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Mastek has announced a strategic partnership with Innovaccer, which will enhance the company’s digital engineering and cloud transformation expertise with healthcare-focused AI, data analytics and customer experience offerings.
Innovaccer started as a data analytics research collaboration between Harvard University and Wharton School in 2012 and formally launched in 2014. In 2016, the company pivoted to focus on the healthcare market. It has raised more than $375m in capital to date, including a $150m Series E funding round in 2021, which valued the business at $3.2bn.
The San Francisco headquartered company provides a suite of AI-powered applications designed to help automate tasks, analyse clinical data, deliver insights, and ease data accessibility. This includes providing advanced analytics and automated workflows to improve population health management, risk analytics tools, contact centre and patient experience functionality.
Innovaccer launched in the UK in 2022 with the aim of accelerating innovation and digital transformation in the NHS. Despite being appointed to the G-Cloud 13 framework, the company has had limited success in the UK to date. Mastek, on the other hand, continues to see good traction in the UK healthcare sector, including supporting the Cumberlege Programme (see Mastek: Significant healthcare win to support NHS transformation) and securing significant opportunities with NHS SBS and NHSBSA (see Mastek Q1: Solid revenue growth and squeezed profits).
The partnership between Mastek and Innovaccer appears to be a good fit. It will enable Mastek to offer healthcare organisations with more actionable insights, drive productivity improvements and enhance the patient experience.
Posted by: Dale Peters at 09:14
Tags: nhs analytics crm AI data healthcare partnership
AIM-listed payment security and customer engagement specialist, PCI-Pal, has posted its latest annual results highlighting strong revenue growth and improved profitability. Revenue for the twelve months to 30 June 2024 was £17.96m, up 20% and successfully building on the 25% revenue growth achieved last fiscal. Meanwhile, the vendor recorded a full-year loss of £1.71m, a 65% improvement on FY23.
PCI-PAL’s Annual Recurring Revenue (ARR) increased by 23% in FY24 to reach £15.5m, whilst Total Annual Contract Value (TACV) increased by 17% YoY to £19.2 million (auguring well for further revenue growth). The vendor also enjoyed strong underlying new business, with the number of new logos signed increasing by 10% to 240 with 80% of new contracts sourced via PCI-PAL’s partner eco-system.
In July this year, PCI Pal, reached a confidential settlement with its US rival, Sycurio (formerly Semafone). The agreement resolved a long running legal battle between the two companies and saw the UK vendor finally able to move on from the unwelcome distraction of litigation (see: PCI-PAL puts its legal hassles behind it).
PCI-PAL has made a strong start to its current fiscal (FY25) with first quarter new business ahead of the FY24. The vendor also recently signed a major global reseller agreement which has already secured a new customer win via this partner in Q1,25. Other highlights include a new contract with a major global BPO provider and an initial contract signed with a “Big Four” professional services firm.
With PCI-PAL having already hit the ground running in FY25 the vendor appears to be well positioned to continue its impressive period of revenue growth. As it builds momentum, having recovered from the unfounded legal action levelled against, it is encouraging to see that PCI-PAL delivered an adjusted EBITDA profit in FY24. With CEO, James Barham and the PCI-PAL team now able to dedicate their entire focus on further growth, PCI-PAL looks set to continue its run of good form.
Posted by: Jon C Davies at 08:41
Tags: payments financial+services
Google Cloud has signed a deal with industrial manufacturer Honeywell to connect its Vertex AI platform with the company’s vast amounts of industrial data, creating more streamlined autonomous operations.
For years, Honeywell has been collecting industrial data through Honeywell Forge, a digital platform that draws on designs, manuals, and real-world performance of Honeywell’s global install base (such as how products have behaved in different environments, where issues have occurred, and how to resolve them). Now, Honeywell is using Vertex AI and Google’s LLMs to build AI agents, like workplace “coaches,” that make this trove of data more accessible and easier to understand.
The new partnership will see Honeywell leverage Google's Gemini AI models to automate tasks and reduce project times. AI-powered tools will help automate tasks for engineers, warehouse workers, and technicians. For example, AI agents can troubleshoot equipment, suggest design improvements, and offer preventative maintenance insights, such as, “How did this unit perform last night?” or “Why is my system making this sound?”
