Proving that Skyscape Cloud Services is always ready to support the Government Digital Service (GDS) on new programmes or initiatives, we spotted (in Brave New Coin, provider of digital currency insights) that the cloud services provider has formed a partnership with Blockchain software-as-a-service provider, Credits.

Credits won’t be well-known to our readers (well, it wasn't to us either!). Based in the Isle of Man, with an office in London, it was only founded in November 2014 (by Nick Williamson and Eric Benz). Its parent company is Manx start-up Pythia. And it only began offering its platform-as-a-service (PaaS) tools “for building secure and scalable blockchains" at on April 6^th this year, having launched the public beta version at Money 20/20 (see TechMarketView research: Innovation in banking – an overview). It has been supported by technology accelerator Level39. Credits states its offering is “designed for developers allowing them to launch a ‘Blockchain in 3-steps without the need to learn a new programming language”.

The partnership with Skyscape is aimed at delivering ‘Blockchain-as-a-service’ (BaaS) to public sector organisations, by combining Credits’ technology with Skyscape’s public sector-focused, security assured, cloud infrastructure. Skyscape’s CEO Simon Hansford states Skyscape is “continuously re-evaluationg and developing (its) service options, in order to ensure we’re meeting the demands of the 30K public sector organisations in Britain”. Skyscape is responding to the UK Government’s desire to try and take advantage of cutting-edge private sector fintech companies and academics.

This partnership follows a range of announcement highlighting that Government is exploring the possibilities of Blockchain. For example, the Cabinet Office hosted its first Blockchain Partnership event last week; in 2015, Government committed £10m to the Alan Turing Institute to investigate digital currencies and digital ledger technologies; and in January this year, the Government Chief Scientific Adviser, Sir Mark Walport, published a report recommending Government start using Blockchain technology immediately. Walport believes the technology can be used to enable Government to create trusted archives of digital public records with greater transparency and accountability. He has stated, “Applying distributed ledger technologies in the registration and payment processes for government grants and benefits could prevent financial losses through fraud and error and support the most vulnerable citizens through full financial inclusion.”

While Government has yet to commit to the use of distributed ledger technologies, you can’t fault Skyscape for ensuring it is always ahead of the game.

Water utility Thames Water is continuing its transformation programme with a new four-year £380m IT services contract with a consortium of Accenture, Bilfinger, Deloitte and IBM.

The new team will form the Technology and Transformation Alliance (TTA) to provide IT services to Thames Water from October 2016, through to 2020, following a period of transition. It will support the existing multi-billion pounds design and build programmes being run by Thames Water to transform its services and infrastructure (see here).

These joint ventures include: eight2O (made up of two consortia - Costain and Atkins and Skanska, MWH, Balfour Beatty, and IBM); and Infrastructure Alliances (Agility - J Murphy & Sons and Morrison Utility Services and KCD (Kier Services and Clancy Docwra).

Technology will play a vital role in the next phase of Thames Water's transformation, from analytics that can help understand the network and infrastructure better, to predictive maintenance that can drive out cost and improve reliability, to more rapid response to issues that arise. This means using many new digital tools and services in areas like IoT, analytics, and smart metering.

Thames Water hasn’t spelled out exactly what the different partners will be delivering. However, Accenture has been running Thames Water’s ‘smart-water’ pilot for the past eighteen months (see here), which we understand it had gone very well. Ian Notley, MD talked about enabling ‘digital interactions with…connected customers’ and ‘equipping employees in the field with the technologies they need to do their jobs more efficiently’.

Bilfinger Industrial Automation Services meanwhile designs, implements, installs and maintains automation, control, and electrical solutions, and talks of using IoT in the solutioning. Deloitte meanwhile talks about focusing on the transformation of the technology platforms, services and projects, meanwhile, IBM mentions the use of data from the smart water network to continue developing Thames Water's infrastructure.

