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The latest edition of OffshoreViews is now available for download by subscribers to the TechMarketView Foundation Service.
OffshoreViews includes our regular summary of the top-tier and mid-tier Indian SI reporting season, along with insightful charts showing multiyear trends for the Top Tier players and a clickable index to relevant UKHotViews posts.
This edition also includes our preliminary estimates of the UK revenues for the Top Six India-centric players for FY21/22.
Click here to download the report or contact info@techmarketview.com for further information.
Posted by TMV Team at '06:00' - Tagged: offshore
Merger and acquisition (M&A) activity in the UK software and IT services (SITS) sector fell back during Q1 2022, according to data from Silverpeak, the mid-market technology specialists that represent European growth businesses in M&A and financing transactions. There were 111 acquisitions by and 123 sales of UK companies in Q1 2022, compared to 123 and 147 respectively in Q4 2021. This data includes deals announced as well as those closed.
In our Q4 2021 report, we observed that "dealmaking bounced back in Q3 and Q4 to round out a strong year, reflecting increased confidence as developed economies continued their emergence from Covid". Of course, macroeconomic and geopolitical events have moved on significantly since then and whilst the Q1 deals figure is not a dramatic drop relative to Q4 2021, it is worth bearing in mind that many of these transactions will have been negotiated in large part in the months prior to Q1.
Subscribers to the TechMarketView Foundation Service and UKHotViews Premium can read more about the Q1 data, as well as thoughts on how the deals market might evolve, by downloading the Q1 2022 edition of IndustryViews Corporate Activity.
Posted by Tania Wilson at '16:00' - Tagged: acquisition M&A
TechMarketView’s Digital Future Review 2021-22 reveals combined spend through four of the Crown Commercial Service's (CCS) Digital Future frameworks (G-Cloud, Digital Outcomes & Specialists (DOS), Digital Capability for Health (DCFH) and the Digital Inclusion & Support (DIS) DPS), was up 20% to £3.8bn (2020-21: £3.2bn). G-Cloud accounted for 73% and DOS for 27%, with combined DCFH and DIS spend representing less than 1% of Digital Future spend during the period.
Driven by strong growth in the Health and Defence subsectors, spend on G-Cloud was up 22% year-on-year to £2.8bn. Central Government represented 53% of G-Cloud spend during the year, compared to 70% in 2018-19.
After the challenges of bringing in teams and specialists during the pandemic, spend via DOS picked-up again in 2021-22 growing 15% to £1.0bn—the first time DOS spend has exceeded £1bn over the financial year.
The rate of growth in spend with SMEs during the period was faster than that of large companies over the year, with the former up 27% to £1.5bn and the latter up 17% to £2.4bn, resulting in SMEs representing 38% of spend for the year (2020-21: 36%).
Four companies (AWS, Kainos, Deloitte and Capgemini) broke the £100m barrier for combined G-Cloud and DOS income during the year. Six buyers (Home Office; HMRC; NHS Digital; Department for Work and Pensions; Ministry of Justice; and Department of Health and Social Care) broke the £100m spend barrier—their combined spend represented 37% of total G-Cloud and DOS spend for the period.
If you are an existing PublicSectorViews subscriber, you can access further analysis and charts now. If you’d like to discuss an extension to your existing subscription or would like details of how to subscribe to TechMarketView, please email Deb Seth.
Posted by Dale Peters at '09:19' - Tagged: research framework g-cloud data dos digital+marketplace digital+future
Regular readers of UKHotViews, particularly those that follow the Business Process Services (BPS) and/or Public Sector markets, may well have followed our coverage of the quiet evolution of Liberata, acquired some six years ago by Japanese outfit Outsourcing Inc (OSI).
