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CGI has been appointed as the Technology Delivery Partner (TDP) for the Home Office’s Emergency Services Mobile Communications Programme (ESMCP). The contract award has a value of £51m over its initial five-year term but could rise to £71m if the two 12-month optional extensions are initiated. The contract was awarded via the RM6100 Technology Services 3 framework.
ESMCP is delivering the Emergency Services Network (ESN) critical communications system, which will replace the current Airwave service used by the emergency services in England, Wales and Scotland.
Initially, CGI will be responsible for implementing and delivering five areas of work. This comprises technology strategy and services design; transition and transformation; operational services (including end user services, operational management, technical management, and application and data management); major services transformation programmes; and service integration and management. Further projects are expected to be drawn down throughout the contract period.
ESMCP has been delayed several times since the first supplier contracts were awarded back in 2015. The programme was reset in 2018 (see A new strategic direction for ESN) with the Home Office adopting a phased approach to deployment. In 2019, the Home Office was forecasting the total cost of ESN would be £9.3bn, a 49% increase from their forecast in 2015 (see ESN programme faces further criticism from NAO). By June 2021, the timetable for turning off Airwave had slipped further, and the cost increased to an estimated £11bn. The situation was further complicated by the Competition and Markets Authority’s (CMA) investigation into the dual role of Motorola as the provider of Airwave and a key supplier in the roll-out of ESN. Further delays are expected to be revealed when a newly revised business case is published later this year.
This is a key win for CGI, which cements its position at the heart of the Home Office’s emergency services programmes. The company was appointed the Strategic Delivery Partner for the Department’s Police & Public Protection Technology Portfolio in 2022 (see CGI UK: Home Office win contributes to Q322 positivity) and has been operating the Police National Database (PND) since its inception (see £70m extension takes CGI’s PND contract to 2026).
ESMCP is a hugely complex programme that has been beset with challenges and costly overruns. CGI will need to draw on its extensive experience in telecoms and national critical infrastructure to help ensure this vital programme makes positive progress over the next five years. The contract award follows its recent £100m Strategic Delivery Partner deal with the Cabinet Office (see CGI wins £100m Cabinet Office Strategic Delivery Partner deal) and provides further proof that its strategy in central government is paying off.
Posted by: Dale Peters at 14:49
Tags: contract police bluelight telecommunications partnership law+enforcement public+safety public+sector home+office central+government
DXC Technology announced its latest annual results last night, revealing another year of revenue decline, coupled with a small profit. For the twelve months ended 31 March 2024, DXC’s global revenue fell by 5.3% to $13.67bn and was down 4.1% on an organic basis (taking account of DXC’s divestments). Despite the latest decline, DXC’s fall in full-year revenue was an improvement on the 11.3% decline experienced during FY23. In what was the first full quarter under the leadership of new CEO Raul Fernandez, DXC’s revenue declined by 5.7% to $3.39bn (down 4.9% on an organic basis). Meanwhile, the company posted a small full-year net profit of $86m compared to a prior year loss of $566m.
FY24 revenue from DXC’s Global Business Services division (GBS) was down 2% at $6.82bn whilst Global Infrastructure Services (GIS) revenue fell by 8.3% to $6.8bn. DXC’s segmented analysis for the latest fiscal revealed that Insurance Software and BPO was something of a shining light, rising 3.3% to $1.54bn. Elsewhere, Cloud Infrastructure and ITO ($4.77bn), and Modern Workplace ($1.64bn) were both down by around 9%. Applications revenue was down by 7% at $3.06bn, whilst Analytics and Engineering ($2.2bn) and Security ($433m) rose by around 1%.
The latest numbers make fairly grim reading for DXC’s new leadership team and its investors. Off the back of the latest revenue declines the company’s new outlook for FY25 indicates that full-year revenue is expected to continue to fall and will be down by between 4 and 6% by the end of the fiscal with a decline of up to 8% in Q1. Meanwhile, diluted EPS is expected to be between $2.50 and $3.00 on a non-GAAP basis. Perhaps unsurprisingly, the DXC share price plummeted last night and was tracking to be down around 25%, from $20.80 to just over $16 following the release of the company’s latest financials.
Posted by: Jon C Davies at 10:04
Reddit has announced a partnership with OpenAI to integrate its content into ChatGPT, part of the company’s broader strategy to diversify its revenue streams beyond advertising. Reddit's stock price rose by 12% in extended trading following the announcement.
This new partnership follows Reddit's recent collaboration with Alphabet, in which Reddit’s content was made available to train Google’s AI models, generating approximately $60m in annual revenue. OpenAI will utilise Reddit's data API to provide real-time, structured content for ChatGPT and other OpenAI products. Additionally, OpenAI will become a Reddit advertising partner.
