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Tuesday 28 January 2020

Eagle Eye rises on "Air" currents

logoA sweet H119 trading update from Eagle Eye (for the period to 31 December 2019) showed it continued to benefit from market demand for personalised, real-time marketing via coupons, loyalty, apps, subscriptions and gift services, driving revenue up 26% to £10.1m (consistent with the growth rate of H118).

Its Air digital marketing platform is proving itself. Revenue rose 28% to £9.6m but operational progress also underlined its appeal. As well as securing new customers and upselling in its home country of the UK, it secured its first contracts in the US, and Australia & New Zealand. The count was just two, but they represent toeholds – and future recurring transactional revenue. The company also saw a number of implementations go live, opening up fresh transactional revenue, while existing customers extended their use of Air, again driving further transactional revenue.

Eagle Eye still has work to do on the bottom line, although it managed to move from an adjusted EBITDA loss of £0.3m in H119 to a profit of £1.2m in the most recent period due to a focus on cost management. 

The company is operating in a growth sector but that would be of no value if its product wasn’t up to scratch. Its challenges are around profitability, geographic expansion (which is expensive) and continuing to extend its partner ecosystem. 

Posted by: Angela Eager

Tags: saas   software   tradingupdate  

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Tuesday 28 January 2020

First two major NHS services move to the cloud

NHS Digital logoThe NHS e-Referral Service (e-RS) and the NHS 111 Directory of Services (DoS) have become the first two major NHS services to complete the move to the cloud using AWS Cloud Computing Services. The move is part of the Government’s ‘Cloud First’ strategy and follows NHS Digital’s guidance in January 2018 giving health and care providers the green light to use cloud services and data offshoring to store patient data.

As you might expect, NHS Digital believes the migration to the cloud provides a ‘wealth of benefits’ for the NHS including lower costs, better security and reliability, greater flexibility, performance, scalability and availability. However, it was interesting to see cloud migration also singled out as a key element of NHS Digital’s sustainability strategy. Ben Tongue, Sustainability Manager, said “large cloud operators like AWS provide significant energy and carbon savings against enterprise and legacy systems”. With sustainability high on the agenda, this is yet another driver for a move to the cloud for some public sector organisations.

AWS logoAWS’ footprint in the UK public sector market has been growing over the last couple of years, particularly in central government where customers include the Ministry of Justice, DVLA, Met Office and Home Office. In the NHS, AWS’ highest profile success to date had been at the NHS Business Services Authority (NHSBSA) where its SME partner Arcus Global deployed Amazon Lex, the same conversational engine that powers Alexa, to automate processes in NHSBSA contact centres. Although AWS is providing major services like e-RS and DoS directly to NHS Digital, we expect partners to remain key to AWS’ success in the NHS and wider public sector, where they are able to take AWS technology and use their sector expertise to tailor it to customer requirements across a more fragmented market. 

Related reading:

Amazon Web Services: Public Sector progress

AWS strengthens Home Office relationship with new four year deal

AWS Summit London: Public sector to the fore

Posted by: Tola Sargeant

Tags: nhs   cloud  

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Tuesday 28 January 2020

Capgemini edges closer to Altran deal completion

Capgemini logoNothing was looking certain in Capgemini’s pursuit of Engineering & R&D Services Supplier, Altran Technologies. We first reported on the company’s bid back in June last year – see Capgemini spends $36b on Industry 4.0. More recently, earlier this month, Capgemini had to raise its bid from €14 to €14.5 per share, upping the value of Altran from €3.6b to €3.7b, as it attempted to secure more than half of Altran’s capital and enable it to pursue its bid.

One of the issues has been that U.S. activist fund Elliott has persistently refused to sell its 15% shareholding. Even the increased bid was not enough to change its mind by the time the offer closed on 22nd January. However, even without Eliott, Capgemini has announced that it has succeeded in securing 53.6% of Altran’s share capital and at least 53.4% of the voting rights (it will hold the shares from 4th February upon settlement and delivery of the tender offer). Capgemini’s offer will now be reopened to investors from 28th January to 10th February inclusive.

In ‘ER&D Services: The next goldrush?’, we took a look at the logic behind Capgemini’s pursuit of Altran and the benefits it will bring the company. Senior UK management see a massive opportunity; form day 1, the acquisition will increase Capgemini’s footprint in some major clients, thus raising its profile. Moreover, there is an opportunity to use Altran’s capabilities, e.g. in advanced analytics, as a springboard into sectors where Capgemini is underrepresented currently. This latest announcement takes them one step closer.

Posted by: Georgina O'Toole

Tags: acquisition   analytics   M&A   corporateactivity   ER&D  

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Tuesday 28 January 2020

SAP upbeat despite decline in operating profit in FY19

logoSAP was upbeat as it released Q4 and FY19 results and in contrast to this time last year, the focus was on the financials not the prior years’ €800m-€950m restructuring programme. There was a legacy however, in the form of a drop in operating profits due in part to those restructuring costs but also the $8bn Qualtrics acquisition.

In a solid end to the year, Q4 (to 31 December 2019) saw revenue increase 8% to €8.04bn while operating profit dropped 11% to €2.1bn in part due to the ingestion of Qualtrics which contributed revenue of €156m. The all-important SAP cloud revenue figure rose a healthy 35% to €1.9bn, representing 24% of total revenue and countering the 4% decline in software licence revenue to €2bn. 

SAP said Q4 saw one of its largest on-premise customers move most of its SAP landscape to the cloud and augmented the use of SAP SaaS solutions. This contract contributed 10 percentage points to the total new cloud bookings growth of 19%. SAP expects more of its larger customers to follow this path. The customer decision is significant in terms of validating SAP’s hybrid capability but also because a successful shift will increase confidence levels among other customers. 

For the full year - during which SAP said it reached all its internal financial targets - revenue rose 12% to €27.6bn while operating profit dropped 21% to €4.5bn. Software licence revenue declined 2% to€ 4.5bn, contrasting with 39% cloud revenue growth to €6.4bn (25% of total revenue). Performance in EMEA was described as “solid” and included cloud revenue growth of 47%, with Germany, Netherlands and UK highlighted as cloud growth spots.

These were the first results since co-CEO’s Jennifer Morgan and Christian Klein took their seats in October so establish their baseline. Increasing operating profits and the level of S/4HANA and C/4AHANA adoption, while ensuring continued cloud growth and extracting value from Qualtrics are on the ‘to do’ list but there is an appropriate level of confidence – and SAP has raised full year 2020 revenue forecasts.

Posted by: Angela Eager

Tags: results   cloud   software  

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Tuesday 28 January 2020

Sopheon falls back in 2019

SopheonBrief year-end trading update out this morning from AIM-listed enterprise innovation management provider Sopheon, confirms expectations that the business has fallen back in 2019. The company was held back by a tough first half and will finish the year with  revenues of approximately $30m (2018: $34m). 

The business recovered in second half of the year and booked a very strong final quarter with a big sales push with new customers but was unable to make up the ground lost in H1. However, the Q4 sales push does provide an opening order book of some $3m in services for 2020. Sopheon’s strategic direction is towards SaaS and on the plus side here it enters 2020 with a base of $15.9m in Annual Recurring Revenue (ARR) up on the $14.8m it had entering 2019.  

Given the headwinds of H1 the results are in line with market expectations and the news of ARR growth will have helped the share price which is up nearly 20% this morning. Management has made the case that H1 was a “bump in the road” of continued expansion and whilst H2 was indeed strong, the next six months will be key.

Results are out on the 19th March which we will cover in more detail.

Posted by: Marc Hardwick

Tags: saas   software   tradingupdate  

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Tuesday 28 January 2020

Tribal revenue lower than expected

Tribal logoIn today’s trading update Tribal Group has announced revenue for the year ended 31 December 2019 will be lower than expected. The Bristol headquartered education software and services supplier blamed the lack of market opportunities for Student Information Systems, the move to subscription sales in the further education market, and the timing of revenue recognition under IFRS15.

In more positive news it says its continued focus on operational efficiencies have help push Adjusted EBITDA marginally ahead of expectations and annual recurring revenue (ARR) continues to grow following the acquisition of Crimson Consultants (now Tribal Dynamics) in May 2019 (see Tribal turns to Crimson to enhance student experience). It was a similar picture at H1, when revenue was down 3.8% to £40.4m (H1 2018: £42.0m), but ARR and adjusted EBITDA were up (see Tribal on track but facing market challenges).

Tribal celebrated some key successes towards the end of 2019 (see Tribal celebrates brace of wins and appoints new CTO), however the revenues from its new Middle East Education Services contract will be largely recognised in 2020.

It was also announced that Tribal has reached a non-binding, in principle agreement to settle the dispute with a platform provider regarding historic royalty payments (see Tribal facing royalty payment dispute). It expects to pay c.£9m to settle all historic liabilities, including related legal fees, and has agreed a new 10-year agreement for royalties due on future sales and renewals.

