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Yesterday Paypal, the e-bay owned payments platform, announced that it was paying $800m in cash for Braintree, an on-line and mobile payments services provider with a good reputation for innovation and customer service, as well as a $12bn annual payments volume.
The attraction of Braintree to PayPal is not the size of the business, (Paypal enjoyed a payments volume of $43bn in Q2), but the innovation and chutzpah that Braintree brings. To this end, Paypal has stated that it will keep the companies and the brands separate. Braintree has a following in the edgy and iconoclastic e-commerce companies, where Paypal has missed out due to its size, sloth and possibly its “establishment” reputation.
Braintree bought Venmo, a mobile payments platform for $26.2m in August 2012. (a good return here for Braintree investors). Mobile now represents about one-third of Braintree’s business, with Venmo offering one-touch payments, a good customer experience and links with social networking, thus driving opportunities in Peer-to-peer payments.
In our recent report, “Setting the Scene for Mobile Banking”, we highlighted the progress of Paypal, with its advantages of scale and links with the e-bay business. With $20bn of mobile payments this year it is already the largest global mobile payments provider (if you don’t count the credit card operators) it is growing strongly, with the market, and should continue to generate good profits growth. Paypal’s overall payments volume is growing by 24% p.a.
However, the acquisition of Braintree presents Paypal with new management challenges. We have often seen an established company buy an innovative, sparky challenger and then destroy value. It will be interesting to see whether Paypal can avoid the usual pitfalls, retain Braintree’s dynamism and customer relationships and drive yet further progress in the growth areas of the payments business.
Posted by Peter Roe at '09:50' - Tagged: mobility payments
Today is the closing date for applications to participate in the next TechMarketView Little British Battler event, to be held on Tuesday 5th November 2013,
So if you are the CEO of a small, privately held UK software or IT services company punching above its weight and are battling to carve out your fair share of local or overseas markets, you better put your skates on!
You could be one of the 12 Little British Battlers who will have the opportunity to meet the TechMarketView research team in central London in closed session and get unbiased, constructive feedback on your company and its propositions. .
The 12 companies will also be featured in UKHotViews, the most highly regarded and widely read source of daily commentary on the UK IT scene, and in a special research report distributed to selected ‘movers and shakers’ in industry and government.
This is our third Little British Battler event since we launched the programme in November 2011. Many of the CEOs who previously participated have seen real benefit to their company in terms of increased market visibility and access to new business opportunities (see here for just a sample).
This is an unparalleled chance to get your company on the radar of the UK’s premier software and IT services research firm and gain a level of exposure which arguably money can’t buy.
If you want to apply, please click here and fill in the registration form (you may apply again if you were previously unsuccessful). The deadline for registrations is TODAY Friday 27th September. We aim to notify successful applicants by Friday 11th October. There is no fee or commitment involved.
Candidate companies must be headquartered in the UK (i.e. not subsidiaries of foreign firms), privately held (though may have accepted external funding), with annual revenues under £25m. Companies must derive the substantial majority of their revenues from software and/or IT services and/or IT-enabled business process services. Applicants will be assessed by TechMarketView on various criteria including the company’s operational and financial track record as well as TechMarketView’s view of the company’s prospects.
Should you have any questions, please email us at lbb@techmarketview.com.
The TechMarketView Little British Battler programme is run in association with corporate finance firm MXC Capital.
Posted by HotViews Editor at '06:00'
The data sheet (containing forecast data and charts) to accompany the PublicSectorViews UK public sector SITS market trends & forecasts 2013 report is now available to download for PublicSectorViews subscribers. If you would like to become a subscriber, please contact Deb Seth.
Posted by Georgina O'Toole at '13:31' - Tagged: publicsector forecasts
CEOs at a number of TechMarketView Little British Battler (LBB) companies got the unique opportunity to bend the ear of Government last night when they dined with Cabinet Office minister Francis Maude and government Chief Technology Officer Liam Maxwell. The dinner was hosted by Eric Van der Kleij, Head of Level39, the recently opened Technology Accelerator on the 39th floor of the iconic One Canada Square building at Canary Wharf. Representing TechMarketView (neatly sandwiched between Francis Maude and Liam Maxwell) were Public Sector Research Director Georgina O’Toole and Managing Partner Anthony Miller.