This paints an exciting picture for real change and innovation across Thames Water's network. However the supplier ecosystem is very complex, while these are big, high profile programmes using new technology and infrastructure. Managing this diversity and complexity is going to be a critical to the programme's overall success.

At the beginning of the year, we highlighted the grand ambitions of Dublin-based IT services player Version 1 (see Version 1: Working towards big ambitions). As it stands, the company has revenues of €75m (£55m) and 750 UK&I-based employees (of which 200 are based in the UK). Its long-term, i.e. 10-year, objective is to be the first €1bn Irish IT Services company. Its current three-year acquisition programme, which started with the acquisition of Tieto Corporation in November 2013, is designed to allow half of the growth over the ten-year time frame to come from acquisitions. Version 1 has its eye on companies that can support its ability to deliver “a complete line of solutions and services across our main technology partnerships with Oracle, Microsoft and Amazon”.

The latest acquisition – Version 1’s fifth in its history - is of Oracle ERP business of London-based Database Service Provider Global Limited (DSP). Employees and customers of the divested business transferred to Version 1 last Friday. Customers sit in the travel & hospitality, retail, utilities, gaming and betting, financial services, professional services and software & high-tech industries. The size of this acquisition is unclear, but it looks small scale. However, highlighting the level of consolidation activity in this area of the market, DSP had, itself, recently acquired Oracle support provider FSR Management.  DSP now hopes that, within the arms of Version 1, it can further invest in its Oracle and Microsoft SQL core technology managed services and the development of its Oracle Cloud and Microsoft Azure solutions.

Carlyle Cardinal Ireland, the joint venture fund created by Dublin-headquartered Cardinal Capital Group and US private equity giant Carlyle Group, is buying in to Derry, Northern Ireland-based Learning Pool, the public sector-focused e-learning supplier co-founded by London-based tech entrepreneur Mary McKenna. Terms were not disclosed.

McKenna co-founded Learning Pool in 2006 and exited the business in May 2014. Among other roles, she is Entrepreneur-in-Residence at Belfast-based Northern Ireland Science Park. Learning Pool co-founder and CEO, Paul McElvaney, remains in post.

Though the e-learning market never got anywhere near achieving the potential that was perceived a decade or more ago (and never will, IMHO), it looks like Learning Pool have dug themselves a great niche. Hopefully the new funding will help them dig even deeper and wider.

BT Group posted strong revenue of £18.9bn for FY16 ending 31^st March 2016, up 6% yoy. Underlying revenue growth excluding cash in transit was limited to 2% but still topped company expectations and constituted its best performance in seven years.

EBITDA rose 5% to £6.6bn with adjusted earnings per share growing by the same percentage to 33.2p. Adjusted pre-tax profits also increased by a healthy 9% to £3.5bn.

It wasn’t all good news – operating costs excluding transit rose 2% partly due to investment in BT Sport Europe. And the company’s net debt following the £12.5bn EEdeal grew by a significant £4.7bn to £9.8bn.

The contrast between BT’s consumer and business sales is also stark. FY16 consumer revenue rose 7% to £4.6bn (including 17% growth in TV and broadband revenue). The £1bn of additional revenue contributed by EE in the final two months of the reporting period alone added gloss to the overall numbers and leaves BT confident of future growth.

Certainly BT seems tightly focussed on sweating its newly acquired assets. A freshly announced £6bn investment plan is centred on fibre broadband and 4G mobile network expansion, with improvements to customer service also pledged to deflect further criticism from telecoms regulator Ofcom.

But while we think BT is well placed to attack rivals in the triple/quad play consumer market, question marks over its business divisions highlighted in H116 remain. BT Global Services revenue declined 4% to £6.5bn in FY16 (down 2% in Q4) though a highlight was a stated 24% growth in cyber security sales. BT Business revenue was unchanged yoy at £3.1bn (up 2% in Q4).

