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With FY14 revenue of £43.6bn, Vodafone is one of the largest mobile network providers in the world. However, it is a business under pressure. Revenue fell 3.5% last year and profit (EBITDA) was down 7.4% to £12.8bn. In Europe (its key markets), service revenue was down 9.1%, while EBITDA dropped 18.3%. Down at the UK level, times are also tough, with service revenue declining 4.4% and EBITDA sinking 9.8%. The performance reflects just how difficult the consumer mobile markets have become as a result of pricing pressure and increased competition; and these trends mean Vodafone has had to re-evaluate its strategy.
The company has therefore committed to refocusing around growth areas through a significant investment programme to improve network infrastructure and build out new capabilities. One strategic growth area is hosting services. The acquisition of Cable & Wireless (CWW) gave it a c£200m hosting business, and brought ‘Big Red’ into the IT services market for the first time. So what are its next steps and is it becoming a force to be reckoned with?
In this CompanyViews note, Kate Hanaghan, Research Director for InfrastructureViews, takes a look at what Vodafone has done with the CWW hosting business and what plans are afoot for future growth. See Vodafone powers up its cloud and hosting business.
If you would like to subscribe to the InfrastructureViews research stream (covering all things Infrastructure Services in the UK), please contact Deb Seth.
Posted by HotViews Editor at '22:21' - Tagged: cloud hosting research telecoms
The SaaS business model is a permanent and growing feature of the SITS market. Start-ups predominantly opt for the model and we are not hearing of much PE/VC funding for businesses wholly reliant on the perpetual licence/on-premise model. Providers are highly valued but those high valuations are under scrutiny in the light of on-going and heavier losses from established SaaS pure plays, (who are still in growth mode), which raises the questions of whether they are they paying too much for growth, and when and what level of returns can be expected.
Debate about SaaS success metrics can descend into a playground-style shouting match but the reality is that the SaaS model is different to the on-premise licence model, so the performance of SaaS companies does need to be assessed using different or at the least additional measures to those used for vendors with licence-based models. But the bottom line is still the bottom line and at this stage in the market lifecycle established SaaS vendors need to provide convincing evidence of when the rising tide of losses will subside sufficiently to bring profits into view, and the likely level.
The latest ESASViews research note, Evolving the SaaS Commercial model, examines how the SaaS commercial model is developing and what we can expect. As always, eligible subscribers can access the research here, otherwise please contact Deborah Seth for information about our subscription services.
Posted by Angela Eager at '17:24' - Tagged: software
FinancialServicesViews presents an overview of the Banking Sector and highlights areas where the banks are focusing their attention and where suppliers can build opportunities for further growth.The report can be accessed here.
UK banks are handicapped by their reliance on the large, unwieldy and inflexible legacy systems which drive the underlying management of the accounts of millions of customers. FinancialServicesViews considers that there is a greater impetus for change emerging and that the established banks are now beginning to make progress in the renewal of their core IT estate. This is creating opportunities for suppliers to the sector, particularly those with domain expertise, a strategic approach and strong balance sheets. The scale and complexity of the problem means that the banks will need to think boldly, using third-party suppliers and implementing new technologies such as cloud to improve their longer term competitive position.
We also expect continued focus on other key areas; complying with the rising tide of regulation, coping with problems in engaging with customers as they shift away from using branches towards a greater use of mobile access and responding to the threat of new competitors leveraging their global brands and positions in adjacent markets. These areas will generate additional spending, with tight cost control on other projects.
However, several new topics, identified by FinancialServicesViews, are beginning to demand additional attention. These will put pressure on Banking IT budgets going forward but will also present the supplier community with significant opportunity.
Posted by Peter Roe at '08:33' - Tagged: legacy banking regulation
When the Commons’ Public Accounts Committee (PAC) published its report on NHS waiting times for elective care in England earlier this month, it described the NHS’ electronic appointment booking system, Choose & Book, as “a missed opportunity to improve patient care and data quality”.
Readers with long memories will recall that Choose & Book was launched by the former Labour government a decade ago and fell under the auspices of the now infamous National Programme for IT in the NHS (NPfIT). Atos (then Sema) with partner Cerner won the five year deal that was initially worth £64.5m but was later expanded and extended a number of times to be worth more than £30m p.a.
Despite some early glitches and delays, Choose & Book ran pretty well from a technical viewpoint and was often cited as one of the more successful elements of the National Programme. Usage levels, however, have stalled and only half of all possible GP-to-first outpatient referrals are booked using the system. As Choose & Book comes to its natural end it is due to be replaced by a new NHS e-Referral Service (NHS e-RS) which – if all goes according to the latest plan – will go live this November. Testing of the first phase of e-RS will begin next month.
