BT and EE have moved quickly to agree the terms for BT to buy the UK’s largest mobile operator. As expected the price will be £12.5bn, paid largely in shares. Deutsche Telekom receives a 12% stake in BT (and a NED seat) and Orange 4% (with more cash). In revenue terms, EE is roughly one-third the size of BT (at £6.3bn in 2014 vs BT at £18.3bn for 2013/14). On UK employee count, EE is much smaller, with 13,000, to BT’s 72,000. (See BT’s 3Q figures, here).

Although the deal was based upon the attractiveness of seamless, ubiquitous service, management emphasises the value of cost and capex savings and synergies (notoriously difficult to estimate and deliver), valuing them at £3.5bn in NPV. This is more than twice the £1.2bn NPV of expected revenue synergies from cross-selling. The deal values EE at 6x 2014 EBITDA after deducting estimated synergies.

EE has built the biggest 4G network in the UK, with 7.7m 4G subscribers and comes out top in network performance statistics. The 580 EE retail stores will also give BT a return to the High St. and opens up new distribution opportunities for the combined Group as it develops a range of converged services. The EE brand will be maintained, but management will review the overall brand strategy as the deal works through.

The combined Group will spend £500m to rationalise systems and extract the synergies. This will take time but BT has worked hard in recent years to reduce complexity. Regulatory clearance will also take time (particularly with a potential O2/Three deal) but management expect deal completion by latest March 2016. The deal will make a positive ROI return by year three.

This bold move will propel BT to a much brighter future in the UK, particularly in the consumer space.

Breaking News is that First Data Corporation, the US based provider of payment solutions have just announced that they will work with Capgemini to develop new payment systems. These will be centred on First Data’s VisionPLUS and AccessPLUS solutions and are looking to leverage Capgemini’s vertical capabilities.

This is a good move for Capgemini in a market that is moving more quickly than ever before. By linking with First Data, the company can access scale, domain expertise and significant credibility in payments solutions to add to its own wide experience across the cards and payments industry.

Investment in new payments solutions is growing apace, for example with VISA Europe planning to spend €200m on developing digital payment technologies, the growth of Apple Pay and of new services such as Paym and the significant investment among the banks in new payment platforms. Companies cannot afford to stand still and this new partnership may well prove very rewarding for Capgemini. We hope to learn more about the company’s overall payments strategy in due course.

Can you see the big picture?

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It all turned out fine in the end for New Jersey-headquartered (though India-centric) IT/BP services firm Cognizant, closing 2014 ahead of (revised) guidance with Q4 revenues of $2.74bn, 16% higher yoy and 6% up qoq. Extracting the contribution from the recently closed TriZetto acquisition (see Cognizant bets big on healthcare with TriZetto), Q4 growth was 13% yoy, and 3.1% qoq, in line with peer leaders. Operating margins, at 17.5%, were a little weaker compared to the prior quarter and 150 bps down yoy.

This brought Cognizant’s 2014 revenues to $10.26bn, 16% higher than in 2014 - even without TriZetto, organic growth was 15%. FY operating margins at 18.4% were 60 bps lower than in 2013 but within Cognizant’s usual range.

Management is aiming for 19% headline growth in 2015, which, excluding TriZetto and currency movements, would equate roughly to 2014 organic growth. This time last year Cognizant guided for 16.5% FY growth but mid-year cut the forecast to 14%, so arguably management is leaving itself a little more wriggle room.

Cognizant’s UK revenues appeared to pick up in Q4 - we estimate 16% yoy local currency growth, which is a somewhat better place for new UK MD Vivek Daga to start from (see UK drags Cognizant but gets new MD).

As usual, we'll have much more to say about the India-centric IT services players – including their UK performance – in the next edition of OffshoreViews.

Daisy Group has confirmed its acquisition of Horsham-based network and data centre services provider, Damovo. We first heard about the deal last week via Paul Kunert at The Channel Register (see his original story here). This is Daisy’s first acquisition since it went private in the latter part of January.

Damovo’s revenue was £27.5m for the year to the end of January 2014 (£30.6m in FY13), with an operating loss of £3.3m. It has around 250 customers, including British Airways, the British Transport Police and DHL.

Daisy’s 'bread and butter' business is in the network/telecoms space (predominantly in the mid-market), with the intention being to use the Damovo acquisition to add scale to its IT services capabilities, for example in managed services and cloud. It will be the job of Neil Muller, whom Daisy brought in from Computacenter, to drive organic growth across the Group.