Last Summer, OSI launched OSUK together with its two new operating divisions – OSUK Professional Services headed up by Liberata stalwart Charlie Bruin, and OSUK Debt Resolution led by Nick Tubbs (see - Outsourcing Inc comes of age in the UK). The professional services business now employs some 1,400 staff in the UK and includes Liberata as well as consulting business Veracity and HR specialists Allen Lane and outplacement provider Renovo. The debt resolution side is not much smaller, with around 1,100 people spread across three different operating brands, serving different stages of the debt resolution market. These include CDER Group (Advantis) on the collections side, CDER and Rundles for enforcement and Court Enforcement Services for High Court debt resolution.
OSI has been investing in its UK operations for some time now and has brought the businesses closer together on the logic that they serve a similar client base. More than 90% of OSUK’s revenue comes from the Public Sector with the Justice and Local Government markets in particular, cutting right across the operating divisions. Given that OSUK is now a year old, combined with the fact that Liberata has just landed a very significant win at Swindon Borough Council (see Liberata lands £30m Swindon deal), we took the opportunity to catchup recently with Charlie Bruin, Nick Tubbs and Mark Turner, Liberata’s MD of BPS, to get an update on how the business has been progressing.
TechMarketView clients, including subscribers to UKHotViewsPremium, can read more by downloading the full article here *UKHotViewsExtra* The maturing of OSUK
If you are not already a subscriber and but would like to learn more or gain access to this or any other of our content, please contact Deb Seth for more information.
Posted by Marc Hardwick at '08:14' - Tagged: localgovernment revs&bens Enforcement collections
Do you have knowledge of the UK public sector or healthcare tech markets? An analytical mind? And enjoy writing? If so, this opportunity to join TechMarketView’s highly regarded Public Sector analyst team as a Principal Analyst could be for you.
A boutique analyst firm, TechMarketView has been supplying in-depth analysis on the UK tech market since 2008. Our PublicSectorViews team is the best in the business, providing research, analysis and advisory services to a wide range of clients including software and IT services suppliers, the government, NHS and other public sector organisations.
As a Principal Analyst, you’d be contributing regular articles to our daily UKHotViews service, analysing data, writing research reports, helping with our market forecasts and supporting clients with bespoke research projects.
The role would suit someone who is a self-starter, happy working remotely and willing to ‘muck in’ as part of a small team. An understanding of the public sector or healthcare tech markets is a must, but you don’t necessarily have to be an analyst already – we’d be open to hearing from those with relevant transferable skills too, perhaps you have a background as a journalist, in market intelligence, or you are working in a research role within a government or public sector organisation, for example.
To apply or learn more about the role, email our Managing Director, Tola Sargeant, at tsargeant@techmarketview.com.
Posted by TMV Team at '08:00'
Formed from the merger of Kimble and Mavenlink, Kantata is a dedicated professional services automation (PSA) provider able to come to market with greater scale, resources, a broader portfolio and geographic reach.
The combination of the ever increasing shift towards a services economy and heightened recognition of the value industry-specific solutions can bring, marks this as a breakout time for both the PSA sector and Kantata. In the HotViewsExtra research note Getting to know PSA specialist Kantata, we explore the high level PSA market trends, the challenges around visibility and the expanding value proposition, and what Kantata aims to bring to the market.
TechMarketView clients can access the research note here. If you’d like details about the range of TechMarketView services, Deb Seth will be happy to help.
Posted by Angela Eager at '17:11' - Tagged: software merger PSA
Long-time TechMarketView clients will know June is the month we launch our refreshed set of complete market data, buyer trends, and supplier analysis. And 2022 will be no exception!
What is striking about this year, however, is the combination of very strong market growth set against a hugely challenging geopolitical and economic backdrop. The acceleration of digital initiatives in 2020-2021 continues to benefit the tech suppliers positioned well to serve these needs. Indeed, we have seen some incredible supplier performances (both through 2021 and continuing into this year) reflecting market conditions that are the strongest they have been for many years.
While the digital transformation journeys of organisations will of course continue, it is essential suppliers have a firm understanding of how the broader picture might impact pace and direction. What are the specific implications for their own businesses and how should strategic direction and priorities be adjusted?
