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2iC's name in lights in Dunne report
18 Jul 2018
More to Microsoft/Walmart alliance than battling Amazon/AWS
18 Jul 2018
Eight Roads refers $7m to Mention Me
18 Jul 2018
Ofcom Media Nation Reports shows 'We are all streamers now!'
18 Jul 2018
Glint funds a golden future
18 Jul 2018
The Operational Research Society's Annual Conference
18 Jul 2018
Speakers confirmed for TechMarketView Evening 2018 – Breaking the Boundaries
17 Jul 2018
Some thoughts on AI and the jobs market
17 Jul 2018
EACS buys Sentronex for disaster recovery
17 Jul 2018
Pi-top secures $16m to drive global expansion
17 Jul 2018
Salesforce boosts marketing cloud with Datorama
17 Jul 2018
SDL buys and raises
17 Jul 2018
Lender Proportunity gets funds to bet on property prices
17 Jul 2018
NCC Group beats expectations with 8% growth
17 Jul 2018
Netflix disappoints
17 Jul 2018
Ideagen delivers 9 years of consecutive growth
17 Jul 2018
Undoing problems secures further funding for Undo
17 Jul 2018
Digital Risks get £2.25m to cover startups
17 Jul 2018
Green Running's Verv more than a token offering
17 Jul 2018
Overcoming the barriers to data centre modernisation
17 Jul 2018
Elon Musk - From Hero to Zero
16 Jul 2018
Every man for himself in latest Brexit move!
16 Jul 2018
FCA must look ahead as it shakes up Investment platform market
16 Jul 2018
Infosys Q1 sets the scene
16 Jul 2018
BP helps put £2.5m in Voltware's tank
16 Jul 2018
Telit finds buyer for US$105m automotive business
13 Jul 2018
Octopus helps Seatfrog jump further
13 Jul 2018
Bothered and bewildered by Broadcom
13 Jul 2018
Experian’s Q1 boosted by acquisitions
13 Jul 2018
Fintech Emma adds to Millennial mix with funding round
13 Jul 2018
European TMT deals ease in June
13 Jul 2018
Getronics announces acquisition of Pomeroy
12 Jul 2018
Atos wins big at Defra
12 Jul 2018
Computacenter momentum continues with strong Q2
12 Jul 2018
Capita offloads ParkingEye for £235m
12 Jul 2018
First Derivatives buys out Kx and goes into space
12 Jul 2018
UK tech industry united at transformed annual dinner
12 Jul 2018
ai Corporation detects more funding for fraud detection
12 Jul 2018
Backers share $6m for Olio's waste food-share platform
12 Jul 2018
Six Degrees makes another public sector move with Ark
11 Jul 2018
Newcastle plans to be UK’s leading smart city
11 Jul 2018
More goings and comings at Nakama
11 Jul 2018
Micro Focus: rate of revenue decline slowing, integration pace picking up
11 Jul 2018
TCS UK growing at over 17%
11 Jul 2018
Further focus key for PCI-PAL
11 Jul 2018
Overcoming the barriers to data centre modernisation
11 Jul 2018

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Wednesday 18 July 2018

2iC's name in lights in Dunne report

2iC logoIt was pleasing to see Little British Battler 2iC (see UKHotViews archive) referenced in the Dunne Report. Former Minister for Defence Procurement Philip Dunne MP launched his independent review – ‘Growing the Contribution of Defence to UK Prosperity’ - earlier this month.  The report was commissioned by Secretary of State Gavin Williamson in support of the Modernising Defence Programme review. It highlights the wider economic impacts of defence spending.

Dunne Report front cover2iC is referenced (in a case study on page 43) in relation to the adoption of open architecture to make the most of new digital capabilities for the armed forces and improve collaboration. It was back in 2012 that 2iC won an MoD Centre for Defence Enterprise (CDE) R&D project, worth £87K, for a proof of concept demonstration of Battlefield interoperability. As the Dunne Report highlights, success ensued with the publication of the software resulting from the research (Lean Services Architecture) being published by the MoD in 2014 under the Open Government License. 2iC also developed a commercial suite of software products, which has been used by a range of partners like Ultra Electronics, BAE Systems and Lockheed Martin.

The report does not refer to the struggles that 2iC has had working with the MoD since. However, pertinently, much of the Dunne report does focus on breaking down the barriers to SMEs and others working with the department. It also highlights the broader issue regarding the necessity to drive a stronger innovation culture within the MoD and allow new technology to be adopted more rapidly. The MoD’s struggles here – in modernising the procurement process, in finding an equitable way to share risk and reward, in setting out its future roadmap, and in instilling innovation into every part of the MoD and into larger procurements – is the reason why 2iC has found greater opportunities for growth in the U.S., Australia and New Zealand (see 2iC: Strong growth driven by international contracts) and, even, in adjacent sectors. It is good to see those issues being addressed in the Dunne Report. It would be even better if the MoD increased its Science & Technology (S&T) spending target as a percentage of the defence budget (currently committed to 1.2%)  in line with the Government Industrial Strategy target to raise total UK R&D investment to 2.4% of GDP by 2027. Whether the current level is sufficient is under consideration.

Posted by Georgina O'Toole at '09:33' - Tagged: public+sector   defence   sme   innovation   littlebritishbattler  

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Wednesday 18 July 2018

More to Microsoft/Walmart alliance than battling Amazon/AWS

logoThere’s no doubt that the five year strategic and technology partnership between Microsoft and Walmart is an alliance against Amazon/AWS (a direct competitor to both), with Microsoft CEO Satya Nadella hinting as much in an interview with the Wall Street Journal, but that is not the be all and end all. A successful relationship should provide at scale digital transformation insight, including practical demonstrations of AI/machine learning and IoT.

The partnership sees existing customer Walmart position Microsoft as its preferred and strategic cloud provider as Walmart continues its digital transformation journey. Specifically, Walmart is looking to make it easier for customers to shop (i.e. improve the CX), improve employee productivity through better collaboration and communications and boost operational efficiency. The enablers will be Microsoft’s cloud services, including AI/machine learning, IoT and data platform products.

There is nothing new about the types of outcomes Walmart want to achieve, which is actually reassuring because it ties advanced technologies with practical, mainstream use cases. Walmart will use Azure and Microsoft 365 across the company, migrate applications and customer facing websites to Azure. More interestingly, it will build a global IoT platform on Azure (Microsoft ramped up IoT investment earlier this year- Microsoft sees big IoT opportunity), use machine learning to route delivery vehicles, optimise HVAC and refrigerator units' performance to save energy, and work on extracting value from the customer data Walmart holds. No doubt there will be more adventurous projects too (possibly a rival to Amazon’s Go cashierless shops) but these early stage ones have the potential to make a significant difference to Walmart.

In addition to acting as a test ground for AI/machine learning and IoT, success within a retailer of Walmart’s scale should open other retail doors for Microsoft. This high profile partnership comes with risks though. Microsoft needs to be able to show deployment and tangible results within Walmart in a reasonably short timescale. And even though Azure is in hyper growth mode, success will also be important in countering the Amazon/AWS trajectory. 

Posted by Angela Eager at '09:16' - Tagged: cloud   partnership   iot   machinelearning  

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Wednesday 18 July 2018

Eight Roads refers $7m to Mention Me

logoIf you are to believe the marketing hype, it is Detroit-based Ambassador that is the world's leading referral marketing platform and Berlin-based Aklamio that does it for Europe. But they are certainly not alone.

A quick squizz on the internet introduced me to many others, including London-based Mention Me, (I like companies that 'do what they say on the tin' – and in their case, demand it!) which has just raised $7m in a Series A funding round led by Eight Roads Ventures. Founded in 2013, Mention Me had previously raised an unspecified sum in an angel funding round in 2015, according to CrunchBase.

The premise behind referral marketing is dead simple. You refer someone to a company's brand and both you and they get a reward if they buy. However, Mention Me's business model is somewhat different from the subscription fee pricing that some other referral platforms use. Instead, Mention Me charges brands a bespoke setup fee and then takes a commission on the first order of referred customers. As such, Mention Me claims to be profitable, "having introduced nearly 1m customers and grown its client list from 20 to 300 in the past three years".

Mention Me claims it takes as little as seven hours to implement a referral scheme on its platform ("just two javascript tags on your site"), which also suggests it is relatively easy to switch between referral marketing platforms to find the one that delivers the best result!

Posted by Anthony Miller at '07:38' - Tagged: funding   startup  

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Wednesday 18 July 2018

Ofcom Media Nation Reports shows 'We are all streamers now!'