In December, Daisy confirmed its intention to delist from AIM having finalised a deal with a consortium of buyers (consisting of Toscafund Asset Management, Penta Capital and Matthew Riley, Daisy’s CEO and founder). Daisy subsequently announced its first-half results (to the end of September 2014), which showed revenue dropping a couple of percent to £169.6m, and operating losses narrowing from nearly £12m to just over £8m.

There is no doubt Daisy has its challenges, however, we're very interested to see how Riley's significant experience in acquistions complements Muller's strength in driving orgnanic growth.

January was an unusually buoyant month for big M&A deals in the UK software and IT services scene. However, across Europe TMT deal activity dropped by about 3% in January and the total value of deals was also down, according to latest data from corporate finance firm Regent Partners. Valuation multiples of trade deals remain strong, although marginally down on the previous month, with the median Price/Sales ratio at 1.6x and the Price/EBITDA ratio at 9.0x.

The big news in the UK was the ‘IPO that never was’, in the guise of UK rail ticket booking portal thetrainline.com, which ditched its proposed £500m London listing in favour of a buyout by KKR (see here), who came in with an offer in the £425-450m range (dosh in the hand better than … etc etc).

A secondary buyout of Colchester-based Access Technology Group saw US private-equity firm TA Associates take over as backers from Lyceum Capital (see here). Lyceum took Access through a £50m MBO in 2011. TA paid a reported £225m for a majority stake in Access.

There were a number of smaller deals involving UK software and IT services companies, but you’ll need to subscribe to the TechMarketView Foundation Service in order to read more in IndustryViews Corporate Activity, our quarterly review of corporate activity in the UK software and IT services sector.

Offshore BPS player Genpact has seen a surge in new bookings in FY14, up 50% on the previous year to $2.16bn, which bodes well for progress in fiscal 2015.

Indeed, FY15 revenues are expected to be up 10-12% on FY14. This will be a significant uptick on FY14, which was up 7.9% in constant currency (ccy) (6.9% in local currency) to $2.23bn, and up 6.7% ccy (5.7% lcy) on an organic basis, excluding the recent acquisition of UK-based life sciences consultancy Pharmalink Consulting (see here). Genpact's adjusted operating margin dipped to 15.1% from 16.5% last time, which management blamed on the upfront costs associated with larger deals being signed during the year.

Genpact has clearly picked up steam, with six new large transformational deal wins over the course of 2014, including two in Q4: one with Mondelēz International to implement a global business services organization over the next few years; and the second with a ‘leading global bank’, to take over its wealth management technology platform and associated services. This is just the type of financial services BPS deal that rivals Cognizant, TCS and Infosys are also keen to secure.

BPS deals are also getting larger again as Genpact focuses on bundling process transformation, operations and new technologies such as social, mobile analytics and cloud. This is a trend that we noted rival HP is also seeing as customers embrace digital transformation within their business processes (see Is HP turning around its fortunes in UK BPS?). The challenge is ensuring that bigger deals don't equate to smaller margins.

Partnering is also becoming increasingly important. In November Genpact formed a partnership with mobile imaging player Top Image Systems, which has applications in emerging tech like Google Glass (see here). It has now announced a new partnership with UK-based regulatory and compliance solutions provider Lombard Risk Management (see Risk Rewards Lombard Risk Management). This is to provide a new solution to help financial services firms optimize their collateral management operations.

Malaysian-based but AIM listed big data analytics provider Fusionex breezed past expectations during FY14 as demand for big data analytics rose. According to CEO Ivan Teh, there was a real shift during the year as businesses honed their plans. Those plans are expected to translate into roll outs during 2015-17, edging the technology closer to the mainstream market. In our view big data analytics is an unstoppable force, although adoption will take the form of a continual flow rather than a big bang.        

As far as Fusionex is concerned, continued growth within its home region of Asia-Pac was a factor in FY14 performance, which saw revenue jump 29% (to RM57.1m), EBITDA rise 17% (to RM25.8m) and PBT grow by 11% (to RM22.8m). There was growth in other regions (international expansion was one of the reasons it chose the London market for its IPO two years ago), including UK and Europe, which is mostly UK business we believe. This region saw 11% growth (to RM12.3m) and while the total is modest, it is strategically important.  