Our two key annual reports – Market Trends & Forecasts and Supplier Rankings – are published through our Foundation Service. They provide unrivalled insight into the UK market (with particular depth in Public Sector and Financial Services) blending robust data with market and supplier analysis built on years of research and understanding.
If you do not have access to the Foundation Service and would like it, please contact Deb Seth.
If you would like one of our team members to present our fully refreshed market data (which explains the Software and IT services market both by type of service and industry) and explain the implications for your business, please contact Chief Research Officer, Kate Hanaghan. (Story picture shows last year's report cover)
Posted by HotViews Editor at '09:45' - Tagged: trends forecasts
I promised I’d take another look at early-stage funding platform Connectd to see if I could unravel the mystery of its business model (see Of funding rounds – and Inspector Montalbano).
You may recall that Connectd is essentially a marketplace where founders, investors and non-exec directors can, you guessed, connect with each other (see Backers connect with Connectd to connect founders without connections). The ‘mystery’ is that investors pay nothing – it’s the founders and NEDs who stump up the platform fee. How was that ever going to make a profit, I wondered?
What better way to solve the mystery than to speak with Connectd’s affable founder, Roei Samuel. Samuel has form as an entrepreneur. He founded a group of gaming and media companies back in 2015, which he exited to AIM-listed e-sports group Gfinity in 2018 in an all-share deal valued at £2.4m. Unfortunately, Gfinity’s shares have since crashed.
Having suffered the many joys of trying to find funding through traditional routes, Samuel decided to set about creating a self-service platform which could match both sides of the early-stage fund raising process in a more transparent manner. After a couple of years of development Connectd was ready for launch in March 2020 – just in time for the lockdown.
TechMarketView research service clients and UKHotViews Premium clients can read more on UKHotViews Extra.
Posted by Anthony Miller at '09:08' - Tagged: startup
In my first monthly share price performance column a fortnight ago, data for April showed tech stock indices taking a hammering that month, with the tech-heavy NASDAQ down 13% month-on-month (MoM).
We are two weeks into the month of May and there is no let-up in sight. At close on 13 May, NASDAQ was down a further 4.3% since end April - or a massive 17.0% down since 31 March - with the FTSE Software and Computer Services (SCS) index down 6.4% and 9.8% in those timeframes respectively.
The magnitude of these falls is most easily seen in the chart showing the calendar year-to-date (YTD). Comparing the tech-focused NASDAQ and FTSE SCS to the more diversified FTSE 100 - which is broadly holding steady YTD - neatly illustrates the challenge facing technology stocks.
How did we get here?
The tech sector's misfortunes are being driven by rapidly rising inflation in both the US and the UK. As larger economies emerged from Covid during 2021, there was pent-up demand, particularly for goods. But as the pandemic continued to evolve at different speeds in different countries, it played havoc with logistics, causing bottlenecks in complex global supply chains.
High demand coupled with disrupted supply started to set inflation alarm bells ringing, although the US Federal Reserve and the Bank of England initially took the view that inflation may remain transitory. But in recent months we have seen the geopolitical shock of Russia's invasion of Ukraine and a serious outbreak of Covid in China, both of which have significantly increased supply-side constraints across multiple commodities and product lines.
Central banks have started to raise interest rates in earnest - and with the markets no longer believing inflation is transitory, further rate rises are expected later in the year. And in a climate of rising interest rates, investors are turning away from tech stocks whose valuations more likely depend on discounting future cashflows and towards stocks with relatively lower growth expectations and more certain near-term income streams (hence the more solid performance of the FTSE 100).
And where to now?
The difficulty for tech investors is that whilst central banks increasing interest rates can impact the demand side of the inflation equation, there is not a lot they can do about supply-side factors. And the risk of turning the screw too tight, too soon on inflation via interest rates is that it triggers a recession.