Although a full year revenue decline was predicted, the situation has clearly worsened. At H1 management stated that the longer-term nature of the sales cycles in higher education may have an impact on expected revenues and operating profit in 2020, so we are unlikely to see a positive revenue trajectory in the near future. We will have to wait until March to see the full detail behind today’s trading update, but at least Tribal can now put the dispute behind it and concentrate on its strategic objectives. 

Posted by: Dale Peters

Tags: results   education   saas   software  

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Tuesday 28 January 2020

*UKHotViewsExtra* IR35: Should we be worried?

IR35 imageIR35 is a hot topic of conversation. It is causing much confusion for contractor and end user organisations alike. A search on LinkedIn brings up IR35 experts, advisors, and compliance specialists aplenty. While everyone can easily seek out the formal policy description, the confusion lies within the detail and how to determine if IR35 applies to you or, as a business, your contractors.

UKHotViews Premium logoIt is now only a couple of months until IR35 – or Off Payroll Tax – legislation is introduced into the private sector. We are, increasingly, being asked what it will mean for our tech industry. In this UKHotViews Extra - IR35: Should we be worried? - we consider the implications, from the administrative burden, to the potential impact on skills supply, to the likelihood of HMRC achieving its tax income goals.

TechMarketView subscribers – including UKHotViewsPremium clients – can access the analysis now. If you are not yet a subscriber, please contact Deb Seth to find out more.

Posted by: Georgina O'Toole

Tags: publicsector   employment   government   privatesector   contractor   legal   IR35  

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Tuesday 28 January 2020

Just Eat eats Uber Eats’ lunch at McDonald's

logoAs its takeover by Dutch Takeaway.com (start with Just Eat looks to share a Takeaway) gets checked out by the UK Competition & Markets Authority (CMA), Just Eat has rather pulled the rug from under archrival Uber Eats’ feet (or wheels, I suppose) by taking over as exclusive delivery partner for McDonald’s in the UK & Ireland.

According to media reports, ‘McDelivery’ accounted for some 10% of Uber Eats’ orders in the UK. Uber Eats was appointed McDonald’s exclusive delivery partner in 2017, though very recently garnered unwelcome media attention for allegedly delivering a half-eaten burger to a ‘furious’ care worker in Scunthorpe. McDonald’s becomes Just Eats’ second exclusive delivery partner, having previously signed up UK bakery chain and purveyor of vegan sausage rolls, Greggs.

Meanwhile, Just Eat archrival Deliveroo is also entangled with the CMA over a proposed acquisition of a minority shareholding by Amazon as part of a $575m funding round announced last May (see Amazon Primes Deliveroo).

This is all fine and dandy – even exciting – were it not for the fact that none of these ‘meals on wheels’ outfits currently make any money (Just Eat used to before it started its own delivery service). Greggs, on the other hand, recently raised its profit guidance again, and expects to report revenues of some £1.16bn for 2019, up by 13.5%, almost double the growth rate for 2018. Very tasty.

Posted by: Anthony Miller

Tags: contract  

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Tuesday 28 January 2020

Payments disruptor Currencycloud secures $80m investment

CurrencycloudUK cross-border, payments specialist, Currencycloud, has secured $80m in Series E funding, as it looks to develop its offerings and establish a wider network of partners. The latest investment was led by US payments giant Visa and involved 10 participants, including BNP Paribas, IFC, SBI Group, Sapphire Ventures and Notion Capital.

In August, Currencycloud secured a £10m grant from BCR, the body established to implement the RBS State Aid Alternative Remedies Package, as a condition of the UK Government’s £45bn bailout of RBS (see: RBS bailout fund awards £40m in new grants). In 2017, Google Ventures became an investor in Currencycloud, following the company’s Series D funding round.

Founded in 2008, Currencycloud provides “out of the box” cross-border payments services to financial services companies. Customers include longstanding global players such as Visa, as well as FinTechs including Starling, Monzo and Revolut. The company has already established a global operation with offices in a variety of international locations.

As this latest investment shows, Currencycloud has continued to garner support from some major global institutions. The company has demonstrated its capacity for growth in this fast-moving arena. Whilst the cross-border payments space remains highly competitive, there is also plenty of capacity for future growth.

Posted by: Jon C Davies

Tags: funding   payments  

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Tuesday 28 January 2020

Juniper FY19 revenue posits weak outlook

Juniper FY19 revenue posits weak outlookJuniper Networks’ FY19 revenue fell 4% year on year to US$4.4bn despite a better than expected fourth quarter (up 7% sequentially). But while the networking specialist is seeing strong sales in cloud solutions and wide area network (WAN) enterprise switches, revenue from core network routers sold to service providers continued to decline.

Full year GAAP net income was down 39% yoy to US$345m, attributed primarily to higher tax rate and lower revenue, while GAAP operating margin fell 12%. Chief executive Rami Rahim highlighted Q4 growth as a contrasting positive, with Juniper seeing record enterprise sales and “solid momentum” from its US$405m acquisition of cloud focussed wireless LAN (WLAN) platform specialist Mist completed in Q2.

As we’ve said before Juniper is failing to grow turnover from its expanding cloud service business fast enough to offset shrinkage in router (down 12%) and switch product sales (down 3.5%) which still represent over half of total revenue. In terms of products, only the company’s security portfolio posted any growth (up 3% yoy).

Management are optimistic Q120 will bring yoy expansion however, as well as “modest growth” for FY20. For that to happen, we think the company will have to accelerate the shift of its product base from hardware to virtualised software and services like Mist and Contrail and sell more of its routing solutions to large cloud service providers such as Amazon Web Services (AWS) as the latter expand their own hosting capacity and edge network infrastructure (see AWS Outpost expands global reach).

Posted by: Martin Courtney

Tags: results   FY19   telecommunications   cloudserviceproviders   networkinfrastructure  

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Tuesday 28 January 2020

Coronavirus spreads to global markets

VirusYesterday global markets finally caught up with the Coronavirus virus. NASDAQ slumped 1.7% and the FTSE100 down 2.3%. But, putting that into context, both indexes are up this month by 2.92% and 0.08% respectively. The Chinese Index/Shanghai Composite was down 2.75% yesterday.

Luxury goods manufacturers (as the Chinese are the biggest customers for brands like Louis Vuitton) and airlines (as passengers fear flying with passengers who might have been exposed to the virus) were the worst affected. The issue for tech is that China is both a big market (albeit mainly for local firms) and an important manufacturing centre for the likes of Apple. Indeed Apple shares fell nearly 3% yesterday. Many factories have been closed on an extended Chinese New Year break. The fear is that a Chinese slowdown will turn into a Global recession.

Conversely, tech might be a relative gainer. Sure, you might be reluctant to get on an airplane to visit your client. But you are more likely to invest in enhanced video conferencing etc. Indeed, reports from Wuhan show a major upturn in online grocery and takeaway food orders as residents fear leaving their homes. Deliveries are left on doorsteps or other holding areas to avoid person-to-person contact.

There were many things that might have derailed the stock market rally we have enjoyed of late. But a global virus affecting millions of people wasn’t one on my risk sheet.

So, what do you fear most?

‘Events dear boy. Events’ as PM Harold Macmillan apparently never said!

Posted by: Richard Holway

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Monday 27 January 2020

MPS begins operational use of Live Facial Recognition tech

Met Police logoThe Metropolitan Police Service (MPS) has announced it is to begin operational use of Live Facial Recognition (LFR) technology.

Use of LFR, which involves the real time processing of digital images to measure facial features in order to produce a biometric template that can be used to identify individuals, is in its infancy in UK policing but has received significant media coverage. It is a topic we discussed in detail in UK Public Sector Market Trends & Forecasts 2019-22.

NPS logoTrials have been conducted by the MPS, South Wales Police and Leicestershire Police, all using NEC’s NeoFace Watch (NFW) system and it is this technology that will now be put into operational use in London. Since the MPS trials, NFW, which is supplied and supported by NEC's UK business Northgate Public Services, has been upgraded with the latest and more accurate M30 algorithm. The MPS' LFR cameras will be focused on targeted areas during operational use and will be clearly signposted. It will operate as a standalone system and will not be linked to other imaging system e.g. CCTV, body worn video or ANPR.

Met Operations - Assistant Commissioner Nick Ephgrave described the rollout as an “important development” for the MPS and one that is “vital” for helping the force reduce violence in the capital. He said the MPS has “a duty to use new technologies to keep people safe in London” and that the “careful and considered deployment” will “strike the right balance” of reducing crime whilst protecting people’s privacy and human rights.

Although the Government has backed the earlier trials, the House of Commons Science and Technology committee concluded last year that the technology should not be deployed until concerns over the technology’s effectiveness and potential bias have been fully resolved. Independent evaluation of the trials also raised further issues with human rights law and operational effectiveness. Last year, Elizabeth Denham, Information Commissioner, said she was “deeply concerned” about the growing use of LFR but that there was strong public support for the police using facial recognition to catch criminals. However, the MPS has incorporated the advice from the ICO into its planning and preparation for this deployment of LFR.