The collaboration aims to improve the user experience on both platforms. For Reddit, this means developing new AI-powered features for users and moderators, leveraging OpenAI's GPT models. For OpenAI, it means incorporating Reddit’s extensive archive of human conversations and content into ChatGPT, enhancing the chatbot's ability to provide timely and relevant information.
It is quite an interesting partnership in that there is clearly huge benefit for OpenAI to have access to the wealth of data on the Reddit platform, which is currently largely written by humans (rather than AI generated). My only concern is that while yes Reddit can be a great source for up to date information on a huge range of topics, it is also filled with memes, inaccurate or completely falsified information, unique terminology, and some rather ‘colourful’ language. Filtering out the bad parts for bias or hallucination could be a challenge.
Earlier this week Google announced its new ‘AI Overviews’ (See Google I/O 2024: The Gemini Era & Project Astra), which could have a significant impact on how we search for information on the web. Other content providers like Reddit are surely watching closely, and thinking about how they can make their own moves with AI to be an alternative go-to source for answers.
Posted by: Simon Baxter at 09:46
Ofwat’s Innovation Fund has announced the winners in the fourth Water Breakthrough Challenge competition, which provides around £40m to highly collaborative water-sector innovations with the potential to deliver “wide-scale, transformational change benefitting customers, society and the environment”. Water companies and their partners were able to bid for funding through two streams: Catalyst (approximately £10m available for projects between £150k and £2m), and Transform (£30m for larger projects, between £2m and £10m apiece). Ofwat’s fund covers a maximum of 90% of project costs, with the remainder being provided by entry partners.
The River Deep Mountain AI project is amongst the winners under the Transform category and sees Northumbrian Water team up with half a dozen other water utilities, Cognizant (through its relatively new Cognizant Ocean business group, launched a year ago to focus on the “blue economy”), Tidal (one of Google X’s “moonshot” companies), wastewater and water solutions specialists Xylem, Water Research Centre, and The Rivers Trust.
The partners will work together to better understand the problems of waterbody pollution, leveraging AI and machine learning techniques to develop open source, scalable, digital models that track river health trends, and the pollution patterns associated with storm overflows, agriculture and road run-offs, etc. – helping to inform more effective action.
"I am excited to see Northumbrian Water receive funding from Ofwat to help provide improved insights into river health and water quality," said Niraj Seth, VP of Manufacturing, Logistics, Energy and Utilities UK&I at Cognizant. "AI is fundamentally transforming our world and now we anticpate working with Northumbrian Water, to use AI and machine learning to aggregate data from multiple sources, allowing us to better interpret river health trends and pollution patterns at scale."
Other winners this time around include projects looking at converting sewage sludge into hydrogen-rich gas, developing technology to repair leaks from within live water mains without disruptive excavations, an autonomous “pipebot” robot which will roam the sewers – constantly inspecting for blockages as they form, a “tell-us-once” service for vulnerable customers across utilities companies responsible for water, energy, telecoms, and support agencies. Ofwat will open up for proposals again (for Round 5) in the Autumn.
The protection of nature and natural resources is a key use case for technology in sustainability, and was highly-placed (in terms of amount of activity worldwide) in TechMarketView’s Sustainability Technology Activity Index). Subscribers to our SustainabilityViews research stream can download the Index now. If you are not yet a subscriber, or would like to learn more about our sustainability research, please contact Deb Seth for more information.
Posted by: Craig Wentworth at 09:32
Tags: competition water ofwat pollution
Customer experience specialist Hinduja Global Solutions (HGS) has its sights set squarely on building a significant position in the UK. The company has been quietly going about its business in this country for almost three decades and currently sits just outside TMV’s Top 30 in the UK BPS market. With $500m still in its war chest from the sale of Healthcare division in 2021 (see here), however, HGS is firmly on our list of “ones to watch” in this arena.
Historically focused on the contact centre arena, the firm has built up a sizeable roster of UK clients predominantly in the Public Sector, Utilities and Retail verticals. Today, the company turns over c.£70m pa and its local headcount numbers some 2,000 employees across five offices in London, Liverpool, Preston, Selkirk and Belfast.
Last year Patrick Elliott was appointed as the new UK CEO charged with developing and implementing a strategy to drive higher growth. The key tenets of the resulting three-year programme are a significant pivot to digital, the increased leverage of offshore delivery, the rebuilding of the firm’s growth function, and the establishment of an enhanced partnering capability.