The overwhelming feeling from the attending LBBs was one of frustration that there are still considerable barriers to both working directly with Government and via the large systems integrators (SIs). Issues highlighted included still being locked out of the larger departments due to ongoing long-term contracts, risk averse CIOs remaining too nervous to commit to working with smaller companies, investing in procurement frameworks with little or no business forthcoming, and struggling to maintain significant work-share and/or margins when partnering with bigger providers.
However, it’s fair to say that the LBBs came away feeling positive about the Cabinet Office’s level of commitment to changing the way Government procures, delivers and uses ICT. No-one is denying that it’s a challenge to change behaviours and mindsets across Government. What is clear is that there has been some significant progress made, particularly over the last six months. And Francis Maude and his team aren’t finished yet!
Posted by HotViews Editor at '09:31'
In 2012, the UK public sector SITS market declined by 2.0% to be worth £11.3b. With further declines forecasted over the current year, we expect the market to be worth £644 million less in 2013 than in 2010. A forecast CAGR of just 1.0% in actual terms between 2012 and 2016 illustrates well our view that the market will struggle to deliver any kind of recovery over our forecast period.
This future view is heavily impacted by the dominating central government market. Since the Coalition Government came to power, ICT expenditure has come under pressure, exacerbated by the increasing powers of the Cabinet Office. Over the last year, actions to put in place the foundations for further ICT savings have started to have more of a pronounced impact. We expect the acceleration in the pace of change—around use of SMEs, smaller contracts, and increased use of cloud services—to continue, particularly in light of the opportunity represented by the peak in large outsourcing contracts coming to an end between 2014 and 2015. Suppliers need to accept the ‘new normal’ and consider changing their commercial and delivery approaches to suit the new environment.
Outside central government, budgetary pressures will continue and there will remain procurement hurdles to overcome, but the use of private sector to deliver both ICT and business process services will continue in various forms. The trick to winning business in a tough market will be having a deep understanding of changing procurement models as well as the varying acceptance of technologies in support of the mobility agenda, channel shift and digital delivery.
This latest TechMarketView report from the PublicSectorViews team – UK public sector SITS market trends & forecasts 2013 – consolidates our forecasts for each of the UK public sector sub-segments through to 2016. It provides our view of the how UK public sector organisations are reacting to budgetary pressures and the issues that suppliers should be considering in their approach to the market. If you are not yet a subscriber, please contact Deb Seth to become one!
Posted by Georgina O'Toole at '09:30' - Tagged: publicsector markettrends forecasts
The UK business process services (BPS) supplier landscape is experiencing increasing diversity of performance as disruptive trends around mobility, analytics, social media and the cloud shake up the status quo, introducing new demand side drivers and opportunities.
Some suppliers are struggling to keep up with the pace of change and are falling by the wayside, while others that have invested ahead of the curve, are now beginning to stretch ahead of the competition targeting emerging sectors like retail, communications and insurance.
In the public sector, austerity pressures are finally driving significant new investment in BPS in areas like local and central government shared services. However recent supplier scandals have the potential to derail progress, and further separate the market winners and losers.
These disruptive shifts are presenting significant opportunities for some providers that have invested (and continue to invest) ahead of the curve (e.g. TCS, Capita, Serco) while others that have been slow to act or have failed to invest at all, are retrenching from the market (e.g. Vertex, Mouchel, Unisys). The rapid rise of some new entrants like Quindell Portfolio and arvato are also adding further volatility among the top 20 rankings - to the point where we have seen more upward and down movement this year than any time we can remember.
Subscribers to TechMarketView's BusinessProcessViews research stream can read our analysis of the leading UK BPS suppliers, the evolving market landscape, and supplier strategies for succcess in our latest report, UK BPS Supplier Rankings & Landscape, 2013.
If you're not yet a subscriber and would like to find out more, please contact Deb Seth (dseth@techmarketview.com) who will be only too happy to help.
Posted by John O'Brien at '07:49' - Tagged: bpo bps SMAC
The House of Commons Public Accounts Committee has published its latest report on the dismantled National Programme for IT in the NHS (NPfIT), which summarises the findings of the PAC hearing on the programme in June (see NHS IT: Plus ça change…?). The key facts are the same, and as a taxpayer and patient it still makes depressing reading.