Although the potential for LFR in assisting law enforcement is clear, there will be understandable concerns about the MPS commencing operational use of the technology. LFR and its acceptance by citizens are at a critical stage and it would be very easy to lose the public’s approval of its use. However, with care it should be possible to navigate the ethical and legal concerns and, as we continue to see advances in the accuracy of LFR, it will, in time, become a vital component in the fight against crime.

Posted by: Dale Peters

Tags: police   AI   biometrics   facialrecognition  

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Monday 27 January 2020

Dynamic partnering between Crunch and Staffology

logologoUplifting news from two emerging UK tech firms this morning as youngster Crunch Accounting partners with startup on demand payroll specialist Staffology Payroll. 

Crunch Accounting has an unusual business model (for a relatively young company - it was founded in 2007) in that it provides a combination of accounting on demand software and integrated business services (e.g. on demand access to in-house certified chartered accountants) to freelancers, contractors, sole traders and small businesses. Via partners but accessed through Crunch, business services extend to areas like small business insurance, self-employed mortgages and investment and pensions. Crunch is not the only provider to have combined in-person business advise with software for developing business - think Moorepay – but its DNA is on demand and it is able to offer a rich set of services.

Payroll specialist Staffology is the latest partner to join Crunch. Regular HotView readers will know Staffology was founded by Duane Jackson, who had previously founded then successfully sold challenger SaaS accountancy business KashFlow to Iris Software in 2013 for c.£20m. The coup as far as Staffology is concerned, is that Crunch already provides payroll through its own platform but selected Staffology (whose product was released during 2019) for its depth of specialist capability. Selection is also an endorsement of Staffology’s investment in integration and its public API which has been designed so that there’s nothing that can be done in the app that can’t also be done programmatically via the API. 

Crunch and Jackson have a history. They were competitors during KashFlow days but post KashFlow Jackson invested in Crunch as soon as he was able. This tie-up could be dynamic for both parties and is another marker of the level of activity and players in the SMB accounting sector, that also includes challenger Xero.

Posted by: Angela Eager

Tags: saas   partnerships   software  

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Monday 27 January 2020

Accesso reappoints founder as CEO

AccessoAccesso, the software provider to the leisure and entertainment industry, confirmed today that it had reappointed founder Steve Brown as new CEO, as it looked to “reenergise” the business following an uncertain period for the company. Paul Noland has resigned as CEO after less than two years in charge following disappointing interim results and a failure to find a buyer for the business having put it up for sale six months ago.

Steve BrownHaving been unable to find someone to pay the required price, Accesso has ended its formal sale process which must have created a good deal of uncertainty within the business. Considering its share price has fallen by some 75% over the last year its perhaps no surprise that it has been taken off the market.

Steve Brown founded Accesso and previously held the role of CEO between 2016 and 2018 and his deep knowledge of the business will be key to setting a new vision and strategic direction for the company. It’s not clear yet if Brown will be a stop-gap appointment or a long-term solution for the company but he starts with a packed in-tray, not least the news that Accesso now expects revenue to be below the lower end of expectations at around $117m to $118m for 2019. 

Posted by: Marc Hardwick

Tags: software   appointment   ticketing  

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Monday 27 January 2020

Sonata’s nice little UK earner

logoResults from Bangalore-based (domestic) reseller and (international) IT services player, Sonata Software, offered an interesting glimpse into at least one success story here in the UK.

It seems that revenues from a ‘large UK travel client’ has topped $35m so far this FY, up from around $23m in FY15. By my estimates, this client now accounts for around 25% of Sonata’s total services revenues, which I put at some $135m YTD (to 31st Dec 2019).

As I’ve said before, Sonata is not going to ‘frighten the horses’ any time soon (see Sonata’s margins march onwards and upwards). But it does seem they have at least one ‘nice little earner’ here in the UK, so well done them!

Posted by: Anthony Miller

Tags: offshore  

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Monday 27 January 2020

SThree grows despite UK drag

logoEchoing both the sentiment and the direction of travel of recruiters Hays (see Headwinds for Hays) and Pagegroup (see Pagegroup’s global challenges (and everyone else’s too!)), Mark Dorman, CEO of UK-headquartered multibrand recruiter SThree, alluded to challenges from Brexit et al for the decline in net fee income (gross profit) at its UK unit. UK revenues in FY19 (to 30th November 2019) fell by 8% to £236m, but NFI dropped faster, by 10%, to £43.8m, trimming UK gross margins by 60 bps to 18.5%. The UK now represents just 18% of SThree’s worldwide revenues and 13% of NFI.

Fortunately, performance in SThree’s other key country markets (Germany – its biggest, Netherlands, USA) and other regions more than mitigated the UK declines, boosting SThree’s top-line revenues by 7% to £1.345bn and NFI also by 7% to £342m. Operating profit grew by 22% resulting in a 4.3% margin, 50 bps higher than in FY18.

Since coming on board from McGraw Hill Education in March last year, Dorman has sharpened SThree’s focus on Science, Technology, Engineering and Mathematics skills, including changing the company’s LSE ‘ticker’ from STHR to STEM (see SThree nails its colours to the (LSE) mast).

At the time Dorman’s appointment was announced, I voiced my concerns as to whether a recruitment industry outsider was the appropriate choice for the job (see SThree appoints ‘3-times outsider’ to run the business). Well, regular readers will know I have always taken the view that ‘the truth is in the numbers’. And it must be said, in the round, the numbers are heading in the right direction!

Posted by: Anthony Miller

Tags: recruitment  

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Monday 27 January 2020

Bank of England accelerates its own public cloud journey

BoEThe Bank of England is running a tender process to identify a partner to help it embrace public cloud provision. The tender for the 2-year contract, reveals that the central bank, is looking for a vendor to design and implement a modern, cloud environment across IaaS and SaaS.

Having previously been heavily criticised by a Parliamentary Select Committee for its antiquated IT systems, the central bank is currently in the midst of major transformation project named 'One Bank Services Transformation’.  The initiative involves bringing in a single cloud-based system to replacement 25 of the bank’s existing systems.

In December, the Bank of England’s Prudential Regulatory Authority, issued guidance to retail banks, imploring them to take firmer control of their own IT modernisation programmes, in the wake of recent IT outages (see:  Banks must act to protect the public from IT failures). Many of the Bank of England’s own internal systems are known to be borne of a bygone age, and it will no doubt be looking to follow some of its own advice.

Although this latest tender is not necessarily pivotal in its own right, it is interesting because it does appear to mark a clear path towards wider public cloud adoption, that is familiar across the wider banking community. Crucially, the bank has highlighted that “advances in security and vendor offerings” have now given it the confidence to move data and services into a cloud environment.

Posted by: Jon C Davies

Tags: contract  

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Friday 24 January 2020

AWS Outpost expands global reach

AWS Outpost expands global reachThe expansion of Outpost to four new countries strengthens Amazon Web Services’ (AWS) hybrid cloud proposition by taking the managed services infrastructure closer to end users’ on-premise or colo data centres to better accommodate latency sensitive data and applications.

With the private cloud hardware stack made available last month now available in Canada, Bahrain, Singapore and the Hong Kong Special Administrative Region, Outpost also addresses data sovereignty concerns for public and private sector organisations keen to host and store sensitive information in compliance with local data protection regulation.

Outposts offers on-premise hardware designed in partnership with the likes of Cisco, Aruba and Juniper Networks that lets customers run compute and storage in their private cloud while connecting to AWS’s other cloud services, including Elastic Compute Cloud (EC2), Elastic Block Store (EBS), ECS, Elastic Kubernetes Service and EMR. Each Outpost has a pair of networking devices equipped with support for a range of 1/10/40/100 Gigabit Ethernet connectivity options.

Itt also looks like a strategic approach that will help AWS combat the threat posed by edge computing, which we think provides an ideal springboard for smaller CSPs to challenge the centralised hosting muscle of super scale providers like AWS, Microsoft, Google and IBM (see our report Super scale cloud service providers and edge computing here).

Posted by: Martin Courtney

Tags: privatecloud   EdgeComputing   hybridcloud   datasovereignty  

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Friday 24 January 2020

*UKHotViewsExtra* National Policing Digital Strategy 2020-2030

National Policing Digital Strategy coverThe National Policing Digital Strategy 2020-2030 was launched at this week’s Police ICT Summit 2020. The strategy was co-authored by the Police ICT Company and National Police Technology Council and builds upon Policing Vision 2025 that was published in 2016.

The strategy document says progress has been made in recent years but that more needs to be done. It presents five key digital ambitions for policing:

  1. Seamless citizen experience: giving the public more choice in how they engage with the police.
  2. Addressing harm: using digital technologies and behaviours to identify the risk of harm and protect the vulnerable.
  3. Enabling officers and staff: investing in people, from leadership through to the front-line, to ensure they are equipped with the right capabilities.
  4. Embedding a whole public system approach: fostering a philosophy of openness and deepen collaboration with partners to jointly design and tackle public safety issues.
  5. Empowering the private sector: strengthening the relationship policing has with the private sector and fostering a vibrant PoliceTech landscape.