Deploying AI at the edge is particularly interesting, in the past it has been challenging to fully leverage AI on smaller industrial assets due to the connectivity and data requirements. To tackle this Honeywell is exploring how to use Gemini Nano (a small AI model targeted at on-device tasks) to provide AI services at the edge of the network - right on devices like scanners, sensors and controllers - so they can operate autonomously, even when they aren’t connected to the internet. Using multimodal AI, Honeywell devices will be able to process various data types, from scanning to voice-based guided workflows.
AI (along with automation) technologies have the potential to tackle the looming talent shortage and skills gap in the industrial sector. With retiring workers, and not enough new talent to replace them, organisations are under pressure to maintain levels of expertise and productivity. AI may not be the sole answer, but it can provide a significant boost to operational productivity and in ‘upskilling’ employee’s, including to help transfer expertise quickly to new hires. It can also benefit the bottom line by driving down maintenance costs and reducing operational downtime.
Posted by: Simon Baxter at 08:37
Tags: manufacturing edge
Many insurance companies enjoyed a stable and profitable 2023, despite the wider economic malaise. The impact of the global downturn did however see insurers maintain a cautious approach to new and discretionary spend. Whilst SITS expenditure did continue to grow in 2023, it was at a much reduced rate compared to the previous year.
Eight of the Top 10 companies in our ranking of leading SITS suppliers increased UK Insurance revenue in 2023. This cohort of vendors generated an aggregate total of £2.4bn. Whilst this figure was higher year on year, real-terms growth (adjusted for the impact of inflation) was just 1%*.
Meanwhile, the current noise around AI is resonating loudly within the UK Insurance sector. Here AI's many use cases have the potential to bring about significant improvements in terms of efficiency and profitability and spend is increasing. Interest in GenAI is high on the boardroom agenda of many insurers, with much of the current activity being driven from the top down.
Subscribers to FinancialServicesViews can learn more by downloading UK Insurance SITS Suppliers, Trends and Forecasts 2024. If you do not currently have access but would like to read this new report or any other of our material, please contact Deb Seth to learn more.
Posted by: Jon C Davies at 07:36
Tags: insurance financial+services
Posted by: HotViews Editor at 07:00
In its Q2 2025 (to end September 2024), Mastek has reported improvements on several fronts compared to its previous quarter (see Mastek Q1: Solid revenue growth and squeezed profits). Alongside stronger year-on-year revenue growth—of 13.3% to Rs 867 crore (compared to 12.1% in Q1)—Mastek also reported a stronger operating margin for the quarter—of 16.5% (an improvement of 125bps quarter-on-quarter). The improved profit margin was achieved despite incorporating partial wage hikes in the quarter.
Mastek continues to benefit from its account mining strategy, earning increased revenues from fewer clients. During the quarter, the total number of active clients was 380 compared to 441 in Q2 2024. However, the number of clients with annual billing > USD 1m grew from 67 a year ago, to 78.
With the effects of the July 2023 acquisition of BizAnalytica largely washed through the numbers, a geographical comparison is easier this quarter. In both the UK & Europe and the US, revenue growth was c12% year-on-year in the quarter, with the UK & Europe reporting revenue of Rs 485 crore (representing 56% of revenues). Meanwhile, AMEA year-on-year revenue growth was 20% to Rs 138 crore. In the UK, amongst other contracts, Mastek continued to deliver 24x7 Live Service support for cloud-hosted micro-service solutions used by HMRC Borders & Trade teams, under a 12–18-month contract with a maximum value of £21m.
Umang Nahatal was appointed as Mastek Group’s interim CEO in August this year. In the first quarter under his reign, the company has reached a milestone: $100m of quarterly revenue. As Nahatal looks ahead, the deal pipeline and order backlog suggest that Mastek is well-positioned to maintain the current trajectory. At the end of the quarter, the order backlog stood at Rs 2,195 crore, a growth of 17.9% on a y-o-y basis. Moreover, Mastek’s Project Nucleus, aimed at improving internal operational efficiencies, is ongoing, offering the potential for further operating margin improvement in the months ahead.
Posted by: Georgina O'Toole at 10:03
Tags: results offshore india itservices IPP
Second quarter results from HCLTech saw the firm accelerate a little in Q2.