For me, however, the most important message from the PAC report centres not so much on the past failings of NPfIT, but on what happens next. The report concludes that: “After the sorry history of the National Programme, we are sceptical that the Department (of Health) can deliver its vision of a paperless NHS by 2018.” I couldn’t agree more.
The good news for SITS suppliers is that they stand to benefit from renewed investment in NHS IT regardless of whether the Department of Health meets its deadline for a paperless NHS by 2018.
Eligible TechMarketView subscription clients can read our full assessment of developments - Learning lessons from the NHS’ National Programme – in our UKHotViewsExtra.
Posted by Tola Sargeant at '16:27' - Tagged: nhs health policy
The week-long banking, payments and standards fest run by Swift, the international financial messaging provider, is well under way, with the 5,000+ delegates in Dubai being bombarded by a host of conference sessions, announcements and reports. The themes of this conference echo those we are developing at TechMarketView and will have clear implications for IT budgets and UK SITS providers.
In Banking, there are three themes worth highlighting; firstly a trend to new sourcing models, with a greater propensity towards outsourcing, partnerships and the use of utilities; second a trend for business units across banks to co-operate and present a unified approach to customers and third the further emphasis on “Big Data” and the consequent burden on banks’ legacy systems (see our UKHotViews article on the Fujitsu/Virgin Money deal).
In Financial Markets, the focus is on the increasing demand for risk management, better audit trails and more transparent trading in derivatives. An interesting announcement is that by Misys as they launch a Global Back Office component for their Capital Markets Fusion offering, echoing Fidessa’s move into post-trade.
In Payments, as well as reports on the progress of SEPA, at SIBOS we have seen the re-assertion of the 50%+ growth in mobile payments, driven by the growth of smartphone penetration. Banks need to keep up in this important competitive area. Yet more companies are entering the mobile/digital wallet market, with announcements from Sopra and Accenture. (TechMarketView subscribers can access our recent report on Mobile Banking here).
The SIBOS conference provides a useful opportunity for bank executives and CTOs to weigh up the threats and opportunities their operations will face. On the flight back from Dubai however they need to work out how they can convince their CFOs to give them additional IT budget!
Posted by Peter Roe at '09:36' - Tagged: payments backoffice banking
My recent trip back to Brazil included a visit to the country’s largest tech hub, Porto Digital, in Recife, the state capital of Pernambuco. No glistening towers of hi-tech ostentation here – Porto Digital is located on a tiny island, the very heart of ‘old Recife’, surrounded by historic sights and monuments. Indeed you’d be hard pressed to realise it is the home of some 200 tech companies unless you looked closely on the nameplates on the buildings.
As usual I also caught up with some of the movers and shakers in the Brazilian IT scene, including ‘local heroes’ Stefanini and Totvs, as well as HP, Tech Mahindra and Wipro.
It’s all in the new edition of BrazilViews which subscribers to the TechMarketView Foundation Service can download right here, right now!
Posted by Anthony Miller at '11:11' - Tagged: brazil
Bango, the mobile web payments and analytics company, today reported half year results which reflect the company’s greater focus on the opportunity created by the growth in the number of smartphones. Reported revenue was down to £4.54m (compared with £5.7m for H1 2012) as customers switched to an agency model and EBITDA losses increased. Importantly though, end user spend through the Bango platform was up 74% compared with the last 6 months of 2012 and promises continued growth.
The company has made substantial progress in building partnerhsips. This includes signing deals with Mozilla (as reported in our 7th August HotView), Facebook, Telefonica and Google Play. Over 100 Mobile Network Operators world-wide and their 1.2bn subscribers can now charge their purchases of digital content and services direct to their mobile phone bill via the Bango platform.
Digital content sales have been dominated by Apple, but other apps and content stores such as Google Play are growing rapidly in importance. This will boost end user revenue, where Bango predicts a gross margin of 2-5%. The company’s business model appears scaleable, with data infrastructure in place for a 100-fold volume increase. Further expansion into the larger emerging markets of Brazil and India is on the cards. An analytics business is also generating a growing revenue stream, based on Bango’s experience of digital buying trends and customer behaviour.
The share price has been becalmed as investors awaited hard evidence of the potential, but the outlook is now clearer and we can expect additional end user spend to boost the bottom line as volume builds from the recently signed agreements. Positive EBITDA may still be some way off, but Bango has the business model, partnerships and infrastructure in place to be the leading platform world-wide for carrier billing.
