Following the January 22^nd Trading Update and announcement of a Strategic Review, see here, activity levels have risen, leading to a series of meetings with industry players and customers. However, these have not yet resulted in a move for the company or any substantive change in strategy.

The Monitise team can certainly view the market from the lofty position of some 30 million registered users and 49m system downloads and strong strategic partnerships with banks such as Santander. Today they announce another major deal with a “global banking partner”. Monitise has also made progress in moving to its new business transaction-related model, particularly with the deal with IBM to provide scale and reach in terms of marketing and deployment and technology with Cloud and analytics. The first applications on the new Monitise Central Platform are anticipated, ahead of schedule, in April. This promises additional functionality and analytics to add value and differentiation to Monitise’s mcommerce proposition. Cash at December was £129m, and management forecast cash break-even without additional funding.

The outlook for near term trading however is not so clear-cut. First half to end-December saw revenue totalling £42.4m, down 9% with an increased EBITDA loss, up to £30.8m from £10.2m. The number and the value of transactions were each up by 50% on an annualised basis, to 5.1bn and US$101bn respectively. But subscription and transaction revenues were flat at £16.2m yoy (albeit with gross margins of near 90%). To meet management’s maintained long term guidance, the key metric of ARPU needs to continue to grow from c.£1 to £2.50 by FY2018. The Central Platform and targeted offers need to play a key role here.

The “Strategic Review” and consequent uncertainty needs a clear and quick conclusion. Then we look to the management to pursue its targets with resolve and leverage its unique market position.

The prime opportunity for virtually all SITS providers is around digital transformation. TCS is no different and has high expectations - management believes the digital opportunity will generate revenue of $5bn globally on a cumulative basis, over the next 3-5 years. But with competition rife, the company needs both an edge, and proven, rapid execution capability.

At its recent European analyst event in Paris TCS provided an update across the business, its growth areas and digital strategy. It straddles several positions in the market: an Indian-headquartered and a fast growing global provider; known for its technology provision but a growing reputation as an end-to-end IT Services provider; business foundations in traditional Application Services but a supplier we consider to be one of the leading pack for digital transformation. These factors are all indicators of positive progress but also highlight the requirement to move in new directions as demand and prices for time and materials technology-led services shifts across the market and the off-shore cost differentiator fades.

Subscribers to Enterprise Software & Application Services (ESASViews) can download our latest report “TCS: Scaling up digital opportunities” here for our view on TCS’s prospects and competitive stance. Alternatively, subscription details can be obtained from Deb Seth.   

The H1 trading update from spend control and eprocurement software specialist PROACTIS shows a company whose “growth rate and scale have been transformed” according to chief executive Rod Jones. This was due to three successful acquisitions which have not only contributed to revenue growth but also an increase in profitability. For the six months to January 31 2015 revenue is expected to be in line at c£8.4m (vs. £4m) with adjusted EBITDA of c£2.2m (vs. £0.8m).

The company maintained organic growth too but the split between organic and acquisition-led growth is not evident from today’s trading update. However, 24 new name deals vs. 15 in 2014 is evidence of significant rise in demand. There will be more to come from PROACTIS when it starts to generate revenue from its Activate global trading network. That is edging closer because it has finished putting the technology foundations in place and has started deployments into client environments. As the volume builds, it will be able to move on the commercial aspects, providing a new source of revenue and better insight into its customers. The company had a good 2014 (see Progress from PROACTIS), and 2015 is shaping up well too.

It's been just a month since we published our maiden Public Sector Opportunities Bulletin. The first issue was well received by our subscribers. However, the PublicSectorViews team have not been short of developments to write about in this, our February issue.

As we explained in January, during the course of our everyday research, the PublicSectorViews team often picks up on interesting developments in the UK public sector market that don’t make it into UKHotViews. In particular, we often become aware of interesting opportunities. These developments don’t get ignored; we use them to form our views within our core research (for example UK Public Sector SITS Market Trends & Forecasts). However, we would have introduced the PublicSectorViews' Opportunities Bulletin as a regular feature of the research stream in order to bring our subscriber base a more regular update.  