First quarter year-on-year growth was 5.6% (constant currency), but this increased to 6.2% for the three months to end September 2024 (to $3.44bn). The firm also returned to quarter-on-quarter growth after a decline of almost 2% in Q1 over Q4.
Combined growth from the IT and Business Services segment and Engineering and R&D Services was roughly the same as Q1 at 5.9%. However, there was a strong uptick in HCLSoftware, from 3.5% in Q1 to 9.4% in Q2. Profitability (EBIT margin) has improved in both Services and Software, most notably in the latter, which remains the firm’s most profitable segment. It puts this down to what it describes as “the increasing relevance of our products for the digital economy”.
By geography, the Americas excelled with year-on-year growth of 7.5%, ahead of Europe at 4.2% (more on that once we’ve caught up with management this week).
For FY25, HCLTech is forecasting revenue growth of 3.5-5.0% (constant currency) with an EBIT margin of 18.0-19.0%.
Posted by: Kate Hanaghan at 09:55
Tags: results
Continuing resilience in North American demand during Q225 helped LTIMindtree to build on its positive start to the financial year (see here). A 7% yoy increase in revenue from the region during the three months ended 30th September underpinned the firm-wide top line improvement of 4.4% at constant currency for the period. This performance both lifted second quarter turnover to $1.13bn and underpinned a sequential improvement of 40 bps in EBITDA margin to 18%. The going in Europe, conversely, remained heavy for the company with sales in the territory declining by 1.9% yoy (Q125: -1.7%).
The most noteworthy progress from a industry market perspective in Q2 came from LTIMindtree’s Banking, Financial Services and Insurance (BFSI) sector business. This group of segments accounts for almost two fifths of firm-wide revenue. Having shrunk by 2.7% yoy in the first quarter of FY25, BFSI demand rebounded to grow by 2.3% in the second three months of the current fiscal. There was also another strong showing by the company’s Technology, Media and Communications vertical, in which turnover for the period rose yoy by 12% (Q125: 11.9%).
As is LTIMindtree’s habit, no forward guidance was provided for either the current quarter or the full fiscal year. The company also offered no commentary on the scale of order inflow during Q2. Continuing low to mid-single-digit top line growth through the second half of FY25 remains the likely shape of things to come for this the aspiring India Tier 1 vendor.
Posted by: Duncan Aitchison at 09:48
Tags: results offshore IT+services
Microsoft and the Crown Commercial Service (CCS) have signed a new agreement that will enable eligible public sector organisations to access cost savings across Microsoft’s suite of productivity apps and cloud services.
CCS first agreed a pricing arrangement with the company in 2020, providing beneficial terms for public sector organisations to use Azure Cloud Services. It was followed a year later by a three-year Memorandum of Understanding (MOU), called the Digital Transformation Arrangement 2021 (DTA21), which included Azure, Microsoft 365, Dynamics 365 and Power Platform (see New Microsoft MoU with UK Government). DTA21 was signed on 1 May 2021 and will run until 31 October 2024.
The new agreement (Strategic Partnership Arrangement 2024 or SPA24), which runs for five-years, extends the MoU to include a broader range of services, including Microsoft 365 Copilot. This should make it easier for public sector organisations to embed generative AI (GenAI) into their operations. Microsoft is also developing new certification programmes aimed at public sector employees, as well as offering events, workshops and self-paced learning opportunities across government.
With AI at the heart of the government’s agenda to drive change, economic growth and improved public services, this is an important agreement for the company. Clare Barclay, CEO, Microsoft UK, said: “AI technologies present a unique opportunity to transform public services and fuel the UK’s economic growth.”
The agreement also highlights Microsoft’s position at the heart of the government’s transformation plans both from a technology and strategic perspective. Barclay has recently been announced as chair of the Industrial Strategy Advisory Council, which will play a pivotal role in the government’s new Industrial Strategy (see £6.3bn investment in UK data centres to power AI innovation).
CCS lists technology MOUs with Adobe, AWS, Cisco, Google Cloud, HPE, IBM, Microsoft, Oracle, Salesforce, ServiceNow and Virgin Media O2; however, negotiations with several of these companies are currently ongoing.