OfcomFurther to my Tuesday report - Netflix disappoints - interesting to read an Ofcom Media Nations report released today which shows that nearly 40% of UK households now subscribe to streaming services like  Netflix, Amazon, Now etc and more than the 15.1m who subscribe to traditional satellite and cable TV like Sky, BT, Virgin etc. Indeed revenues from those traditional services FELL for the first time last year. No wonder that Sky sees its future as part of a larger media group to enable it to compete with the ‘streamers’.

Sharon White, Ofcom’s CEO, wants to see BBC, ITV, CH4 & C5 work together to create a ‘British Netflix’.

Spending on content by the likes of BBC, ITC, Ch4 has dropped by 28% - whereas spending by Netflix has soared. Time watching broadcast TV continues to fall - lead by the youngsters. The age of those watching ‘conventional’ TV has also changed with viewing by 15 year-olds down 15% yoy and down 12% yoy for 16-24 year-olds. Watching by Oldies (like me) is unchanged. Indeed the age of an average BBC & ITV watcher is now 60 years old! Watching on mobile devices is soaring. The average 16-34 year-old spends an hour a day watching stuff on Youtube.

In the UK music streaming has overtaken physical sales. Revenues from streaming services grew an impressive 38% to £577m whereas physical music sales dropped to £470m.

The Ofcom report is always a good read - packed with loads of charts and tables to satisfy data-junkies like me. You can explore and download it Click here.

Posted by Richard Holway at '07:28'

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Wednesday 18 July 2018

Glint funds a golden future

logoGlint (www.glintpay.com) offers its growing customer base a unique opportunity: the ability to pay for everyday items using gold. This is not just a marketing gimmick. It enables individuals to hold some of their wealth in a store of value that has really stood the test of time. Using an Apple or Android app, account holders lodge a sum of money in a ring-fenced account, selecting whether to hold their money in gold, sterling, dollars or euros. The physical gold is stored in an accredited Brinks facility in Switzerland. When the account holder decides to pay a bill he/she can pay in currency or link the Glint Mastercard payment card to their gold account, with the merchant receiving the currency equivalent as calculated at the then market rate.

Glint launched in Q1 2018 having begun the development of its proprietary platform in 2014 and having gained an FCA eMoney licence and regulatory approval across the EEA. Over 15k customers have already registered for the service.

tmvShoreditch-based Glint is now part-way through a £15m Series A financing round which includes a £1.25m crowdfunding exercise. The money raised will fund further development of the platform and accelerate Glint’s partnership activity, linking with the Bud plug and play financial services platform and working with financial planning practices whose clients want to access Glint’s facility to hold cash balances in gold. The company plans to launch its service in the US by the end of the year, having already signed several distribution deals and a strategic partnership in the region.

With a stated target of over 500k clients on its platform by then end of next year, Glint is setting out to be the Gold Standard of the Fintech community.

Posted by Peter Roe at '06:27' - Tagged: funding   payments   banking   FinTech  

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Tuesday 17 July 2018

Speakers confirmed for TechMarketView Evening 2018 – Breaking the Boundaries

TMVIt's TechMarketView's tenth anniversary year and to celebrate we are announcing a formidable line-up of speakers to enlighten, inspire and surprise you at our annual Evening with TechMarketView.

Hosted by TechMarketView Chairman Richard Holway MBE, the evening focuses on TechMarketView's theme for 2018, Breaking the Boundaries, and you will be hearing from:

·      Tola Sargeant, TechMarketView Managing Director, who will bring the theme alive and challenge the way you look at the UK tech market by illustrating how buyers and sellers of enterprise technology are breaking their own boundaries to try to keep one step ahead of the pack

·     Chief Analyst Georgina O’Toole showcasing brand new TechMarketView analysis that examines the contrasting performances of the ‘legacy’ & the ‘new’ segments of the UK SITS market and ask the question: ‘what needs to happen to return to the halcyon days of double-digit growth?’

·     TechMarketView’s Martin Courtney hosting a ‘fireside chat’ with our special guest Andrew Johnson from Shell. One of the world’s largest retailers with a significant UK presence, Shell is three years into its digital transformation journey and Andrew will share his experiences, which touch everything from digital payments to autonomous vehicles

·     Kate Hanaghan, Chief Research Officer, who will unveil TechMarketView’s Market Readiness Index to share findings from our new end-user analysis and explore how buyers and suppliers can work better together to Break the Boundaries

·     Anthony Miller, TechMarketView Managing Partner, who will be putting his own inimitable slant on the changing fortunes of the leading UK tech suppliers over the past decade and what the future may hold for them over the next.

TMV Evening drinks

The event will be held on Thursday 13th September 2018 at the magnificent premises of the Royal Institute of British Architects in London with registration and a networking drinks reception, sponsored by InterSystems, commencing at 6:30 pm. This will be followed by the speaker sessions and a first-class silver service dinner.

The TechMarketView Evening is the only event where over 200 leaders from tech industry giants, mid-market specialist suppliers, aspiring 'Great British Scaleups' and innovative early stage companies, as well as advisors, investors and end-user organisations, get the chance to meet and form new friendships and partnerships – and learn what TechMarketView believes the future may hold!

You can book individual seats for the event, or why not recognise your key clients and partners by booking a table for ten. 

For more details and to book your place click here or contact our event management partner, tx2 Events on 020 3137 2541.

Don’t forget that if you are a TechMarketView subscription client, a UKHotViews Premium client, or from one of our Little British BattlerGreat British Scaleup or Early Stage Partner programme companies, you qualify for the discounted ticket price.

TMVE banner

Posted by HotViews Editor at '16:55' - Tagged: event  

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Tuesday 17 July 2018

Some thoughts on AI and the jobs market

Humans vs robots

You have probably seen the media coverage of the PWC report forecasting that AI would create >7.2m UK jobs by 2037 - slightly more than the 7m jobs it would displace. PwC estimated that c20% of all jobs would be automated over the next 20 years. Healthcare and social work were highlighted as the ‘biggest winners from AI’. Manufacturing would be amongst the biggest losers - closely followed by Transport and Storage.

The main gainers would be those in scientific and technical areas - particularly in London.

So ‘no need to worry then…’

Well, actually a lot to be worried about. I’ve just been reading What’s the Future by Tim O’Reilly. BTW - It is a long (400pages) and tedious (mainly a CV of the author) book which I wouldn’t recommend. But, it had some interesting stats. It quotes a McKinsey Global Institute study which indicated that c580m people - ie c70% of households in the 25 most advanced economies - had seen their incomes fall or flat between 2005 to 2014. Between 1993 and 2005, fewer than 10m (ie <2%) had the same experience. The main reason was the automation of jobs. Conversely the Top US CEOs now earn 383x the income of the average worker - up from 42x in 1980.

Today, we learned that employment in the UK had reached record highs. 32.4m now in employment with the jobless rate at 4.2% (BTW - a figure of <5% is almost always referred to as ‘full employment’)  But average earnings are up just 2.5% yoy - barely keeping pace with inflation. Apparently, the average person is worse off than they were 10 years ago.

The conclusion from all the reports from various sources that I read would indicate that:

  • Automation or AI disrupts the job market but creates more jobs than it displaces
  • BUT, those new jobs are at a lower relative level - certainly a lower earnings level - than the old jobs.
  • Those that gain from automation and AI are already at the top levels of the skills ladder - be it managerial, scientific or technical.

The effects of this on society are significant. Maybe the greatest reason for the ‘popularist’ uprisings that have disrupted politics in the UK, US and around the world.

I’m not suggesting for one moment that AI should be resisted. Indeed it is impossible to do so. But sometimes I think the consequences are not fully appreciated. Before WW2, the underdogs in our society could still put bread on their families’ table by working down a mine, in the fields, in a factory or as a foot soldier. These jobs - of which most people were very proud to do - have largely disappeared to be replaced by jobs that don’t have that same sense of pride and certainly don’t maintain the same earnings ratio. Society is poorer as a result. And the outlook, as a result of automation and AI,  is even bleaker for ‘the many rather than the few’.

Posted by Richard Holway at '16:51'

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Tuesday 17 July 2018

EACS buys Sentronex for disaster recovery

EACS buys Sentronex for disaster recoveryEACS - formerly Streamwire and one of TechMarketView’s Little British Battlers (LBBs) from 2016 – doesn’t look so little any more after its acquisition of London-based disaster recovery (DR) firm Sentronix for an undisclosed sum.

The buy is expected to push EACS’ FY18 revenue to £30m, and provide a solid foundation for a concerted push into the key financial services sector where Sentronix has been providing DR and managed IT services and consultancy to City firms since 2005.