The document is well timed, coming in the same week the Government announced the biggest increase in funding for the police system in a decade. The settlement includes the £750m announced by the Chancellor in last year’s Spending Round to recruit 6,000 of the 20,000 additional police officers pledged by the Government by the end of March 2021 (see Spending Round 2019: turning the page on austerity?).

UKHotViews Premium logoAs almost every traditional crime now has a digital element to it, both in terms of how it was committed and how the police investigate it, getting the right strategy in place for digital, data and technology will be essential for the future of policing. UKHotViews Premium and research subscribers can read more about the National Policing Digital Strategy here.

For more information about TechMarketView's subscription services please contact Deb Seth.

Posted by: Dale Peters

Tags: strategy   police   government   digital   data  

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Friday 24 January 2020

Q4 report on Citrix triple transition

logoLow level revenue growth of 1% in both Q4 and FY19 to $810m and $3bn respectively for Citrix Systems reflects a company transforming on three fronts simultaneously but one that is progressing.  

As it transitions from products to platforms, on-premise to cloud and perpetual licenses to a subscription model, the shape of the company is changing but in predictable ways. Product and Licence revenue fell 16% in Q4 to $177m with Support and Services down nearly 5% to $440m. However, Subscriptions revenue expanded 49% to $193.5m driven by Networking, while SaaS bloomed 45% to $113m on the back of Workspace demand. Subscriptions revenue is a robust 24% of total revenue but at 14% SaaS is a bit behind the curve compared the wider market although with Workspace positioned for growth this has scope to improve. 

Reassuringly, net income increased, rising from $166m in Q418 to $207m in Q419 (to 31 December 2019), while for the full year it expanded from $576m to $682m. 

Overall, it was strong finish to the year and added to the upward trend developed during FY18, which was reflected in close to an 8% improvement in the share price in after a full day of trading following the results release.  

Posted by: Angela Eager

Tags: results   software  

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Friday 24 January 2020

*NEW RESEARCH* Business Process Services Supplier Prospects 2020

Our new Business Process Services (BPS) Supplier Prospects 2020 report looks at how the top 10 largest players in the market are set up to deal with the current turbulent market environment.

Report coverDigital complexity is driving the market forward, with clients looking for guidance as they look to navigate the emerging “digital chaos”. One of the clearest symptoms of this is the increasing requirement for expert advice as organisations grapple with their next move. Buyers are expecting digital solutions to create value quickly, which means suppliers are having to be geared up to operate at speed.

Consultancy-led services and the need for consultative selling is pushing through changes to both BPS operating models and staffing requirements. Demand for innovation and design-led thinking skills in particular are red hot, as BPS players invest in the areas likely to deliver both the greatest return as well as a deeper, more strategic relationship with their clients.

The report contains profiles of the top 10 suppliers of Business Process Services to the UK market, from top placed Capita to 10th placed Concentrix.

The insights within Business Process Services Supplier Prospects 2020 and beyond are a positive way to kick of 2020 and the report is available to eligible TechMarketView subscribers. For those of you who don’t have a subscription, Deb Seth will be happy to provide details.

Posted by: Marc Hardwick

Tags: bps   suppliers   newresearch   prospects  

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Friday 24 January 2020

Restructure underpins turnaround at NCC Group

Restructure underpins turnaround at NCC GroupNCC Group’s ongoing Security Growth Transformation (SGT) programme is starting to reap rewards for the UK cyber security consultancy, with reported first half revenue up 5.3% to £133m on a pre-IFRS 16 like for like basis and adjusted operating profit increasing 11.5% to £17m.

This time last year poor UK performance precipitated a steep 30% decline in the company’s share price (see Cyber skills shortage and cloud undermine NCC Group results). For the six months ending November 2019 however, expanded turnover was spearheaded by strong growth in NCC’s core Assurance business which was up 7% in the UK (£48m) and 11% in the US (£42m), fuelled by a big investment in its technology and workforce.

Within Assurance, NCC saw substantial H1 year on year gains in both its technical security consulting business (up 15%) and its managed detection and response (MDR) proposition founded in its Netherlands based Fox-IT and Accumuli acquisitions (up 6.2%), the latter amidst fierce market competition from managed security service providers (MSSPs) and systems integrators.

With gradual and planned phasing out of product sales, only NCC’s risk management consulting (RMC) practice showed cause for concern, down 13% yoy attributed to sharp falls in revenue in both the UK (down 11%) and the rest of the world (down 77%).

The Escrow business too saw continued shrinkage, down 2% in the UK and 3% on a global basis, after the belated introduction of a cloud hosted Escrow as a Service (EaaS) platform in partnership with Microsoft in July last year came too late to make any material impact.

Overall though, this was a very positive first half for NCC after the travails of the past, and we see no reason why current momentum won't continue into H2.

Posted by: Martin Courtney

Tags: results   escrow   H1   cybersecurity   consultancy  

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Friday 24 January 2020

New Babylon partnership to deliver Digital-First Integrated Care

Babylon logoThe Royal Wolverhampton NHS Trust (RWT) and Babylon are launching a 10-year partnership to develop a new healthcare delivery model of ‘Digital-First Integrated Care’, with the first new services expected to go live before the end of 2020.

RWT is one of the largest acute and community healthcare providers in the West Midlands. It employs more than 9,400 people and serves c.300,000 people across Wolverhampton and the wider Black Country, South Staffordshire, North Worcestershire and Shropshire regions.

Through the new partnership RWT will offer patients a free app providing connected primary and secondary care services, including access to clinical consultations with The Royal Wolverhampton and Babylon doctors and specialist nurses; appointment booking; prescription services; access to personal clinical records; health assessments based on medical history and lifestyle information; an AI-driven triage service; and health management, monitoring and rehab services.

The partnership is intended to help RWT deliver its vision for joined-up and integrated care, which forms a key component of the NHS Long Term Plan and is intended to improve access to and the quality of health services whilst reducing the pressure on limited resources. However, questions will be raised about the scale of RWT’s commitment to Babylon and whether it should be entrusting this breadth of services to a single supplier.

Babylon is one of the most high-profile HealthTech start-ups, attracting investment and controversy in equal measure (see Babylon joins unicorn club with $550m fundraise). This partnership represents a new approach for the company that currently offers an app-based private primary care service and operates the GP at Hand service in London and Birmingham and which it expects to expand into Manchester later this year (see The Expanding Influence of Babylon). The service it is developing with RWT will be monitored closely by other Trusts as the NHS looks for new ways to address the challenges created by a growing and aging population. 

Posted by: Dale Peters

Tags: nhs   partnerships   healthcare  

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Friday 24 January 2020

Kurtosys reports cash injection

KurtosysLondon based enterprise content management (ECM) specialist, Kurtosys, has secured funding from Vistara Capital Partners to fuel its growth ambitions for its digital experience platform (DXP). The company provides an end-to-end solution targeted at global financial services providers. The platform helps users to create and manage all their financial data, documents, websites and content in a secure and compliant environment.

Founded in 2002 by CEO, Mash Patel and Harry Thompson, Kurtosys originally identified the need for greater clarity and efficiency around client communication and reporting within the asset management industry. The company’s solutions include secure websites and portals, document libraries, interactive data tools and automated factsheets.  Kurtosys has a presence in the UK, US and South Africa and intends to use the latest cash injection to accelerate its global growth initiatives and to invest in the automation and delivery of its services.

Posted by: Jon C Davies

Tags: funding   FinTech   ECM  

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Friday 24 January 2020

Barclays helps FinTech Nimbla earn its stripes

NimblaUK banking group, Barclays, has formed a commercial partnership with insurance startup, Nimbla, one of the FinTechs to successfully pass through its accelerator programme. Founded in 2016 by Flemming Bengtsen, Nimbla is one of the many new offerings targeting the SME segment. The company provides its clients with the ability to insure against individual invoices to protect against bad debts.

The cost of insuring a single invoice against default via Nimbla starts from just £6 and cover can be arranged quickly and easily online or by the app. The service is compatible with Xero, FreeAgent and is also available via the Starling Marketplace. In contrast, the cost of securing credit risk insurance cover for a whole book is a specialist provision and might typically cost many thousands of pounds and can often be time consuming to arrange.

The Barclays accelerator programme has been running since 2014. The intensive 13-week program is designed to help fast-track FinTech innovation. Another successful graduate, Shoreditch based, Cutover, recently secured $17m in funding, for its mission critical planning tool aimed at the IT departments of financial institutions (see: Cutover secures $17m funding led by Index Ventures). Accelerator programmes run by banks, insurers and IT services providers, are increasingly helping to ensure that the established players retain their strong stake in the tech driven future of financial services (see: Financial Services Predictions 2020).

Posted by: Jon C Davies

Tags: funding   FinTech  

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Thursday 23 January 2020

Dr Mike Lynch and the UK-US Extradition Treaty

LynchLast week the HPE v Mike Lynch High Court case ended. Judgement is not expected until mid year.