In this second issue, we take a look at SITS supplier opportunities in the Health, Police, Defence and Education sectors. Once again, they are opportunities that caught our eye, as we feel they resonate with our ‘Sector Shaping Trends’ for 2015 (subscribers can read about these in our Research Agenda 2015). As a result, our view is that the potential may extend far beyond this initial, sometimes small, contract. If you would like to discuss anything within the Bulletin, please don’t hesitate to contact one of the team. In addition, we would welcome any feedback on this publication - Please email gotoole@techmarketview.com.

PublicSectorViews subscribers can download February's Opportunities Bulletin now. If you are not yet a subscriber, and don't want to miss out, please contact Deb Seth to find out more.

UKHotViews readers will be aware that we are always keen to promote the use of apprenticeships in the UK ICT industry. A look through the UKHotViews Archive reveals good news stories from larger companies, like Fujitsu, Accenture, Computacenter and Avanade, through to smaller companies like Littlefish and Kainos.

This week, Agilisys’ Arch Apprentices has announced that, over two years, it has supported the hiring of 500 apprentices into digital and IT roles at more than 200 employers, including Facebook, Google, The Guardian and Lloyds. Arch Apprentices was established in 2012 by Agilisys and its parent company Blenheim Chalcot Group. Supported by the Government’s Apprenticeship Programme, it provides a formal training programme that focuses on 17-19 year olds (although open to 16-23 age group) that have made the decision not to go to university.  Employers that have benefited state they have previously struggled to hire into the roles. Though apprentice schemes are on the up, many companies struggle to find the right people to hire. Arch advertises the job position and sources the right young person as well as providing all the support and off-job training.

As the General Election approaches, education is becoming one of the battlegrounds amongst the main parties. Already we have seen Labour and the Conservatives trying to outdo each other on their funding commitments. Apprenticeships are also featuring in party pledges; just two days ago Labour leader Ed Miliband pledged to guarantee apprenticeships for every school leaver in England who “gets the grades” by 2020. Labour has also said that it will ensure that any major Government contract winner has two-year apprenticeships in place. Meanwhile, the Conservatives have pledged to put three million people into apprenticeships. TechMarketView’s PublicSectorViews team will be publishing our view on the General Election pledges from the main parties, and how they could impact the UK public sector SITS market, over the next couple of weeks.

The devil, as ever, is in the detail, of which a little more was revealed in the concall illuminating investors on Bangalore-based Infosys' $200m acquisition of Israeli-founded software testing SaaS startup, Panaya (see here). The call was led with much fanfare by Infosys CEO Vishal Sikka from his home base in faraway California.

Panaya's revenues were around $30-35m (Infosys: $9bn) and was loss-making. Panaya has about 400 customers i.e. c.$80k per client p.a., and some 160 employees i.e. c.$200k per head. To put things into context, Infosys has 170k employees, gets $9.5m per client p.a. and $53k per head.

It was worrying that Sikka appeared to have only a vague grasp of the facts surrounding this 'super-exciting' acquisition, needing to refer to his team in Bangalore for key numbers such as how many people Panaya employs, how much revenue derives from the channel, the proportion of revenue derived from software vs services, and regional revenue distribution. Sikka also seemed to be unaware of a competitor (Cast) mentioned by one of the investment analysts, though in fairness, I hadn't heard of them – or for that matter Panaya – either.

The real issue is whether Infosys will be able to extract value from Panaya beyond taking some seemingly smart IP off the market. Their product appears to be a software testing engine with capability for fault prediction and correction, notably with ERP applications (indeed SAP co-founder Hasso Plattner was one of Panaya's investors). As such it sounds like Panaya could give Infosys a useful tool to tweak ERP development and maintenance productivity. Sikka also has hopes that Panaya's product can be deployed in other parts of the business, but could not articulate where, when or how.

Needles will not be moving any time soon.

Mi-Pay, the payment solutions company providing mobile top-up services to telcos has given an optimistic view of current trading. At the same time it is raising £1.65m (net) through a placing of shares. Half year figures in September, see here, highlighted the success in winning new customers, the positive effect on volumes of the greater penetration of credit cards and bank accounts in some of the Asian markets the company serves and the prospect of increased operational efficiencies.

