The practice of “thoughtful discipline” at CA Technologies enabled it to deliver in line results for the year to March 31 2016 but it is still on its long journey back to growth and profitability so will need on going discipline.

Results are edging in the right direction, with Q4 revenue only delivering a 1% yoy decline (but up 1% cc) to $1.01bn, and an qoq improvement too (see here), however the Rally Software Development acquisition added three points of revenue growth. Net profit from continuing operations was up 18% to $171m. For the full year revenue declined 6% (1% cc) to $4.03bn with net profit down 5% to $769m.

The company is refining its product portfolio and making strategic acquisitions, but still suffered from lower renewals and lower sales. It is managing to attract licence deals with incremental contract values over $10m each, showing there is still good business to had from legacy environments, as Micro Focus also proves.

The approaching inflection point CEO Mike Gregoire spoke of last quarter is not here yet and there is only a certain amount of improvement that can be achieved through “thoughtful discipline”. 

Last year Unit4 sets its sights on better visibility and international expansion, especially in the US, and judging by its latest results, it is hitting the target.

As a private company it is able to be selective about the performance metrics it releases, nevertheless there is evidence of good Q1 growth in North America, with a threefold increase in SaaS bookings and over 25% growth in license revenues, alongside a record number of new customer wins. That all makes it Unit4’s fastest growing region.

High growth from a low base is relatively easy to achieve but it is clear that Unit4 is moving forward. We have tracked its rise in the UK where it has become more than an irritant to tier 1 ERP providers and will monitor its US progress. The US is a more difficult market but Unit4 is building its base. 

It’s still a minnow compared to Sage and Intuit but that isn’t holding Xero back – and its international growth is coming on at a cracking pace, especially in the UK.

For the year to March 31 2016 the SaaS accountancy software company delivered revenue of NZ$207m, up 67%, from a subscriber base that expanded 51% to 717,000. Naturally that expansion came at a cost with a net loss that increased by nearly NZ$12m to NZ$82.5m. Cash burn improved somewhat from NZ$88m to NZ$86m, with NZ$184m of cash, cash equivalents, and short-term deposits available. Additional funding might be required at some point although the company is now running a tighter operation.   

With international revenue up by 95% to NZ$63.6m, it is flying. CEO Rod Drury highlighted the United Kingdom as a particular growth area, aided by the ability to automatically load transactions from most banks into Xero’s software. These types of links are what Sage has to watch out for, especially in relation to its own fast growing Sage One offering (see here) as ambitious Xero pushes forward.

A couple of interesting things happened to Apple yesterday.

Firstly, it looks like Apple lost their crown as ‘Most Valuable Company’ to Google. Apple shares closed down 2.4% making them worth $495b – a shade less than Google’ $499b. As readers know that is all down to Apple’s slowing sales of its iPhone and rumours that orders to its suppliers for the iPhone7, due in Sept 16, have been cut. It also shows that, in tech, the baton has finally been passed from Hardware suppliers to the Services sector led by Google and Facebook.

Last night Apple announced a $1b investment in Didi– the Chinese competitor to Uber. It is significant as Apple doesn’t normally invest in start-ups. It joins Alibaba and Tencent on the shareholder register. Of course, $1b hardly puts a dent in Apple’s $233b cash hoard. But it shows that maybe even Apple believes that it now has to do something different if it is to regain its crown.

Apple stresses that it too has a fast growing services business. Revenues from such things as Apple Pay and Apple Music rose 20% to $6b in Q1 (see – ‘Rotten’ Apple?)

Apple certainly needs to come up with a Next Big Thing. Apple Watch is clearly not it and Apple TV has had such a long gestation that I fear it will never make it. Perhaps the Apple iCar will finally restore excitement to Apple? But, if the Didi investment is a change of course, maybe those persistent rumours of Apple buying Tesla might resurface again too? Tesla closed last night with a market cap of $27.4b – not much more than a tenth of Apple’s cash hoard.

Despite the rather excited hyperbole in its press release, Appointedd, the Edinburgh-based booking management SaaS start-up ‘dedicated to empowering small business superstars’, actually looks like it could hit the spot with personal services SME businesses.