We recently sat down with Patrick to discuss the progress, priorities and ambitions in this region. What we found is a business that has been building firm foundations and is confident that it is now ready to start stepping up.
TechMarketView subscribers, including UKHotViews Premium subscribers, can read about what our discussion with HGS UK revealed in our expanded UKHotViewsExtra article by clicking here.
If you aren't a subscriber – or aren't sure if your organisation has a corporate subscription – please contact Deb Seth to find out more.
Posted by: Duncan Aitchison at 08:28
Tags: digital HotViewsPremium BusinessProcess customer+experience
A chink of light in an otherwise gloomy tech market
In this edition of TechMarketView’s ‘View from the Chief Analyst’, Georgina O’Toole looks back over the last month of TechMarketView analysis – in UKHotViews, UKHotViewsExtra, and reports – to identify some of the most prominent trends we are seeing in the UK tech market.
This month, Georgina highlights a chink of sunlight in an otherwise gloomy reporting period. While the dominant Q1 24 message from suppliers was of a growth slowdown, one industry stood out: the Manufacturing Sector. It proved a fertile hunting ground for a wide range of suppliers.
And with increased activity, has come increased investment in the form of acquisitions, partnerships, and portfolio development. For many, the excitement is around Industry 4.0, which makes TechMarketView’s recent Quantum Computing research an essential read.
You can download May’s ‘View from the Chief Analyst’ now. To learn more about TechMarketView’s research and array of services, please contact Deb Seth.
Posted by: Georgina O'Toole at 07:00
Tags: partnerships manufacturing iot IIoT Industry4.0 acquisitions market+trends investments smart+factory
Palo Alto Networks (PAN) and IBM have announced a new strategic partnership to deliver advanced AI-driven security services. The collaboration will see the acquisition of IBM QRadar security assets by PAN and IBM Consulting as the preferred managed security supplier for PAN customers.
PAN plans to incorporate IBM's watsonx large language models (LLMs) into its Cortex XSIAM platform, enhancing its Precision AI solution. IBM will, in turn, feature Palo Alto Networks' products in its security consulting services, with PAN becoming the IBM cybersecurity partner of choice. In a rather unexpected move, a notable aspect of the deal is Palo Alto Networks' acquisition of IBM’s QRadar Software as a Service (SaaS) assets.
QRadar is a successful security product in its own right, but clearly IBM saw more opportunity (or less risk?) from going all in with PAN. For QRadar customers this means a likely transition to the Cortex XSIAM platform. Both companies will provide no-cost migration services to ensure a smooth transition. The integration of watsonx LLM’s into Cortex XSIAM is also expected to drive further automation and improve customer support outcomes, such as creating tailored self-service solutions and boosting agent productivity within PAN.
IBM is set to train over 1,000 security consultants on the adoption and deployment of Palo Alto Networks products, with IBM Consulting to be a preferred Managed Security Services Provider (MSSP) for current and future PAN customers. The partnership will also see the establishment of a joint Security Operations Center (SOC) and a Cyber Range for immersive customer experiences. IBM will also build industry-vertical capabilities on top of Cortex XSIAM, leveraging watsonx.
IBM will also adopt Palo Alto Networks' security platforms internally, showcasing the practical benefits of the collaboration. The deal, expected to close by September 2024, is an interesting move by both organisations and really typifies the ongoing consolidation in the cybersecurity market.
Posted by: Simon Baxter at 10:26
Cisco reported revenue fell -13% yoy to $12.7bn in Q3 2024, as the networking business took a significant hit, whilst the $28bn Splunk acquisition helped prop up growth across security and observability.
Cisco saw declines across all geographic segments due to the continued implementation of inventory by customers. Its networking business, which represents over half of company revenue, fell -27% yoy and is now down -11% YTD. Despite a tough comparison to Q3 2023 where networking revenues benefited from significant shipments of excess backlog, this still doesn’t paint a positive picture.
Fortunately, other areas performed better though revenue from the Splunk acquisition significantly propped up growth, with Splunk contributing $413m in revenue. Security was up 36% yoy, with Security revenue overall now up 14% YTD. Excluding Splunk, security grew just 3%, driven by growth in SASE and double-digit growth in Cisco’s zero trust offering.
Collaboration was flat, driven by growth in cloud calling and contact center offerings, offset by declines in meetings and devices. Observability was up 27%, driven by growth in ThousandEyes network services and the benefit from the Splunk acquisition. Excluding Splunk, observability grew 14% yoy in Q3. In customer markets, service provider and cloud were up 10%, public sector was up 6%, and enterprise was up 2%.