Nor was there any mention of future investment specific to either division which tells us BT’s priorities lie elsewhere for the moment despite the organisational reshuffle earlier this year.

The protracted takeover of insurance software and business process services (BPS) provider Xchanging has now reached its conclusion, with the deal now signed, sealed and ‘unconditional in all respects’.

To reach this point, and meet the mid-May merger deadline, CSC said it had ‘waived the German regulatory approval condition’ – the only regulatory hurdle still to overcome (see FCA approves Xchanging takeover. CSC had been holding out to receive written approval from the German regulator over the change in ownership of Fondsdepot Bank GmbH, Xchanging’s former banking JV with Allianz Global Investors.

CSC explained to us that BaFin (the Federal Financial Supervisory Authority) was now reviewing CSC's application, however, that is not required to wait for the regulator’s approval. CSC said ‘as often occurs in these transactions, CSC has notified BaFin that it has waived such approval as a condition to closing’.

Of course, there’s no certainty that the German regulator will approve the change in ownership. However, CSC said that it ‘does not anticipate any changes to Xchanging’s business approach while BAfin completes its review’. So there while this issue works itself out there will remain a degree of uncertainty over the future shape of Xchanging post-merger.

Meanwhile, Xchanging’s shares are now expected to cease trading on the LSE on or around 6 June. TechMarketView subscribers can read our analysis of what the CSC/Xchanging merger means for both parties in our comment Xchanging exchanges Capita for CSC. We will also be meeting CSC/Xchanging management in due course to hear about their plans for the future, and will a further deep dive soon after.

Yesterday I had a media interview where I was introduced as a person who most accurately predicted the future of tech. I was a bit taken aback. My response was that it was actually quite easy. Big head or what?

The point I went on to make is that everything that will become common place in the next 10-20 years is actually here today. It is just that at the moment it is too expensive, too slow, too big or whatever. But any simpleton knows Moore’s Law and can extrapolate that to other areas.

Forecasts about the effects of the internet on our lives made in the 1990s were wrong. NOT because they were too optimistic but because every forecast was exceeded. If I had put up a slide (yes that’s what we used in the 1990s!) in 1999 on how the internet would be used in 2016, I would have been booed off the stage.

So, today forecasting that most homes would be ‘off grid’ and self-sufficient in energy in 20 years seems a doodle. Solar panels will become so cheap and so efficient. Cheap, efficient batteries will store the energy during the day to power our homes overnight. And, of course, all cars, buses, lorries etc will be electric using renewable power. Oil (and the countries that rely on oil revenues) will be a thing of the past.

Human’s driving cars will be banned within 20-30 years. Self-driving cars are both safer and more efficient as long as we don’t let stupid human’s on the roads to crash into them.

Now, you may say, ‘Richard has finally and completely lost his marbles’ but all of the above are purely an extrapolation of what I know TODAY. All that is needed is ‘cheaper, smaller, faster’ – all the things that tech always delivers. So these forecasts are not of the ‘Will Leicester win the Premier League?’ -type. They just will happen.

Simples?

I’ve been writing for many years about the opportunities of the IoT and in particular of ‘connected pills’. See my 2012 post ‘Welcome Generation IP 2025’ or ‘Wearable Computing’ in 2013 as examples. But there have been many since. Indeed Google was said to be at the forefront of these developments.

Today, The Times reports on Proteus Digital Health which has developed a miniscule sensor that can be attached to pills to send a message once the pill has been swallowed. One side is coated with copper. The other with magnesium. So when it gets wet it acts to create a charge which sends the message to a wristband or smartphone.

The point is that a majority of patients forget to take their pills adding millions to the NHS budget in wasted prescriptions and, of course, the consequences of not taking those pills on the patient’s health. The study found that within 4 weeks 85% of those using the smart pill achieved their required blood pressure or cholesterol levels compared with only a third who did not.

Pretty conclusive!