EACS CEO Kevin Timms has long expounded his plan to turn the company into a £50m business, forging a steady path to that goal with the acquisition of Apple technology support specialist EvEnt Computer Services in 2015, followed by EACS itself in 2017.

The challenge for EACS now will be the seamless migration of Sentronix’ existing customers and the integration of the two business various managed services, cloud and consultancy portfolio into a single entity able to capitalise on any upselling opportunities.

Posted by Martin Courtney at '09:50'

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Tuesday 17 July 2018

Pi-top secures $16m to drive global expansion

pi-top logoUK-based build-it-yourself computer business pi-top has secured $16m (c.£12m) in a Series B funding round led by Hambro Perks and Committed Capital. The investment follows Series A funding at the end of 2016 (see pi-top tops up with £3.5m funding), which was also led by Hambro Perks and Committed Capital. In total it has now raised $22.5m.

Pi-top was founded by Jesse Lozano and Ryan Dunwoody in 2014. It started life as a crowdfunded (via Indiegogo) build-it-yourself Raspbery Pi laptop that aimed to make hardware creation more accessible. It produces both modular laptops and desktops, a range of additional components, and a suite of software, including pi-topOS.

The company states that it has now manufactured more than 100,000 devices and it currently employs c.80 people worldwide, with its headquarters in London and offices in Texas and Shenzhen. It intends to use its latest investment to continue to expand its manufacturing, marketing, sales and operations capabilities and to drive international growth.

Like competitor Kano (see Kano announces investment from Sesame Ventures), pi-top has proved popular in the education sector. Over 2,000 schools are using its products and it recently announced the pi-top Learning System, a package that includes the hardware, software, curriculum content, training and support to help schools deliver the computer science and STEAM (science, technology, engineering, arts and mathematics) curriculum.

We have covered the many problems associated with computing in schools over the last 12-months (see here, here and here for a start). Pi-top can certainly be part of the solution, but if we are to meet the future skills requirements much more must be done.

Posted by Dale Peters at '09:43' - Tagged: education   funding   startup   edtech  

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Tuesday 17 July 2018

Salesforce boosts marketing cloud with Datorama

logoMedia reports suggest Salesforce is paying $800m+ for Israeli founded/New York based Datorama. It would be a very successful outcome for the company (and its share-holding staff and investors) that was founded in 2012 and has received $50m in funding.

What Datorama offers is AI/machine learning enabled marketing software, providing insight, intelligence and analytics. It is clearly an attractive offering because the 3000 customers of the company (who has 400 staff) include PepsiCo, Unilever, Foursquare, Trivago and Ticketmaster. The customer base also demonstrates Datorama’s ability to span traditional companies and digital-natives in the provision of digital services.

There are obvious synergies with Salesforce. Datorama can boost the Salesforce Marketing cloud that was built around the $2.3bn ExactTarget acquisition in 2013. It has since grown through in-house development and several acquisitions as Salesforce goes head-to-head with Adobe around digital marketing. Datorama will also add to Salesforce’s important - and targetted - analytics capability.

One of the areas where there is rising activity among enterprises is the B2B2C space as companies who haven’t traditionally had a direct relationship with their customer base, look to make a connection. This is an area where Salesforce is seeing demand and in its view successful B2B2C operations require a combination of customer service, commerce and marketing capability. Customer service was one of its earliest clouds, it built its Commerce Cloud on the 2016 Demandware acquisition with smaller add-ons such as ecommerce provider CloudCraze in 2018 and has been investing heavily in the Marketing Cloud in recent years, with Datorama representing the latest – but probably not the last – marketing acquisition. B2B2C is still an emerging market but with its typical energy and determination Salesforce is staking its claim and claiming market share. Capturing a share of emerging markets is also key to maintaining the high growth rates expected of Salesforce.

Posted by Angela Eager at '09:35' - Tagged: acquisition   cloud   software   analytics  

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Tuesday 17 July 2018

SDL buys and raises

LogoMaidenhead-based language services and technology provider SDL plc is buying Donnelly Language Solutions (DLS) for c.£60m on a cash-free, debt-free basis. The deal will be funded through both the drawdown on new debt facilities and a recently completed share placing which raised £36.2m. The acquisition and placing taken together is expected to be earnings enhancing in the first full year of ownership, being the twelve months ending 31st December 2019.

SDL has been having a difficult time of late. Despite initiating an extensive change programme nearly three years ago, the company delivered a poor set of FY 2017 results (see here).

The purchase of DLS, the first major acquisition made by SDL since the sell-off of its non-core assets in 2016 (see here), should help to restore profitable growth. The combination of the two business will not only strengthen significantly SDL’s position in the “premium” financial services and life sciences industries, but also beef up its presence in the Asian markets. It will move the balance of SDL’s revenues into services, which will account for over 70% of sales post acquisition. The deal will also provide SDL with the opportunity to improve margins through the deployment of neural machine translation into the DLS service portfolio, bringing more human translation services in-house, back-office consolidation and automation, and office location rationalisation.

We noted earlier in the year that SDL was doing the right things, albeit that this had yet to result in improved financial performance. Profitable scale was the challenge and company management acknowledged that it had been hampered by its infrastructure and delivery capabilities. It must be hoped that operations have been strengthened sufficiently to make the most of what appears to be sensible acquisition.

Posted by Duncan Aitchison at '09:27' - Tagged: services   acquisiiton   software.  

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Tuesday 17 July 2018

Lender Proportunity gets funds to bet on property prices

logoI have a problem when a money-lender cloaks itself in the mantle of artificial intelligence with a proposition to homebuyers "to understand the potential of tomorrow".

So let's be clear about what London-based startup Proportunity does. It offers five-year, fixed term, interest-only loans to first-time homebuyers for up to 15% of the purchase price to supplement the mortgage deposit. The buyer needs to have already raised a 5% deposit and must repay Proportunity 15% (or the percentage borrowed) of the current market price when the loan falls due or when the property is sold. There is no mention on Proportunity's website of interest rates or exit valuation methodology.

And if you are thinking, "aha – what happens if the value of the property goes down over the term of the loan?" Well, that's where the AI bit comes in. Proportunity claims that its technology can accurately forecast house prices and only lends money on what it considers sure-fire bets (my words, not theirs).

According to TechCrunch, Proportunity has secured £5m in credit to start making loans (expected Q3 2018) and has raised £2.7m in a funding round backed by Global Founders Capital, Concrete VC and various angel investors. And in what I would consider the height of hubris, some of the Proportunity team are reportedly taking out loans on the platform "to show we're eating our own dog food".

There are other ways for first-time buyers with a 5% deposit to get mortgages which do not involve having to pay back an unknown amount of money five years into the loan. For example, the UK Government's Help to Buy scheme is interest free for the first five years and you can borrow as much as 40% of the property value in Greater London.

By the way, according to comparison website uSwitch, "it’s unlikely you will be offered a mortgage if you decide to get a loan for your mortgage deposit." Just saying.

Posted by Anthony Miller at '09:26' - Tagged: funding   startup   PropTech  

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Tuesday 17 July 2018

NCC Group beats expectations with 8% growth

NCC Group FY18Better than expected FY18 results at NCC Group bumped the company’s share value up as much as 9% this morning, with reported group revenue growing 8% yoy to £233m. Adjusted organic growth neared 12% once the impact of currency fluctuations and various acquisitions and divestitures are taken into account, with a strong second half building on a solid H1.

The cyber security consultancy and pen testing specialist even posted a pre-tax profit of £12m, a considerable improvement on the equivalent loss of £45m in FY17, with diluted earnings per share up to 4.4p from -17p a year earlier (net debt too improved to £28m from £44m).

As part of the strategic review that heralded the departure of former CEO Rob Cotton, NCC has revamped its structure and operations. By managing to keep its cost of sales at FY17 levels whilst simultaneously growing its turnover, the company saw a 23% yoy increase in gross profit to £96m. A broader group rationalisation also saw NCC sell its web performance business to TechMarketView Great British Scaleup Eggplant (formerly Testplant) for £7.5m, and offload its software testing division to QualiTest for £3.6m.

It is too early to tell if the leaner, tighter focussed NCC Group under CEO Adam Palser can maintain its current performance in the cyber security market. Much may depend on whether any surge in demand for its professional services and cyber consultancy services (revenue from which grew 17% yoy to £159m) fuelled by GDPR and NIS compliance initiatives extends into FY19 and beyond

But the company is undoubtedly in a better place today than it was in FY17 (subscribers to our SecureConnectViews research stream can access our Cyber Security Supplier Prospects 2018 report here) and we wait to see what new chief financial officer (CFO) Tim Kowalski (previously Group Finance Director at Findel) and recently opened cyber security research labs in Cheltenham can add to the mix.