Combining security and networking continues to be a focus of the business, with the launch last month of Cisco Hypershield, an AI-powered approach to highly distributed security. Cisco also continue to push customers toward its Security cloud, a unified platform with end-to-end solutions, including XDR and Secure Access capabilities. Gary Steele, former Splunk CEO was named president of Go-to-Market, effective immediately, with his experience expected to contribute significantly to Cisco's strategic plans.
In February, Cisco confirmed expectations that it will cut 5% of its global workforce, some 4000 jobs, (See Cisco cuts 4000 jobs as revenue declines) as it adjusts to the tough market conditions it is facing. The pain looks set to continue in Q4 with revenue forecast to be between $13.4 to 13.6bn a decline of c.11%.
Posted by: Simon Baxter at 10:21
Enterprise management software provider, Workday, is planning to invest over £550m in the UK over the next three years.
The investment will cover a wide range of initiatives, which should also serve to bolster the firm's position in the UK market. The half a billion pounds will be ploughed into expanding its workforce here but also into shifting all Workday apps for UK Customers into the Amazon Web Services London region. There will also be a new Customer Experience Centre and new facilities at the firm's HQ in London. Additionally, Workday says it will be expanding its UK partner ecosystem, funding UK digital skills programmes, and supporting local technology SMEs through Workday Ventures funding.
Workday first opened an office in the UK back in 2011 and the company estimates that the £550m pledge is a 40% increase over the prior three years.
More than a third of the FTSE100 use Workday (e.g., Centrica and Rolls Royce), with Crown Commercial Service and the Department for Education customers in the Public Sector. In Q4 (its most recently reported quarter), Aztec Group and David Lloyd Clubs were announced as new customers. Indeed, Workday saw an increase in demand in FY24 across all of its vertical industry and geographic markets. Progress in EMEA, where quarterly revenues crossed the $1bn mark back in Q3, was reported to have been strong, with the expansion in UK called out as being particularly noteworthy. The period also saw the continued expansion of Workday's global partner ecosystem. The company’s collaboration with Kainos, the top European Workday partner and its seventh largest globally, on the firm’s new Spark&Grow offering was cited as being particularly fruitful.
Posted by: Kate Hanaghan at 09:55
Tags: investment
BT Group’s FY24 ended up pretty much as expected. Headline revenue for the twelve months ended 31st March improved by 1% yoy to £20.8bn with Adjusted EBITDA for the period up by 2% yoy to £8.1bn. On a pro forma basis, taking account of the JV established between BT Sport and Warner Bros. Discovery last September, these improvements in the top and bottom line metrics switch to 2% and 1% respectively.
The performance of the company’s Business Division, which has placed a drag of BT Group’s progress throughout latest financial year, took a turn for the worse during the final quarter. Having largely kept pace with prior fiscal for the first nine months of FY24 (see here), turnover shrank yoy by 5% in Q4 with Adjusted EBITDA falling by 24% to £555m. Declines in higher margin legacy contracts and inflationary impacts were cited as the primary causes of softer three months. Unit sales and profits for the year as a whole were down by 2% and 16% against FY23.
More encouraging results were produced by BT’s Consumer and Open Reach businesses. FY24 revenues from these units were up by 4% and 7% yoy to £9.8bn and £6.1bn respectively. The latter benefited from not only CPI linked price increases, but also growth in both the FTTP broadband and Ethernet customer bases.
Looking ahead, BT Group is not anticipating a material change in its growth trajectory. Company guidance points to an adjusted revenue increase of 0-1.0% generating EBITDA of around £8.2bn in FY25. From FY26 to FY30, BT expects consistent and predictable revenue expansion coupled with EBITDA improvements ahead of revenue. Having passed peak capex on its full fibre broadband rollout and achieved the £3 billion cost and service transformation programme a year ahead of schedule, however, the company is projecting a significant hike in normalised free cash flow. This is forecast to rise from £1.5bn in FY 24 to c.£2.0bn in FY27 and c.£3.0bn by the end of the decade.
There remain, nonetheless, significant challenges for new CEO, Allison Kirby to overcome as she seeks to both accelerate the modernisation of the company’s operations and drive the next phase of BT Group's transformation to a simpler, UK focused business. Continuing difficult macro-economic conditions and cost of living pressures coupled with a highly competitive market for connectivity services will only add to the scale of the task ahead.
Posted by: Duncan Aitchison at 09:54
Tags: results telco
Sage, provider of finance, HR and payroll software to small and mid-sized businesses, reports robust demand for its solutions at the mid-year point although growth rates are more subdued than this time last year.