Appointedd has just scored a further £595k in a seed funding round led by angel syndicate Equity Gap, which is hoped will help the start-up scale globally (I know it’s a small world, but I’m not sure that £595k goes that far). Former magazine editor Leah Hutcheon won a Scottish EDGE funding award of £30,000 to kick-start the business. This was later boosted by a £160k funding round also led by Equity Gap along with Apollo Informal Investment and the Scottish Investment Bank.

Appointedd’s standard service starts at £10 per month and provides a booking website and appointment book, along with CRM, and staff & rota management functionality. You can pay more to be able to take bookings directly from Facebook, run SMS and email marketing campaigns and even integrate with EPOS.

If Appointedd really ‘does what it says on the tin’ then I think it could be a winner. But is £595k really enough to get them across the finishing line?

India-HQ’d but increasingly onshore-centric business process services (BPS) provider Firstsource is hitting its stride in the UK, its second largest market.

UK growth in FY15/16 hit 10% to reach Rs. 11.9bn (£123.4m) although pre-tax margins dropped a point to a still very respectable 20%. In Q4, UK grow was even stronger at 24%, although this is coming at the expense of profitability, which dipped to 19% vs. 24% last time. 

The reason for the strong growth is a number of recent UK wins, and expansions of existing deals. For instance, key client Sky expanded its relationship with Firstsource via its Now.tv service, meanwhile mobile network provider giffgaff extended a three-year customer management contract. Firstsource also signed a ‘large transformational deal’ with one of the UK’s largest retail banks, which it said involves significant elements of process re-engineering and automation.

In the UK there is also now a partnership with Ulster University to offer its employees a degree in contact centre management. Northern Ireland is where a lot of the employment growth has been in the past two years – it now employs c2,000 - so providing career path incentives to staff is a sensible way to ensure commitment on both sides.  

While the UK onshore model expands, Firstsource is actively managing down its offshore delivery model. It removed two Indian centres in the year as revenues continued their decline. We will explore the changing dynamics of the offshore BPO market in a future note for BusinessProcessViews. 

We were chatting to the top team at one of our larger clients the other day and they posed the question as to whether we think they are seen as a ‘cool’ company by the market and by their customers.

That rather got me wondering about the value of being ‘cool'.

Here’s one way to look at it.

You can think of ‘cool’ as being at the low-value end of a ‘customer perception’ spectrum:

COOL --> RELEVANT --> NECESSARY --> INDISPENSABLE

If that works for you, then you’d probably conclude that if you want to be seen as a ‘cool’ company then maybe it would be best if you just focus on the ‘cool’ things (products or services) where there is a clear path to move to ‘relevant’, then ‘necessary’ and ultimately ‘indispensable’ to the customer.

The rest is really froth.

By the way, there’s nothing wrong with a little froth – but it probably won’t help the numbers!

Symantec got most of its bad news out in April when it warned it would miss Q4 revenue targets and that CEO Mike Brown was stepping down, so its Q4 and FY results have not caused much of a stir and shares dropped less than 1% in after hours trading.

With Q4 revenue down 3% to $873m, it met its downwardly revised target. Income figures are skewed due to the Veritas sale but on a non GAAP basis net income was down 28% to $147m. For FY15 revenue dropped 9% to $3.6bn with non GAAP net income down 23% to $698m. The situation is not quite as bad as it seems: revenue was impacted by a faster than expected shift to subscriptions so there should be future revenue benefits to be reaped.

There are more costs and uncertainty to come as the newly reorganised security specialist is to cut 1200 staff (c10% of the workforce) and close facilities as part of a restructuring plan that will play out over next to years, incurring costs of $230m - $280m. The aim is to remove layers of management, consolidate operations and rebalance some positions to lower cost regions. And it is looking for its fifth CEO in c5 years.

Appointing a dyed in the wool security specialist would go a long way towards rebuilding Symantec and getting the message out that there is more to it than anti virus capabilities. It has invested heavily in unified and advanced threat protection alongside information protection. This combination, plus the EU Data Protection Regulation changes, provides a prime opportunity to reestablish its credentials and benefit from additional regulatory driven security spending in the market. Timing is vital however, and one issue is that the timescale for the EU regulation changes overlaps with Symantec’s transition programme. 