Posted by: Dale Peters at 09:45
Tags: cloud procurement government AI mou ccs
Highlighting the transformative effect that AI technology is expected to have on the financial services sector, regulator the Financial Conduct Authority (FCA) has revealed the next step towards developing better governance. In a speech delivered at an FCA Innovation 10th anniversary event, the regulator’s Chief Data, Information and Intelligence Officer, Jessica Rusu announced the creation of an AI Lab to fuel collaboration around the development of future AI oversight.
The FCA’s new AI Lab is designed to help firms to overcome challenges faced as they develop and implement AI solutions, whilst also supporting the Government’s work around safe and responsible AI development. The creation of the AI Lab follows the launch in April this year of the FCA’s AI & Digital Hub, created in conjunction with the DRCF (Digital Regulation Cooperation Forum) and providing cross-sector guidance on AI solutions
The FCA’s newly launched AI Lab will consist of four main components:
An AI Spotlight area on the FCA portal, to provide a space for firms and innovators to share real-world examples of how they are leveraging AI, and to share emerging AI solutions.
An AI Sprint (in January 2025) bringing together industry, academia, regulation, technology and consumer representatives, to collaborate on facilitating safe adoption of AI in financial services.
An AI Input Zone allowing all stakeholders to have their say on AI in UK financial services via an online feedback platform.
A “Supercharged Sandbox” featuring AI-focused TechSprints facilitated by an enhanced infrastructure and greater computing power, enriched datasets and increased testing capabilities.
AI has the potential to revolutionise many aspects of the financial services sector however, even some of the most enthusiastic proponents of AI recognise the associated risks and the importance of ensuring these are mitigated. As a regulator, the FCA clearly has a crucial role to play in ensuring that AI technology is deployed safely, fairly and in the best interests of consumers and the market as a whole.
Whilst the Financial Services sector is already heavily regulated, regulators are typically slow to respond to the impact of emerging technologies and fast trends. Whilst for now, AI initiatives are of course subject to the rigours of the established compliance and risk management processes, with the AI genie already well out of the bottle, the latest progress announced by the FCA is perhaps a little overdue.
Posted by: Jon C Davies at 09:42
Tags: regulation
Having returned to sequential growth in Q125 (see here), Tech Mahindra’s “turnaround year” took another step forward in the second quarter. The period saw the firm deliver a yoy revenue increase for the first time since Q423. Company turnover for the three months ended 30th September rose by 0.7% qoq and 1.2% yoy at constant currency to $1.59bn. The healthier top line performance generated a significantly larger uptick in Tech Mahindra’s profitability with the Q2 EBITDA margin advancing by 480 bps to 13.1%.
Strengthening demand in the European region and Communications vertical were the primary drivers of the firm’s positive progress. The 7.3% yoy fall in sales in the former during the first quarter flipped to a 4.1% increase in Q2. The latter, revenue from which shrank by a tenth in Q1, saw the pace of turnover decline slow to just 1.7% yoy in the second quarter. Together, these improvements helped to offset a weaking position for Tech Mahindra Americas where the Q2 top line downturn steepened to 2% yoy from 0.6% in the prior three months.
No forward guidance was provided. A 6% yoy reduction in net new deal wins in the recently completed quarter, however, suggests that there is little imminent prospect of a material boost to Tech Mahindra’s growth trajectory.
Posted by: Duncan Aitchison at 09:33
IBM has announced the release of its most advanced family of AI models to date, Granite 3.0. The new models are designed as 'workhorse' models for enterprise AI, delivering strong performance for tasks such as Retrieval Augmented Geneneration (RAG), classification, summarisation, entity extraction, and tool use.
They are relatively small models (8bn and 2bn) in comparison to the 100bn+ parameter models from the likes of OpenAI or Anthropic, but are designed to be fine-tuned with enterprise data and integrated across business environments or workflows. IBM provides an IP indemnity for all Granite models on watsonx.ai so enterprise clients can be more confident in merging their data with the models.
IBM also unveiled a number of other AI solutions including; a new family of Granite Guardian models that permit application developers to implement safety guardrails by checking user prompts and LLM responses for a variety of risks; the release of the next generation of watsonx Code Assistant; a new AI agent chat feature for watsonx Orchestrate; and plans to release new tools including agentic frameworks, integrations with existing environments and low-code automations for common use-cases like RAG and agents. Big Blue’s 160k consultants are also set to get an AI boost through a major expansion of its AI-powered delivery platform, IBM Consulting Advantage. The multi-model platform contains AI agents, applications, and methods like repeatable frameworks.