An encouraging set of interim results from Sage Group this morning that shows off the changing shape of the company as it transitions to the cloud and subscription model, plus the surprise announcement that it has taken a minority stake in SaaS HCM specialist and Little British Battler FairSail.

At 6.2% to £747m, organic revenue growth is on target for the 6% FY goal, and was up 4.1% on a reported basis. Organic operating profit was up 1.9% to £189m, but down c15% as reported in part due to anticipated investments in areas like sales and marketing.

At this stage in its transformation, the bigger picture is what counts and Sage is making tangible progress, while maintaining performance. We can see it in numbers such as 10% growth in recurring revenue to £513m, taking it to 69% of total revenue (from 66%) which includes a 35% increase in subscription revenue. The increase in subscription revenue was countered by a 6.3% decline in licence and support revenue and within this licence revenue dropped 18%. This is evidence of customer migration to recurring and subscription revenue, although as the management team pointed out, there is still a way to go.

Customer migration is an important factor in recurring and subscription growth but Sage also needs new customers to maintain growth. We hope to get further insight when we speak to management later but from our perspective we see Sage One as an increasingly important gateway product for the Sage portfolio especially with its mobile bias, with growth also primed to come from the payments processing business and Sage Live now that it is fully launched in the US and UK.

In terms of Fairsail, Sage has taken a minority stake, as part of Fairsail’s latest funding round and will offer it as the HCM solution for Sage X3. It strengthens the existing relationship between the two (Fairsail is one of the Sage Live partners). Significantly, it extends what Sage describes as its ‘golden triangle’ adding HCM to its accountancy and payments capability. Again, more on this relationship later.

Sage showed transition progress when it reported end of year results in December (see here) and has done the same again in H1. 

In an increasingly competitive integrated care market (see Integrated care: opportunities and an evolving supplier landscape), Servelec, which derives around half of its revenues from health & social care (see Servelec’s business of two halves), has made its next move to strengthen its offering.

Described as the company as a “small acquisition”, the purchase of Target eSolutions Holdings Ltd (trading as Abacus eSolutions) will enhance the functionality of Servelec’s existing product suite. From today, Target eSolutions will become Servelec Abacus Ltd trading under the Servelec Corelogic brand. The Abacus product suite will bring functionality, such as debt management, and the ability for care providers to manage their own billing and payment online, to Servelec’s social care case management software suite, Mosaic. Servelec will also continue to support Abacus as a standalone product.

In FY15, Servelec’s health & social care business delivered the strongest performance of the Group: 95% headline growth to £32.5m, with 22.5% organic growth. The acquisition of Corelogic in late 2014 (see Servelec sees Corelogic of social care move) took the company into the adult and children’s social care market, while the subsequent addition of Synergy strengthened its position in the evolving Converged Care market. Taken together, Servelec was able to offer clients a single view of the child, facilitating early and coordinated intervention. But Servelec is aware it needs to keep on its toes, with many suppliers offering solutions to support integrated care. Capita, for example, has taken strides in strengthening its position in the social care market by integrating its Capita One Education system with the Liquidlogic social care system (System C). And most recently, Agilisys has acquired Quickheart (see Agilisys takes Quickheart into its care) to add social care functionality to its local government product suite. Servelec is clearly keen to make sure it stays ahead of the pack as the converged care market continues to develop.

Following closely on from its acquisition of Carrenza last month, Six Degrees has made another purchase. The company has acquired small application hosting firm, Insite. Charlesbank-backed Six Degrees did not disclose the terms of the deal.

We estimate that Six Degrees has an annual run rate of c£100m, meaning that Insite (which is slightly larger than Carrenza in revenue terms) will initially make a relatively small contribution to the top line. However, this is an important acquisition from a strategic perspective as Insite gives Six Degrees capabilities in the public sector, and specifically in Local Government (Insite is G-Cloud accredited) - complementing Carrenza’s position in Central Government. Together Kent-based Insite and Carrenza boost Six Degrees' public cloud capabilities, with the former having Microsoft Azure capabilities and the latter Amazon Web Services expertise. We think it's an interesting combination with plenty of potential.