That’s software containers, not shipping containers, by the way. London-founded but now transatlantic middleware developer Weaveworks Inc has scored a $15m Series B funding round from GV (formerly Google Ventures) bringing the total raised so far to $20m. Formerly known as Zettio, Weaveworks, raised $5m in a series A funding round led by Accel Partners at the end of 2014 (see IndustryViews Venture Capital Q4 2014).

In truth, all this stuff about ‘containers’ and ‘microservices’ is too deep for me, but thankfully there are those with deep pockets who ‘get it’.

Declaration – I am a long standing Apple shareholder. If you don’t know that you haven’t been paying attention for the last decade. Indeed I bought my stake in 2004 at $20 – or c$3 at today’s price due to the 7:1 share split. If I had ‘bet the house’ on it, I would be sitting on a beach in the Bahamas now (or maybe not…) I invested £1000. I am really not complaining but it is hardly a retirement fund.

Today, Apple shares are up nearly 4% (to $94 – ie a 30x gain for Holway) This was completely down to Warren Buffett buying $1b of the stock.

My friend, Anthony Miller, TMV’s Managing Partner, often lectures me on the difference between 'Great companies and Great stocks'. Mr Miller is a ‘Sage’ just like Mr Buffett - the Sage of Omaha - who says "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.". Mr Miller would agree!

Now I do NOT want, or intend, to give financial advice; you really are ‘on your own’. But Apple is still, to me, a ‘wonderful company’. On every valuation metric I have learnt over these last 50 years, Apple is ‘cheap’. Now companies can be ‘cheap’ for many good reasons. But here is about the most profitable company ever which generates cash in an obscene manner. I sit here surrounded by Apple kit and all my ‘Little Ones’ only want Apple kit. The Apple ‘eco-system' is so powerful – I really couldn’t think of giving up my iTunes library. Anyway, I’ve mastered the Apple ‘way of the world’.

Why would I change? Am I really that ‘strange’?

It’s only a small contract at £820K, and there was apparently only one viable supplier for the deal, but Dell’s contract with DWP to decommission the Government’s legacy online identity verification portal, Government Gateway, is interesting nonetheless. The reason: it means that the Gov.UK Verify platform needs to be ready as a viable replacement, including for higher level security assurance requirements, before Gateway disappears for good. If departments and agencies lack confidence in Verify's ability to fully support their digital services, they will start to look for their own alternatives. The deadline is 2018. At the moment, Verify remains in public beta, after its live data was postponed. It is currently going through a service standard assessment. As one of the first Government-as-a-Platform (GaaP) initiatives, all eyes will be on whether Gov.UK Verify proves to be a success. GaaP will only bring value to the public sector if the common platforms developed are widely adopted across Whitehall.

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.

Our recent meeting with Microgen’s top management confirmed our view that the company is picking up the pace, as well as adopting a more open approach to the City and analysts. The Group has some good news to deliver with a confident view of its strategy and growth prospects.

The Financial Systems business (48% of Group revenue, at £15.2m) is continuing to build in the Trust and Fund Administration (T&FA) market with another small acquisition, this time of Cyprus-based Infoscreen. This will give access to Infoscreen’s 200-strong customer list, presenting new sales opportunities for Microgen’s 5Series product suite. The T&FA market is a complex market niche where increasing regulatory and governmental oversight is driving growth, but where the larger software providers are generally not active. Microgen has been able to build a leadership position and its policy of growing its customer list through small acquisitions (see here) is paying off, as T&FA revenues grew 38% last year. Overall the Financial Systems business grew by 6% as the legacy application management business declined. Looking ahead, Microgen is still looking for similar deals in T&FA and will be driving add-on sales through enhanced services (dashboards, workflow management, etc.) and opening up adjacent markets.

The other Group business, Aptitude Software, also looks set for further growth as financial services companies increasingly use its Application Platform to accelerate solution development and adopt the Group’s specialised finance applications. Microgen is also extending into the telecommunications sector through its new Revenue Recognition Engine to enable compliance with new reporting requirements. Additional work with partners should also accelerate growth.

Microgen looks set for faster progress, particularly now that the constraining policy of returning large amounts of cash to shareholders (in addition to dividends) is a thing of the past.

Alongside progress with the police, today also sees another step forward for Sopra Steria in its UK private sector business with the decision by the fashion retailer N Brown Group to select the company as its partner for digital transformation.