Across the group, statutory revenue increase by 6% to £1.15m in the first half and underlying annualised recurring revenue (ARR) was up 11% on the prior year period to £2.25m, with growth across all regions balanced between new and existing customers.
Operating profit increased by 38% to £215m, a 19% margin, driven by operating efficiencies as the business scales, as well as lower restructuring and M&A related charges. Cash conversion remains healthy at 127% on the back of growth in subscription revenue.
Sage continues to see the benefit of the move to the cloud, with Sage Business Cloud revenue up by 18% to £915m in H1, and cloud native revenue growth of 25% to £353m. There is also progress on strategic initiatives to deepen vertical-specific capabilities, for example with the acquisition of Bridgetown Software, the cloud-native bid analysis tool for construction, in January.
Innovations such as Sage Copilot, the generative AI-powered digital assistant, and Sage Earth, its carbon accounting solution, should also support growth in the future (see also Velo’s ESG journey with Sage Earth – a carbon accounting case study) .
By geography, North America remains the powerhouse although growth moderated slightly compared to the prior year, with total revenue from the US up by 14% to £454m. By comparison, UK & Ireland revenue grew by 7% to £249m with a significant contribution from new Sage Intacct customer wins.
Looking ahead, management expects FY24 revenue growth to be broadly in line with the first half, but operating margins to keep trending upwards as they focus on scaling efficiently.
Posted by: Tola Sargeant at 09:19
Tags: results software payroll accounting
More good news for the currently buoyant UK AI industry, London-based PolyAI has raised $50m in funding from Hedosophia and NVentures, the VC arm of AI chip giant Nvidia. There was also participation from existing investors including Khosla Ventures and Point72 Ventures. The funding round provides for a valuation of the conversational AI player of near to $500m.
As my colleague Simon Baxter covered last Friday, (see UK continues to attract high levels of AI investment) the UK is increasingly seen as an attractive place for building AI capabilities, with a Pro-AI regulatory stance from the UK government, numerous hubs of talent from UK universities and strong demand from both enterprise corporations and UK start-ups. This has seen series of significant investment announcements over the last couple of weeks from the likes of CoreWeave, a cloud provider for AI, self-driving car start-up Wayve, and San Francisco HQ’ed AI data infrastructure company Scale, announcing a new European HQ in London. PolyAI can now be added to a burgeoning list of good news stories.
PolyAI is a firm that TMV has followed since 2019 (see PolyAI secures $12m for the art of conversational AI) and whose conversational AI offering operates in one of the most dynamic and potentially lucrative areas of the AI space. Founded in 2017 by a group from Cambridge’s Dialog Systems Group, part of the Machine Intelligence Lab at the University of Cambridge, PolyAI is targeting the contact centre with a platform that promises a “conversational platform that lets your customers speak naturally, interrupt, change topics — and always have a fantastic customer experience.” The start-up uses its own proprietary large language model as well as technology from ChatGPT maker OpenAI. It typically charges clients per minute of calling time and has already signed up a host of blue chips including VW, Marriot, Carnival, and Caesars.
The potential of cracking real-time conversational speech with AI is almost endless and goes way beyond the call centre – as many of you may have already seen with the demo of the OpenAI’s latest model GPT-4o, (see The new and improved ChatGPT) which brings significant improvements to ChatGPT and a more human-like ability to converse. Whilst there are still significant consumer barriers to overcome, chatbots are getting much more intelligent and increasingly human like. Things are certainly looking up for PolyAI and UK AI more generally.
Posted by: Marc Hardwick at 09:05
Tags: funding AI contact centre
It’s only been a month since the bright lights of Las Vegas and Google Cloud Next (See Google Cloud Next 24: Las Vegas lights up the latest AI innovations), but Google is not slowing down with the pace of its AI announcements. At its I/O developer conference yesterday, the company announced a slew of further AI-led product enhancements and new releases, including an AI assistant which seems set to become the latest innovation battleground following the ChatGPT announcements yesterday.
Gemini, Google’s proprietary frontier (foundation) models were of course central to many of the announcements. In December, the company launched Gemini 1.0 (See Google launches Gemini AI model), before releasing 1.5 Pro only a few months later. At I/O yesterday the company introduced Gemini 1.5 Flash, a lighter weight model designed for high-volume, high-frequency tasks such as summarisation, chat applications, and data extraction from long documents.
Not to be undone by OpenAI (See The new and improved ChatGPT), Google announced Project Astra, which is focused on the development of a universal AI agent, built by Google Deepmind. Much like the new ChatGPT-4o, Astra can respond to voice input, analyse the world around it through real-time video and converse in more natural language. Google released a demo on YouTube, which didn’t quite have the same wow factor as GPT-4o, latency was quite a bit higher, and the AI lacks the same ‘character’ as GPT, nonetheless it demonstrated other suppliers are close on the heels of ChatGPT.