The launch of new AI model iterations is becoming a bit of a non-event at this point, organisations already have available a range of highly capable AI models to choose from, whether that is from OpenAI, Anthropic, Meta, AWS, IBM, Google or many others. They all come in different sizes and cost profiles, and most tech suppliers building AI solutions are taking a very agnostic approach, allowing customers to easily switch between LLM suppliers. The main barriers to AI adoption at present are rarely the capabilities of the AI LLMs themselves, but a mixture of cultural barriers (lack of willingness to embrace AI), a lack of fundamental data infrastructure, difficulty integrating disparate data sources and internal applications, or budgetary and skill constraints. The ‘AI hype’ so to speak is far from dead, but more practical considerations are increasingly front of mind for many enterprises.
Posted by: Simon Baxter at 09:31
techUK held its annual Tech and Net Zero conference (now in its third year) earlier this week, bringing together technology practitioners and policy advisors for a day of sessions looking at how the tech sector is approaching net zero in its own back yard, and also how it’s helping to deliver net zero improvements for customers in other industries.
Many of the sessions explored access to greener energy to fuel tech’s contribution to the UK’s economic growth, but also with concerns about the impact (especially of AI) on demand for compute and storage infrastructure (and hence the carbon implications of training AI models and fielding AI queries at scale – and how much end users are aware of this cost).
The need to strengthen evidence-based business cases for sustainable technology initiatives (that can demonstrate returns in financial terms) also featured strongly in discussions – something we’ve been at pains to highlight in our SustainabilityViews research.
TechMarketView subscribers, including UKHotViews Premium subscribers, can read more about tech’s dual challenge of driving net zero and economic growth in our expanded UKHotViewsExtra article here.
If you aren't a subscriber – or aren't sure if your organisation has a corporate subscription – please contact Belinda Tewson to find out more.
Posted by: Craig Wentworth at 10:28
Tags: greentech growth net zero business case
Earlier this week, Bytes Technology Group released its first half results showing Gross Invoiced Income (or GII – a key metric for resellers) growth of 13.7% to £1.23bn. Operating profit margins increased from 40.6% to 43.4%. The firm gave a preview of its performance back in September.
GII growth came primarily from software, and by industry the firm saw a continued “strong contribution” from Public Sector. Contract wins in the prior year with NHS and HMRC have “seen further growth”. The firm increased share of wallet amongst the existing base as well as gaining new customers in both the commercial and public sectors. CEO, Sam Mudd, said she was “very optimistic about what the future holds”. Investments in strategic areas continued (e.g., people [with a particular focus on sales and delivery teams], systems, and vendor accreditations).
Key tech focus areas for the firm are cloud adoption/workload migrations, storage, cybersecurity, virtualisation technologies and Microsoft-focused AI – namely Copilot. Bytes believes it is well placed to continue to benefit from these “structural demand drivers” for the remainder of the financial year.
Posted by: Kate Hanaghan at 10:00
Tags: results cloud growth cyber AI
German reseller, Bechtle AG, has acquired Warrington-based DriveWorks from investors, BGF. The exit has generated a "money multiple of 2.7x and an IRR of 32% for BGF".
DriveWorks has a design automation software tool for companies using SOLIDWORKS 3D CAD. It is used in a wide range of industries around the world. Bechtle has been selling the DriveWorks’ add-on software for a number of years and is therefore very familiar with the company. Interestingly, DriveWorks will continue to operate independently serving SOLIDWORKS resellers in 54 countries.
During BGF’s investment period, DriveWorks did incredibly well, more than doubling revenues to €6.5m in the 2023/24 financial year. The firm was co-founded by Glen Smith and Maria Sarkar in 2001.
Neckarsulm-headquartered Bechtle AG has had a presence here in the UK for more than 25 years. The addition of DriveWorks will expand its software portfolio and bring staff numbers to c.430 across the UK. Bechtle has been on something of an acquisition trail of late. Earlier in October it announced its acquisition of Newbury-based Qolcom, which at the time had c.45 employees and revenue of €30m in its latest financial year. DriveWorks is Bechtle UK’s fourth acquisition in three years; the company is clearly on a mission. The UK business is led by Managing Director, James Napp (pictured).