Posted by Martin Courtney at '09:22' - Tagged: resullts   cybersecurity   consultancy   NCCGroup  

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Tuesday 17 July 2018

Netflix disappoints

NetflixThe ‘problem’ with being a FAANG is that your ever-booming market valuation is ‘Priced for Perfection’. Nothing else will do.

Netflix shares have doubled in the last month but fell c13% in after-hours trading last night as they missed one of their KPIs. Q2 Profits rose from $66m to $384m yoy - which beat expectations and revenues rose from  $2.8b to $3.8b. The ‘problem’ was that the rise in paying subscribers - in particular outside of the US - was about 1m less than had been expected which could point to difficulties ahead. The disappointment was exacerbated as the outlook statement issued just 3 months back was so upbeat.

The bigger problem is that Netflix looks to be facing more-and-more competition. Not just from the ‘new disruptors’ like Amazon Prime, Apple, Youtube and Facebook  but from the established players ‘fighting back’. In the US, that new competition could come from a combined AT&T and Time Warner.  Walt Disney and Comcast are fighting for 21st Century Fox. Here in the UK the BBC, ITV and Channel 4 all have ever improving ‘catch-up/streaming’ services.

All this assumes that consumers will be prepared to pay multiple subscriptions on top of their licence fee. I don’t think that’s a ‘given’. Subscriptions are a ‘discretionary spend’ and, if the economy falters, could be hit.

Having seen one FAANG take a bath, it will be interesting to see how the others fare as the Q2 reporting season gets underway.

Posted by Richard Holway at '08:44'

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Tuesday 17 July 2018

Ideagen delivers 9 years of consecutive growth

IdeagenFull year results from Ideagen, the AIM-listed specialist in Information Management software show the firm growing revenue and EBITDA for the 9th consecutive year. Revenue increased 33% to £36.1m (FY2017: £27.1m) with underlying organic revenue growth of 11% (FY2017: 10%). Adjusted EBITDA increased by 40% to £11m (FY2017: £7.9m).

Ideagen’s strategic focus has been on transitioning to a recurring revenue model whilst integrating the four acquisitions it made in the previous year. Recurring revenues now represent 62% (FY2017: 57%) of total revenues whilst SaaS bookings were up 174% with 106 new logo SaaS customer wins including Scandinavian Airlines, AirAsia and Northumbrian Water

Ideagen principally supplies regulated industries such as aviation, banking and finance and life sciences and has been particularly targeting international growth. Results were boosted by its first US acquisition of Medforce Inc which added 300 US healthcare customers, IP, recurring revenues and a platform for further expansion in North America.78% of all new SaaS logo wins were outside of the UK.

This was the last set of results under previous CEO David Hornsby, who has become Executive Chairman – with a specific remit around strategy, M&A and Investor Relations. To sustain the objective of doubling revenues and adjusted EBITDA every three years the company has now turned to Ben Dorks (former Chief Customer Officer) who takes on Hornsby’s position as CEO – focusing in particular on operational performance, customer acquisition and retention, and product development.

Posted by Marc Hardwick at '08:34' - Tagged: results   software  

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Tuesday 17 July 2018

Undoing problems secures further funding for Undo

logoFounded in 2005, ‘record, rewind, replay’ software debugging provider Undo has made quiet but steady progress (supported by two funding rounds in 2014 and 2016 securing $1.25m and $3.3m respectively) and has now been rewarded with $14m Series B funding from investor Cambridge Innovation Capital.

The company seems to have taken off in 2012 when founder and CEO Greg Law gave up his job to concentrate full time on Undo. It has 30 customers, including brand names such as SAP, IBM, Arm, Cadence and Mentor Graphics. The funding will be used to expand the development team, for product development and for US expansion.

Product development could include expanding beyond compiled code to Java and other JM-based languages and there is also discussion around more accountable software (where programmers/organisations know exactly what a program has done and account for what the software does). In a world moving towards automation, this could be a very valuable capability with widespread applicability. We can see Undo’s pathway opening up. 

Posted by Angela Eager at '08:27' - Tagged: funding   startup   software  

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Tuesday 17 July 2018

Digital Risks get £2.25m to cover startups

logoInsurtech company Digital Risks (www.digitalrisks.co.uk) offers high-growth technology and media companies a new way of buying insurance. Companies in the dynamic and volatile technology and media markets need to ensure that they are protected from a growing number of risks, ranging from the more conventional areas of accidents or damage to office equipment and employer’s liability, to protecting against a data breach or the effects of making a mistake on a website or company blog. Selecting the appropriate cover is complex and time-consuming, made all the more difficult when the scope and scale of the underlying business may well be changing on a monthly basis.

London-based Digital Risks has developed an online offering, automating the process of buying and managing insurance. This approach enables the company to offer insurance cover aligned to a customer’s specific needs, placing each risk with the most appropriate underwriter. Cover is provided on a monthly subscription basis so that it can be changed quickly and easily.

A £2.25m funding round has been led by Concentric, with the money being targeted at increasing the marketing effort and developing new online insurance products. This should drive additional growth and enable the company to expand into Europe over the next 12 months. With the proliferation of technology start-up companies focusing on an ever-wider range of sectors, there looks to be an exciting market opportunity for Digital Risks and its innovative approach.

Posted by Peter Roe at '08:23' - Tagged: funding   insurance   FinTech   insurtech  

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Tuesday 17 July 2018

Green Running's Verv more than a token offering

logoMany thanks to Stuart McKnight, MD at corporate finance firm Ascendant (and data partner for TechMarketView's IndustryViews Venture Capital report series) for alerting me to Verv, the energy monitoring device developed by London-based startup Green Running (and now its trading name). Verv appears to work on similar lines to the platform developed by BP Ventures-backed Voltaware (see BP helps put £2.5m in Voltware's tank) in that it takes high frequency samples of the electricity supply to detect when appliances are switched on and off.

Originally founded in 2010, Green Running raised nearly £1.2m in November last year on crowdfunding platform CrowdCube in a round which originally aimed to raise £500k for a 4.46% equity stake at a £25m (!) pre-money valuation. British Gas parent Centrica had previously backed Green Running to the tune of £750k and the startup had also received some £250k in project funding from Scottish Power Networks. The Verv Home Hub was launched in 2015 and costs £249.

Perhaps even more interesting is that Green Running has also formed a subsidiary called VLUX which has announced the 'pre-sale' of an Initial Token Offering (ITO) to create tokens "that will enable energy to be traded on the renewable energy trading platform that Verv has developed". This venture was recently backed by blockchain-focused Scytale Ventures with a £250k investment. Verv is planning for a "full-scale international roll-out" of the VLUX token in Q1 2019.

I am very willing to admit that blockchain is 'above my pay grade' and I have no idea whether VLUX is going to change the way of the world for energy trading or just blow a fuse or two. Irrespective, the case for the Government's smart meter rollout programme gets more tenuous by the day – or rather, by the startup!

Posted by Anthony Miller at '08:23' - Tagged: funding   startup   smartmetering  

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Monday 16 July 2018

Elon Musk - From Hero to Zero

MuskI’ve held up Elon Musk as something of a ‘hero’ of mine for many years now. But that hero status is being tested in all kinds of ways right now.

A couple of months ago Musk hit the headlines by calling an analyst question ‘bonehead’. All the analyst was questioning was Tesla’s need for more cash. As a shareholder that is the kind of question I would have asked - and wanted answered!

Then Musk criticised people for referencing him as ‘a billionaire’. He would prefer ‘scientist’ or ‘engineer’. I sort of ‘get that’. I remember the late, great Jim Feeney - CEO of Hoskyns - insisting that his occupation was listed as ‘Programmer’ on his passport. But if you are a billionaire it seems a bit rich to really complain when people refer to you as such. ‘If only..’ I say!

Last week Musk was unmasked as a Top 50 donor ($40,000) to the Republican Party. I won’t bore you with my views on President Trump but, let’s be honest, his views on the environment seemed a million miles away from those of Musk and his championing of everything ‘green’. Made even worse when Musk said the donation was ‘false news’ even though it was in an FEC filing.

That Elon Musk jumped quickly to help the boys stuck in the cave in Thailand was praiseworthy. Indeed, his first idea of a plastic tube which could be inflated and drained of water to let the boys walk out, was - in my mind - quite inventive. The mini sub he sent was clearly not. But to accuse the British diver who played a part in the rescue, but criticised Musk’s idea in ‘colourful language’, of being a paedophile just because he lived in Thailand, was inexcusable.  