The other big announcement was around Google Search. AI overviews are a new feature rolling out, first to everyone in the U.S, with more countries to follow. AI overviews essentially act as a GenAI overlay to the Google search you are used to, providing a summarised answer to your search query, including several targeted links, before providing the usual traditional web listings below. The next steps in the development of AI overviews will be the ability to run complex searches with nuances and caveats all in one go, as well as the ability to search with video.
There were numerous other announcements at I/O including the next generation of Google’s open models Gemma 2, the release of PaliGemma, a vision-language model, enhancements to Gemini 1.5 Pro, the pending releasee of Imagen 3, and the release of Trillium, the 6th generation Google Cloud TPU hardware for training AI workloads.
Many of these products are not going to see large scale release (especially in the UK) for some time, which dampens enthusiasm somewhat. Project Astra certainly caught my attention though, and it will be interesting to see who will be next to announce a similar AI assistant, Anthropic perhaps or maybe Alexa 2.0? The changes to Google search will also create a whole new dynamic around how we search for information, though again the really advanced features like video search we will have to wait for.
Posted by: Simon Baxter at 09:33
Plenty of speculation in the tech press that Meta has taken the decision to exit the enterprise comms space, closing its Workplace (Facebook at work) business in a phased approach over the next couple of years.
If true, this would mark a major strategic retreat from the enterprise market for the world’s largest social media platform, signalling a likely focus back on to core offerings, as well as AI and Metaverse technologies and opportunities.
Workplace has been around for something like ten years, as Meta looked to diversify revenue streams away from its core consumer social media platform(s). However, Workplace has found the going tough with strong competitors of the likes of Slack, Zoom and of course Microsoft with Teams, at a time when ‘back to the office’ has softened demand.
Meta has yet to make an official public comment and how this impacts its share price remains to be seen. Recent revenue growth has been positive at Meta, up 27% in its most recent quarterlies (see here). but there remains significant investor concern around how much time and money the business is investing in both AI (Meta shares dive on accelerated AI spending) and the Metaverse, which managed to lose a whopping $3.8bn on revenues of just $440m in Q1. This looks like a doubling down on that strategy as Meta surrenders a key component of the business market to its rivals.
Posted by: Marc Hardwick at 09:03
Tags: communications enterprise
Accenture has appointed its first Chief Responsible AI Officer. Arnab Chakraborty, a longstanding leader in the firm’s data & AI practice and a member of the US Senate AI Insight Forum, steps into the role with immediate effect. His remit focuses on developing Accenture’s responsible AI capabilities, solutions, platforms, ecosystem partnerships and thought leadership.
High on Chakraborty’s to do list will be expanding the firms advisory and technology services to help companies establish and implement AI policies, principles and standards as well as manage their ongoing monitoring and compliance. This includes the navigation of the evolving regulatory landscapes, such as the EU AI Act. As we noted in our recent Artificial Intelligence: Market Trends, Use Cases & Suppliers report, AI ethicists are increasingly in demand as businesses seek to demonstrate that they are adhering to ethical standards and deploying appropriate safeguards. In addition, he will lead the firm’s focus on education and empowerment in this arena through the deployment of responsible AI academies for Accenture’s personnel and its clients.
The company is also taking steps to beef up its Gen AI cybersecurity capabilities. Accenture has announced that it is expanding its long-standing strategic alliance with Palo Alto Networks. Combining the latter’s Precision AI™ technology with Accenture’s secure generative AI services, the new joint offerings will focus on securing Gen AI builds, discovery and exposure management, proactive threat detection and prevention, responsible AI practices. AI is certainly lowering the bar for cyber threat actors and protecting against these fast-evolving risks will be key to facilitating the scale adoption of these technologies.
Posted by: Duncan Aitchison at 08:44
Tags: AI cybersecurity AI_ethics
Earlier this month, Blackstone completed its acquisition of Civica from Partners Group, providing the company with the resources to pursue its goal of becoming a global GovTech champion (see Blackstone completes Civica acquisition).
Recently published accounts show Civica is entering this new era in its 22-year history in good shape. For the year ended 30 September 2023, Group turnover was up 7.2% to £511.0m (2022: £476.5m); however, revenue from its core software divisions (a better indicator of Civica's prospects) increased by an impressive 16.2% to £463.7m (2022: £398.9m). On a proforma basis (taking into account acquisitions and exchange rates), software revenue was up 10% to £431m (2022: £393m).