So, the best hope for tech markets is that the issues impacting supply chains start to settle down, which could see inflation coming under control. If that happens - and if the market has already priced in roughly the right level of future interest rate increases - then the bottom for tech stocks may not be too far off. That doesn't necessarily mean a quick recovery to previous valuations however. Interest rates surely won't drop back immediately to pandemic lows and indeed may not do so in the medium term. The best bet for technology companies therefore is to double-down on cost management, recurring revenues and pricing power and (where relevant) articulate to investors the path to profitability.
Of course, tech is not a homogeneous sector and some tech companies are weathering the storm much better than others. There will be more on share price performance of different stocks and the broader macro environment in the May full month round-up, available at the start of June.
Posted by Tania Wilson at '07:29' - Tagged: markets macro
TechMarketView’s latest Market Readiness Index (MRI) report is now LIVE for our tech buyer clients. The Market Readiness Index is a keystone piece of research within the TechMarketView Tech User Programme, for tech buyers - see: Welcome to the Tech User Programme.
The MRI is designed to help end user organisations – tech buyers and decision makers – determine the readiness of ICT suppliers to support them as they continue to transform. This year’s report is our fourth and as ever it provides a unique insight into the profiled companies, based on in-depth interviews and TechMarketView’s scoring model.
This time around we focus on the Top 10 fastest growing Solutions providers to the UK market and specifically the challenger organisations. The criteria we have used to select the Top 10 is as follows: The supplier must be a Top 40 UK Solutions provider with more than 50% of total turnover coming from the Solutions market (as defined by TechMarketView). We have not included the management consultancies in this cohort and have used pro forma revenues to reflect major recent acquisitions.
Companies included are: 6Point6, AND Digital, BJSS, Coforge, Endava, Kainos, Made Tech, Mastek, TPXimpact, Version 1.
A big thank you to all the analyst relations people and company leaders for their inputs - and of course to their customers for contributing.
We’ve questioned and probed, we’ve analysed the numbers, the investments made, and the decisions taken. We’ve undertaken a rigorous scoring and analysis exercise across six key areas:
The MRI launched in 2019 with our first report looking at how well placed the UK’s Top Ten IT and Business Process Services players were then in terms of their ability to deliver digital transformation. In 2020, TechMarketView published our Market Readiness Index looking at the UK's IT/BP Services providers ranked 11-20. Our third report revisited the ten largest players and assessed their progress as of last year.
Tech User Programme members can read the research here: TechMarketView Market Readiness Index 2022.
If you would like to find out more about joining the programme and accessing the report, please contact Deb Seth.
If you are Software and IT Services provider and an existing TechMarketView subscription client, reports published within our Tech User Programme are available to purchase. Please also contact Deb Seth.
Posted by HotViews Editor at '09:45' - Tagged: digital MRI TechBuyers digitalsolutions
Tuesday saw the Queen's Speech lay out the government's agenda for the coming year. Unsurprisingly the government's stated priority was "to grow and strengthen the economy and help ease the cost of living for families". With consumer price inflation now at 7.0% and news on Thursday that GDP contracted in March, the economic situation is understandably front of mind for businesses and consumers.
There is much for the technology sector to consider in the government's stated priorities. You can read Georgina's comprehensive summary of where digital investment will support these priorities here.
Meanwhile The Times Education Commission Summit, in associated with professional services firm PwC, also took place on Tuesday. The Commission launched in June last year, with the objective of "examining Britain's whole education system and considering its future in light of the Covid-19 crisis, declining social mobility, new technology and the changing nature of work".
It set out a slew of worrying statistics - including several from a survey of employers conducted for the summit, which found that:
The government is correct that a focus on growth is essential for the country to prepare for the future. And as we have commented before, it is also correct that digital investment is a key building block in achieving the innovation and improvements in productivity which are essential to driving growth. Some measures targeting skills of young people and workers were presented in the Queen's Speech. But statistics such as those bulleted above suggest there is a long way to go to provide UK businesses with the talent pipeline they need.
