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SAP and Oracle need to get the transition to the cloud right or risk losing their positions in the software market to nimble cloud pure-plays. The two giants are putting money behind the cloud – investing via in-house developments and through acquisitions – but despite their efforts they are still at the early stages of the transition process. They have expanding portfolios but need to do the hard work of making their respective matrices of acquisitions integrate with each other and with their on-premise offerings (especially at the data and process levels). This process has barely begun in our opinion but will be a key success metric. Subscribers to TechMarketView ESASViews can see our view on their progress in How are SAP and Oracle handling the cloud transition?, here. If you would like to know how to access our subscription services, Deborah Seth (dseth@techmarketview.com) will be happy to assist.
Posted by Angela Eager at '19:10' - Tagged: cloud software PaaS
As I wrote in The Last Time, I gave my very last 'State of the ICT Nation' speech at BT Tower last night for the Prince's Trust. Because of the generousity of BT Group in hosting the event and dinner, we raised £75,000 last night making it a cumm. £1m since these presentations started back in 2002.
Many of the CEOs from TechMarketView customers and HotViews readers attended the presentation last night. Indeed the atmosphere was fantastic. I thought you might be interested in some photos from the event.
Posted by Richard Holway at '07:43'
Last night I gave my final ‘State of the ICT Nation” presentation for the Prince’s Trust at BT Tower. 50 of the very top Chairmen, CEOs or Country Managers from the leading suppliers of IT to the UK market attended. As BT paid all the costs, we raised £75,000 on the night. So, since my very first such talk in 2002, the 14 speeches have now cumulatively raised over £1m for crucial work of the Trust helping disadvantaged young people. I am chuffed!
This year’s speech – The Last Time – had a certain autobiographical feel. Indeed, I went back to reprise the my first two major themes.
Acquisition Indigestion
I introduced the concept of Acquisition Indigestion in my very first Holway Report published in 1988. “The after effects of taking over companies of the wrong type or size”. Being a simple kind of guy, I think that doing lots of small acquisitions is better than one huge ‘meal’. Indeed I do not know of any acquisition which has worked where the acquiree is >50% of the size of the acquirer. I prefer something less than 10%! Also, acquisitions work when they extend the depth of an existing product or service in an established geography or taking an established product into a new geography. What doesn’t work is taking a leap into a whole new product area in a new geography. Eg Misys (established in general IT in the UK and global retail banking) deciding in 1997 to buy a healthcare provider in the US for something over 50% of their then size. It, of course, ended in tears. I have so many other examples that I could fill a book with them.
Boring Awards
In 1992, the then technology correspondent of the FT, Alan Cane, asked for my views on Admiral’s results. My comment “Admiral’s performance is boringly consistent” got printed next day as “Admiral in Boring”. So grew Holway’s Boring Awards which were only given to companies with 10 or more years of uninterrupted EPS growth. Admiral got the first but relinquished it when they were acquired for £1.4b by CMG in 2000. (I remember one wag suggesting CMG had paid £400m for Admiral – about what it was actually worth in those crazy dot.com days! – and £1b for the Boring Award!)
I had previously given 10 year Boring Awards to Sage (the late David Goldman) and Capita ((Sir) Rod Aldridge).
So last night I decided to give 20 year Boring Awards (these are proper engraved trophies – no expense spared!) to the only companies ever to achieve 20 or more years of uninterrupted EPS growth. A massive achievement.
I gave the Sage Boring Award to Paul Walker (CEO 1994-2010) and the current CEO Guy Berruyer. Since their 1989 IPO, Sage has increased EPS by 90x and its share price is up over 120x.
I gave the Capita Boring Award to Paul Pindar (CEO 1999 – present). Since their 1989 IPO, Capita has increased EPS by 180x and their share price by 200x. Indeed, if you include reinvested dividends etc, the TSR since 1989 in over 300x.
Why?
Is it a coincidence that both Sage and Capita had/have accountants at the helm? Or that both companies hold records for the longest serving FTSE100 CEOs? Methinks not.