Insite provides hosting services to manage the application performance, with its focus being Microsoft Dynamics. It doesn’t provide services at the application layer (e.g. development or integration services) but partners with ISVs on that. Acquiring application hosting capabilities helps Six Degrees with its stated aim to move up the value chain, to provide more margin-rich, business critical services to customers. Six Degrees is investing organically in staff, working practices, processes and tools to create automation and orchestration capabilities to manage the various services (including cloud delivered services) it provides into a customer.

The bigger picture for Six Degrees is about creating a broad range of offerings for mid-market customers, enticing them to buy multiple services from voice through to application hosting. Indeed, Six Degrees tells us that it has recently signed some of its biggest deals to date – all of which contain the full range of services. As a result, we estimate that the company’s contract base is growing (organically) at around 5%.

Hearts are aflutter with the news that SAP and Apple are in partnership to bring iOS and HANA together as Apple intensifies its efforts to push deeper in the enterprise world and SAP pursues its positioning as a cloud company powered by HANA.  

The partnership encourages the development of native enterprise apps for the iPhone and iPad using the HANA platform. SAP will develop apps itself while an SDK will encourage the legions of external SAP developers to create native iOS apps for S/4 HANA and the HANA cloud platform. SAP will also create training academies to bring Apple’s design sense to mobile app development.

With the iPhone and iPad in maturity and Apple’s latest Q1 results showing a 13% revenue decline (see here), it is looking for a new business avenue. This partnership, along with similar ones with IBM (2014) and Cisco (2015), provides a direct route into the relatively untapped enterprise and back office business world

Partnering with a software provider is a smart move given that volume and variety of applications is what will drive enterprise success rather than a pure technology or platform alliance. Native iOS applications able to access data held in SAP systems hold the promise of different types of rich applications (not just mobile front ends) and the (official) deployment of Apple kit more widely across enterprises. With lower Apple selling prices, provisioning larger workforces with Apple devices comes into scope.

For SAP, the partnership is another means of promoting HANA, stimulating applications to encourage its adoption, building its cloud credentials, as well as aligning itself with a provider known for design and innovation. It is a win-win situation.

Apple is becoming partner friendly and appears to have software companies in its sights. It has also recently partnered with Sage, including building a version of Sage Live for iOS, and has several mobile first apps infused with the Apple design ethos in the pipeline. It will surely only be a matter of time before we see an Apple/Oracle partnership. There is also scope for deeper relationships with cloud pure plays like Salesforce, Workday and NetSuite who all have iOS plays.

It was just a ‘tightening up’ of guidance, but it’s more the sentiment that counts rather than the small reduction in predicted growth rate for New Jersey headquartered, India-centric offshore services major, Cognizant.

After signalling back in February that 2016 would be a slower year in general (see Cognizant sets scene for slow year), management reduced the midpoint of its headline revenue growth forecast by almost a point, from 12.2% to 11.3%. Earnings guidance remains static. This came on back of an ‘in line’ Q1 (to 31^st March) which saw headline revenues creep back by 1% qoq to $3.2b, but 10% higher yoy. Operating margin, as ever, was managed within an inch of its life and in fact rose a tad to 17.3%.

It’s tough out there!

We're delighted to say that tickets for our fourth annual ‘Evening with TechMarketView’, which will take place in London on Thursday 8 September 2016, are selling like the proverbial hot cakes! If you'd like to join us there don't leave it too late - you can book by clicking here.

Following the success of the sell-out 2015 TechMarketView Presentation & Dinner, this year’s event will once again be held in the magnificent premises of the Royal Institute of British Architects (RIBA) in Portland Place, London, from 6.30pm.