Now Mike Lynch has to turn his attention to another issue - his possible extradition to the US. This afternoon David Davis stood up in the House of Commons and delivered a very powerful speech about the inequality in how the UK uses the UK-US Extradition Treaty of 2003 compared to the US. The treaty was brought in to address issues in the immediate aftermath of 9/11 and was designed with terrorists and dangerous criminals in mind. Since then the UK has sent 135 of its citizens to the US - 99 for non-violent crimes. Whereas only 11 Americans have been extradited to the UK. Some of the most high profile extraditions have been for white-collar issues where the alleged crimes took place on British soil - eg Ian Norris/Morgan Crucible and the Nat West Three.

This is an issue which should trouble every senior director of a UK company - particularly those with any trading links to the US.

Anyway, David Davis’ plea was that Mike Lynch’s extradition should be delayed at least until the verdict of the current High Court case is known.

You can read the full Hansard transcript of the speech and debate HERE. Regardless of your views on the Mike Lynch case, it is well worth the read. Let’s hope none of our readers ever finds themselves in such a situation.

Posted by: Richard Holway

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Thursday 23 January 2020

NEW RESEARCH: Taming Digital Chaos – Predictions Compendium

We are excited to today launch the TechMarketView Predictions Coprempendium for 2020. Based around our research theme for 2020, Digital Chaos, our Predictions are essential reading for both buyers and suppliers of technology and services.  

The report combines all of our Predictions research for 2020, including our Top Ten Predictions for the UK Software and IT Services market, and our views from our experts in the Public and Financial Services sectors. Also included in the Compendium is a special section from Richard Holway entitled: “2020 Vision - Forecasting the Future”.

Expect far more research on Digital Chaos as 2020 progresses. In the meantime, the 2020 Predictions Compendium is available here: Taming Digital Chaos: Predictions Compendium 2020.

For further information, please contact our Client Services team (info@techmarketview.com).

Posted by: HotViews Editor

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Thursday 23 January 2020

Computacenter update indicates record full year results

cccThis morning’s upbeat pre-close statement from Computacenter indicates that the firm will record its “best ever” performance across revenue, profit, earnings per share and cash generation. It has also increased profitability by the largest absolute amount ever. As a result – and perhaps not surprisingly – Board members are “comfortable” that Computacenter will hit the upper end of market expectations.

Total revenue for the Group (i.e. including acquisitions in the US and the Netherlands) leapt 17%. The organic, constant currency growth rate was 4%.

In the UK specifically, revenue was broadly flat, but with strong margin growth in both Technology Sourcing (i.e. resale) and Services

Computacenter says it has entered 2020 “with confidence”, pointing to momentum both within the company and the broader market. Its focus on developing capability in areas such as networking, security and cloud is the right approach. Likewise its continued investment in its Services portfolio is essential as the market continues to navigate its way through Digital Chaos.

Posted by: Kate Hanaghan

Tags: tradingupdate  

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Thursday 23 January 2020

Actual Experience grows via the channel

AEAnalytics specialist, Actual Experience plc, has released preliminary results, reflecting encouraging revenue growth and a reduction in its losses. Total revenue for the full year ended 30 September 2019 was up 79% to £1.9m, helped by the annualisation of two large customer engagements that were secured last fiscal. The company's operating loss was reduced from £7.4m to £6.3m and overall, Actual Experience recorded a loss for the year of £5.9m compared to £7.2m in 2018.

The Bath based vendor, founded in 2009, has started to build up some sales momentum, having previously demonstrated the value of its partnering strategy (see: Partnering pays off for Actual Experience). The switch to a channel-led go to market approach required significant investment, which is bearing fruit in terms of new business opportunities.

Actual Experience has established valuable relationships with Accenture, Verizon, Vodafone and Cisco, which are helping it boost its pipeline. It is also good to see the company making progress in reducing its cost overheads. Profitability, however, still appears to be some way off.

Posted by: Jon C Davies

Tags: results   analytics  

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Thursday 23 January 2020

IMMJ and SPS aim to improve patient care in Norfolk

IMMJ logoNorfolk and Norwich University Hospitals NHS Foundation Trust (NNUH) will work with Swiss Post Solutions (SPS) to deliver a digital transformation solution across the Trust. The Zurich headquartered business will work in partnership with Great British Scaleup IMMJ Systems to help improve patient care across the region.

IMMJ participated in the fourth wave of TechMarketView’s Great British Scaleup programme in June 2018 and subsequently went on to engage ScaleUp Group to help obtain growth funding (see Tim Gregory to help Great British Scaleup IMMJ scale up and work back). The company was established in 2015—it achieved revenues of c.£500k in the year ended 31 March 2019 and has been growing rapidly.

NNUH is embarking on the first step to becoming a digital hospital and has a target of becoming ‘paper-lite’ by 2023. It will utilise IMMJ’s Electronic Document Management (EDM) software, MediViewer, to provide digitised clinical content and full electronic patient records at the point of care.

By digitising paper health records and making them available electronically, clinical and administrative staff will be able to access and search patient records, wherever they are based geographically, with much greater efficiency. It should mean that users have the most up-to-date version of patient information, which will allow them to provide more effective and timely treatments and interventions. The platform will also allow greater collaboration across different sites and help streamline internal processes, which NNUH believes will ultimately help them deliver cost savings of £2.5m per annum.

As the largest Acute Hospital in the Norfolk and Waveney region and one of the largest Acute Trusts in the country, NNUH represents an important new customer for IMMJ. As more trusts seek solutions to digitise their paper records, we think IMMJ’s solutions will continue to be in high demand. 

Posted by: Dale Peters

Tags: nhs   contract   digital   transformation   healthcare  

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Thursday 23 January 2020

Blue Prism sees sales surge

LogoUK-based RPA specialists Blue Prism delivered very impressive top line growth in FY19. Beating the guidance issued by the company in its trading update last November (see here), the largely second half weighted performance saw sales for the twelve months ended 31st October increase by 83% yoy to £101m. As significantly, the level of monthly recurring revenue (MRR) being generated at the end of October was £10.6m, up by 71% on FY18, which represents an increase of 60% on 2018 when MRR contributed via the Thoughtonomy acquisition is excluded.

Adjusted EBITDA losses, however, deepened markedly to £71.9m (FY18: £21.5m) as the result of increased investments in both global expansion, via spend in sales and marketing, and continued product development. Indeed, Blue Prism’s headcount at the end of last October stood at just over the 1000 mark, up over 100% on the position at close of the prior financial year.

The company had nearly 1700 customers at 31 October 2019, a yoy increase of 73%. Notable new name wins included Audi, Amazon, Bank of China, Consolidated Edison, the International Monetary Fund, L'Oreal and the United States Department of Justice. Client retention remained very strong, with minimal revenue attrition during the year driving a gross retention rate of 99.3%.

Looking forward, the Blue Prism Board is confident about meeting its revenue expectations for FY20. It believes that the business momentum generated during H219 augurs well for the coming months. The leadership team also anticipates that the benefits of the 2019 investments should begin to come through during 2020.

Early trading would suggest that investors agree with Blue Prism stock up c.10% on last night’s close. Returning Executive Chairman Jason Kingdon still has plenty to do, however, if he is to guide the company to realise its ambition of becoming a market leading platform for corporate adoption of Artificial Intelligence (AI) technologies.

Posted by: Duncan Aitchison

Tags: results   RPA  

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Thursday 23 January 2020

CGI delivers MoJ service desk

CGI logoIt’s taken a while to be made public, but the Ministry of Justice has finally published the notice of a contract awarded back in November. CGI has won the department’s Service Desk contract in a £24.1m, 5-year, deal. The arrangement will run from 28th November 2019 to 27th November 2024. The competition was undertaken via the Crown Commercial Service’s (CCS) Tech Services 2 framework. CGI is already a major supplier of application support and hostng services to the department; however, the shape of its relationship has started to change as the MoJ pursues its disaggregation agenda.

The MoJ’s service desk arrangements were previously covered under two deals: Atos provided the service desk for the HM Courts Service (HMCTS – under a £45m “ICT infrastructure services exit contract” let in 2017), while DXC was the provider for HM Prison & Probation Service (HMPPS). This deal merges the two arrangements. Bringing the two contracts together is part of the MoJ transitioning to a common ICT infrastructure. We understand that both Atos and DXC were in the running, alongside Computacenter and Wipro.

The Ministry of Justice is at a critical junction in its relationships with suppliers. Its old ‘FITS’ tower contracts were scheduled to end in 2019, but some were extended to allow for a smooth transition. It is now looking to let a range of much smaller, shorter, contracts, consolidating the ICT requirements of the various agencies.

As an aside, the delay in making this contract award public is not unusual (the delays are often far longer). As a result, suppliers continue to find it hard to navigate their way through a maze of incomplete and hazy information on the actions and intentions of Government departments and agencies, making it very difficult to pursue opportunities. Although things have improved, Government Transparency is not always evident. And, there is a fear that, following New Years’ honours data breach, the Government could further pull back on data publication to avoid further mistakes.  