For the full year, the top line revenue figure will still show the effect of the loss of a major customer in 2013 and lower professional services revenue giving a total of £2.7m (against £3.3m). Mi-Pay has focused on tightening up its far-flung operations (with offices in London, Romania, Dubai and the Philippines), cutting headcount by a third and saving costs at an annual run-rate of £1m. Further investments have been made in its fraud monitoring solution (opening up a potential revenue stream but also giving some competitive differentiation), in building a resilient data centre solution and other smaller operational improvements.

Five new MNO clients were brought on stream in 2014 with two more going live in early 2015. The work with Sun Cellular, a Philippines operator, is particularly important as this opens up a potential of 60m end users. The management are “cautiously optimistic” for growth in 2015, with their confidence underwritten by the roll-out of new customers and the underlying market trends. They also anticipate cash flow break even on a monthly basis by end 2015.

The market for mobile top-up solutions is already crowded and becoming increasingly competitive, but Mi-Pay’s approach to fraud whereby it indemnifies its MNO customers and its established relationships should provide a good foundation from which to grow.

In December 2014, IBM announced several large outsourcing wins, with Lufthansa (€1bn), ABN Amro (multi-billion dollar), WPP ($1.25bn) and Thomson Reuters. These are impressive signings not just because of their size, length and the quick succession with which they were announced, but because they appear to go against the grain of current market sentiment. So what can we read into this recent collection of wins? Is IBM outperforming peers such as HP? Is the market warming up again to megadeals? And how do these contracts fit into the broader context of IBM needing to significantly increase its SMAC sales as part of its programme to transition the business?

Subscribers to TechMarketView’s Foundation Service and our very popular InfrastructureViews can read our analysis in this recently published research note: What does IBM’s recent run of wins tell us?

If you would like to become a TechMarketView subscriber, please contact Deb Seth.

Despite sustaining growth and improving profits, Rackspace saw its shares dip following its Q4 announcement. Net revenue increased 16.4% year-on-year to $472m, with the adjusted EBITDA margin up from 32.4% to 35%. However, the numbers apparently fell slightly short of financial analysts’ estimates pushing shares down almost 5% in afterhours trading.

The challenge for companies providing cloud infrastructure services is that there are such high expectations from industry watchers. We believe that a growth rate of c15% for the provision of a blend of public and private cloud solutions is a good target. Margins must also keep moving upwards at the same time. In that regard, the numbers from Rackspace look respectable.

However, we do have concerns for the company, and in particular how its positioning will impact its financial numbers over time. Rackspace is by no means the only company providing managed cloud services. A whole range of suppliers from the very large – such as IBM– through to much smaller local providers – such as Pulsant– also play in this space. The failure of Rackspace to find a buyer last year indicates that others share our concern that the company sits in a middle ground between the hyperscale providers on the one hand and the established services providers on the other – having to fight off fierce competition from both.

For FY15, Rackspace is forecasting growth of 14-18% and is expecting currency movements to continue to impact the top line. It is anticipated that GAAP revenue will be in the $2-$2.1bn range, with adjusted EBITDA margins of 33-36%.

Related reading for subscribers: AWS and the cloud upstarts: Death knell for the established players? and How the leading Infrastructure Services players are fighting for their place in the cloud market.

ZOO Digital managed to wipe itself down a little in H1 (see ZOO climbing out of the poo) after its woeful prior year but got mucky again in H2 as seasonality and “disruptions within a major customer” made their mark, with the result that H2 revenues are expected to be lower than H1. However, the overall result is better because the UK-founded but US-focused media industry production and workflow software and services provider expects full year revenue to be ahead of the previous year. We'll have to wait for the full results to the see the impact on the bottom line where there was a slight reduction in the loss in H1. 

Management says demand in the UK and US is increasing, citing a new contract with BBC Worldwide to provide a new subtitling and captioning solution for its global operations as an example. ZOO will provide a centralised, searchable system to manage and repurpose all BBC subtitling and captioning assets. Although it is just one deal and the contact size was not revealed it is likely to be a very significant win with the expectation of more to come as BBC Worldwide plans to a wider deployment over time to create a comprehensive, multi-language database containing all localised BBC Worldwide subtitle and caption assets. With delivery starting this month, the contract is a good start to the financial year.  