The evening, which will be centred around our 2016 research theme ‘Surfing the Waves of Disruption’, will commence with short, insightful presentations from the TechMarketView analyst team highlighting key trends in the UK software and IT services market. This will be followed by plenty of time for networking over drinks and a sumptuous three course dinner with your peers.

We’re expecting a similar audience to the previous three years with around 250 ‘movers and shakers’ from the UK tech scene, for what has been described by previous C-level attendees as “the best networking event in the industry”.

Tickets do sell quickly, so we’d advise you to book early to avoid disappointment! We’ve held the prices at the same level as last year - £395+VAT per person for TechMarketView research subscription clients and £495+VAT per person for everyone else. There are also a limited number of tables of ten available at £3,950+VAT.

To secure your place, please click here to book or email tx2 events who are organising the event for us on eventenquiries@tx2events.com.

If your organisation would also be interested in sponsoring the event please email Tola Sargeant (tsargeant@techmarketview.com) for details of available sponsorship packages.

You might have noticed a banner ad on HotViews today featuring a Tesla Model S and White Car.

I got to know White Car via its founder Mark Strachan. Basically White Car rents out Teslas for £149 incl VAT per day. They say this is cheaper than hiring a BMW 5 or Mercedes E Class. It is starting with 5 Teslas based at Heathrow. You book via a simple App. They plan to have 20 outlets in the UK and Germany within 3 years. That all rather depends on the success of their £250K funding (via Crowdcube) launched today. That values White Car at £750K.

One of the other founders is Christina Lawford – the CEO of Diamond Air which runs at ‘Meet & Greet’ service at 475 airports/stations worldwide. Seems like an obvious client for White Car!

To be clear, I make no recommendations about White Car – other than being intrigued by the idea. I wish Mark luck with the fund-raising.

BTW - If you'd like to run a Banner and/or Sponsored post on HotViews, please contact Rebecca Johnson on rjohnson@techmarketview.com. What better way to reach a highly impressive audience?

Delhi-based IT/BP services player NIIT Technologies closed the year in better shape than prior, with FY revenues (to 31^st March) 13% higher at Rs26.8b (c. $410m), and operating margins almost 3 points wider at 13.5%.

NIIT Tech is the smallest of the global mid-tier players that we track (Mastek is smaller but essentially only serves the UK market) and is not growing as fast. But they have proved they can pull off some very good deals (see NIIT to replace CGI at Ofcom) – they just need more of them!

Last week Bango, the mobile payments company specialising in direct carrier billing (DCB), announced its first link-up with a mobile operator in the growth market of India. The deal with Idea Cellular opens up 182m subscribers who will be able to add their purchases of apps, games and music via Google Play to their phone bills. As credit card penetration is very low in India, DCB may well prove to be an attractive payment mechanism.

Today Bango announces another move to increase its scale, this time with the acquisition of BilltoMobile, the US-based carrier billing services of Danal Inc., for a cost of around US$3.5m (£2.4m). In addition to the capital cost, Bango will have to pay £150k in fees as services are migrated from Danal. The BilltoMobile operation lost c.£590,000 in the last year. BilltoMobile is the largest DCB player in the US and executed transactions with around £55m of End User Spend (EUS) in 2015. This compares with EUS of Bango of £44.7m in 2015. Bango management was however forecasting a doubling of its annualised EUS run rate and the US growth rate is likely to be considerably slower.

Bango will migrate all of BilltoMobile’s transactions onto its existing, scalable platform. As no staff, equipment or premises are being acquired it is unlikely that there will be further additional costs so there should be a direct benefit from the additional gross margin. This acquisition includes a cash payment of £3m, but Bango was well-placed with year-end cash of £12.1m.

Bango’s route to profitability is getting steeper as gross margins decline (see Jam tomorrow, again, for Bango) and depends entirely on increasing volumes. These two moves are positive steps along the road. Bango will also benefit from being seen as a market consolidator.