N Brown generated revenue of £866m in its last reported year, up 3.5%, but warned of lower product margins and higher operating costs going forward. Among its key priorities for the current year are a new merchandising tool, a new web platform and financial services system as well as an emphasis on its digital capabilities, including the launch of JDWorks, an innovation incubator to enable rapid adoption of new retailing technologies. The growing importance of digital technology is seen in the increased proportion of online access among new customers, now around two-thirds compared with 51% of all customers (for the Group’s JD Williams brand).

Sopra Steria will run a core applications and infrastructure support service to manage IT infrastructure and sub-contractors through what looks to be a wide-ranging digitalisation programme, working to ensure a smooth transition to the new digital enabled services.

We highlighted the revenue decline for Sopra Steria in the UK private sector in 2015, see here and work back, but this deal adds to progress in the Financial Services business, see Sopra Steria takes centre stage…, and could open up more opportunities in the rapidly developing and intensely competitive retailing sector.

South Yorkshire and Humberside police last week awarded a framework contract to Sopra Steria with a contract value in the range of £11.8m to £41.2m. The framework covers the provision of an integrated multi-channel customer contact and resource management solution. The aim is to replace existing arrangements with a common IT platform to support the business functions of both forces, thus allowing for the potential rationalisation and alignment of business processes. Ultimately, the forces are seeking cost efficiencies and improved operational effectiveness. The maximum potential value of the contract will only be realised should other ACPO North East Regional Forces decide to use the framework.

According to the contract award notice, the competition was heavily weighted towards price considerations (40%). However, Sopra Steria has considerable experience in this type of shared services. Indeed, most recently its joint venture with the Cabinet Office, Shared Services Connect Limited, won a contract to provide back office support services to the Metropolitan Police Service (MPS). This was the JV’s first success outside of Whitehall. Sopra Steria is working with Capgemini on the MPS delivery (see First Sopra Steria SSCL win outside Whitehall).

This is not the first foray into shared services for South Yorkshire and Humberside Police forces. They had, for example, already merged their IT departments into a combined Information Services function. Moreover, Home Secretary, Theresa May, is a strong advocate of police forces sharing back-, as well as middle-, office functions in order to improve their productivity. Sopra Steria is now in a strong positon to help other police forces go down this route.

As trailed in April, the full year results of First Derivatives came in ahead of earlier market expectations, with revenue up 41% to £117m and Adjusted EBITDA advancing faster, by 51%, to £23.3m. Over the past couple of years, this provider of Big, Fast Data solutions has built some good foundations and we can see why the management is confident of further high rates of growth.

Consulting revenue for the year was up 29% to £75m, with an increasing trend for Financial Markets engagements to be longer term, larger and more strategic (see First Derivatives graduating to bigger things). Regulatory compliance and multi-vendor application support are growth areas, enabling bigger contracts and extending First Derivatives reach across the customer organisation.

The company now states that the top ten investment banks use its Kx database technology, underlining not only its success but also its momentum and growing importance within this sector. Investment in additional sales resource has enabled some significant wins across both the buy- and sell-side, as well as with market utilities and exchanges, most recently with Thomson Reuters.

The proprietary Kx database technology and software is being applied in other sectors, notably in Digital Marketing and Utilities as well as in pharmaceuticals, telecoms and sensor analytics. These moves are generally facilitated by working with specialist partners (e.g. Utilismart of the US in the management of power and water supply networks) or through targeted acquisitions.

Maintaining the growth rate will become more difficult as the operation expands, but the management are making the right noises about financial discipline, access to and training of high quality staff and strengthening the management team. As a consequence, we would expect that 2016 will prove to be another successful year.

Ahead of announcing its first half results on 7the June, Idox has updated the market on its performance for the six months to the end of April. Revenue increased c26%, including contributions from acquisitions: Cloud Amber (July 2015) and Reading Room (October 2015). The underlying organic revenue growth rate was 5%.

About three quarters of the company’s revenue comes from its Public Sector Software (PSS) division. The unit reeled in 81 new system wins during the period – including in the area of planning and building control where its iApply solution is positioned.

The Engineering Information Management business was “in line with expectations” and showed an “improved performance”. Note that in H1 2015 the business declined 28%.

All of the above has contributed to an EBITDA performance that is expected to be “substantially ahead” of H1 last year when Adjusted EBITDA was down 10%.