Since we launched the programme in November 2012, some 300 privately held software and services companies have applied to join the ranks of the TechMarketView Little British Battlerbrigade. Sixty companies – all punching above their weight in their respective markets – have so far been selected to participate in the programme.

We’re now looking for the next twelve ‘battlers’ to join their ranks.

The sixth TechMarketView Little British Battler Event will be held in London on Wednesday 22nd April 2015. Twelve more companies will have the opportunity to share their aspirations and challenges, and get valuable opinion and advice on their business plans, in confidential sessions with TechMarketView research directors and senior partners of MXC Capital, the tech focused, AIM quoted merchant bank that actively invests in and advises companies in the UK tech sector.

And as usual, it’s absolutely free.

Candidate companies must be headquartered in the UK (i.e. not subsidiaries of foreign firms), privately held (though may have accepted external funding), with annual revenues under £20m. Companies must derive the substantial majority of their revenues from software, IT services or business process services.

We’re particularly looking for companies that play to our 2015 theme, “Joining the Dots”. In other words, your products and services help connect everything (or everybody!) to everything else – and make sense of the information flow that these connections enable. 

This is a broad brief which touches all on all aspects of the ‘digital transformation’ agenda. Your products and services should be differentiated and aim to disrupt the marketplace.  You may not be fast-growing yet – but you want to get there.

To apply, just click here and fill in the registration form. You may apply again if you were previously unsuccessful.

The deadline for registrations is Friday 6^th March. We aim to notify successful applicants by the end of March.

Should you have any questions, please email us at lbb@techmarketview.com.

The TechMarketView Little British Battler Programme is run in partnership with MXC Capital, the tech focused, AIM quoted merchant bank that actively invests in and advises companies in the UK tech sector.

In FY14, the UK was the only major Atos geography to report organic growth: up an impressive 5.6% to €1,707m, with operating margin of 8.4% (vs. 8.2%). For the Group as a whole, top line revenue growth stood at 5.1% (€9,051m) but at constant scope and exchange rates, the Group reported an organic decline of 1.1%. The topline was impacted by numerous acquisitions and disposals but most notably the addition of Bull into the fold (see Atos/Bull update). Total operating margin was up from 7.5% to 7.8% and net cash increased by 9.2% to €989m.

Without the UK contribution, the declines in the Consulting & SI business (down 1.1% organically) and Managed Services businesses (down 2.0% organically) would have looked worse. In consulting & SI, Atos refers to strong growth in the UK, particularly in public & health service/application management). While in managed services, strong growth in the UK was as a result of a ramp up of major BPO contracts, also in public services.  Perhaps not surprising, then, that the public service & health service line was the only vertical to grow during the year: up 7.3%.

But it’s the new service line, big data & cyber security, created following the acquisition of Bull in August 2014, which chairman & CEO, Thierry Breton, would like us to focus on. He refers to FY14 as “very dynamic”, pointing to the Worldline IPO, the integration of Bull and the project to acquire Xerox ITO (see Atos zeroes in on Xerox ITO). All were designed, to some extent, to accelerate Atos’ repositioning in cloud, big data, mobility and security. In FY14, Big Data & Cyber Security remains a tiny part of the picture, representing revenues of just €240m (all from the last four months of the year).  Organic growth was 14.0%. In addition, within Managed Services, ‘cloud computing’ grew 37%, driven by demand for PaaS, SaaS, and consulting. More specifically, Atos refers to orders for big data platforms for industrial analytics and for virtualised desktop solutions (“mutualised IaaS”). Atos is jointly investing, with Siemens, in Industrial Big Data Analytics. Many of the successes in these areas appear to be coming from outside the UK, e.g. in France and Brazil.

In the UK, growth over the last couple of years has been strongly influenced by the UK management team successfully navigating the increasing complexity in the public sector market – retaining major clients and winning its fair share of ‘Tower’ contracts. We are now entering a much more difficult period for that vertical: the General Election will bring uncertainty and an inevitable slowdown. The UK management team must, therefore, ramp up in the private sector. And that will mean drawing on Atos’ global investment in “innovative offerings” in order to compensate for the inevitable ramp down in traditional business.