Tesla shares are down 3.3% today with many saying this is due to the adverse reaction to Musk’s comments.

Having met Elon Musk, I have to agree that he has behavioural issues. Some might suggest he is some way along the autistic scale. I also think that many geniuses have similar issues. Whether mere human beings like us should accept/tolerate such behaviour in return for the gifts that such geniuses provide for mankind, is an interesting debate. Indeed one that we have in our family regularly!

Posted by Richard Holway at '18:00'

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Monday 16 July 2018

Every man for himself in latest Brexit move!

brexitcityAt TechMarketView we would not presume to predict where the Brexit debate will end up, particularly since the Chequers “accord”, and with the prospect of more problems in Parliament.

However, it is clear that there has been a major shift in the Government’s stance towards the Financial Services sector as the proposed solution from Theresa May looks to have thrown the services sector (representing 80% of the economy) to the proverbial wolves!

There seems no prospect of the negotiations including any ways of maintaining easy access to EU market for the Financial Services industry. This means that companies will have to set up meaningful operations within other EU countries resulting in the significant migration of jobs, capital and expertise outside the UK. Many companies had taken a “wait-and-see” approach as we discussed in our latest Market Trends and Forecasts report, but now we expect that there will be a rush to implement contingency plans, shifting attention and investment into Amsterdam, Dublin, Paris, Frankfurt, etc.

The Financial Services sector is a jewel in the UK’s crown, as well as being a major source of growth and prosperity. As such, it would have been a major asset in any negotiations with the EU. However, it seems to have been dismissed as being of any value in this latest proposal, a move which could have serious and long-term repercussions.

Posted by Peter Roe at '09:36' - Tagged: financialservices   brexit  

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Monday 16 July 2018

FCA must look ahead as it shakes up Investment platform market

LogoThe FCA has just published its interim report on its study of investment platforms. With the rapid increase in use (and diversity of) investment platforms as financial services institutions seek cost-effective ways to provide advice and execution services, the FCA is keen to address some important problems.These centre on five specific areas;

  • The difficulty of switching to a different (and more suitable) platform
  • Enabling better price comparisons
  • Improving the comparability of providers and their model portfolios
  • Highlighting the opportunity cost of holding large cash balances, and
  • Supporting individuals who are no longer receiving advice from a financial advisor.

To this end, the FCA has proposed a package of remedies to these problems, at the same time attempting to increase the level of competition between asset managers. It is looking for feedback on its initial findings, hoping to publish its final conclusions about the market in early 2019.

However, the investment platform market is at the nexus of a huge amount of technological change as a growing number of companies seek cost-effective and differentiated ways to service this potentially lucrative market. These changes include; the use of artificial intelligence to derive new investment strategies, the automation of the investor:advisor interface, the scouring of many more data sources to predict investment performance, the management of regulatory reporting and investor protection, the safeguarding against fraud and money-laundering. The list goes on.

Given all these changes, the FCA will need help from the software and IT services community to avoid regulating this important market using the rear-view mirror!

Posted by Peter Roe at '09:33' - Tagged: platformbasedbps   automation   regulation   AI  

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Monday 16 July 2018

Infosys Q1 sets the scene

logoFirst quarter figures from Infosys appear to presage another year of hard graft. After the new CEO had set the company on course for faster growth, total revenues came in at US$2.8bn for the three months to end June. This is just shy of Salil Parekh’s 7-9% guidance, showing an increase of 6.8% on the previous year.

India watchers will note that this falls short of TCS’s Q1 mark of 10% as reported last week. Infosys’s slight uptick in gross margin, to 64.3% provided a little comfort but operating margins shaded to 23.7%, in line with Parekh’s guidance of slightly lower operating margins.

Further comparisons with TCS make for uncomfortable reading in the vital area of “digital”. While TCS trumpeted growth of nearly 45% yoy in digital revenues, Infosys reported a comparative of plus 25.6%. Digital accounted for 28.4% of total revenue dollars. Products and Platforms now account for 4.8% of dollar revenues, down from 5.4% in Q1 2017, possibly a foretaste of future trends given the change in top management.

Financial Services continued to decline as a proportion of the total, to 31.8% compared with 33% in Q1 2017, in fact falling by 0.2% in constant currency terms. Revenue growth in constant currency for the European region was 2.1%.

There are grounds for optimism. Agile Digital and AI-driven services are gaining traction and the group is working hard to develop its large client base, increasing the number of US$100m+ clients to 24. Utilisation rates were also at an all-time high of 85.7% (although this could prove to be a two-edged sword if not carefully managed). It is still early days for the new CEO and he will be looking to provide top management stability and clear direction, in an increasingly competitive market.

Posted by Peter Roe at '08:37' - Tagged: financialservices   digital   IPP  

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Monday 16 July 2018

BP helps put £2.5m in Voltware's tank

logoRegular readers of UKHotViews will be familiar with my rants on 'Smart Meter Madness', the Government's misguided programme to replace every gas and electricity meter in the land with a smart meter by 2020 (if not, start with Smart Meter Madness (8): 10m down, 40m to go and work back through the UKHotViews archive).

My 'problem' isn't that smart meters are a silly idea per se; it's about the business case. Smart meters are being 'sold' to the public through media campaigns (at our expense, of course) as a way to reduce monitor energy usage, even though there are – and have been for some years – cheap and easy ways for consumers to do this.

London-based startup Voltaware ('does what it says on the tin') is such an example, though just for electricity. Like many consumer energy monitoring devices, Voltaware's sensor is installed 'non-invasively' on your fuse box. It collects data every time an appliance is switched on or off and an app analyses your energy usage by appliance.

Voltaware has attracted a £1.5m from BP Ventures which led a £2.5m Series A funding round for the startup. First Imagine! Ventures and Contrarian Ventures also participated.

A fundamental part of Voltware's platform is its API to allow partners such as energy suppliers and telcos to integrate. Voltware's sensor currently only supports domestic 'single phase' electricity supply, but they are developing a sensor for industrial supply too.

I see the next step is for platforms such as Voltaware to communicate directly with sensors in the appliances themselves (my Samsung washing machine has an app for just this purpose). If appliance manufacturers could just agree on a base set of standards for remote device monitoring we really would be 'cooking with gas', so to speak!

Posted by Anthony Miller at '08:08' - Tagged: funding   startup   smartmetering  

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Friday 13 July 2018

Telit finds buyer for US$105m automotive business

Telit finds buyer for US$105m automotive businessInternet of Things (IoT) connectivity specialist Telit has found a buyer for its automotive division, with Hong-Kong headquartered autonomous driving technology specialist TUS International set to stump up $105m to fund the deal.

Telit put the automotive division - which makes communications chips for connected vehicles - up for sale in October last year. Rumours about potential buyers have been widely circulated ever since as valuations of anything between £150m and £200m were aired.

Those estimates appear to have got a reality check (or TUS International has got a steal) once Telit's disappointing FY17 results materialised and the company reviewed its strategy following the departure of controversial former CEO Oozi Cats in the wake of fraud allegations going back to the 1990s. The company also revealed it was the subject of an ongoing investigation into the timings of its interim results announcements by the Financial Conduct Authority (FCA) in March this year.

Amidst those distractions, Telit has focussed its efforts on core industrial IoT (IIoT) capabilities which span wireless communications modules and managed connectivity services. The automotive division - which generated approximately US$63m revenue in FY17 and EBIDTA of US$10m - is deemed both surplus to requirements and a vital source of cash to reduce Telit's debt and fund further acquisitions in the end to end IoT solutions space.

While TechMarketView anticipates that is a market on the cusp of significant growth (see OUT NOW: Internet of Things and IT services providers), we think Telit has to move quickly to get its house in order before it can fulfil its potential.

Posted by Martin Courtney at '09:36' - Tagged: divestment   iot   Telit   automotive  

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Friday 13 July 2018

Octopus helps Seatfrog jump further

logoAs if trying to book passage on Britain's National Rail network wasn't a joyful enough experience, you can now add an extra frisson of excitement by bidding for a seat upgrade too!

London- (and/or Sydney-) based startup Seatfrog let's you bid for seat upgrades (currently just on LNER, the erstwhile Virgin Trains) up to 15 minutes prior to departure. The minimum bid is a fiver and you have to have purchased a "standard Advance ticket" to bid for an upgrade to First Class "when travelling on an eligible service which has First Class availability". It is an auction so you might not win. Or, of course, you could end up paying more than the First Class seat is actually worth, I would imagine.