Although both companies have grown massively, they still have a very simple business message. I really can sum up what each of them do in a single sentence “Business and accounting software for SMEs” or “Business Process Services”
Both have adopted my “How to avoid Acquisition Indigestion” maxim. They have both done literally 100s of relatively small acquisitions additive to core business and/or to take their core business into new geographies. Interestingly Sage came a real cropper when they broke the rules in 2006 by buying buying healthcare software provider Embeon in the US for $297m. They sold it for a $70m loss in 2010.
Of course, they have both enjoyed good organic growth too. Indeed ‘Blended acquisitions and organic growth’ is the key.
So Sage and Capita are worthy Holway Boring Award recipients. Long may they continue to be both ‘Boring’ and UK HQed although my fear is that they won’t!
Thankyou again to all the people who have supported my series of presentations for the Prince’s Trust over the years. BT will be sponsoring another ICT Leaders Dinner for the Prince’s Trust in Sept 13 – but without me presenting. And TechMarketView will be running its first ever ‘Annual’ Conference on 26th June 2013 at BAFTA – involving presentations from all of the TMV team. See you there!
Posted by Richard Holway at '07:00'
As we start to feel the chill of autumnal mornings, TechMarketView subscription service clients can feel warmed by the fact that they continue to get excellent value for money from our range of services. In the last two weeks of August, our InfrastructureViews and ESASViews services took the spotlight. In the first two weeks of September, it has been the turn of BusinessProcessViews and PublicSectorViews.
John O’Brien published a major report – UK BPS Supplier Landscape Report 2012 - updating subscribers on the fortunes of the key business process services suppliers to the UK market in 2012, as they face rapid, disruptive market changes. In addition, BusinessProcessViews subscribers were treated to John’s views on the fastest growing part of the UK BPS market - Business Process-as-a-Service (BPaaS) – in BPaaS in the UK: Managing the opportunities and risks.
Meanwhile, Georgina O’Toole and Tola Sargeant published PublicSectorViews’ third annual UK public sector SITS market trends & forecasts report outlining the main trends affecting the UK public sector software and IT services (SITS) market and highlighting where suppliers will find rare growth opportunities. This was followed by a deeper dive by Tola into the healthcare and education markets, both of which declined in size in 2011 but are set to return to positive growth territory in 2012 – see UK education SITS market trends and forecasts and UK healthcare SITS market trends and forecasts. And by Georgina’s in-depth analysis of the fastest growing of the UK public sector SITS segments: the police market (see UK police SITS market trends & forecasts).
Over the same period, TechMarketView Foundation Service clients have benefitted from Anthony Miller’s regular concise view of venture capital investment in UK SITS companies in IndustryViews Venture Capital quarterly review. Anthony has also had a prolific couple of weeks giving us greater insight into three UK SITS suppliers on UKHotViewsExtra: K3 Business Technology, Corero and Infosys.
The media have also been keen to publish TechMarketView opinion. The team has been quoted in various publications. With the UK public sector SITS market trends report hot off the press, Georgina O’Toole was widely quoted in Computerworld, ContractorUK, and CRN to name but a few. Georgina also drew attention for her views on the Cabinet Office’s register of high risk IT suppliers (for example, in MIS Asia). Richard Holway and Anthony Miller have been widely quoted, in both UK and Asian publications, on the impact of CGI’s acquisition of Logica (e.g. CFO World, Computerworld and The Times), as well as on the Sage takeover rumours (e.g. Computerworld). And Angela Eager was quoted by BusinessCloud9 on Citrix’s acquisition of Beetil. Finally, as if Richard would let an Apple product launch go by without expressing his views on the shiny new device (see Computing for just one example)!
Can you afford to be left out in the cold? If you’re not a subscriber, email Deborah Seth (dseth@techmarketview.com) to find out how to become one.
Posted by HotViews Editor at '22:28'
Following the publication at the beginning of the month of our third annual UK public sector SITS market trends & forecasts report, TechMarketView’s PublicSectorViews team today publishes a deeper dive into another one of the public sector sub-segments: the UK police SITS market. It is set to be the fastest growing area of the UK public sector SITS market over our forecast period. However, with a forecast CAGR of 8.0% between 2011 and 2015, our forecasts remain more depressed than might have been expected considering some of the large outsourcing deals on the horizon.