All eyes are on the Giant big data analytics platform (launched in Q1) which is storming ahead (see here). The company had a target of 10 customers but has already secured 12 whom Teh says are in live production. We expect the scale of rollouts could be modest, but primed for growth. Rather impressively, subscription-based Giant is delivering revenue too – 21% of total revenue. Some of the 12 early adopters are UK-based and include media and market research companies.      

The company also benefitted from new partnerships (Revolution Analytics– now acquired by Microsoft, EMC and AvNet), and existing ones (Cloudera, Hortonworks) but it is only just starting to build its partner network. It is also in talks with global, regional and local SIs as it looks to open up this aspect of its network and expects to ink deals over the next 4-6 month period.   

Based on its progress to date, its burgeoning partnership plans, plus the drive for data driven decision making within organisations, Fusionex’s prospects are bright.

Frankly we’re running out of ways of headlining the many disappointments at troubled network security appliance supplier Corero Network Security– the word ‘woe’ and its variations is illustrative (see Corero’s woes continue).

This time management is warning that 2014 revenues will miss even the downgraded $9m target and will look more like $7.5m, nearly 30% lower than in 2013. However, due to the miracle of emergency cost management (one assumes) EBITDA losses will be in line with prior guidance of $7m, even so, more than 10% worse than the prior year.

We admire the unshakeable belief and optimism of Corero CFO/COO Andrew Miller (no relation), who ever brims with confidence in the company’s prospects and positioning for the great wave of sales which are always just over the horizon. Unfortunately that seems to be where they will stay.

As is always the case when a new iteration of the G-Cloud framework is released, we get a very full postbag of companies letting us know they have secured a place for their product(s) or service(s). Not surprising really, as this time around (G-Cloud 6), there are 516 new suppliers, bringing the total number of suppliers vying for G-Cloud business up to 1,453.

One company new to the G-Cloud framework is Sage. It now has several of its account and payroll software and services listed on the framework, including Sage One and SagePay. Stephen Kelly, ex-UK Government CEO, became Sage’s new CEO on 5^th November 2014 (see Kelly gets his dream job at Sage and Sage announces Stephen Kelly as CEO); submissions for G-Cloud 6 closed on 17^th December with “more than three quarters of submissions started only 10 days before closing date and nearly 90% submitted during the final days".

Kelly told us in December that amongst the 100 Sage clients that he met on his 25,000 mile road trip, many were worried that Sage was moving too fast ‘into the cloud’. It’s likely that a fair few of those were in Government. But Sage knows it needs to be ready and waiting when its customers are. In the public sector, a listing on G-Cloud will help that.

Notably, cloud pure-play rival, Netsuite (see Sage meets the cloud), has yet to list on the framework. However, Netsuite’s Chief Executive, Zach Nelson, has confirmed that the company plans to open two data centres in Europe before the end of 2015. One driver of the move may well be an attempt to secure cloud services business with UK Government; it has already been expanding its business in the US public sector. Notably, long time G-Cloud supplier, Skyscape Cloud Services, has just released the results of a survey that showed “parliamentarians view offshoring of data as greatest barrier to cloud adoption in public sector”. If it establishes a UK datacentre, perhaps we will see Netsuite compete for G-Cloud 7. However, Sage got there first. It could be that Kelly had a hand in encouraging Sage's G-Cloud application.

From March, Atos will become the new service desk provider for Transport for London (TfL). Atos replaces CSC, which originally won a deal to manage the service desk and desktop in 2007 – replacing Logica (now CGI, of course). The CSC contract was extended in 2012 for 27 months for $33m. Atos says the new deal is worth up to £6m over 3-4 years.

Atos will play a key role in moving TfL to a new infrastructure management delivery approach under a SIAM model. The service desk will be able to identify cross-tower issues and trends by analysing real-time information. The aim is to quickly act upon this to address issues before they advance and to improve the end user experience.

What caught our eye in particular was a comment from TfL’s CIO, Steve Townsend. He said that the approach put forward by Atos “complemented our transformation plan”. A similar point was also highlighted by the Post Office when it inked its deal with Computacenter last year. The Post Office was of the view that Computacenter fully understood the requirements of its modernisation journey.

Organisations want suppliers that are able to ‘join the dots’ for them as they look to create a more digital and more seamless experience for their customers (and their staff). Depending on the type of organisation, those ‘dots’ could be highly complex (e.g. a bank using ‘bleeding edge’ technology with high security requirements), or they might be more about laying the foundations for future change. The challenge for suppliers is to be able to very precisely understand what must be changed in the first instance and then at what pace change should continue.