Anyway, Seatfrog, which appears to have been founded in 2014, has just closed a £4.5m Series A funding round led by Octopus Ventures with participation from existing investor Howzat Partners.

In my opinion, this would be a far more interesting and effective proposition if Seatfrog ran it as a 'Dutch' auction, i.e. with the upgrade price dropping until all the seats are gone.

Posted by Anthony Miller at '09:24' - Tagged: funding   startup  

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Friday 13 July 2018

Bothered and bewildered by Broadcom

logoWhat do you get when you bring a semiconductor producer together with a mainframe-heavy infrastructure software provider? Bafflement. That’s the reaction to Broadcom’s $18.9bn cash bid for CA Technologies, reflected in a 14% dive in Broadcom’s share price (at one point it was down 20%) as shareholders and market watchers try to understand the rationale for the move.

In the words of Broadcom president and CEO Hock Tan: "This transaction represents an important building block as we create one of the world's leading infrastructure technology companies. With its sizeable installed base of customers, CA is uniquely positioned across the growing and fragmented infrastructure software market, and its mainframe and enterprise software franchises will add to our portfolio of mission critical technology businesses. We intend to continue to strengthen these franchises to meet the growing demand for infrastructure software solutions."

logoBy moving into software Broadcom is certainly “breaking the boundaries” and the implication is that CA will be used as a platform for further software acquisitions as Broadcom repositions as a broader infrastructure technology company. But there’s no hint yet of how Broadcom’s silicon and CA software portfolio will aid each other. There is a case for closer alignment of software and silicon for intensive AI/machine learning operations but CA would not be the choice for that scenario – around half of its $4.2bn revenue (low growth, largely acquisition-driven - see here) comes from mainframe software and even its SaaS line isn’t expected to be big enough to merit reporting separately on until 2019.

With its acquisition of Qualcomm blocked by the Trump administration on national security grounds Broadcom is evidently looking for new opportunities. It could use CA as a way to engage directly with larger enterprises. It has been suggested Broadcom could build and run a portfolio of separate companies – private equity style, or similar to the SoftBank Group model (would KKR-backed BMC be a target?). There is also scope to reap the cash benefits of the CA mainframe operation (c.$10m cash flow annually) and sell off other assets. It’s definitely a case of ‘watch and see’. 

Posted by Angela Eager at '09:08' - Tagged: acquisition   software   hardware  

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Friday 13 July 2018

Experian’s Q1 boosted by acquisitions

ExperianGlobal information services provider Experian updated on its Q1 performance in line with expectations, supported by recent acquisitions. Total revenue grew by 10% at constant exchange rates (up 9% at actual rates) and saw organic revenue grow by 8%. 

Experian’s strong finish to last year has continued with total revenue (at actual rates) up 11% in the UK and Ireland, up 13% in North America and up 15% in EMEA / AsiaPac.

In the UK and Ireland, organic revenue growth was 3%, with B2B up 7% whilst Consumer Services continued to lag down 8%. Total revenue growth (at constant rates) was 4% reflecting the acquisition of Runpath.

Experian acquired Runpath in 2017, a UK-based fintech company, for its ability to aggregate Experian data with external sources. Runpath’s technology is used extensively in price comparison websites and in the testing of the government’s Pension Dashboard. 

The UK business received a further boost by June’s decision by the FCA to accredit Experian to supply Open Banking and PSD2 services. This will allow Experian to bring new services to market as Open Banking APIs are implemented in coming months, complementing its existing credit bureau services.

In UK B2B Experian benefited from its capabilities in pre-qualification services, decisioning software such as PowerCurve and in analytics. Consumer Services moderated its rate of decline with growth in CreditMatcher partially offsetting lower credit monitoring revenues. Experian will also have gained customers following last year’s well-publicised data breach at rival Equifax

The company has left its full-year guidance unchanged. 

Posted by Marc Hardwick at '08:47' - Tagged: results   financialservices   FinTech   data  

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Friday 13 July 2018

Fintech Emma adds to Millennial mix with funding round

logoGiven the deluge of financial management apps for 'Millennials' being launched on the market (e.g. see More moolah for 'Millennial microsaver' Moneybox), there's no excuse for these youngsters not to be financially secure by the time they retire!

London-based Emma is yet another fintech startup taking advantage of 'open banking' APIs to help users manage their money held in multiple bank accounts. Emma is a 'read only' app so if you actually want to do anything you'll have to log in to your bank account(s) to make any changes.

Founded in 2017, Emma recently closed a £420k seed funding round led by Kima Ventures and Aglaè Ventures, the early-stage investment arm of Paris-based Groupe Arnault, owner of the LVMH luxury brands.

Emma is free to use "and always will be", according to its website, but "there are plans to expand the product offering and generate revenue". 'Nuff said.

Posted by Anthony Miller at '08:37' - Tagged: funding   startup   FinTech  

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Friday 13 July 2018

European TMT deals ease in June

chartAfter a high value deal spree in April and May (see European TMT valuations continue upward trend), European buyers focused more on relatively smaller deals in June, leaving US buyers to lead global TMT M&A activity.

According to latest data from corporate finance firm Regent Partners, European deal flow eased slightly to just below 300 transactions per month, though aggregate transaction value was still materially higher than in June 2017. Profit-based valuation multiples continued to improve, with the aggregate Price/EBITDA ratio up from 9.6x in May to 10.9x in June; the aggregate Price/Sales ratio remained stable at 1.6x.

M&A activity involving UK software and IT services companies was thin on the ground and mainly involved small plug-in acquisitions, such as Cardiff-based consultancy DevOpsGroup acquiring specialist delivery methods training organisation Agile Snap (see DevOpsGroup: New guise, new guys, a buy and a raise).  

To see the rest, TechMarketView Foundation Service clients and subscribers to our new UKHotViews Premium service can search on the keyword 'acquisition' in the UKHotViews archive. Simples!

Posted by HotViews Editor at '08:03' - Tagged: acquisition  

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Thursday 12 July 2018

Getronics announces acquisition of Pomeroy

getIf you’ve been following the evolution of Getronics in recent years, today’s acquisition of Pomeroy might not come as too much of a surprise. If you’re not up to date on progress, the Getronics of today is a very different beast to the one you'll know from several years back, with greater georgraphical coverage and a much-expanded portfolio of services.

Pomeroy is headquartered in Ohio and provides “digital workplace transformation services”. Together, Getronics (which has made various acquisitions in the recent past – see Getronics deals reflect depth and breadth of services and work back – and gained a new owner – see Getronics sold to Brazilian backers) and Pomeroy will have combined revenue of c$1.3bn.

This means Getronics has achieved its goal of becoming a billion-dollar company two years earlier than originally planned. That begs the question, so what next?

The acquisition was enabled by a $815m financing and recapitalisation transaction.

We’re speaking to management shortly so will have more analysis soon.

Posted by Kate Hanaghan at '10:04' - Tagged: acquisition  

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Thursday 12 July 2018

Atos wins big at Defra

Atos logoAtos has won the Defra UnITY programme hosting and application support contract. With the ‘tower model’ no longer supported centrally, in a subtle change of wording, the department refers to the contract as one of a “suite” that will replace the existing IT services delivered by two separate suppliers under the legacy arrangements – Capgemini at the Environment Agency and IBM at Defra.

Atos has every reason to celebrate. As other suppliers to Whitehall have watched their central government revenues nosedive due to the disaggregation of their mega ICT outsourcing deals, it has maintained a steady ship and positioned as an alternative to the trio that dominated the sector for a long time – Capgemini, DXC, and Fujitsu; so much so, that – according to our latest PublicSectorViews analysis due to be published this month, it is now the leading supplier of software and IT services to central government.

This latest deal is set to further stretch its lead. Under the core contract, Atos will deliver standard application support & hosting functions (DC facilities management services, infrastructure services, platform services, app support & operations and service management). But, it has the potential to grow the contract value to a maximum of £135m over a 6-year period (including the one-year extension option), by adding project work, bringing other Defra agencies into the contract, or supporting new applications.

According to the contract tender, there were seven bidders for this deal. But it would have been difficult – or nigh on impossible – to attract smaller suppliers to the table. SMEs like Littlefish (see Littlefish keeping up the momentum and work back) have had great success winning IT managed services deals with smaller organisations like The Pensions Ombudsman or the Single Source Regulations Office (SSRO). However, in combining the app support & hosting requirements of Defra, the Environment Agency, Natural England, the Animal & Plant Health Agency, the Marine Management Organisation, and the Rural Payments Agency, the size of the contract was such that it would have been out of reach for all but the larger players.