Subscribers to TechMarketView’s PublicSectorViews subscription service can delve into the detail and get more insight into the sub-segment market trends in UK police SITS market trends & forecasts 2012. Anyone else should contact Deb Seth to find out how to access the reports.
Posted by Georgina O'Toole at '11:24' - Tagged: publicsector markettrends police forecasts
Eligible TechMarketView subscription service clients can download IndustryViews Venture Capital, our concise quarterly summary of venture capital investment in the UK software and IT services companies, right here.
Posted by HotViews Editor at '16:24'
Having reviewed the fortunes of the key BPS suppliers to the UK market during the past year, it is clear that diversity of performance is becoming a major theme among the Top 20, as disruptive change introduces new types of player in to the market.
Emerging trends such as platform-based BPS, Business Process-as-a-Service (BPaaS) and the convergence of B2B and B2C communications are forcing leading suppliers like Capita, Atos, Xchanging, HP, BT, Serco, Equiniti and Accenture to adjust their established BPS delivery models, and invest in new areas of opportunity. Meanwhile, others such as Mouchel and Vertex are falling by the wayside.
The supplier landscape is changing. India-based players like TCS are fast growing market share, and new entrants, from construction/support services providers like Balfour Beatty and G4S, to communications-focused BPS players like Arvato and Williams Lea, and vertical specialists like insurance player Quindell Portfolio, are carving out a place in the market.
Subscribers to TechMarketView's BusinessProcessViews service can read our analysis of the Top 20 UK BPS players, and this rapidly changing market landscape in our new report UK Business Process Services Supplier Landscape, 2012.
Posted by John O'Brien at '12:08' - Tagged: platform
Having spent the day with Sage not so long ago hearing about its future path, we’ve been assessing its prospects in the cloud age and its place in the competitive business applications market. Although it is doing some things right – aligning with Microsoft for the infrastructure to support its cloud solutions, pushing ahead with adjacent areas of business like payments, and at last adopting a more global stance around product development and availability, there is a question over whether it is pushing through enough change and whether it will be able to execute fast enough. The question becomes more acute given the latest speculation about a bid (see Sage bid rumours – AGAIN). ESASViews subscribers can see what we think of Sage’s prospects in the latest piece of research from the stream, Is Sage still relevant?
Posted by Angela Eager at '14:31' - Tagged: software
On the basis that if you don’t beat your own drum, no one else is going to beat it for you, Infosys Consulting head, Steve Pratt, proudly proclaimed during yesterday's announcement concall (see here) that Infosys was the first Indian firm to make the transition from offshore outsourcing company to global consulting major, and should be considered in the same peer group as Accenture and IBM. I may not share Pratt’s view on this, but he is entitled to his opinion.
Eligible TechMarketView subscription service clients can read more in UKHotViews Extra.
Posted by Anthony Miller at '08:06' - Tagged: offshore acquisition
Business Process-as-a-Service (BPaaS) is the fastest growing part of the UK BPS market. From a very low base today, we estimate that revenue for suppliers will more than double every year over the next four years, and be worth in excess of £100m per annum by 2015. Effectively ‘BPS on-demand’, BPaaS is being enabled by the growing availability of cloud-based business process platforms (BBP), and driven by client expectations for BP services delivered on a flexible pay-per-use basis.
Although it is very early days, different BPaaS models are emerging as suppliers like Fuijtsu, Capita, BT, Liberata, NorthgateArinso, Accenture and India-based players TCS, Genpact, Wipro, Infosys and Cognizant are testing the water with some real life examples.
Subscribers to TechMarketView's BusinessProcessViews service can read the analysis and implications here.
Posted by John O'Brien at '17:27' - Tagged: saas bpo bpaas bps analytics
Following this morning’s publication of our third annual UK public sector SITS market trends & forecasts report, TechMarketView’s PublicSectorViews team has also published a deeper dive into two of the public sector sub-segments: healthcare and education. Both areas of the market declined in size in 2011 but are set to return to positive growth territory in 2012.