Three private sector services consortia, including UK business process services market leader Capita, have been awarded a place on the £3-5bn Lead Provider Framework for Commissioning Support Services to the NHS’s recently formed Clinical Commissioning Groups (CCGs).

Capita and its partners, will be competing against the MBED Consortium comprising Mouchel, BDO LLP (BDO), Engine and Dr Foster, and US-based healthcare giant Optum. There are also nine NHS Commissioning Support Units and their partners bidding for support services work with the CCGs.

Optum will be a name new to many in the UK SITS space. It employs 80,000 people mostly in the US and refers to itself as a ‘leading information and technology-enabled health service business’. Mouchel is of course well known to us, mostly for the wrong reasons (see here and work back). Its partners are an interesting mix – BDO for its financial and business advisory services, Engine for its ‘expertise in facilitating consultation to bring about change in healthcare’ and Dr Foster for its healthcare informatics.

The framework is a major opportunity because it requires all CCGs to re-procure their support services by April 2016 in order to comply with EU procurement law. NHS England anticipates between £3-5bn of services will be procured through the framework. Capita and Optum have been approved for Lots 1 and 2A of the framework, meanwhile MBED has been approved for Lot 1. None of the private sector providers have been selected for Lot 2B.

Lot 1 covers `end-to-end commissioning support' including back office finance and HR, GP IT services, contracting, engagement and business intelligence. Lot 2A covers ‘medicines management’, including services for commissioners to support medicines procurement, the implementation of new national guidance and analysis of data to identify efficiencies in medicine use. Lot 2b covers support for ‘continuing healthcare and individual funding requests’. This will be handled by the NHS Commissioning Support Units.

Although there is going to be plenty of competition for Lots 1 and 2A, the scale of the opportunity is huge. Capita’s shares rose 2% on the announcement, and are up 8% YTD.

Looking at the Q4/FY14 results for Swedish ERP provider IFS, the upward trajectory remains in place but there was some turbulence.

A difficult December, partly due to jitters within the oil and gas sector over the fall in oil prices,  meant licence sales failed to meet target and were down 15% yoy in Q4 (cc), although up 1% across the whole year. This was not the best development given the IFS strategy of increasing the proportion of product revenue. Excluding the oil and gas sector, business was still brisk with new names and extensions among existing clients and CEO Alastair Sorbie says the pipeline is increasing.

Consulting revenue increased by 14% in Q4 and 11% in the full year, at a time when the strategy is to decrease the reliance on this service line. While mid market partners generate their own leads, IFS also uses them for local delivery so has been formalising the structure with certifications and training, which has increased consulting business but also costs. However, Sorbie says IFS is also doing more business through the likes of Accenture, Deloitte and Capgemini, which indicates an increase in larger (and more complex) deals and is a further sign of the rise of the tier 2 ERP providers.    

The overall result was a 5% revenue uplift in Q4 to 867m SKr, and a 9% increase to 3.03m SKr over the year, but net income dropped 15% yoy in Q4 although was up from 143m SKr to 211SKr over the year.  As was the case last year (see here), IFS is still outperforming the tier 1 providers.

In terms of cloud activity, IFS launched IFS (running on Oracle) on Microsoft on Azure which extends its off premise options. This is hosting rather than SaaS, as clients pay IFS for licences (not subscriptions) and standard Azure fees to Microsoft. As such, it will not impact IFS revenue flow. The other interesting development was ‘IFS in a box’ which is IFS pre-configured on Oracle servers which provides another deployment option, but is not a strategy for targeting smaller customers.

We may be waiting to assess the impact of Symantec’s move to split itself into two later this year but in the meantime it still has to plough on with its current structure and Q3 results (to January 2 2015) were disappointing, for security market watchers in particular.

Overall revenue dropped 4% to $1.64m – and the market responded by taking 4% off the share price in after-hours trading. The Information Management unit, which will be spun off as Veritas Technologies (see here), was the only segment to grow and that was just by 1%, to $668m. Consumer Security was down 11%, while Enterprise Security fared somewhat better with a decline of only 4%. The final result – a 22% decline in net income – was not pretty.

Looking for positives within the quarter, sales of end point security were up 5% yoy, and more powerful advanced threat protection products to improve detection and remedial action are in the works. Symantec’s performance contrasts sharply with that of the more than buoyant Sophos (see here). The Symantec company division cannot come too soon.