The new e-referrals system is very much a product of the Coalition government’s ICT strategy: procured via the G-Cloud framework, it is being built by much smaller companies (BJSS and InTechnology) using agile methodology, open source technology and open standards. The approach is the antithesis of the large, multi-million pound contract let to a big SI and its proprietary software supplier a decade ago. According to NHS England, the operating costs should be 20% of those of Choose & Book as a result.
Our latest PublicSectorViews research considers what lessons can be learnt from Choose & Book and whether the new e-Referrals service that’s set to replace it stands any better chance of success. Analysing the two very different projects also provides an excellent illustration of how UK government ICT strategy has changed over the last decade. PublicSectorViews subscribers can download NHS IT: learning lessons from ‘Choose & Book’ from today.
If you don’t yet subscribe to our PublicSectorViews research and you’d like further details, Deborah Seth from our Client Services team would be very happy to help.
Posted by Tola Sargeant at '14:29' - Tagged: health research
The UK Government’s G-Cloud framework was first launched in February 2012. The difference between G-Cloud and other frameworks is that buyers pay for services as they use them rather than being tied to long-term contracts. The Cloudstore is the online marketplace where suppliers offer their services to the market via the G-Cloud framework.
Under the current iteration of G-Cloud, G-Cloud 4 (the fourth iteration), around 1,200 suppliers are listed offering more than 13,000 services. The 5th iteration of G-Cloud (G5 Framework) goes live on 23rd May. Offerings on the framework fall under four categories of ‘Lots’: Infrastructure-as-a-Service (IaaS); Software-as-a-Service (SaaS); Platform-as-a-Service (PaaS) and Specialist Cloud Services (SCS).
As we head towards G-Cloud 5, in this PublicSectorViews research note we analyse G-Cloud sales to date. Which suppliers are winning? Who is buying? And what is being bought? We also consider whether G-Cloud is meeting its objectives and what we can expect moving forwards.
PublicSectorViews subscribers can access the research note - UK Government G-Cloud: meeting its objectives? - now. If you are not yet a subscriber please contact Deb Seth to find out more.
Posted by Georgina O'Toole at '13:11' - Tagged: publicsector cloud agile government
The great thing about LBB Purple Secure Systems is that its business model allows it to grow even during times of downturn in the IT industry. David Harris, the company’s MD, co-founded the company eight years ago. Having previously worked for IPL, he spotted a gap in the UK government and defence sector, which he identified often experienced a lack of capacity due to the ups and downs in demand for software and systems engineering expertise. Purple Secure Systems was established to fill that gap, offering both the capacity and the capability for their clients to deliver projects more effectively. Harris brings the IT systems and software sales and marketing experience from the MoD and Government sectors. While the company’s Technical Director, Jez Williams, brings IT engineering experience.
The vision from the outset was simple: to be “the best employer in (its) sector and (its) clients’ preferred supplier”. By taking that stance, the idea was that the business would almost build itself. Recruitment and training are key to the company’s success; Purple employs graduates, often from ‘Russell Group’ universities with degrees/masters/PhDs in Maths, Physics or Software Engineering. It is a very similar philosophy to that adopted by Detica in its early days. The philosophy is critical to National Security challenges because the application of technologies in areas such as Intelligence, Big Data and Cyber are constantly changing; the engineers taking on those challenges need the ability to learn and produce results very quickly. Also noteworthy is the investment that Purple has made in developing its agile software development methodology for software engineering.
So far so good; Purple has achieved growth of between 15% and 40% in each of the last four years. And it expects growth of close to 30% in the current financial year. Indeed that growth could be far superseded if one particular major strategic bid is successful. Moreover there are opportunities to move into adjacent markets, for example, cyber security or mobile applications development. So far sticking to the vision is delivering results.
Posted by Georgina O'Toole at '07:00' - Tagged: defence lbb government
We’ve just had a chance to catch up with CGI’s UK President Tim Gregory to add a bit of colour and movement to the H1 results (to end March 2014). As we highlighted in CGI UK grows in Q214, the UK business improved during the period, with a stronger Q2 than Q1. And the good news is that Gregory expects this positive news to continue into Q3 off the back of some recently signed long-term outsourcing deals.To find out more about what's happening under the covers, TechMarketView subscribers can access the UKHotViewsExtra article now. If you are not yet a subscriber, please contact Deb Seth to find out how to become one.
Posted by Georgina O'Toole at '23:20' - Tagged: results itservices
We are very pleased to welcome Fulham-based Mvine to this year’s list of Little British Battlers. Mvine will play a central role in the growth of many organisations and their suppliers as they work in an ever more connected world. The company develops portals to link people with information and infrastructure in the right context, providing the means to manage security, identity and regulatory compliance in robust, enterprise-wide implementations, based on the company’s proprietary platform.