However, the education and healthcare SITS markets will take very different paths between 2013 and 2015. The education SITS market is set to be flat or declining from next year onwards predominantly impacted by the negative impact of the BSF programme. Meanwhile, despite the demise of the National Programme for IT, and continued pressure to make savings and improve efficiency, new money from IT and business process outsourcing contracts will boost the healthcare market allowing it to remain in positive growth territory.
Subscribers to TechMarketView’s PublicSectorViews subscription service can delve into the detail and get more insight into the sub-segment market trends in UK education SITS market trends & forecasts 2012 and UK healthcare SITS market trends & forecasts 2012. Anyone else should contact Deb Seth to find out how to access the reports.
Posted by Georgina O'Toole at '11:48' - Tagged: publicsector markettrends education health forecasts
Today we publish our third annual report outlining the main trends affecting the UK public sector software and IT services (SITS) market and highlighting where suppliers will find rare growth opportunities. 2011 was another difficult year for SITS suppliers targeting the UK public sector with the market declining by 2.3% in actual terms to be worth £11.5b. All sub-segments (bar police) fell into negative growth territory with the education sector taking the prize for the worst performing sub-segment.
Suppliers hoping to see an improving picture this year will be disappointed as we predict a 3.1% decline in market size. Indeed, over our forecast period to 2015, the compound annual growth rate (CAGR) will only just reach positive growth territory in actual terms. In real terms, the market (at 2010 prices) will be worth £1bn less in 2015 than in 2010. Budgets remain under pressure and ICT is still too often considered an expense rather than an opportunity to innovate and transform public service delivery cost effectively. Subscribers to TechMarketView’s PublicSectorViews subscription service can delve into the trends impacting demand in the six UK public sector sub-segments – central government, local government, education, health, police and defence – by downloading the UK public sector SITS market trends & forecasts September 2012 report now. If you’re not yet a subscriber please get in touch with Deb Seth.
Posted by Georgina O'Toole at '09:29' - Tagged: publicsector centralgovernment localgovernment markettrends defence education police health forecasts
The holiday season is over; the new business term has begun. If you need to catch up on what has been happening across the UK SITS market, you’re in the best place.
IndustryViews Corporate Activity Q2 -2012 will bring you up to date on M&A activity in what was an active quarter (e.g. CGI/Logica, Micros/Torex). Meanwhile, OffshoreViews Q2 2012 highlights the level of diversity in the Indian market. That diversity was reflected among European services providers too, as seen in Two European SIs – contrasting performances where Georgina O’Toole reviews Atos and Steria, and in Anthony Miller’s European SI UK performance summary – H1 2012 assessment. In UKHotViewsExtra, John O’Brien casts his eye over Serco’s performance and aspirations in Serco – emerging markets and BPS point the way. John also spoke with Sean Riddell, CEO of GP systems software supplier EMIS, to hear how the company is delivering organic revenue growth of 19% in the current depressed market (see EMIS getting stronger and stronger (update)).
Those tasked with exploiting disruptive forces should read Angela Eager’s Breaking mobile market inhibitors research note for guidance on entry points and where to focus precious resources. Whatever the technology area, savvy resource allocation is front of mind for vendors, as Progress Software: radical lessons in ‘back to basics, shows. The disruption theme is continued in UK Infrastructure Services Supplier Landscape, which analyses the impact of cloud, mobile internet and BYOT.
The media continues to come to TechMarketView for forthright views on key events – recent highlights include: Richard Holway in The Times commenting on overhyped technology companies; Anthony Miller in various journals on the CGI/Logica aftermath (see here) and on BT’s sale of a stake in Tech Mahindra (see here); Georgina O’Toole in Computing on police IT spending and Information Policy on UK government ICT strategy implementation; and Angela Eager in Businesscloud9 on the IBM Kenexa acquisition and SAP’s latest results, and in Computerworld on NCC’s US acquisition. John O’Brien meanwhile was also quoted in Computing on Capita’s acquisition of business travel provider Expotel.
Can you afford to miss out on this and all of TechMarketView’s other insight and research? If you’re not a subscriber, email Deborah Seth (dseth@techmarketview.com) to find out how to become on
Posted by HotViews Editor at '09:53' - Tagged: publicsector software bps