If they didn’t already, Tesco management now know that running the IT for a bank is no trivial matter. A computer glitch recently blocked customers from accessing their current, savings and loan accounts for a couple of days. This didn’t have too many serious repercussions (and pales into insignificance in comparison with problems in larger banks) but it illustrates the difficulty, and sensitivity, of moving into the banking market.

Tesco launched its current account in June last year, building on its successful credit card, ISA, insurance and loans business that had seen seven million accounts opening under the Tesco banner. They are probably disappointed that the new faster account switching facility didn’t result in a tsunami of new accounts, with the total number switched advancing only 12% in 2014, less than 100k per month (source: Payments Council), but the company is firmly established as one of the key challengers.

Tesco’s current account uses a Fiserv platform, with a big emphasis on mobile and on-line access. Fiserv’s Agiliti platform is also used by Atom bank. Although the Tesco glitch shows that the new systems are not without problems, challengers have the benefit of a clean slate as far as IT is concerned, see here. This fresh start will give them lower costs and the ability to introduce products faster than the larger, legacy burdened majors who are under pressure, see Santander fights back .

We continue to hear that the big banks are intent on postponing core system renewal (due to the cost and risks involved), but they will face ever greater competition and the leaching away of transactions and margin. Coping with legacy will be a key theme for the sector and for FinancialServicesViews throughout 2015. Our latest Market Trends report is available here.

I find the headline “Twitter shares jumped 11% as it beats on earnings and revenues but disappoints on user growth” heartening. For years we seem to have been reading the opposite headlines - ‘Look at the growth – disregard the mounting losses”.

In 2014, Twitter doubled sales to $1.4b. Although earnings were indeed positive, Twitter still made a $578m loss on a GAAP basis. We still say you shouldn’t ignore stock related staff payments – which the non GAAP results do.

Although Twitter users increased 20% yoy to 288m, it was up just 1.4% in Q4 qoq. Looks like the hardcore Twitter users can’t do without it and, indeed, advertisers are prepared to pay more to get to those Tweeters. Non-Tweeters are going elsewhere. Facebook, with 5x the number of Twitter users, is still gaining huge numbers of new users at a higher rate than Twitter. But it is the WhatsApps and WeChats of this world that seem to be more attractive to many, mostly young, users.

Although I use Twitter, I can’t really say it has become an integral part of my life. Although, from a TechMarketView viewpoint, it’s quite likely you will be reading this after following the link on a Tweet. Twitter can also have its downside. Twitter trolls can be hugely damaging to those targeted. I had a minor taste of that yesterday when a widely inaccurate comment inaccurately ascribed to me in The Times, ‘went viral’ – ie was retweeted many times. Stopping it, or correcting the inaccuracy, is almost impossible once the genie is out of the bottle.

Xchanging appears determined to not let the grass grow under its feet while the ongoing saga around its takeover of AgencyPort Europe continues (see Xchanging’s AgencyPort takeover docked). It is making another smaller bolt-on acquisition of UK-based spend analytics provider Spikes Cavell (SCAL).

Xchanging is paying $11.5m on a cash-free, debt-free basis, or 4x SCAL's revenue of £1.8m ($2.8m). Xchanging will pay $6.75m up front, and a further $4.75m if SCAL meets performance targets over the next two years.

SCAL employs 35 people across two offices in Newbury and Virginia (US), and it brings c60 customers, some of whom represent groups, notably in the public sector.

From what we know of SCAL, it offers an on premise system that populates data on indirect spend, so that it can be shared across a whole sector like higher education. The differentiator is its people, analysts who are actively involved throughout the data transformation process to ensure that data is accurately categorised. This makes the offering quite labour intensive and therefore could present challenges scaling it to meet Xchanging's expectations.

It’s clear to us that SCAL was in distress. In its latest filing with Companies House, cash had fallen 73% to just £30k in the year ended March 2014. Without Xchanging stepping in (or another financing arrangement) we can assume SCAL was on borrowed time.

SCAL is quite a different proposition from the MM4 procurement platform Xchanging acquired in late 2013 (see Xchanging buys US SaaS procurement player), which works directly in the e-sourcing space. Xchanging will be interested in the value-added services SCAL can offer to augment its MM4 offering, for instance it offers analytics services based on its Observatory product that benchmarks an organisation's competitiveness against its peers.