Posted by: Kate Hanaghan at 09:45
Tags: acquisition reseller
inforcer, a UK HQ’ed startup providing Microsoft multi-tenant management solutions, has raised a $19m in Series A financing round led by Meritech Capital.
Founded in 2022 by channel veterans Jamie Daum, Will Connor, Rory McInerney, and Richard Thompson, inforcer leverages the advanced security technologies already included in Microsoft 365 to help MSPs secure end-user environments and comply with evolving cybersecurity regulations. inforcer has already been adopted by MSPs including ITRM, Cloudtech24 and Infinity Group.
By automating the deployment of Microsoft policies and security baselines across multiple tenants - processes which are typically handled manually – inforcer allows MSPs to productise new wrap-around security services underpinned by existing Microsoft technologies often included in their client's existing licences. With ongoing reporting, remediation tools, and regular product updates that complement Microsoft’s release schedule, inforcer is designed to help MSPs ride the Secure Score-as-a-Service wave, a key initiative on Microsoft’s agenda.
The UK has a broad and successful MSP market, and one that is vital in supporting the technology requirements of UK SME’s, organisations which are increasingly under pressure from evolving cyber threats. inforcer has built a unique business model that allows it to tap into that MSP market and enable organisations to better leverage a range of Microsoft security technologies. It is another great example of successful UK tech startups with a bright future ahead, a point echoed by inforcer CEO Jamie Daum, “As a team we are really proud that a UK start-up has attracted such a quality investor in Meritech. They understand our market, the MSP market, and they recognise that we’ve been able to quickly establish a global footprint on limited resources. Crucially they also understand how we now scale it from here. We are very excited about the future”.
Posted by: Simon Baxter at 09:44
Infosys has backed up its encouraging start to FY25 with a further acceleration in growth during the second quarter. Revenue for the three months ended 30th June increased by 3.3% yoy at constant currency (Q125: 2.5%) to $4.89bn, albeit the top line performance benefitted from the impact of a recent European acquisition. Operating margin for the period was down a tad, easing back by 10 bps against Q224 to 21.1%.
From a geographic perspective, it was Infosys Europe that again made the largest contribution to the company’s improving fortunes. Sales in this region were up by an impressive 15.5% yoy in Q2. This was driven in part by the purchase of German Engineering R&D services specialist in-tech which completed during the prior quarter. North America, conversely, continued to prove more of a challenge for the offshore major. Second quarter turnover in the geography of $2.68bn was down both qoq and yoy by 3.6% and 2.7% respectively.
In terms of industry segments, only company’s Retail and Life Sciences sector units saw revenue dips during Q225. Importantly, Infosys’s turnover from the Financial Services arena (the firm’s largest vertical market focus) returned to growth in the period rising yoy by 2.3%. The stronger top line performances came from the company’s Energy, Utilities, Resources & Services and Manufacturing verticals. Sales in these units were up yoy by 10.9% and 12.3% respectively during the second quarter.
The latest results have led Infosys to again raise its FY revenue guidance. The company now anticipates that turnover for the period will increase at constant currency by 3.75%-4.5%, up from the 3%-4% projection issued three months ago.
Posted by: Duncan Aitchison at 08:46
WNS shares took a tumble yesterday, down more than 11% as the Business process operations specialist went backwards in Q2 with challenges in revenue growth and profitability. The BPS ops provider reported revenue of $322.6m, down 3.4% YoY impacted by several factors including: the loss of a major healthcare client, reduced volumes in online travel, the offshore transition of a large internet customer, and a decline in discretionary project work.
Despite these headwinds, WNS did manage to add nine new clients and expanded 41 existing relationships with CEO Keshav Murugesh noting “robust demand for digital-led business transformation and cost reduction services”. However, challenges persist in online travel volumes and project-based revenues. The company's large deal pipeline is growing, but conversion timelines remain uncertain.
In response to these dynamics, WNS has revised its FY2025 guidance. Revenue less repair payments is now expected to be between $1,250m and $1,296m, whilst adjusted Net Income is now expected between $190m to $200m. This outlook represents a potential YoY revenue decline of -3% to growth of +1% on a reported basis.