Posted by Georgina O'Toole at '09:49' - Tagged: public+sector   centralgovernment   contract   hosting   ApplicationServices   disaggregation  

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Thursday 12 July 2018

Computacenter momentum continues with strong Q2

cccComputacenter released some very positive news this morning in the form of a trading statement for its second quarter.

The update is short but sweet outlining that the firm has seen “considerable progress” in adjusted profitability. Furthermore, it says it has experienced “even further progress” in adjusted earnings per share (EPS) following the buyback completed in February.

Regular readers will know that last month TechMarketView issued Computacenter with our highly coveted Boring Award, which recognises companies that have produced at least 10 years of uninterrupted EPS growth (see Computacenter gets a Boring Award!). Mike Norris (CEO) and Tony Conophy (CFO) have been at the helm for many years and both were delighted to receive an award that only a few have ever received.

Other good news in today’s update was that the Supply Chain business (particularly in Germany) saw “continued momentum”. There was no specific update on the Services business, which was up 2% in Q1 (see Computacenter updates on strong Q1). We’ll have to wait until 24th August for the full Q2/H1 results and more information on that part of the business.

Good execution on sales and a well-run business are clearly serving Computacenter very well, and the Board now believes its results for FY18 as a whole will be “comfortably in excess” of its previous expectations.

Interestingly, all the Boring Award holders have had very long-serving CEOs. All lost their Boring Awards soon after those CEOs stepped down. Perhaps a hint that Mike Norris and Tony Conophy should never leave!

Posted by Kate Hanaghan at '09:44' - Tagged: tradingupdate   profits  

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Thursday 12 July 2018

Capita offloads ParkingEye for £235m

CapitaCapita continues to execute on its new strategy and slimdown with agreement to sell its parking management business, ParkingEye, to a vehicle owned by Macquarie and funds advised by MML Capital Partners for £235m. The valuation represents a healthy profit on the £58m that Capita paid for the business five years ago.

ParkingEye manages car parks for retail, hospitality, education and the NHS with revenue of £40m and an operating profit of £14m for last year. ParkingEye was never core to Capita and was one of the businesses earmarked for sale in a new strategy designed to simplify the business and focus on a smaller number of growth markets. When added to the disposals already undertaken this year it will raise more than £400m for Capita, well ahead of the target of £300m. Proceeds are likely to be used to reduce Capita’s debt.

In a separate announcement, and hot on the heels of the MoD Fire and Rescue win Capita has won a contract with the Department for Education’s Standards and Testing Agency (STA) to manage English primary school national curriculum tests from September 2019. The six-year contract, covering the 2020 to 2024 test cycles, will be worth approximately £109m.

The STA is moving to a single-supplier model with Capita managing the printing, distribution, and collation of over 9 million test papers annually for key stage 1 and 2 tests, as well as administering the marking of four million key stage 2 test papers annually. Capita will then move to digitise the process allowing all 16,000 schools and 4,000 test markers to review the status of the test process, access results and records online.

CEO Jon Lewis still has a long way to go on his turnaround but announcements like these show the promise of a good start.

Posted by Marc Hardwick at '09:10' - Tagged: contract   disposal  

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Thursday 12 July 2018

First Derivatives buys out Kx and goes into space

logoNewry-based First Derivatives had already established itself as a leading provider to the financial markets sector, with high profiles deals such as with IEX (as written up in “Flash Boys”) promising a big future in big data. However, it wasn’t until October 2014 that the management made the crucial decision to buy a controlling majority stake in Californian company Kx systems which developed the high performance, in-memory database through which the obvious potential of First Derivatives was to be delivered. The company has now moved to acquire the outstanding shares, paying a further US$53.8m on terms agreed back when the earlier deal was done. This tidying up of an important strategic relationship should provide additional certainty as to progress in the next phase of this group, much-enlarged through acquisitions and initiatives into other industry sectors. Since October 2014, the shares have more than quadrupled, with the market capitalisation now standing at over £1bn. The company has recently reported results for the year to end February, showing revenue of £186m and EBITDA of £34m.

tess-mitThe company has also announced an extension of Kx’s work with NASA. Here Kx’s ability to analyse huge volumes of data is to be deployed to monitor solar activity to predict space weather. The company will also apply artificial intelligence and machine learning techniques to support the new NASA Transiting Exoplanet Survey Satellite as it sets out to find new planets in the nearer parts of the universe. Truly out of this world!

Posted by Peter Roe at '08:59' - Tagged: software   big+data   space   M&A  

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Thursday 12 July 2018

UK tech industry united at transformed annual dinner

picDisappointment hung heavy in the air as the final whistle blew at industry association techUK's Annual Dinner last night. The evening had been miraculously transformed at the last minute from a formal Black-Tie dinner into the flagship event for the 'UK tech industry for the Three Lions' supporters club. The sense of anticipation was palpable.

It was especially stirring to see virtually all the 600-ish attendees rise and sing the National Anthem along with the England team. It would be fair to say that little attention was paid to anything other than the big screens scattered around the venue from that point on.

The half-time guest speaker (also a last-minute switch), Margot James MP (pictured) bravely stuck to the theme and said all the right things.

However, it was not to be.

But for those two-and-a-half hours, it really did seem that the entire UK tech industry was truly united in a common cause.

Nonetheless, many congratulations to techUK CEO Julian David and his team for an otherwise excellent evening.

Posted by Anthony Miller at '08:38'

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Thursday 12 July 2018

ai Corporation detects more funding for fraud detection

logoIt's great to hear of our Little British Battler companies growing from strength to strength and attracting investor interest. Such is the case for Guildford-based payment fraud detection company The ai Corporation, which participated in our 9th Little British Battler programme back in 2016 (see LBB The ai Corporation – catching the 'millennial fraudster').

Founded in 1998, ai beefed up its top team last year (see Confident ai Corporation offers a new approach to fraud) and they have just closed a $2.5m funding round. Backers were not disclosed other than to say that ai's principal existing shareholders participated.

Another milestone on the journey from Little British Battler to Great British Scaleup!

Posted by Anthony Miller at '08:29' - Tagged: funding  

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Thursday 12 July 2018

Backers share $6m for Olio's waste food-share platform

logoSometimes it's the simplest ideas that are the best – and in this case, also incredibly socially worthy. Pretty accurately described as the "food waste heroes programme", London-based startup Olio makes excess food, such as from restaurants, supermarkets and events but also including households, available for distribution in local communities by volunteers.

Founders Yorkshire-born Tessa Cook and Saasha Celestial-One ('daughter of Iowa hippy entrepreneurs', as she explains on their website) launched the platform in just five postcodes in North London almost exactly three years ago to the day, since when over 400,000 items of food have been distributed by more than 17,000 volunteers across 41 countries.

Olio recently closed a $6m Series A funding round, led by Octopus Ventures, with existing investors including Accel, Quadia and others also participating, and new investors Silvergate Investments 2, Bran Investments, and others joining in.

A fantastic achievement from every aspect.

Posted by Anthony Miller at '07:58' - Tagged: funding   startup  

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Wednesday 11 July 2018

Six Degrees makes another public sector move with Ark

Six Degrees logoSome interesting news from Six Degree’s public-sector division, Carrenza this morning. Avid TechMarketViews’ readers will remember that Carrenza was a Little British Battler (LBB) in 2013 (see Little British Battlers: The third wave), before it was acquired by Six Degrees a couple of years ago (see Six Degrees buys Carrenza). Its journey prior to acquisition, as a scalable infrastructure-as-a-service and platform-as-a-service solution provider, included winning its first government contract in October 2013 (see LBB Carrenza bags GOV.UK hosting contract), becoming the first company to be awarded the UK Government’s OFFICIAL Pan-Government Accreditation for its G-Cloud service, forming partnerships with a range of public cloud providers to service client’s hybrid cloud requirements, and getting to a point where public sector was driving its growth (see Carrenza continuing to innovate).  

Now, within the Six Degrees’ fold, it has announced that it has doubled its public-sector data footprint to four UK-based availability zones, with two new zones, in Corsham and Farnborough, in Government-accredited Ark Data Centres. Six Degrees states it will now be able to hold data at OFFICIAL and above classifications for public sector customers. Carrenza runs workloads in both the Microsoft Azure and Amazon Web Services’ clouds.

One of the most notable aspects of this move is the link with Crown Hosting Data Centres, the joint venture between the Cabinet Office and Ark Data Centres, which supplies co-location services to the UK public sector. Six Degrees will offer a multi-cloud solution to the UK public sector on the Crown Campus. Crown Campus builds on the Crown Hosting co-location environment by bringing cloud providers, including UKCloud, Expo-E and Capita, ‘on campus’.