For the software business, net revenue was up 15.7% to £420.2m (2022: £363.3m), EBITDAE was up 16.0% to £130.8m (2022: £112.8m), and EBITDAE as a % of net revenue was 31.1% (2022: 31.0%). On a proforma basis, UK and Ireland (UKI) software revenue was up 10% to £319m (2022: £289m), representing 74% of total proforma software revenue for the year.
Under Blackstone's ownership, we do not expect to see any radical departure from Civica's strategy of recent years, but it will have a more customer-centric approach. At the heart of the business is its vision of becoming a global GovTech champion, and this feeds into its mission, which it defines as, "we make software that delivers critical services to citizens around the world". It will also stick to its core markets of local government, health, education, and central government, where there remains significant white space for Civica to target.
There remains significant opportunity for international growth, and we expect to see Civica's activities outside of the UK accelerate under the new ownership. The Group has completed more than 35 acquisitions in the last 10 years, and M&A will remain a strategic focus in 2024 and beyond.
Working in partnership with Blackstone, we expect the company to build on its existing public sector foundations in the UK, Australia and New Zealand (and somewhat smaller foundations in North America) to scale into a global (rather than 'multi-local') GovTech business serving citizens internationally.
TechMarketView subscribers, including UKHotViews Premium subscribers, can learn more about this new era for Civica in our expanded UKHotViewsExtra article here.
Posted by: Dale Peters at 08:25
Tags: results software digital public+sector govtech
Long-time Amazon employee and seasoned leader, Adam Selipsky, is stepping as AWS CEO. He will be replaced by Matt Garman, whose official title is SVP, AWS Sales, Marketing, and Global Services, on 3rd June.
In internal memos, Selipsky and Amazon CEO, Andy Jassy, indicate that Selipsky had never planned on doing the role long-term. “…he’d likely do it for a few years” was how Jassy reflected on Selipsky’s appointment back in 2021. Before that, Selipsky was Tableau CEO, but had originally spent more than a decade at AWS.
Selipsky told his team that he would be taking the opportunity “to spend more time with family for a while, recharge a bit, and create some mental free space to reflect and consider the possibilities”.
While all of this may well be the case, from the outside looking in, there may be other factors in the mix. The firm’s GenAI product, Bedrock, was reportedly late to launch with Selipsky also apparently passing up on initial opportunities to invest in key startups – including Anthropic (now backed by both Google and Amazon and the firm behind GenAI chatbot, Claude). Three years is not a bad stint by any means and a fresh set of eyes on the case could be really helpful.
Amazon CEO, Andy Jassy, said he was “deeply appreciative” of the time Selipsky spent as AWS leader, with the hyperscaler hitting $100bn in annual revenue run rate in the past quarter.
Meanwhile, the Amazon CEO describes Garman as having “an unusually strong set of skills and experiences” – presumably with reference to his beginnings and subsequent long stint at the firm. Garman started at Amazon back in 2005 as an MBA intern and became the first product manager for EC2. He also played an integral role in the development of the firm’s first service level agreements and pricing plans. Safe to say, he knows AWS inside out. Now all he has to do is lead the juggernaut that is AWS into this next chapter.
Posted by: Kate Hanaghan at 07:45
Tags: people leaders
Can I commend you to read the excellent article by William Hague in The Times yesterday.
This was occasioned by PM Rishi Sunak’s Big Speech on Monday when he referenced the effect that innovative, successful companies could have on the whole GDP of a nation. Sunak quoted Novo Nordisk- - a Danish based company that had invented the weight-loss drugs Wegovy and Ozempic. Without that single company Denmark’s GDP would have shrunk last year. With it, Denmark had one of the fastest GDP growth rates in Europe.
Hague also referenced the Taiwan Semiconductor Manufacturing Company which accounts for 7% of Taiwan’s GDP and a million-plus jobs. And ASML in the Netherlands which contributes Billions to the economy.
Also the US where its innovative tech and life sciences companies have been the bedrock of the US superb growth record.
Last week there was a slew of announcements of £1billion+ AI investments in the UK from the likes of Coreweave, Graphcore, Wayve and Scale. See Simon Baxter's article - UK continues to attract high level of AI investment. So the ambition of AI – and other innovative industries like life sciences – becoming the main driver of above average GDP growth is not a pipedream. It can be done because it has been done in other countries. The benefits are, of course, huge. It could fund the massive investment in our public services that the UK so badly needs.