In its last full year results announcement, Idox said it wanted to become a £100m company. To do that, it’s going to need to marry a robust organic growth line with possible further acquisitions.

As the annual Sapphire Now conference kicks off, early birds are moving on the opportunity around the migration of SAP customers running on the Oracle database to SAP HANA.

Growing independent maintenance providerRimini Street has announced the extension of its support services to cover the HANA database and platform components, with support provided by HANA certified engineers. Its SAP business has been growing – up 30% yoy in terms of revenue and the number of clients up by 35% over the past year to more than 200 – but moving into HANA is a step change and shows that Rimini Street can take on the latest technologies.

With many SAP customers running their ERP applications on Oracle database and analytics solutions on HANA, Rimini Street is taking advantage of SAP’s decision to stop direct support of Oracle databases licenced through SAP in December 2019, by offering on-going support for mixed environments.

Elsewhere Dell has updated its SharePlex Oracle-to-Oracle replication suite to enable SAP customers to migrate from Oracle database to HANA. The development of the exit route has been prompted by the withdrawal of support for SAP on Oracle after 2025. SAP S4/HANA won’t run on other vendors’ databases.

While SAP may be concerned about the impact on its maintenance revenue stream from Rimini Street offering HANA support at a 50% discount, it could help drive HANA adoption, given that some SAP customers are finding it difficult to build a business case for HANA despite recognising its capabilities. It is also a positive endorsement of HANA’s progress as Rimini Street only puts its resources into volume markets. The Dell move is a welcome one that could also further boost HANA adoption. There are opportunities for other tool and application services providers to hook into the migration opportunity as the deadlines approach but each supplier will need to be clear on their points of differentiation.

Accenture has announced what looks like a major step forward in the use of artificial intelligence (AI) within IT and business process operations by forming a new practice with IPSoft.

Accenture will set up an Accenture Amelia practice to ‘develop go-to-market strategies, solutions and consulting service offerings around deployments of virtual agent technology’.  The aim is to focus initially on clients in the banking, insurance and travel sectors. Last November, Accenture also announced an investment in AI at its Centre for Innovation in Dublin to help clients to ‘accelerate the integration of intelligence and automation to transform their businesses’.

IPSoft is one of a group of technology providers emerging in the AI/cognitive learning space, which we discuss in our reports into Intelligent Automation (see Business Process Automation – what is Intelligent Automation? and work back).

What makes IPSoft’s approach different is Amelia, a virtual agent that communicates directly with the end user, supporting IT and process automation tasks. It uses natural language and neural networks to understand words and context and learn from experience. IPSoft says Amelia is able to handle 1,000s of conversations in parallel, operating 24/7 at machine speed, in a polite, friendly manner. This has the potential to make Amelia far faster and more productive than her human equivalent. And of course she doesn’t get fed up doing that!

Amelia started out responding to IT service desk ticket requests. But as the technology improves it is increasingly moving into more complex business process tasks, in areas like managing invoice queries, providing policy guidance for mortgage brokers, and assisting customer service agents.

This latest commitment from Accenture is a real show of faith in the virtual agent approach, that we believe will become increasingly accepted in enterprise environments as the technology improves over the coming years. We will be providing a deep dive specifically into AI/cognitive applications within business process services in a forthcoming BusinessProcessViews report.

Video search and advertising technology provider Blinkx spent FY15 riding shifting sands as part of a necessary realignment in response to shifts within its market (see here for the background). As expected it showed up in the numbers, but so did its progress.

While total revenue for the year to March 31 2016 dropped to $167m from $215m and loss before tax rose from $25m to $94m, the Core programmatic products the company has bet the business on are moving in the right direction – and quickly. Core programmatic revenue saw a satisfying increase from $45m to $75m. However, revenue from other core products declined from $59m to $41m so while the total revenue for Core products was up to $116m, (from $103m), there is still work to be done.

The Core area of mobile, video and programmatic trading now represents 70% of total revenue and the RhythmOne platform is proving to be a real asset and capable of attracting the all important programmatic partners. In fact, Blinkx made substantial progress, signing up partners across the board. With the technology in place (with scope to grow), a large part of its success will come down to the volume and quality of its partners in what is a tough and volatile market. It also needs to continue its cost control, building on the $40m reduction in operating expenses achieved through the year in order to move back into (sustained) profitability.