Capgemini’s FY14 results, out this morning, show revenues grew 3.4% (at constant Group structure and exchange rates) to reach €10.57bn, meeting the company’s FY14 revenue target of 2-4% growth. After being flat in Q1 (see Capgemini: improvement needed to meet FY14 guidance) organic growth surged by 5.5% in Q4 to reach 3.4% for the year. The worldwide adjusted operating margin was 9.2% (up 0.7 points). The ‘real’ operating margin was 8.1% (up from 7.1%). 

Application services (55% of Group revenues) grew 3.8% in 2014. The company said this was not entirely based on their SMAC offerings but also application maintenance. In Capgemini confident of countering cloud cannibalisation we highlighted that SMAC offerings accounted for a 12% share in FY13, fuelled by growth of 25%; in FY14 their share rose to 14% and by another 25% YoY. Other managed services (25.5% of Group revenues) increased revenues by 5.3% thanks to growth in BPO and Infrastructure Services. Sogeti grew by just of 1.1% with a slight downturn in France. Consulting services contracted by 3.4%.

The stand out 8.5% revenue growth in North America was driven by 9.3% growth in application services and other managed services (+11.4%). The 4.1% growth in the UK&I was driven by application services, notably in the private sector (see here) and by other managed services. Revenues in France were up only 0.5%, Benelux fell by 0.6% while the “Rest of Europe” grew by 2.3% and the Asia-Pacific and Latin America region grew by 5%.

In FY14, the Group recruited close to 40,000 new employees. Offshore employees totalled 67,404 (including 56,006 in India), representing 47% of the total Group.

For FY 2015 the Group forecasts revenue growth of between 3% and 5% with an operating margin rate between 9.5% and 9.8%. 

We are pleased to announce the launch of www.informedfunding.com, a service that connects businesses to finance.

There is a revolution in the way that finance is offered to businesses, with 100’s of new suppliers entering the market at a time when traditional players are also making huge adjustment to their offers. Informed Funding provides an independent, structured and educational route for business owners to find the type of finance and supplier that might suit them – and engage directly with the supplier.

The platform is being launched by Knowledge Peers plc, in conjunction with major partners including Workspace Group, GLE, Buzzacott and ABP. Over 100 Funders have already committed to working with Informed Funding, which has reach to some 25,000 businesses from the outset.
 
We are providing TechMarketView readers with FREE access to our launch event in London on 26 February. This will be a packed day including:

• Live Question time with senior directors of leading Banks
• Economic forecast for UK businesses by CBI’s head of research
• Seminar with leading gurus on future of Bitcoin
• Leaders of the prominent “alternative” funders presenting
• Business Q&A with leading London MP
• One to One advisory clinics for business (including “How will an investor value your own business”)
• Refreshments, wine and canapes
• Network with 100’s of exciting businesses

Please CLICK HERE to register for the Event and claim your free place.

Recently I was having a debate over lunch with three of our ‘Little Ones’ (aged 6 – 10) about the Internet of Things. That’s the kind of price you have to pay to eat in the Holway Household! The conversation turned to whether we should microchip all children at birth. Afterall all our cats and dogs have them.

We debated the advantages that micro-chipping humans would provide. No more passports. Instant location if someone got lost or abducted etc. But the unanimous view of the Little Ones was ‘No way’. They seemed to rather like the possibility of not being found and, anyway, it would ruin the games of ‘hide and seek’ we play.

I was reminded of this by an article in The Times today by James Dean about members of BioNyfiken in Sweden who have implanted microchips into their hands which they use‘to shop around Stockholm, open electronic locks to their front doors and ping digital business cards to nearby smartphones”. They are lobbying to use them on Stockholm’s transport system.

Of course being able to securely identify a person is key to many of the developments we expect in the next period. Mobile payment systems like ApplePay link the payment identification to a token on your mobile phone. How much ‘better’ if that token was in your hand…

But, as even my Little Ones would argue, this is a step too far for most people.