It is important Xchanging finds the right balance between the value-added people-based offering of SCAL, and the more automated standardised offering of MM4. Only then will it succeed in remaining competitive while differentiated in the marketplace.

We recently caught up with Andrew Anderson, CEO of artificial intelligence (AI) software company and Little British Battler (LBB) Celaton to see how things have progressed since we met in November 2013 (see Little British Battlers – The Third Wave).

Anderson says business has taken off. His initial projections for sales have ‘gone way beyond’ initial expectations with Celaton more than doubling its customer base in the past twelve months, primarily amongst disruptive brands like its latest deal with Virgin Trains. Business has picked up even more since the start of 2015. This brings with it significant opportunity as well as challenges for a company of Celaton’s size.

Partnering is going to be an ever more important as Celaton attempts to scale and grow Partners will also be able to offer support where needed in areas like diagnostics, project management and training.

Celaton is already working with emerging/disruptor service firms like Genfour and Agilisys (see Agilisys Automates with LBB Celaton). We suggested opportunities to tie-up with back office robotic process automation (RPA) providers like Blue Prism (see Business Process Automation an emerging opportunity for BPS providers). This is now happening with Celaton automating the unstructured inbound comms for a growing number of Blue Prism customers, in partnership with companies like Virtual Ops.

Celaton is also now working with new kid on the block Symphony Ventures, which was launched in November 2014 by the team responsible for setting up Sutherland Global Services’ RPA practice. Clearly Sutherland’s grand ambitions in RPA haven’t quite worked as planned. Then there are bigger names to add to the list like marketing services player Communisis and PPI and regulatory complaints handler Huntswood. Anderson is also now talking to other tier one UK business process services (BPS) players, which could prove a real break-through.

Building and securing the right partners is going to be critical to Celaton’s success in 2015 and beyond.

Decision paralysis resulting from too much choice and complexity is one of the challenges facing retailers, particularly where complex products and services are concerned. A meeting with UK-based Cinergy International provided a glimpse into an evolving data driven solution that combines product configuration principles with a customer-centric front end plus multiple data sources with data ranging from lifestyle to competitor pricing, all used to generate customer recommendations.

Cinergy’s initial market was providing a tool to help sales staff select mobile packages for customers based on price comparison data, but has now expanded into more broadly into call centres, retail and online channels and makes intelligent use of attributes like lifestyle data to enable recommendations. The product could be applied to any number of product sectors where there are multiple variables that need to be considered when purchasing, from white goods to electrical goods, and even down to sofas and pet food from what we can see, so one of the challenges facing Cinergy is honing in on a defined set of complementary markets.

Cinergy’s journey reflects the changes within organisations as they look to engage in more intelligent and relevant interactions with their customers – and the central role of accessing and manipulating data from disparate data lakes (see Does the market need Big Data driven applications?)

Following the company's annual sales kick off, Computacenter’s CEO, Mike Norris has confirmed to us that there will not be a direct replacement for UK MD, Neil Muller. Instead, Muller’s responsibilities will be split amongst members of the existing management team. There is a number of long-serving senior staff who know the UK business very well and who are already deeply involved in running elements of it.

Kevin James, who has been in the role of Director of Services and Solutions since 2011, will take a large proportion of Muller’s staff. James – who has essentially worked for Computacenter since 1990 with a five year break to do other roles – will be responsible for managing the day-to-day business.

Large services deals will be overseen by Neil Hall, who currently has the same responsibilities in the German business. COO, Chris Webb, already plays a fundamental role in managing the UK business and will oversee service management and service desk. Julie O'Hara, another CCC long-timer who took a brief break to work for Colt, will run service management in the UK and report to Webb. 

We’re not surprised Norris has chosen this approach. He has always been a big believer in nurturing staff upwards and recruiting from within; we would have been very surprised if he had brought in someone from a competitor to directly replace Muller. Likewise, we’ll be very surprised if there is a fundamental change in strategic approach.

Computacenter’s UK business had a good FY14, with total revenue up 10%. Services increased 9% while Supply Chain (resale) revenue grew 11%. And with several recent large wins under its belt (e.g. Post Office, Royal Mail Group, AstraZenaca), it’s clear there is momentum in the UK business right now. While James et al will need a little time to adjust to their additional responsibilities, we expect this to happen quickly and efficiently given their experience and existing roles.