT services (SITS) market.

With public sector spending under scrutiny and the government looking for ways to save money to balance the national books, larger public sector SITS contracts are attracting unwanted attention. The Labour government is debating which projects could be sacrificed, but the risk to IT projects is significantly higher if there is a change of government at the election.

In Public sector spending cuts: Which contracts are at risk? Tola identifies over £26b worth of major UK public sector SITS contracts at risk of cancellation, curtailment or ‘de-scoping’, and calls out the suppliers most exposed.

Then in UK Public Sector 2010: Spotting the opportunities, we tell you the good news. Tola identifies the many opportunities for SITS suppliers to the UK public sector market in 2010 and where to find them. This research features Tola’s unique ‘heat map’ showing at a glance where the opportunities are and which are the hottest.

It’s really very simple. If you are supplying software, IT services or BPO to the UK public sector - or you have aspirations to do so - then you must read what Tola has to say. But only TechMarketView subscription service clients have the chance to do so. You don’t need to respond to an RFP to become a subscriber - just contact Puni Rajah (prajah@techmarketview.com) and she will tell you how you can unlock the ‘government gateway’ to TechMarketView research!

Posted by Anthony Miller at '07:10'

UK SITS M and A activity reverts to type

After the Q2 UK software and IT services ‘buying spree’, the M&A market reverted to type in Q3, with more sellers than buyers. The value of the top 10 deals involving UK SITS companies was up 16% to $617m, with the two biggest deals accounting for over half.

And that’s just a taster!

As ever, with the invaluable support of Regent Partners, TechMarketView brings you the latest round-up of M&A activity in the UK software and IT services scene, with the Q309 edition of IndustryViews M&A.

TechMarketView subscription service clients can download it right now. Everybody else, please form an orderly queue to contact Puni Rajah (prajah@techmarketview.com) who will be only too happy to let you know how you can join the cognoscenti.

Posted by Anthony Miller at '07:10'

The UK software industry - a “significant investment opportunity”

Despite numerous claims to the contrary, the UK’s software industry is a thriving and highly profitable business. With the top 50 companies reporting revenue growth of 20% and operating profit growth of 25% last year, it is also a significant investment opportunity for those willing to take UK software to the world stage. These are the findings of a comprehensive report into the UK software industry by TechMarketView, the leading analyst firm focused on the UK software and IT services market.

“There is a tendency to write-off the UK software industry because most of the familiar software companies are in the US. That would be a big mistake,” states Richard Holway, Chairman, TechMarketView. “A combination of organic and inorganic growth has resulted in the top 50 UK headquartered software companies growing c20% in the last year. Perhaps even more surprising, to an ever sceptical British audience, is the c70% of revenues that the UK software industry earns abroad. Indeed, the UK is not that far off earning as much from overseas markets as we buy in. Currently £4.6b plays £5.6b with the gap narrowing each year.”

While the report paints a more positive picture of the UK software industry, it highlights a number of “national failings” that have prevented the UK from producing global software giants the likes of Microsoft, SAP or Oracle. “The problem for the UK software industry has never been the quality of its people or its innovation,” argues Holway, citing the following factors as holding the UK back:

* Lack of available financial backing: In comparison to the US, it is much more difficult for UK software developers to gain access to venture capital funding.

* Lack of marketing expertise: Many of the UK’s best developers simply fail in explaining how great their product is to investors and to the market.

* Local not Global: Many of the UK’s software companies focus mainly (if not solely) on products geared to the UK market.

* Lack of ambition: Many UK software companies are run as ‘lifestyle’ businesses. Very few UK software entrepreneurs seem prepared to risk the Merc for the seemingly scant possibility to become a global player.

* Lack of management skills: Growing from a small enterprise to medium-sized is hard enough - but not a fraction as hard as that required to grow to be large. Few founders are up to running large, global organisations; even fewer are prepared to step aside!

* Easily pleased: UK software companies have a long history of being other nations’ ‘acquisition fodder’. Founders seem to want to ‘take the money and run’ rather than take the risk of growing to something larger.

“The UK software industry is often dismissed as an insignificant player in the global market. Our analysis shows that it is thriving as much as it ever has, but most companies fail to break out of the confines of the domestic market,” states Phillip Carnelley, TechMarketView software research director and lead analyst on the report. Anthony Miller, Managing Partner, TechMarketView explained why. “This situation is not due to a lack of talent - we estimate over 40,000 UK nationals work in the US software industry. It’s more a lack of ambition and a nurturing capital structure. The global software industry is a £150b market opportunity. We have the talent and the innovation, but with the right investment, appetite for risk and management panache - all of which are readily available to leading venture capitalists - there should be no reason why the UK cannot capitalise on the opportunity to produce if not the next Google, then at least deliver significant returns for those willing to take the risk.”

For further information, please contact TechMarketView on info@techmarketview.com or +44 (0) 117 230 1796.

Posted by Anthony Miller at '07:41'