Sagentia Group, the R&D outsourcing firm chaired by Martin Ratcliffe, has been fairly quiet recently but has nevertheless been building up its cash reserves, ending 2014 with gross cash of c£24m/c£15 net. Some of those reserves have been put to use for the acquisition of Oakland Innovation Ltd.

Oakland is a fellow R&D consultancy who specialises in technology innovation and market intelligence for the global consumer and healthcare markets. These are two of Sagentia’s target markets so the two companies will fit together neatly. With the issue of customer experience front of mind for most enterprises and the healthcare market active, we can readily see a use for the additional resources - including 47 staff - that Oakland brings.

In the year to December 31 2014, Oakland delivered revenue of c£3.9m with PBT of £0.7m. The total cash consideration for the purchase is £5m, split between £3.6m in cash from Sagentia's cash resources, and £1.4m from the sale of shares. Sagentia is due to release prelim results on March 4^th. It ended FY13 with revenue up 37% to £30.6m, PBT up 65% to £4.9m and adjusted operating profit up 48% to £5.7m. According to its January 2015 trading update, operating profit for 2014 is expected to be below the 2013 level due to an FX hit but would have exceeded it on a constant currency basis. There is still a large amount of cash in the business and having considered and dismissed a tender offer, the company is exploring alternatives and will provide an update at the time of the prelim results.   

This week saw two significant and contrasting developments in the mobile wallet market.

Samsung is to acquire LoopPay, to build a mobile wallet for incorporation in its range of smartphones, moving fast before Apple Pay’s US position is unchallengeable and aiming to drive sales and margin of Samsung’s devices. LoopPay’s technology works with around 90% of existing payment terminals whereas Apple’s device can interact with fewer than 10% of the current installed base. Despite this, Apple Pay already drives two-thirds of US contactless payments in the US, with 750 banks signed up. Geographical expansion is set for later this year.

Elsewhere, at Monitise’s Capital Markets Day we saw the new “More” white-label mobile wallet app which will enable B2C companies, including banks, to front offers from retailers, restaurants  and venues and provide targeted discounts and loyalty schemes. Here Monitise is providing an important new channel for its customers, enabling them to radically increase the level of interaction with their consumer end-customers. This will build on the experience gained in the Yaap trial in Spain and also join the growing competition for such systems, increasingly being used in shopping malls, transport hubs, etc. Monitise will take a revenue share of any transactions made by the wallet.

Mobile wallets have yet to take off in the UK as companies work out how to build the correct customer experience (a key issue as discussed in FinancialServicesViews Market Trends Report). However, with 4G availability, the enabling HCE technology and the likely arrival of Apple Pay, many companies, particularly banks and mobile operators will be pushing hard to develop this new channel to customers. The latest battle for position on what is becoming the most valuable real estate in the world – your smartphone screen – is only just beginning.

If your business operates in the UK public sector ICT market, and you haven’t yet read yesterday’s blog post by Alex Holmes, Deputy Director and Chief of Staff in the Office of the CTO, I commend you to do so. His article is entitled, “Knocking down the towers of SIAM”. When, last year, we met with then-UK Government COO, Stephen Kelly, he did indeed state that he saw the SIAM/Tower model as an interim solution; a model that would not be appropriate as Government moved towards a ‘Government-as-a-Platform’ world (see Cabinet Office: Accepting win-win good for all). What we didn’t expect was for the nail to be put in the coffin of the Tower model quite so soon.

The situation has become confusing for suppliers. In the last few weeks we have had numerous calls from clients asking for us to clarify the Cabinet Office’s positioning on SIAM/Tower. We have said the same thing to all: that, although we knew that the longer term aspiration was to move away from the model, we saw no indication that a change in approach would happen imminently. Indeed, there are still procurements underway that adhere to the Tower approach. For example, in central government one of the application services towers remains to be awarded, TfL is in the midst of procuring various elements, and DWP has just issued a tender for a SIAM service desk provider. While outside central government others, such as the Metropolitan Police Service, are following suit. It appears that the departments and agencies are just as confused.

Well, if you want clarity on the Government’s stance, Holmes provides it: “I am now writing this post to be clear that the Tower model is not condoned and not in line with Government policy. Government should use the best of what is already out there, not develop its own model”. But, is it clear? And if not the Tower model, then what?