Excellent article in the Sunday Times yesterday by Luke Johnson entitled Animal Spirits: unicorns that belong in the land of make-believe. Unfortunately, because of the paywall, I can’t link you to it. But basically it castigates Powa Technology,Theranos and other so called failed tech unicorns. Pointing out that 225 unicorns were identified last year – but undoubtedly rather fewer this year. Johnson makes the telling comment“I have met young founders of hi-tech companies who seem more familiar with financing than the actual operations of their business”. So have I! The play is all about attracting Series A, Series B financing, growing users (often no real talk of revenues and almost never talk of profits). The end point is a sale, whether by IPO or to another set of investors, before any need for profits and hopefully before the cash runs out. At that point the founder gets out and plays the same game over again. Indeed joins the ranks of the ‘Serial Entrepreneur’.

Recently I had an exchange with probably the best known tech serial entrepreneur in the UK. I asked if any of his companies had ever made a profit. I never got an answer. But this person had made tens of millions in the process and is feted by all – incl HMGovernment – as ‘an example to us all’.

Johnson makes the point that the days of being able to do this are coming to an end. Not soon enough for me.

A report in today’s Times tries to link the prophesy of the unicorns’ demise to the sale of table tennis tables. All Silicon Valley unicorns must have games areas with table tennis tables. But sales of table tennis tables fell 50% qoq – even faster than the 25% fall in funding for US start ups. Same phenomena is being experienced in the UK apparently.

TechMarketView does not have a games area. TechMarketView has experienced double-digit growth in every year of its existence. TechMarketView has always made a profit.

Forbidden Technologies is raising £1.3m to fund the growth plans for its portfolio of professional and consumer video editing and distribution services. Last week the company announced a paid Proof of Concept with a “US technology giant” for a “major UK broadcaster” to use its cloud-based workflows and benefit from lower post-production costs. This adds to the announcement of the use of its Forscene professional cloud video platform at two major, but also unnamed sporting events (which sound suspiciously like Wimbledon and the Rio Paralympics). Forscene is also available via the Microsoft Azure Marketplace.

Such signs of progress are positive after a year of transition and hopefully tighter focus. Revenue for 2015 totalled only £708k, essentially flat on 2014, but annual losses fell to £2.66m (2014: £3.64m) as a new executive team came on board and costs were cut.

Elsewhere across the business, 30,000+ people have registered for the free trial of the company’s Captevate consumer video editor and some paying customers have been signed-up. Although this is a crowded market, the company expects that it will generate meaningful revenue in 2017. The embryonic social media platform “eva” is also making some progress with its first paid channel. Management are right to describe this potentially distracting business as “unpredictable”.

The placing will be used to bolster the company’s sales infrastructure and to fund higher sales in its existing portfolio. The management also holds out the prospect of more focus and further cost reductions. We highlighted the need for focus in our HotView in September and this apparently more disciplined approach is welcomed.

With customer loyalty at the vanguard for most organisations, those suppliers with proven capabilities are well placed to claim part of customer facing digital enablement budgets. Escher Group, with its outsourced point of service offerings for the postal industry, has been building its credentials in this area, so news of a pilot contract with Saudi Post is positive, particularly at it comes at a time of ongoing model and market transition (see here).

It has signed a six month pilot for an identity, post office network and loyalty scheme management platform. The pilot will kick off with a loyalty platform rollout across 100 Post Offices, based on customer identification using QR codes.

Although the size of the contract has not been released, there are two notable aspects to this deal. The first is the potential to expand to 800 Saudi Post offices, illustrating once again the small steps suppliers need to adjust to where digital modernisation projects are involved but the scope to grow into sizable contracts if the initial parts go well. The six month timeline is also an indicator of the demanding timescales covering implementation and ROI. The Escher contract also underlines the potential around loyalty management solutions, something Eagle Eye also demonstrates (see here), as organisations move to an omni channel position.