Posted by: Georgina O'Toole

Tags: publicsector   centralgovernment   contract   infrastructureservices  

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Thursday 23 January 2020

Craneware reports strong sales performance

CranewareHealthcare analytics specialist, Craneware, has released an encouraging H1 trading update, highlighting strong new sales and customer renewal volumes. The company, which provides healthcare analytics to the US market, saw sales growth for the 6 months ended 31st December exceed 30% year on year.

Craneware indicated that the number of hospitals renewing their contracts was “significantly above” the same period last fiscal. Meanwhile, the company's numbers were negatively impacted by the loss of one large client which saw renewals by dollar value fall to 73%, below the company’s historic annual range of 85% to 115%.  

Craneware has a lucrative niche in this specialist area of the vast North American healthcare sector. The cost and process efficiencies delivered by its cloud-based, Trisus, platform, have demonstrated a strong appeal as the industry increases its focus on value-based care.

In September, Craneware released encouraging full year results (see: Craneware poised to capitalise on US market potential). Although the company experiences something of a sales slowdown in its previous H2, prospects appear strong for further growth this fiscal and the company’s management is confident of meeting its full year targets.

Posted by: Jon C Davies

Tags: healthcare   tradingupdate  

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Thursday 23 January 2020

Indian tech company entry-level pay jumps 15-20%

logoAn article in the Economic Times of India gives a rare insight into graduate pay rates at top-tier tech companies – in this case, HCL Technologies.

According to the article, HCL – which plans to nearly double its graduate intake next FY (to 31/3/21) to some 15,000 – is offering Rs 20-23 lakh (c. $28,000-$33,000) for management graduates from top-tier Indian business schools (IIMs) and Rs 15-18 Lakh from lower-ranked IIMs. MBA grads from other campuses get Rs 4.5-7 Lakh ($6,500-$10,0000).

In contrast, technical graduates from Indian Institutes of Technology (ITTs) get Rs 12-15 Lakh, and those from NITs (National Institutes of Technology) get Rs 8-12 Lakh. The article goes on to say that the bulk of hires get annual salaries of Rs 3.6-3.8 Lakh.

The salaries represent a 15-20% increase over the current year for management and technical recruits.

It also seems that grads pay for their training. According to the article, engineering grads pay Rs 2 lakh (c. $2.8k) for a 6-month training programme, while non-engineering grads pay Rs 1 Lakh for a 3-month stint. Employees also sign a bond to commit to working with the company for a specified period of time.

HCL is the fastest growing among the top-tier players, recently reporting another impressive set of results in terms of growth and profitability (see HCL Q3: Europe increases share).

Graduate hiring at Indian tech firms is a bunfight for the best talent. However, most of the players keep entry-level salaries within a narrow band for fear of sparking a wage war. I hope to look into this a little further in the next edition of OffshoreViews.

Posted by: Anthony Miller

Tags: offshore  

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Wednesday 22 January 2020

IBM exits 2019 in growth mode

IBMIBM closed its FY19 with revenue of $77.1bn and growth in the fourth quarter of +3% (at constant currency and adjusting for divested businesses). For the year as a whole, the business was also able to boast marginal growth - of 0.2%.

The broad revenue trends continued, with Global Business Services flat ($4.2bn) having been held back in particular by a 3% decline in Apps Management, and a 4% decline in Global Technology Services (to $6.9bn). However, Cloud & Cognitive Software - now a very meaty business at $7.2bn - grew 9%. Managing the lack of growth in established business areas is an industry-wide challenge with the aim for many being to achieve a performance in new areas that is able to outweigh that decline. In this regard, IBM is certainly not alone.

Other signs to look out for include the performance of new products (such as Cloud Paks, which is showing “good adoption”) and the integration of Red Hat. IBM talks of entering the next chapter of cloud (which mirrors TechMarketView’s “complex digital” description of the market). The focus is all about moving substantial mission-critical workloads into hybrid/multi-cloud environments - based on a foundation of Linux, and with the application of containers and Kubernetes. This is where Red Hat plays a pivotal role, and indeed, the business hit $1bn in quarterly revenue for the first time in Q4 (+24%).

Red Hat is also having a broader positive impact across the business. For example, the number of new services engagements in GTS and GBS that leverage Red Hat has increased significantly. Meanwhile partner use of the Red Hat tech is also growing - e.g. Workday has committed to using the Red Hat portfolio as a key component of its service delivery infrastructure.

With various positives to pick out in the results, the challenge now is to sustain and improve growth in FY20, which CFO, Jim Kavanaugh, is promising the firm will do.

Posted by: Kate Hanaghan

Tags: results  

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Wednesday 22 January 2020

Solid H1 for Netcall; low code still rising

logoAccording to its latest update, low code and customer engagement provider Netcall traded in line with expectations during the first half of the year (to 31 December 2019) which translates to an expected 8% revenue increase to approximately £12.3m and adjusted EBITDA expected to rise 5% to £2.1m.

Although the rate of revenue growth was slightly higher than the 6% of the year ago period, there was growth in product sales and professional services, and total contract value metrics all moved comfortably in the right direction, Netcall’s share price dipped slightly in early trading. This might reflect cloud ACV growth of 22% to £6.7m (out of overall ACV growth of 9% to £16.6m) - the market could have been expecting higher cloud ACV growth given that Netcall reached the inflection point where cloud services bookings exceeding product bookings for the first full annual period when it reported results for the year to 30 June 2019 (see here). The cloud curse is that the market generally expects performance to exceed expectations. 

The low code platform remains a driver for the business  - ACV grew 21% to £5.1m - reflecting ongoing demand for the digital transformation enabler. Given low code acquisitions by both Google Cloud and Appian already this calendar year, the stage is set for low code’s profile to rise higher during 2020.

Posted by: Angela Eager

Tags: software   low-code   tradingupdate  

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Wednesday 22 January 2020

SteadyPay secures £2.9m top up of its own

SteadyPayUK startup, SteadyPay, has secured £2.9m in equity and debt funding from Hambro Perks and Ascension Ventures. Founded in 2018, by John Downie and Victor Pawley, SteadyPay is one of a growing band of app-based financial services offerings targeted at the burgeoning gig economy.

SteadyPay’s subscription service enables workers on variable incomes to smooth out fluctuations in their cashflow with automated short-term credit. SteadyPay tops up the bank accounts of its subscribers when their earnings fall below average and allows them to repay the loan over time, via interest-free instalments.

The SteadyPay proposition, is very similar to a number of others recently brought to market, such as by fellow UK startup, Portify (see: Portify raises £7m for gig economy push) and taps into a genuine need in society. Irregular earnings are a day to day reality for an increasing number of workers (see: Uber becomes a challenger bank) and the flexible credit provided appears to be a more convenient and favourable option than payday lenders.

Posted by: Jon C Davies

Tags: funding  

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Wednesday 22 January 2020

FireEye buys in Cloudvisory

FireEye buys in CloudvisoryFireEye’s latest acquisition adds virtual security tools to its Helix platform, helping organisations to perform compliance audits across various on- and off-premise platforms including public and private clouds.

Founded in 2014 US start-up Cloudvisory monitors assets and workloads and identifies potential risks spread across Amazon Web Services (AWS), Microsoft Azure, Google Cloud, Kubernetes, OpenStack and VMware environments, as well as virtualised and bare metal architecture.

FireEye is just the latest cyber security supplier to add virtual cloud infrastructure governance capabilities to their portfolio, mindful of the public and private sector organisations commitment to implementing and demonstrating ongoing compliance with data protection regulation such as the European Union GDPR (read more detailed analysis in our report Cyber Security Market Trends and Forecasts to 2022 here).

Posted by: Martin Courtney

Tags: cloud   compliance   cybersecurity   dataprotection  

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Wednesday 22 January 2020

Sage update reflects wisdom of SaaS move

SageUK based enterprise software provider, Sage, has released a Q1 trading update highlighting encouraging overall revenue growth and excellent sales of its subscription offerings. Total group revenue in the period ended 31st December 2019 was up 6.7% to £465m, with recurring revenue up by 10.7% to £410m, as software subscriptions climbed by 24.8% to £286m.

Sage recently took the decision to shift to an “as a service” model, despite the potential short-term balance sheet impact (see: Sage revenues grow as it leaps into the cloud). The latest numbers provide further validation of the strategy, as adoption of the company’s cloud-based subscription software has continued to grow strongly.

Sage is continuing to enjoy good momentum in North America, where subscription software helped recurring revenue grow by 11.8% to £154m. However, growth was strongest in the UK and Ireland, where revenue was up by 15.1% to £93m, fuelled by sales of cloud-based contracts. Meanwhile, “other” revenue fell by 15.8% to £55m, reflecting the decline in traditional licence sales and professional services, as the company focuses on subscription software.

Sage has started its latest financial year well and management will no doubt be pleased with the strong growth in subscription services. Whilst the company’s adoption of its new business model was likley to prove a commercial necessity in the longer term, Sage is now positioned nicely to build on its excellent growth trajectory.

Posted by: Jon C Davies

Tags: as-a-service  

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Wednesday 22 January 2020

Ideagen heading for 11 in a row

IdeagenInterim results from acquisitive AIM-listed risk management software specialist Ideagen shows both a first half performance in line with market expectations and a positive outlook for the second half of the year. 