Posted by Peter Roe at '09:25' - Tagged: mobility payments
Following yesterday’s announcement that Lockheed Martin has acquired Amor Group (see Lockheed Martin acquires Amor Group), we have just had chance to catch up with Amor’s COO, Scott Leiper, and Lockheed Martin IS&GS VP/GM for UK & Europe, Daniel Norton.
So, we thought it was worth an update for our subscribers as we now have a bit more information and clarity around the acquisition. The latest analysis can be accessed here. If you are not yet a subscriber, please contact Deb Seth
Posted by Georgina O'Toole at '13:28'
CA Technologies is one of the stalwarts of the enterprise software sector but demonstrates some of the challenges long-established vendors have when adapting to the cloud environment. It is very much a business of two halves, with the mainframe-based products sustaining the business, while the enterprise solutions segment wavers in the face of intense competition. Hard work and imagination is needed to restore the overall business. There are signs of progress but the company has a long and tough journey.
In the latest research from the ESASViews stream, ‘CA Technologies: remixing the business’, we examine what the company is doing and where its best prospects are. This is particularly pertinent in the light of ailing BMC Software being taken into private ownership (see here). Eligible subscribers can download the CA Technologies report here. As always, Deb Seth is on hand to help those looking for information on how to subscribe to TechMarketView.
Posted by Angela Eager at '12:53' - Tagged: software
IBM is often an innovator in the markets it sets out to dominate. So the news that it is now disposing of its global customer services BPO business to US-based IT distributor and BPO player SYNNEX is a major announcement, which could have significant ramifications for the broader BPO market and players (see IBM sells customer services BPO operation).
TechMarketView Foundation Service subscribers can read our analysis and implications for IBM, the market and its competitors in UKHotViewsExtra here.
Posted by John O'Brien at '09:39' - Tagged: bpo manda bps
It’s a week of big news for Lockheed Martin’s UK IT business on HotViews this week. This morning it was the winning of the Ministry of Justice SIAM contract (see Lockheed preferred SIAM bidder at MoJ). This evening we hear that Lockheed has acquired Scotland-headquartered, private equity-backed, Amor Group.
Amor will be part of Lockheed’s Information Systems & Global Services (IS&GS) business, more than doubling the UK headcount to over 1,000. No terms were disclosed. The deal appears to be a good outcome for Amor’s previous funders, including Scottish Enterprise, which will be pleased to see another international business investing north of the border. TechMarketView Subscribers can read our analysis of the acquisition in UKHotViewsExtra. If you are not yet a subscriber, please contact Deb Seth.
Posted by Georgina O'Toole at '22:12' - Tagged: publicsector acquisition transport energy
Today we are issuing a research report on what has recently become one of the most exciting areas of the Financial Services industry. The increase in penetration of smartphones is driving a revolution of how people bank, buy and pay. Mobile banking and commerce is growing at about 50% p.a., faster than on-line at 20% p.a., and this growth will continue as consumers gain confidence in these innovative systems. This dynamic is generating a host of opportunities for established companies and many new entrants. It will also create many challenges as the new business models interact with the more traditional structures in a complex, global ecosystem. Winning in any area of the payments and banking world depends on the ability of companies to generate scale and reach and to create real and defensible value. Many new entrants will fail to achieve these objectives.
“Setting the Scene for Mobile Banking” describes the ecosystem and highlights the key issues and opportunities facing many of the industry’s participants, setting the agenda for further research as the industry rapidly evolves – providing substantial opportunities for Software and IT services vendors.
Subscribers to the TechMarketView Foundation service can access the report here. If you are not yet a subscriber and would like to learn how, please contact Deb Seth (dseth@techmarketview.com).
Posted by Peter Roe at '13:53' - Tagged: mobility payments banking
The second instalment of the 2013 ESAS Market Trends and Forecast report is now available for download. Part 2 analyses the performance and prospects of the two segments that form the overall ESAS market and includes the latest data on market size and growth potential at the top levels, and for the sub-segments within each area. Of the two segments, enterprise software is faring better than application services but with CAGR of 2.3% and 0.7% respectively, neither can be considered robust. In real terms (i.e. excluding the effect of inflation) both are in decline.