Crown Hosting Data Centres has been growing fast. Its FY results to end June 2017 show turnover increasing from £4.1m to £20.5m. It also turned a loss into a profit, benefitng Ark too. With more providers working with Crown Hosting to offer multi-cloud solutions to organisations with tight data and infrastructure restrictions, that growth is set to continue. Six Degrees has made a smart move expanding its public-sector data footprint with Ark. And the public sector now has more choice. But, it will be competing with UKCloud (amongst others), which, as we highlighted in UKCloud – responding to a changing market, has a far larger footprint in public sector, and has been investing heavily in developing compelling, and differentiated, propositions for its public sector clients and prospects.

Posted by Georgina O'Toole at '09:58' - Tagged: public+sector   cloud   iaas   hosting   PaaS   hybridcloud  

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Wednesday 11 July 2018

Newcastle plans to be UK’s leading smart city

LogoA proposal by Newcastle City Council, which is expected to be approved at a cabinet meeting on Monday 16 July, outlines the city’s ambition to increase its global reputation as a smart city and deliver “radical digital transformation” of council services.

To date, the council has undertaken a series of smart city pilots, relating to waste management and housing. It is also working with Cisco, Newcastle University, Connexin, Mayflower and Quantela to install sensors in two streets in the city (Mosley Street and Neville Street) and merge the data generated with existing sources to give greater insight on parking availability, traffic congestion, air pollution, refuse management, street lighting and road surface quality. Newcastle University is leading the way in urban sciences. It opened the £58m Urban Science Building last year, a “living laboratory” with over 1,000 sensors connecting its walls, windows and fittings. The building is also home to the Urban Observatory, which manages the largest set of publicly available real time urban data in the UK.

The council believes there are even greater opportunities that are not currently being exploited and it has an ambition to become the UK’s leading smart city. The proposal says that without further investment Newcastle risks stagnating in its digital progress, losing ground on other cities and therefore not maximising on opportunities for economic growth.

It says that a “step change in approach” is needed and a significant part of that includes the appointment of a “tech partner” to help develop and deploy smart technology in the city. The proposal says procurement of a partner would be a significant undertaking given the potential value of the end contract. However, the partner would be expected to provide the financial capital to deploy the technology. It anticipates a prior information notice to be published this summer, and formal market engagement launched Autumn 2018. For further discussion about smart cities see: Breaking the Boundaries – Predictions Compendium 2018.

Posted by Dale Peters at '09:52' - Tagged: localgovernment   SmartCity  

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Wednesday 11 July 2018

More goings and comings at Nakama

logoThere's more comings and goings at troubled ‘recruitment business of two halves’ Nakama, with the news that it is to put its Melbourne subsidiary into voluntary liquidation (see Nakama naka'd in Oz).

And following the retirement of John Higham (see Higham retires as Nakama moves closer to Sheffield), Nakama is also to part ways with one of its original founders, Paul Goodship, currently running Nakama's London business.

Meanwhile, Nakama CEO, Andrea Williams, is relocating from Dubai (where Nakama has zero presence as far I can tell) back to the UK, the source of some 60% of Nakama's revenues. Williams joined Nakama in December 2017 as non-exec director and was appointed CEO in January this year (see Nakama naka'd (again)). I don't think it was mentioned at the time that she was actually based in the UAE.

Otherwise all is going swimmingly well with Chairman Tim Sheffield reporting a return to profit of some subsidiaries (not Melbourne, obviously), despite flat revenues in Q1 (3 months to 30th June 2018). However, we'll have to wait till September to see Nakama's annual results for the FY18 ended 31st March.

Stand by for the next exciting instalment.

Posted by Anthony Miller at '09:51' - Tagged: recruitment   management  

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Wednesday 11 July 2018

Micro Focus: rate of revenue decline slowing, integration pace picking up

logoFirst pass takeaway from Micro Focus interim results is that the HPE Software integration programme is gaining pace after its initial challenges, with executive chairman Kevin Loosemore commenting that “since March there has been an improved momentum in the HPE Software integration process and a slowdown in the rate of revenue decline. This has led to revenues for the period being at the better end of management guidance.”

For the six months to 30 April 2018 pro forma constant currency revenue declined 8% to $1.97bn but there was a 6.4% improvement in pro forma adjusted EBITDA to $710.5m, with the pro forma adjusted EBITDA margin rising 4.2 percentage points to 36% and the expectation that it will reach 37% for the full year, the mid point of guidance.

The integration is running approximately a year behind the original plan resulting, as previously announced, in lower than expected revenues for the year. However, management believes that by the year ending 31 October 2020, revenue declines will have stabilised and the group will be delivering adjusted EBITDA margins in the mid-40% area. It remains highly cash generative - $672m generated from operations during the period, an 121.5% increase.

What comes across from the discussion around the results is open recognition of the problems, from too much complexity to not enough pace and inconsistent application of the Micro Focus operating model across the enlarged group, and work still needed in several areas. But importantly Micro Focus is acting fast and acting iteratively - for example the operating model is being applied “fully and robustly” says CEO Stephen Murdoch, while the business is being simplified, costs taken out and the sense of urgency and “tone” improved.

With its hybrid IT strategy and focus on “bridging the old and the new", the company has a strong story. The challenge is managing a set of products that range from double digit growth to those in revenue decline as each also moves though its own lifecycle - but Micro Focus has previously proved itself adept at this. There are execution improvements to be made (and the level of work is not being underestimated) and changes to the portfolio such as the proposed sale of SUSE, but despite a dip in the share price this morning there is a sense that goals are achievable within known timeframes. 

Posted by Angela Eager at '09:49' - Tagged: results   software  

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Wednesday 11 July 2018

TCS UK growing at over 17%

TCSTCS banked another impressive set of quarterly results that saw global revenues for Q1 increase 10% to a fraction over $5bn. Net profit was also up 17.2% YoY with operating margin at 25%.

As we reported from the recent TCS Innovation Forum roadshow, TCS is positioning itself as the ‘glue’ that binds digital technologies to clients’ operations and strategies. TCS saw strong demand in Q1 for digital contributing 25% to total revenue and growing 44.8% YoY. 

Having breached the £2bn revenue barrier in the UK last year, TCS UK has now delivered its biggest quarter by revenue to date. We estimate that UK revenues for the quarter were up 17.3% YoY to £584m buoyed no doubt by the strong sales achieved in the last financial year.

Last year’s sales momentum has continued into the new financial year. The stand out UK deal for Q1 was an expansion of TCS’s existing partnership with M&G Prudential to deliver services for its UK savings and retirement customers, bringing the total number of policies managed by TCS to 5.8 million. The expansion so early in the relationship, is a strong vote of confidence in TCS’s transformational capabilities and represents the transfer of operations that were previously managed in-house effectively doubling the value of the Prudential relationship to TCS.

Other UK deals for the quarter included a digital transformation contract with a major retailer, an IoT and analytics deal with a major port and a cloud services deal with a leading airline.

Whilst many peers struggle in the current environment TCS continues on its impressive growth path, most notably here in the UK.

Posted by Marc Hardwick at '09:18' - Tagged: results   offshore  

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Wednesday 11 July 2018

Further focus key for PCI-PAL

logoThe decision of PCI-PAL to focus the activities of this customer engagement business on the supply of secure payments systems looks to have been the right one. In October the company launched its AWS-based platform, new channel partners have been enlisted and the flow of contracts, both new and re-signs, appears encouraging. In addition, the US operation has been launched and scaled up, enabling access to a market which is 4-5x larger than the UK and desperate for more secure management of payments.

The positive messages of the “strong first half” about top line prospects have continued for the full year according to today’s trading update. 15 customers have signed up to use the new platform and interest continues to build. The pipeline of qualified sales opportunities has doubled to £22.4m. Over the year 48 contracts were signed, of which 30 were via channel partners, with PCI-PAL signing up Capita Pay 360 and US payments provider NewVoiceMedia as resellers.

Nevertheless, the company’s share price now stands at around half its December level. Pre-tax losses at the first half had more than doubled over the previous year, to £1.6m, on revenue of just £1m. Indirect costs had doubled to £2m. Further investments in product development and sales and marketing, particularly in the US, will have weighed heavily on results in the second half.

So further focus is needed – to accelerate the improvement of the bottom line. The company is right to build channel partnerships to drive scale, but recognises that this will take time. Average contract values seem low, at £10-20k per deal. Some of these may represent sprats to catch mackerel but greater focus on larger opportunities is likely to pay dividends. We should learn more as full results are published in early September.

Posted by Peter Roe at '09:07' - Tagged: security   callcentres   payments  

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