Ideagen has already banked ten years of consecutive revenue and profit improvement and continued to grow both in H1, with revenue up 30% to £27.3m (H1 18 £21m) and adjusted EBITDA up 38% to £8m (H1 18 £5.8m).

The company also continued its transition from a perpetual licence to a SaaS based subscription model with continued growth of recurring revenues now representing 74% (H1 18 67%) of all revenues. SaaS revenues also increased by 76% to £9.7m (H1 18: £5.5m). There was also strong overseas growth with 90% of all new SaaS wins falling outside of the UK.

Whilst the business saw healthy organic revenue growth of 7% (H1 2018: 8%) the business is being principally driven forward by acquisitions with two new businesses coming on board during the period. Ideagen snapped up Redland Solutions, a RegTec SaaS company supplying software to the financial services industry and Optima Diagnostics a SaaS based Health and Safety compliance business.

Ideagen looks in good shape and set up to make it 11 years in a row of revenue and profit growth having started the second half of the year in line with expectations. 

Posted by: Marc Hardwick

Tags: results   saas   risk  

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Wednesday 22 January 2020

3D Repo models a £2.3m funding round

logoMajor construction projects involve multiple parties, all – in theory at least – working from the same plans. London-based 3D Repo aims to turn the theory into practice with its cloud-based Building Information Management (BIM) platform, which allows all parties in a construction project to work from, as they put it, ‘a single source of truth anywhere and at any time’.

Spun out from University College London in 2014, and originally backed by Sussex Place Ventures (the VC fund wholly owned by London Business School), 3D Repo has raised a further £2.3m in a Series A funding round led by Ingenious via its Infrastructure Ventures EIS Service.

3D Repo has already made its mark in high-profile public and private construction projects including London Olympic Stadium, Wood Wharf, Crossrail, and Smart Motorways. Indeed, according to its website, the UK Cabinet Office mandated the use of collaborative 3D BIM technologies on all public construction from 2016 onwards.

There are of course many other players in the BIM market, not least of which, US-based CAD giant, Autodesk’s REVIT. 3D Repo’s challenge is to show that it really is the best tool for the job.

Posted by: Anthony Miller

Tags: funding   startup  

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Wednesday 22 January 2020

Nyansa boosts network performance monitoring for VMware

Nyansa boosts network performance monitoring for VMwareThe acquisition of Nyansa should give VMware customers greater visibility into the performance and availability of its VelcoCloud software-defined wide area network (SD-WAN) services and attached Internet of Things (IoT) devices.

Billed as a cloud-enabled artificial intelligence for IT operations (AIOps) platform, Nyansa’s Voyance tool acts as a virtual appliance to monitor user network traffic across thousands of different customer sites. It was designed to simplify the way network administrators and engineers plan, deploy and manage edge, local area network (LAN), WiFi and IoT configurations by automating performance analysis across multiple topologies from a single analytics dashboard.

The start-up was founded in 2013 and landed US$15m of Series B investment led by Intel Capital in 2018, bringing the total to US$27m. Terms of proposed acquisition were not disclosed, but the deal is not expected to have any major impact on VMware’s revenue, but it will bring around 100 customers into the fold, including Tesla, Uber, GE Healthcare, SF International Airport, Stanford and Northeast Georgia Healthcare System.

Posted by: Martin Courtney

Tags: iot   SD-WAN   networkinfrastructure   networkmanagement   networkperformance  

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Wednesday 22 January 2020

Stasher drops ‘City’ but gains $2.5m

logoThey called themselves CityStasher when I first wrote about them a couple of years ago (see CityStasher bags $1.1m to stash your baggage), but the London-headquartered luggage storage platform is now plain Stasher, making the point that the platform intends to spread beyond cities.

Indeed, Stasher is now available in over 1,200 locations in 250 cities worldwide and is building a network of accommodation partners such as Accor, Premier Inn, Expedia and Hotels.com (which is owned by Expedia), as well as high street retail outlets, to store travellers' luggage.

Stasher has now raised a further $2.5m in a venture round led by Venture Friends, along with various angels including Johan Svanstrom, former president of Hotels.com.

Stasher still charges users £6/$6/€6 to stash a bag for 24 hours, of which roughly 50% goes to the storage partner, and they’ve upped luggage insurance cover from £750 to £1,000.

As I said before, this is a great idea and other startups thought so too. Just as an example, Italy’s BAGBNB (“The first luggage storage network”) claims over 3,000 storage locations worldwide and charges €5 per bag but with only €500 insurance cover.

I would imagine travellers would select which of the several platforms now out there based on location convenience, and I am therefore still waiting for an entrepreneur to build a Trivago-like platform to help users choose.

(PS Not to be confused – as was CrunchBase – with Stasher, the silicone storage bag manufacturer recently acquired by SC Johnson!)

Posted by: Anthony Miller

Tags: funding   startup  

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Wednesday 22 January 2020

Netflix faces increased competition

NetflixAs it’s a bit ‘left-field’ for TechMarketView, I cover Netflix only because it’s the ‘N’ in FAANG/FANMAG. Last night Netflix announced that subscriber numbers had risen from 158m at end of Sept 20 to 167m at end Dec 20. But it forecast slowing growth rates - particularly in the US - this year. Revenues grew 30% yoy to $5.47b and profits rose 4-fold to $587m.

Once upon a time, Netflix pretty much had the video streaming business to itself. Now almost every month sees a new competitor entering the market. Apple, Amazon, Disney, Britbox, HBO etc. On top of that, each new competitor removes its own programmes from the Netflix platform. Eg Netflix has lost its most watched programme - Friends - to HBO.The problem is that if you wanted to subscribe to every streaming platform, as well as paying your BBC licence fee, you’d be shelling out over £500 pa. Probably nearer £1000 pa if you included all the sports channels too.

Anyway, the results were not as bad as some feared. Netflix shares rose 2% in after-hours trading.

Posted by: Richard Holway

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Wednesday 22 January 2020

Capgemini's UK health breakthrough with Barts

Capgemini logoCapgemini has won a three-year framework agreement with Barts Health NHS Trust, one of the largest NHS Trusts in the UK. The deal will see Capgemini deliver cloud services across multiple cloud providers to all five hospitals within the Trust. The aim will be to create a “more secure, scalable and agile operating environment” by transforming cloud services end to end. Capgemini will provide security solutions, ongoing management, and the migration of workloads.

Capgemini’s Head of Public Sector in the UK, Matt Howell, has described it to us as a “breakthrough deal”. Our estimates suggest the company has only has a tiny footprint in the subsector up to this point. The value of the deal is unknown; however, Capgemini will clearly seek to use this as a growth platform. We expect to see Capgemini displaying assertiveness in the sector in the months ahead.

In October last year, Barts Health NHS Trust announced that it would receive £35.8m in loan funding from the Department for Health & Social Care (DHSC) to go towards modernising equipment, refurbishing wards, and ensuring safety of buildings; it is part of a £184m package of capital loan funding allocated to 12 Trusts. £7.6m of Barts’ loan was allocated to moving IT networks to the cloud and other IT infrastructure developments. The Trust is also currently tendering for a provider of a virtual platforms and end user computing service as part of its wider programme of infrastructure transformation (value estimated at £10m). 

Posted by: Georgina O'Toole

Tags: publicsector   contract   cloud   health   framework   migration  

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Tuesday 21 January 2020

*NEW RESEARCH* Business Process Services Supplier Prospects 2020

Our new Business Process Services (BPS) Supplier Prospects 2020 report looks at how the top 10 largest players in the market are set up to deal with the current turbulent market environment.

coverDigital complexity is driving the market forward, with clients looking for guidance as they look to navigate the emerging “digital chaos”. One of the clearest symptoms of this is the increasing requirement for expert advice as organisations grapple with their next move. Buyers are expecting digital solutions to create value quickly, which means suppliers are having to be geared up to operate at speed.

Consultancy-led services and the need for consultative selling is pushing through changes to both BPS operating models and staffing requirements. Demand for innovation and design-led thinking skills in particular are red hot, as BPS players invest in the areas likely to deliver both the greatest return as well as a deeper, more strategic relationship with their clients.

The report contains profiles of the top 10 suppliers of Business Process Services to the UK market, from top placed Capita to 10th placed Concentrix.

The insights within Business Process Services Supplier Prospects 2020 and beyond are a positive way to kick of 2020 and the report is available to eligible TechMarketView subscribers. For those of you who don’t have a subscription, Deb Seth will be happy to provide details.

Posted by: Marc Hardwick

Tags: bps   suppliers   newresearch   prospects  

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Tuesday 21 January 2020

Learning Technologies beats profit expectations

Learning Technologies Group logoLearning Technologies Group had sounded confident in its H119 results that the business was on the right track for a strong set of full year results (see Learning Technologies Group H1 momentum gives FY confidence). Its trading update for the twelve months to end December suggests it has delivered.