Aside from the moral imperative of ensuring more equal access to the skilled jobs market for all in our society, there is also another imperative which should worry us all. The current shortage of workers in particular disciplines - including IT - has the ingredients to create a wage/price inflation sprial, as those with the in-demand skills bid up wages for employers desperate to attract them. This threatens to embed inflation and depress growth for the medium-term, leaving those without the skills to bargain even worse off.
The government is adamant it will not spend its way out of economic trouble - but one area where we cannot afford to scrimp is investment in literacy, numeracy and STEM skills.
Posted by Tania Wilson at '15:00' - Tagged: skills growth productivity resilience macro
Recently announced full year results from Fujitsu showed that at the global level, the firm’s revenue was roughly flat at 3,586 billion yen, with the operating margin edging up from 6.9% in the previous year to 7.7% in FY21. Operating income increased more than 10% year-on-year.
The firm does not break out the performance of the UK in its results documents, but based on our analysis three quarters of the way through the year, we know it’s been a positive year in its Private Sector services business with renewals and expansions across multiple sectors. Public Sector has been more mixed, with both wins and losses contributing to a revenue line that did grow overall.
In this HotViewsExtra (available to subscribers only), we look at some of the key initiatives the firm has been undertaking as it continues to evolve its business: Fujitsu holds steady in FY21.
Posted by Kate Hanaghan at '09:45' - Tagged: results
Infor is marking its 20th year of business following its founding back in 2002. As the market accelerates its move towards industry-specific applications and at the same time the ERP cloud transition gears up, this is in an opportune time for the company whose strategy is based on cloud provision of industry-specific ERP suites.
Its approach is well aligned with strengthening trends but with several other suppliers taking a similar industry ERP cloud proposition to market, that presents a challenge. Given the maturity of the ERP market it is increasingly difficult for suppliers to differentiate, with much coming down to depth, detail and nuance. As industry specificity becomes an increasingly important competitive marker, we look at what it means for Infor and draw some lessons that are applicable across the broader enterprise software sector.
TechMarketView clients, including UKHotViews Premium subscribers, can access the research note Broader lessons from Infor’s industry specificity. If you’d like information about the range of TechMarketView services and how to access them, please contact Deb Seth.
Posted by Angela Eager at '14:37' - Tagged: erp cloud software industryexpertise
Great news! We’re extending our Early Bird ticket pricing for this year’s TechMarketView Evening for another week! In light of our long (sunny!) Easter break, we’d like to give you a little longer to secure your place at a discounted rate. Book by 7th May to take advantage of this offer!
The event will take place at the magnificent Royal Institute of British Architects (RIBA) building in London on the evening of 22 September. Join us from 6.30pm to gain insight from – and share views with - our expert analyst team and guest speakers around the theme of ‘Building Resilience’ and what it means for the UK tech sector.
As in prior years, you can expect an opportunity to mingle with your peers at the welcome drinks reception; to hear first-hand from our analysts and guest speakers through a series of short presentations on our latest research; and to network over dinner with leaders from across the UK tech sector.
To secure your place at Early Bird pricing, book your table or individual tickets via our event partners tx2 Events today here.
If you’re unsure which tickets you’re eligible for, or you’d like details of the sponsorship packages available, please email info@techmarketview.com.
Posted by TMV Team at '00:00'
Infoshare was one of just six UK tech scaleups shortlisted for the recent Capita Scaling Partner pitch event held in association with the TechMarketView Innovation Partner Programme. Contenders are vying for the opportunity for a transformative partnership with UK business systems leader, Capita.
TMV had the pleasure to meet Pamela Cook and Richard Onslow - respectively CEO and Business Development Director of Infoshare - at the recent Capita Scaling Partner Programme pitch event in London.
Infoshare is a B2B data-for-good company, specialising in creating accurate, enriched and up-to-date single views of data. It uses leading data quality and data management software to transform customer data into a strategic asset by cleansing and linking records from across disparate siloed business systems and by enabling information sharing between organisations.