There is still a precarious balance evident between cost reduction and investment agenda’s across both software and services. Organisations are intent on updating existing landscapes to get them fit for new styles of customer interaction-led, real/near real time business. We sense they are getting closer to upping their investment in newer areas like mobile and analytics but many still need more convincing before committing to the all-important strategic projects. The extent to which suppliers can prove the business cases will determine whether that happens in 2013/14 or is pushed further out. With the economy showing signs of improvement, the future for the ESAS market is very much in the hands of the suppliers.
ESAS Market Trends and Forecasts 2013, Part 2 – Segments, can be downloaded here. If you do not subscribe to TechMarketView or ESASViews , you can talk through the options with Deborah Seth.
Posted by Angela Eager at '08:04' - Tagged: software trends forecasts applications
Today we launch our latest research into the UK Infrastructure Services market - the largest of the UK software and IT services four market segments. Overall, the infrastructure services market is set to remain broadly flat to 2016, with a CAGR of just 0.4%. In real terms - in other words, excluding inflation - the market will actually shrink. However, beneath this top line number, the market’s sub sectors exhibit varying performance levels - from the shrinking Operations market, to the strongly growing Provisioning market (which will hit double-digit growth in 2016).
Key to many buying decisions through our forecast period will be the CIO’s struggle to attain the optimal balance between outsourced/insourced supply and on-premise/off-premise infrastructure services. This is a fascinating market where traditional infrastructure services meet the ‘new world’ of cloud platforms and commercial models. But where precisely are the opportunities, and what challenges will suppliers need to tackle? “Infrastructure Services Market Trends & Forecasts 2013” examines these fundamental issues, details our view of the key market trends, and provides forecast data to 2016.
Subscribers to our ever-popular InfrastructureViews research stream can access the report here. If you are not yet a subscriber and would like to sign-up, please contact Deb Seth (dseth@techmarketview.com).
Posted by HotViews Editor at '08:47' - Tagged: research infrastructure report
August might have been the month for summer sunshine and laid back living but for the analysts here at TechMarketView there was still plenty to write about!
Research directors Georgina O’Toole and Kate Hanaghan released their analysis on HP Enterprise Services: a mountain to climb. HP is the leading provider of software and IT services (SITS) to the UK market. We estimate HP UK's IT services business declined by 7% last year. To read more about the effects of the decline click the link above.
Georgina also wrote Musings on Government procurement, in which she ponders about the way in which UK Government, and the broader public sector, procures - a recent hot topic of conversation. With a number of announcements that have prompted discussion click the link to read more.
Also in PublicSectorViews director, Tola Sargeant, spoke to Allocate Software CEO Ian Bowles to discuss the company’s performance and strategy. Tola reports that there are bright spots within the results that suggest they have the foundations needed for future growth. For more information read Allocate Software - Foundations for future growth.
Over in ESASViews, research director, Angela Eager released the much anticipated ESAS Market Trends and Forecast 2013, Part One. Angela uncovers some interesting changes as two mature markets - Enterprise Software and Application Services - come together in this ever evolving sector. Subscribers to ESASViews will be able to download the full report by clicking the link above. Make sure you read our daily UKHotViews email so as not to miss Part Two, out soon!
Angela also reported on Mood International: optimising the outsourcing market. With low levels of growth set to be the norm in the UK SITS market, Angela caught up with Mood International CEO, George Davies and his team to explore some of the options for teasing out revenue in this space.
Released by the Foundation Research stream were the regular OffshoreViews Q2 2013 and IndustryViews Venture Capital - Q2 2013 giving our concise review of the major India-centric IT services firms and a quarterly summary of venture capital investment in UK software and IT services companies respectively. Eligible TechMarketView subscription service clients can download the latest editions by clicking the links above.
Last month's roving reporter, InfrastructureViews research director, Kate Hanaghan, compiled her analysis of Computacenter H1 2013. As Computacenter announced its results for the first half of 2013, Kate delves into the figures and what they will mean for the company.
In his article, ‘Serco CE ‘saddened and appalled’ by latest allegations (update)’ BusinessProcessViews research director, John O’Brien, updates us on Serco’s H113 results and the impact of their ongoing problems regarding recent allegations of overcharging on government contracts.
To see more of what we publish you’ll find details in our Quarterly Research Summary, available to download here. If you would like to find out more about our subscription packages, just drop Deborah Seth an email and she’ll be happy to help.
Posted by HotViews Editor at '07:00'