The provider of services and technologies for digital and learning management highlights KPIs all heading in the right direction. Group revenues increased by c38% to £130m. And excluding PeopleFluent (see here - which contributed a full year of revenues), the company points to organic revenue growth (constant currency) in both its divisions: Software & Platform and Content & Services. Recurring revenues are also, once again, a bigger part of the mix (73% vs. 68% a year previously).

As we have previously highlighted, LTG has shown confidence in its investments in R&D and incremental sales initiatives, and the attitude appears to be paying off with momentum apparent going into 2020. Alongside the company’s established businesses, PeopleFluent is also outperforming expectations, delivering $93m of revenue vs. the expected $91m; a return to growth in 2020 looks more certain.

The profitability and cash position is also strong. Adjusted EBIT is expected to be comfortably ahead of expectations at not less than £41m (up 58%, 2018: £26m). Improved margins across the Group have been accompanied by synergies from the integration of businesses. And “substantial cash generation” in H2 has led to a net cash position at year end of £3.8m (vs. net debt of £11.5m at end Dec 2018).

With more acquisitions on the cards (LTG points to an active pipeline of attractive international targets), proof that sales and cost synergies can be found, and the exploration of new routes to market, it looks like it will be an exciting year ahead.

Posted by: Georgina O'Toole

Tags: results   software   learning   tradingupdate  

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Tuesday 21 January 2020

Steadying SDL

logoA brief year end update from SDL, the language translation and content management specialist, indicates the improvements seen in FY18 and H119 have continued. Revenue and adjusted operating profit are expected to be “significantly ahead of 2018” and in line with market expectations. Net cash increased from £14.4m as of 31 December 2018 to £26.4m at the end of 2019.

As revenue hit £182.5m in FY18 - much of which was due to the July 2018 Donnelley Language Solutions acquisition - SDL’s position is clearly improving. Fortunately, it’s not all down to acquisition as investments activities, operational benefits from its automation programme, the launch of the SDL Language Cloud software platform and upgrades to the Neural Machine Translation (NMT) product evidently contributed to growth. In terms of sectors, there was growth across high tech, financial services and life sciences. 

Following a prolonged period of difficulty and transformation, SDL’s experience is a lesson in ‘sticking to its knitting’ i.e. language translation software and services. And the need for such capabilities are not going to go away. Full results are scheduled 25 March.

Posted by: Angela Eager

Tags: software   tradingupdate  

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Tuesday 21 January 2020

Ascent extends IoT play via £30m Purepoint

Ascent acquires IoT skills with £30m Purepoint buyAscent Software’s £30m acquisition of Purepoint deepens its Internet of Things (IoT) expertise and brings a host of new clients to the group.

Founded in 2011, Purepoint employs around 25 people, with current chief executive Alex James remaining with Ascent as chief technology officer (CTO). The London-based company develops custom-built, cloud-native hybrid and mobile software applications as well as embedded firmware and virtual agents for a range of Industry 4.0 and Smart Home/City devices, backed by middleware, APIs, testing, migration and analytics tools and services.

Backed by Horizon Capital and based in Reading, Ascent is a software development house that offers services to customers on a global basis in various verticals, including financial services, manufacturing, retailing, postal, telecoms, eGovernment and eHealth.

TechMarketView believes IoT adoption is on the brink of rapid acceleration with the imminent arrival of fifth generation cellular network coverage in the UK (see our report 5G: Opportunities in Next Generation Mobile Networks). We expect that activity to fuel rising demand for bespoke IoT focussed applications and services in a range of new business cases and usage models, and software development houses like Ascent willing to invest in the skills and flexibility to adapt are likely to enjoy positive returns.

Posted by: Martin Courtney

Tags: acquisition   softwaredevelopment  

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Tuesday 21 January 2020

CityFibre pushes ahead with FibreNation buy

CityFibre pushes ahead with FibreNation buyWith the general election out of the way and Labour’s plan to nationalise BT Openreach dead and buried, UK wholesale broadband provider CityFibre is pushing ahead with its purchase of FibreNation from TalkTalk Group.

FibreNation is the JV between TalkTalk, Sky and CityFibre launched in 2018 to deploy full fibre infrastructure across the City of York. Planned dark fibre rollouts elsewhere in Yorkshire are expected to now help CityFibre reach an additional 3m UK homes and businesses, expanding its total to 8m through an additional £1.5bn of fibre to the home (FTTH) investment on top of the £2.5bn announced in 2018.

Terms of the acquisition were not disclosed but press reports put the figure at £200m. TalkTalk will remain as a retail customer (though there was no mention of Sky), using CityFibre’s infrastructure to offer broadband services under its own brand. In parallel with the deal, reputedly worth around £200m, CityFibre has also modified the terms of its existing partnership with Vodafone to allow rival consumer Internet Service Providers (ISPs) access to FibreNation network. That looks to effectively end a temporary exclusivity agreement between the two companies, which may have been influenced by Vodafone’s decision to enter a new commercial partnership with BT Openreach for Fibre to the Premise (FTTP) provision last November and could have stopped CityFibre signing lucrative contracts elsewhere in the meantime.

By our reckoning the network expansion now cements CityFibre’s place as the UK’s third largest wholesale provider of fibre infrastructure behind BT Openreach and Virgin Media. The consolidation may also enable greater competition in the retail fibre broadband market which Britain needs if it is to become a truly digital economy. Private equity backed CityFibre is certainly helping to push the envelope by enabling smaller providers to deliver better value services.

Posted by: Martin Courtney

Tags: acquisition   broadband   fibre   networkinfrastructure  

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Tuesday 21 January 2020

dotdigital standing tall on its three pillars

dotdigitalSix-month trading update from marketing automation SaaS provider dotdigital, shows continued progress on its ‘three pillars’ strategy helping it grow revenue c.15% to £23.1m (H1 2019 £20.1m) driven predominantly by strong direct sales. Average revenue per user (ARPU) was also up a healthy 14% to £999 per month (H1 2019 £876 per month) driven by increasing spend from current clients and new customers taking on a wider range of channels.

Pillar 1 - Product development and R&D remain key, with recurring revenues from improved product functionality growing by 32% to £7.4m (H1 2019 £5.7m). Further channel functionality was also added to ‘Engagement Cloud’, including a new chat solution and additional SMS capabilities.

Pillar 2 - International sales now represent 34% of all sales (excluding Discontinued Operations), up from 30% last year, reflecting the increased focus on geographic diversification. EMEA sales grew by c.11% whilst the US grew organically c.18% to $5.1m, (H1 2019: $4.3m). Asia Pacific was the real star performer growing organically by c.51% to AUS$2.5m, (H1 2019: AUS$1.6m).

The final pillar of the strategy is partnering and sales via strategic partners increased 4% to £10.7m (H1 2019: £10.3m), slowed by ramp up times for new staff. The Magento/Adobe relationship looks important with revenues growing 16% for the period and with Engagement Cloud live chat now bundled into the core code base of Adobe Experience Manager and available with all Magento downloads.

Half-year results are out on 25th February when we will report more.

Posted by: Marc Hardwick

Tags: marketing   automation   tradingupdate  

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Tuesday 21 January 2020

£2.5m for Feedstock as compliance drives demand

FSUK startup, Feedstock, has secured £2.5m in funding for its AI based offerings. Praetura Ventures led the funding round, with £1.8m, with the other contributions coming from existing investor, Illuminate Financial, along a group of angel investors. Feedstock plans to use the cash to accelerate its product development and to fuel its market expansion.

Founded in 2015, Feedstock’s main SaaS product, Cortex, enables financial services companies to use natural language processing techniques to meet compliance obligations. The software scans correspondence and a variety of other inputs to ensure MiFID II compliance. Meanwhile, the company’s new Synapse offering, analyses client communications to provide for workflow routing, whilst automatically populating CRM fields.

The ever-increasing regulatory burden on the financial services industry continues to drive the market for specialist technology, dedicated to improving the efficiency and efficacy of compliance (see: UK Financial Services Market Trends and Forecasts). Meanwhile, regulation is also helping to drive investment in areas such as data analytics, reporting tools and cyber security.

Posted by: Jon C Davies

Tags: funding  

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Tuesday 21 January 2020

Facebook's confidence in the UK

FacebookOn a stop-over in the UK on her way to DAVOS, Facebook’s CEO Sheryl Sandberg announced that the company would recruit another 1000 staff in the UK. Thus taking their total to over 4000 - the largest headcount outside of the US. Many of the jobs will be in high-skill areas including software engineering and data analytics.

As we have reported many times before, over the last 5+ years the UK had become the best place in the world to setup and build a tech company - be it from scratch or as your base outside the US. ‘Hubs’ are crucially important to this. The more the hub grows the more it attracts everything from advisers to investors etc. Indeed it can become an unstoppable movement - as was found in Silicon Valley in the US.

Regardless of your views on BREXIT, this is really great news. Indeed the success of the UK post BREXIT will depend on us retaining and growing that world-beating position as a tech hub. If we achieve that, the future could indeed be bright.

Posted by: Richard Holway

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