The company's target market is those organisations holding critical data on individuals, particularly where that data may be inaccurate or incomplete, or organisations needing effective processes for managing personal data and consent. But their traditional markets are expanding; the growing adoption of machine learning, automation and analytics solutions to generate value from data requires the underlying data feeding into these solutions to be accurate and reliable.
Infoshare's technologies were built in collaboration with social care and police analysts to match mission-critical and highly sensitive data that require the highest levels of accuracy and transparency. This incorporates powerful evidence-based, iterative matching and customer consent reconciliation to resolve customers' conflicting data held in multiple databases, enabling organisations to trust their data and have the confidence to use it strategically.
As the volume of data generated and stored in public and private organisations grows, so too does the need to organise and share that data in a way which facilitates decision-making. Infoshare has proven their ability to automatically process tens of millions of records daily, saving their customers significant time or cost. They are already responsible for processing the data for an impressive client roster across both the private and public sectors, including Royal Mail, Pets at Home and the Met Police.
The growing market for Infoshare should therefore be sizeable and we watch their progress with interest.
Posted by Tania Wilson at '09:30' - Tagged: analytics data tipp ML
Summary
Richard commented in his 1 April column that "if we weren't all too aware of the troubles facing us - a major war in Europe and the highest cost of living hit in a generation - a glance at the share performance in the last month (March) would not indicate that anything much was wrong".
The markets certainly caught up during April, particularly as far as tech was concerned.
NASDAQ fell 12.3% month-on-month (MoM) and is now down 19.2% year-to-date (YTD), as investors moved away from growth bets on new technologies and back towards "traditional" dividend-paying stocks. In the UK, the flagship FTSE100 index was a beneficiary of this flight to dividends, holding flat during April and managing 2.2% YTD growth.
But in the UK, as in the US, almost everything tech-focused was in negative territory for another month, with the FTSE SCS index (which most closely mirrors the mix of stocks we track) down another 3.7% in April and 19.7% YTD. And interestingly, the FTSE Hardware index - which enjoyed a sustained post-pandemic boom as investment in IT infrastructure ramped up - had the bumpiest ride of the smaller specialist indices, with companies perhaps reducing investment spending amid fears of a recession.
Winners and Losers
Despite the gloom, there were strong performances from Twitter, Corero Network Security, Netcall, THG (The Hut Group), PCI-PAL, 1Spatial and Capita, amongst others, though in some cases it was not enough to reverse share price declines earlier in the year.
The Big Tech group - comprising the FAANGs (Meta/Facebook, Amazon, Apple, Netflix and Alphabet/Google) plus Microsoft - all posted month-on-month (MoM) declines, with Netflix taking the overall Wooden Spoon.
Away from Big Tech, the volatile markets saw many other companies posting MoM declines, including Cazoo, Unisys, Oxford Nanopore, Infosys, Tesla and others.
More detail on the Winners and Losers is available in Share Performance in April 2022 for HotViews Premium readers.
Outlook
UK consumer price inflation (CPI) in the 12 months to March stood at 7%, driven by the ongoing and devastating conflict in Ukraine and Covid lockdowns in China, both of which are causing severe supply chain disruption and price increases across many product lines.
Despite these supply-side pressures on inflation, the UK Treasury pressed ahead with pre-planned tax rises in April, putting further pressure on consumers. The combination of all of the above - and other factors - has led to a drop in consumer sentiment to its lowest level since the 2008 financial crisis.
The Bank of England now has the difficult task of working out when and by how much to further increase interest rates to combat inflation, knowing that doing so could further damage consumer confidence and may make a recession more likely.
Whatever the answer, it is inevitable that rates will rise further. With investors already turning away from growth stocks which performed so well during the pandemic and back towards more cyclical stocks, we can unfortunately expect the bad news to continue for tech for some months to come. All that being said, tech is an embedded part of our lives and our economies now and it is not going away. The question for many tech companies however will be whether they can adapt quickly from being the darlings of the pandemic to something rather less loved, at least for the time being.
Posted by Tania Wilson at '09:30' - Tagged: markets macro