Of course, achieving this is no easy task. We need to continue to make the UK the best place in the world for inward investment by ensuring we have the right skills – be they home grown or by welcoming immigrants with those attributes. We need to ensure that the companies that startup and scaleup in the UK STAY in the UK by ensuring that the London Stock Exchange (and its investors/investment trusts/pension schemes) back such companies to IPO and give them the backing to remain here. We need to have the right tax incentives – not just for companies but for managers, employees and investors too.
I really do share both Sunak’s and Hague’s optimism that ‘We can do it’ regardless of which party forms the next Government. Conversely the future looks very bleak if either party fails.
Posted by: Richard Holway at 07:40
Alexa, Siri, Bixby, stand aside, there is a new top dog in town, which may finally usher in the level of conversational AI we have all been waiting for. Yesterday OpenAI revealed its latest model GPT-4o, which brings significant improvements to ChatGPT and a more human-like ability to converse. If you haven’t seen the demo yet then I highly recommend you take 10 mins after reading this to go and watch it (See here).
GPT-4o (“o” for “omni”) is the latest model from OpenAI, and it really does represent a significant step towards much more natural human-computer interaction. It accepts input from any combination of text, audio, and image and can respond to audio inputs in as little as 232 milliseconds, which is similar to human response times in a conversation. It also matches GPT-4 Turbo performance on text in English and code, while also being much faster and 50% cheaper in the API.
Now I don’t want to get too carried away with the hype, but I must admit on first glance it truly is an impressive step forward. The short demo from OpenAI showed how GPT-4o can converse so naturally compared to the slow, and largely unhelpful voice assistants we are used to. This new version of ChatGPT is capable of real-time conversational speech, which includes the ability for you to interrupt it, ask it to change tone, and react to user emotions.
During the demo we saw ChatGPT make up a bed time story, demonstrating the ability to sound not just natural, but dramatic and emotional, it could also sing and tell the story with varying degrees of intensity. Language is an area it seems to really excel at, seamlessly translating between Italian and English in real-time. It could also be a game changer when it come to Education, acting as an invaluable personal tutor. During the demo it used a combination of new vision capabilities and conversational AI to walk the user through how to solve an equation, adapting to what was written, but without just giving the answer. It could also view and analyse code, describe potential issues and even in layman terms explain what the code actually does.
This type of conversational AI is what many of us (certainly myself) have been waiting so long for. It has echoes of the fantastic 2013 movie ‘Her’, and yes while there are many kinks to work out, it paints a picture of the future state of AI we are heading towards. Give it another 5 years (maybe even less), when it is fully embedded across our devices, cars and other technologies, and I expect conversing with AI assistants will become such a natural day-to-day occurrence many of us will wonder how we ever did without them. There are already rumors Apple is in talks to incorporate OpenAI’s models and ChatGPT into its products, if true bringing such capabilities as seen in GPT-4o to our smartphone would be a significant next step towards that reality.
Posted by: Simon Baxter at 09:54
Leicester and Hinckley Community Diagnostic Centres (CDCs) are aiming to transform their breathlessness diagnostic pathway using technology provided by Lenus Health.
Shortness of breath, or breathing difficulty (dyspnoea), is the most common reason for seeking medical help in the UK; however, NHS England says delays to diagnoses and misdiagnoses commonly occur. Breathlessness is reported by approximately 10% of the UK population, increasing with age to 25% in people over seventy years old.
The causes of breathlessness are often multifactorial, being associated with heart failure, chronic obstructive pulmonary disease (COPD), obesity, anaemia, anxiety, and depression. This complexity makes it challenging to diagnose accurately and often leads to treatment delays.
To address these issues, Leicester, Leicestershire and Rutland Integrated Care Board (ICB) aims to transform the existing symptom-based care pathway using Lenus Health's digital diagnostics platform, Lenus Diagnose. The solution will provide triaging, streamlined diagnostic data capture, enable multiple tests to be run concurrently, and allow remote specialists to provide input earlier in the decision-making process. It will be implemented at the existing Leicester CDC and the new Hinckley CDC, which is set to become operational in early 2025.
The collaboration brings together primary care, secondary care, and academic partners to support the implementation of this solution. Additionally, the University of Leicester and Lenus Health are working on an InnovateUK-funded Accelerated Knowledge Transfer to Innovate (AKT2I) project to generate evidence of the intervention's benefits.
Lenus Health spun out from Edinburgh-based digital transformation consultancy Storm ID in 2021 (see Healthtech startup Lenus Health gets funding boost from ResMed). Its data and AI solutions have already been implemented in heart failure, cardiovascular disease, and COPD pathways (see AI partnership to improve cardiac care in Scotland).
Posted by: Dale Peters at 09:43
Tags: nhs health innovation AI healthcare ICS
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