Holmes asserts that departments and agencies have resorted to SIAM/Tower because they have been “clinging on to the concept of outsourcing while also wanting to adhere to the multi-sourced IT approach”, asserting that the model is unique to Government. Firstly I think most SITS suppliers would be happy to point to examples in the private sector. But more importantly, it is not clear how departments will make this transition (will existing procurements be stopped?). Holmes wants: 1) to bring accountability for decisions about technology and digital services back into government; 2) for Government to own accountability and architecture; and 3) to buy different things in different ways, e.g. commodity products like hosting outsourced to utility suppliers, but novel or unique things “close to the user” built in-house. Personally, I am not sure the Tower model precludes any of these things. It is not a rigid model. One tower, e.g. for networking, can be procured via commodity frameworks, while another can be served by an in-house team. And there’s nothing to say that Government can’t retain control over decisions such as the technology architecture; that all depends on how you design the SIAM. So what will really be different, apart from the name? Isn’t what this really advocates a further disaggregation of the ‘Towers’, which will inevitably lead to more complexity and an even tougher task integrating all the parts. It might have worked at smaller organisations such as the Cabinet Office and DCMS but can Government really handle that on a larger scale?

If you’ve tried to drop me an email these past couple of weeks you would have seen that I am having some well-earned R&R in the ‘land of the samba sun’ (yes, again!). No better time to be here in Brazil than in carnival month, with the largest parades in Sao Paulo and of course in Rio de Janeiro. The Sao Paulo parade is spectacular but Rio leaves it wanting. These are the only two cities with Sambadromes – huge purpose-built arenas for the annual carnival. In much of the rest of the country the parades are held in the streets – indeed where they were born.

But what you would never have guessed watching the parades and seeing the celebrations (I did – but just on TV) is that Sao Paulo and Rio – in fact across both states – have a critical water shortage. Here in Sao Paulo, households get just just two hours supply per day. There has even been talk of limiting water supply to just two days a week.

The reason for the shortage is put down to the weather. But the real reason is a history of endemic government corruption and maladministration (both Federal and State) which starved investment in necessary infrastructure. The drought affects Brazil’s three richest and most populous states: Sao Paulo, Rio de Janeiro and Minas Gerais – the rest of the country is essentially fine.

I love Brazil – it’s our second home. And I still believe Brazil is a land of opportunity, and this includes IT suppliers too (but see Are Brazilian IT market forecasts still too high?). However, I fear that without fundamental change in government policy and practice, Brazil will exist as a land of opportunity unfulfilled.

PS Huge controversy over the Rio Carnival Championship – awarded to the Beija-Flor (hummingbird) samba school. Most watching the Rio carnival (including me) would have picked other schools. Beija-Flor was reportedly funded by the government (and I use the term loosely) of Equatorial Guinea. You may draw whatever inferences you see fit.

The growth in cross-border payments and the remittances market has featured extensively in HotViews and the levels of enthusiasm and activity continue to rise, particularly concerning emerging markets.

Recent news includes Earthport’s strong interim results last week, see here, as it benefited from its global network of payment corridors. Worldremit has just raised a further US$100m to extend its own network of links enabling smartphone and web-based money transfers and India has announced plans for a unified electronic payments system with smartphones at its centre. There is lots going on.

We also got a glimpse of the size of the prize from a recent Boston Consulting Group report on the use of mobile-delivered financial services in sub-Saharan Africa. This suggested that the number of mobile phone subscribers outnumbered bank accounts by two and a half to one, resulting in an unbanked population of c.250m, and that delivering payments and other financial services over mobile in this region would generate US$1.5bn of fees to Mobile Network Operators and financial services providers by 2019.

We continue to be sceptical about the position of Mobile Network Operators in the provision of financial services in developed markets. However, it is clearly a different story where there is no established banking infrastructure and where MNO brands and distribution networks are more powerful. Remittance companies will also be in line for a share in the upside, particularly as work forces, trade and money flows increasingly move across international borders.

The potential is large, but income levels in emerging markets will require a low-cost operation and volumes may still be some way away. With many MNOs, banks and financial services companies all vying for position, competition will be fierce, but their progress will certainly make for interesting reading.