By way of mitigation WNS continues to invest in its core strategy of domain expertise, data analytics, and AI-enabled offerings to try and position itself for long-term growth. The company's focus on large deal conversion in H2 FY2025 will be crucial for setting up revenue acceleration in FY2026.
Posted by: Marc Hardwick at 08:36
Tags: results operations
A near top end of guidance Q225 performance saw Wipro’s top line return to sequential growth after six successive quarters of qoq decline. Company turnover for the three months ended 30th September was up by 0.6% over Q1 at constant currency to $2.66bn, albeit this was down yoy by 2.3%. The offshore major’s operating margin improved by a further 30 bps qoq to 16.8% for the period.
Across the company’s industry sector portfolio, it was again Wipro’s Health segment business which delivered the strongest yoy revenue performance with sales to the vertical increasing by more than 5% in Q2. Importantly, demand from the firm’s Banking, Financial Services and Insurance clients also continued to recover. Turnover in these segments was up both qoq and yoy by 2.7% and 0.6% respectively to $926m in the second quarter. Conversely, the going for the firm’s Technology & Communications, Energy, Natural Resources & Utilities and Manufacturing sector units remained heavy with their revenues falling by 8.4%, 9.2% and 11.7% against the Q224 numbers.
From a geographic perspective, Wipro Europe shrank further in the second quarter, although the pace of decline slowed from the double-digit drop in Q1 (see here). Turnover in this territory was down 6% to c.$742m. The company’s two Americas businesses, which together generate more than three fifths of firm-wide sales, proved somewhat more resilient. The top line across these units improved by c.1% yoy for the period.
In more positive news, Wipro reported a near 17% jump large deals bookings to $1.6bn for the quarter. The latest batch of bigger contracts included a notable win in the UK. August saw the firm secure a four year extension to its large infrastructure, network and end user services outsourcing contract with John Lewis Partnership (see here).
Despite these recent sales successes, Wipro’s return to quarterly growth looks set to be short lived. The company expects that Q325 revenue will be in the range of $2.607bn to $2.660bn. This translates to sequential guidance of a -2% to 0% improvement in constant currency terms.
Posted by: Duncan Aitchison at 08:29
At IBM’s “Think” event in London this week, there was certainly a buzz as the firm’s partners and customers gathered for an agenda where AI was ‘centre stage’.
I spent some time with the leadership team of the UK Consulting business, where the aim is to be “essential for customers’ business critical platforms”. The firm’s work with Virgin Money is an example of where it has been possible to make quick wins. The bank has 6.6m retail and business customers and started its conversational AI strategy in the credit card business. Here, the integration of the “Redi” intelligent agent into the bank’s core systems has enabled the firm to reduce call volumes for the humans in the contact team and sort out customer queries as quickly as possible. Key for Virgin Money was doing all of this “without losing the warmth and personality of the … brand voice”. Virgin Money also wanted to see ROI within a year and to improve its NPS score. IBM helped the bank achieve both of these – indeed, ROI was achieved within smonths.
I also chatted with leadership in the UK Public Sector business, where the firm is leveraging its smaller, UK partnerships (e.g. Grace and Exponential-e) to support its work with the large government agencies.We expect to see the firm become even more active in defence following the acquisition of Farnborough-based SiXworks.
The challenge for IBM – and of course the whole of the supplier community – is scaling AI and GenAI-powered pilots. However, until organisations tackle the deep-rooted obstacles around lack of data and data structure, the AI journey will not be a straightforward one.
Also taking a turn on stage was Rory Stewart who spoke broadly about tech and society. With regards to climate change, he suggested that resentment towards green initiatives will only grow as lower income individuals continue to pay a larger proportion of their income on energy bills than the wealthy. Specifically on the topic of artificial intelligence, Stewart warned: “Let us not fool ourselves, there are always downsides.” He made an interesting point in terms of tackling the more challenging side of increased use of artificial intelligence. He argued that targeting “counter AI” (e.g. AI-powered cyber security to find AI-powered cybercrime) may actually be more important than defining and establishing regulation.
You can read our profile/scoring of IBM UK in the latest Market Readiness Index: The road to AI for tech buyers within our Tech User Programme. Contact me if you don't have access.
Tags: AI
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