Mvine, growing revenue at over 60% in the year to March 2014, is headed by Frank Joshi with around 20 years’ experience in portals and technology start-ups. The company has 25 staff in the UK and Bulgaria. Currently 50% of revenue is generated through direct sales, where Mvine is focusing on the development of secure, robust Private Business Networks, for use in collaborative environments across multiple organisations. Within these, data can be shared securely across closed user groups, combining multiple active directories on the Mvine platform. Customers here include university groups and BT.
The other route to market is through System Integrators and OEM partners, cloud enabling “traditional” software products and giving users access to multiple systems, databases and content sources over cloud-based infrastructure through the Mvine client portal. This approach is gaining momentum in many sectors, particularly in Financial Services in areas such as client reporting and asset management and promises substantial growth. Use cases are driven off the common platform, ensuring consistent reductions in time and cost to implement and configure.
As companies increasingly embrace the “Big Data” world and as they and their suppliers deal with the complexity of integration, mobility and user experience, as well as cost pressures, Mvine’s experience and expertise will come into play, generating growth and margin for this unique Little British Battler.
Posted by Peter Roe at '08:08' - Tagged: cloud portal lbb
Earlier this month, Computacenter updated the market on its performance for the first few months of the year. Revenue in the UK increased 20% to £350.4m in Q1, with Supply Chain (i.e. resale) revenue up 27% to £233.3m, and Services revenue up 8% to £117.2m. There were positive performances in both Professional Services and Contractual Services (i.e. managed infrastructure services contracts). The former currently has “the strongest … order backlog in the history of our UK business” (see more: Computacenter off to a good start).
Computacenter’s UK services business has become a well-oiled machine, delivering market-beating revenue growth in the past couple of years, in addition to margins that keep moving in the right direction. But as the key markets in which it plays continue to stay suppressed, what can CEO, Mike Norris, do to sustain those achievements against an increasingly competitive supplier landscape?
In this recent research note, we outline Computacenter’s target investment and growth areas and give our view on its prospects. Subscribers to TechMarketView’s Foundation Service and InfrastructureViews can download it here: Computacenter outlines "growth plays".
Posted by Kate Hanaghan at '08:38' - Tagged: results infrastructure growth
Outsourced analytics is a rapidly emerging area of the BPS market set for considerable growth over the coming years.
The burgeoning use of SMAC (social, mobile, analytics and cloud) technologies by consumers and businesses is generating huge amounts of valuable, yet largely untapped data on the customer. It is also creating massive complexity in terms of the underlying business processes, and how to make sense of and exploit it for business advantage.
Meanwhile, the growing adoption of platform BPO and cloud-based Business Process as a Service (BPaaS), is also generating increasing amounts of data on transactional processes. These platforms are likely to become increasingly important channels for gathering and analysing both digital and business process data for the enterprise.
Providing an end-to-end outsourced analytics service could help BPS providers exploit these new areas of opportunity around data and analytics, and help deliver measurable business outcomes for the end customer.
Many suppliers are responding to the opportunity – from global players like Accenture, IBM, and Capgemini, regional players like Steria and Atos, BPS providers like EXL Service, Genpact and Capita and consultancy firms like E&Y, Deloitte and KPMG. Each plays a different role in the data-to-insight-to-action journey, addressing key business challenges with technology, people and process solutions.
Subscribers to TechMarketView’s BusinessProcessViews research stream can read the report into this fast emerging space here: Outsourced analytics – an emerging opportunity for BPS suppliers.
If you're not yet a subscriber, please contact Deb Seth (dseth@techmarketview.com), who will be happy to help.
Posted by John O'Brien at '12:48' - Tagged: outsourcing bpo bps analytics
Eligible TechMarketView subscription service clients can download the latest edition of IndustryViews Quoted Sector here to see our latest analysis of how the stock performance of UK software and IT services companies listed on the London Stock Exchange compares with their international peers.
Posted by HotViews Editor at '10:40'
TechMarketView’s annual Presentation & Dinner will be held on Wednesday 17th September 2014. During the evening, 200 of UK tech’s ‘great and good’ will gather at BAFTA in London to hear the TechMarketView analyst team, led by our Chairman Richard Holway MBE and Managing Partner Anthony Miller, share views on the trends and suppliers shaping the UK software, IT services and business process services market. Last year’s inaugural event was a huge success and this year’s, which builds on our 2014 ‘Race for change’ theme, promises to be an equally high profile date in the UK tech calendar.
For the first time we are inviting applications to become the sole sponsor for this prestigious event. The sponsorship package includes a five minute speaking slot before the dinner as well as the right to have your company logo on promotional material and prominent at the event itself. If you’d be interested in learning more about this sponsorship opportunity, please contact TechMarketView Director Tola Sargeant for full details.
You’ll find more detail on the TMV Presentation and Dinner 2014 itself within the Events pages on our website.
Posted by HotViews Editor at '09:11'
