Conduent’s Q2 performance was essentially more of the same as the business continued to slim down and improve profitability. Revenue was approximately $1.4bn for the quarter down by 7.6% year-on-year on a constant currency basis. Once adjusted for the impact of 2017 divestitures and a new accounting standard revenue was down about 3% year-on-year.

Conduent is working to deliver cost savings this year to the tune of $700m and the associated transformation programme is improving profitability. Adjusted EBITDA in the quarter was $166m, an increase of 8.5% year-on-year. Adjusted EBITDA margin grew to 12%.

Divestment is the order of the day and it closed the sale of two businesses in the quarter including its commercial vehicle operations business and its off-street parking business. It also expects to close on the sale of its actuarial and HR consulting business in the near-term. Talks are also ongoing to sell a group of local government businesses which together accounted for some $113m of 2017 revenue.

The sale of these business is expected to raise some $600m for Conduent which also announced it was making progress in finding a buyer(s) for a range of standalone customer care contracts potentially worth an additional $500m to the business.

The other major highlight from the quarter was the sales activity where Conduent booked its largest quarterly sales performance to date with total contract value (TCV) signings of $1,947m for the quarter up 56.5% compared with Q2 2017, mainly driven by renewal signings with technology, government and transportation clients.

All in all, a good quarter for the business which looks like it remains on track to return to organic revenue growth by year end.

Do you want to network with the ‘movers & shakers’ in UK tech?

As part of 'An Evening with TechMarketView' on 13th September 2018, we will be discussing the digital journey of one of the world’s top energy suppliers and the valuable lessons for tech suppliers? You will also benefit from our top analysts’ insight into what it takes to be a leading supplier with double-digit growth and more. 

To attend:

Click here for more information and to book your tickets.

Are you part of an organisation that wishes to raise its profile within the industry?

To sponsor, contact Sarah at srobinson@techmarketview.com or call +44 (0)7880 908 008.

We hope to see you there!

NTT has announced that it will restructure the group of NTT operating companies. Five companies – Dimension Data, NTT Communications, NTT DATA, NTT Security, and NTTi3– will be transferred to a newly created holding company, called NTT, Inc. The changes will come into effect before the end of this calendar year. Jun Sawada, CEO of NTT Corporation, will also serve as the CEO of NTT, Inc. By Q3 of calendar 2019, NTT will “consider” integrating the businesses, except NTT DATA, into two new businesses; one will look after the global business, the other will focus on NTT’s domestic market in Japan.

NTT Group is a mammoth Japanese-headquartered business; the 60^th largest corporation in the world. But outside Japan, NTT struggles has struggled with its brand identity, being predominantly seen as a telco player. The simplification of its structure makes sense if NTT is to improve awareness of the Group’s offerings globally.

NTT DATA, with its full range of ICT services offering, has had a particular issue with brand identity; it has recently run a brand awareness campaign in the UK (see NTT Data UK: Public sector potential). Within the new arrangements, NTT DATA will “continue to collaborate with the other companies, while retaining its present management structure, status as a limited company, management autonomy and brand”.  In our view, this is a good decision. There would have been a risk that if NTT DATA had been integrated with the other companies; its market messaging would have suffered due to the dominance of telco, infrastructure and security offerings in the mix; NTT DATA is unique in the Group with its range of ICT services capabilities and offerings. The positive for NTT DATA is that the simplied Group structure should make it easier to pursue cross-company collaboration and leverage the combined resources of the rest of NTT. 

The other NTT announcement is increased commitment to global research and development. The Group already undertakes a lot of R&D development; we understand it has 4K employees working in its labs.  In the UK, we’ve witnessed, for example, the use of lab-developed IP within a smart transport project in local government. The new move is the creation of an incubation fund, NTT Venture Capital, L.P. The idea is to accelerate the development of new, particularly digital, technologies. The challenge will be ensuring that the global business has the capacity to understand the IP and where to apply it.

We can expect further details of the strategic initiatives to be announced in November 2018.

After the phenomenal success of our inaugural TechMarketView Early Stage Partner Programme event in association with Capita Scaling Partner (see TechMarketView Early-Stage Partner Programme shortlist announced), Capita has posted video comments from the founders and CEOs that participated on its website here.

We will have some very exciting news about the programme in coming weeks which we are sure will be of great interest to all UK tech SMEs – not just early-stage companies – that believe they can bring innovation to the market.

Keep an eye out on UKHotViews for more.

UKHotViewsPremium - An Individual Subscription

If you’re a keen UKHotViews reader - who isn’t fortunate enough to have access to a corporate subscription to TechMarketView research - you can now subscribe to UKHotViews Premium, a service for individuals.

Until now, this invaluable resource – the combination of our searchable UKHotViews archive and our more in-depth UKHotViewsExtra analysis - was only available to our corporate subscribers as part of a subscription to one or more of our focused research streams. But we recognise that there are many individuals that would benefit from access to this rich, searchable source of insight too, so we’ve launched a new service, UKHotViews Premium, especially for you.

Sign up to UKHotViewsPremium & gain access to:

• TMV's repository of 15,000+ UKHotViews & UKHotViewsExtra articles for news and views on suppliers, market and industry trends
• 50% off your first TMV report
• Annual discounted client rates on TMV events
• 1 year for £395+VAT or 2 years for £650+VAT

Browse the analysis online or, if you wish, select multiple articles to print or PDF on demand. Quickly build up an informed picture of a supplier of interest; spot trends in share prices over time; identify start-ups you should be talking to; or mine the archive for insight on areas of opportunity in the UK public sector IT market.

For more details or to sign up to UKHotViews Premium today please click here.

London-based Zopa is the granddaddy of the peer-to-peer lending sector and if imitation is the sincerest form of flattery, the founders must be blushing. Its stats are pretty impressive too, having lent £3.5bn to customers since its inception in 2005, with about £1bn lent over the past year, and has over 60,000 investors and institutions investing their money in the P2P concept. Zopa backs up its operations with a tried and tested credit risk policy, planned diversification and a seasoned approach to debt recovery. Zopa is authorised and regulated by the FCA.

In the year to end December, Zopa had revenues of £46.5m and after-tax profit of £1.5m, with loans originated growing 43%. The company is looking to continue to grow its customer and lending base and at the same time scale its technology infrastructure robustly

Zopa is now raising £44m in the first stage of its latest funding round with the intention to fund a new set of products.

European buyers resumed a strong position amongst the top global TMT deals in July, according to latest data from corporate finance firm Regent Partners. During the month there were seven deals valued at more than $1bn involving European TMT companies. Valuation multiples remained strong with the aggregate Price/Sales ratio up from 1.6x in June to 1.7x in July, while the aggregate Price/EBITDA ratio remained unchanged at 10.9x.

The top deal involving a European company was the acquisition of US-based, Syntel, a global provider of integrated information technology and knowledge process services, by the French IT services firm, Atos, in an all-cash transaction valued at $3.6bn (see All eyes on Atos North America).

The top deal involving a UK company was the sale of Micro Focus’s SUSE enterprise-grade Linux  operating system business to Swedish private equity firm, EQT Partners, for $2.54bn in cash (see Micro Focus separates from SUSE). The deal represents an enterprise value of approximately 7.9x revenue and 26.7x adjusted operating profit for the SUSE business in the 12 months to 31 October 2017.

To see more, TechMarketView Foundation Service clients and subscribers to our new UKHotViews Premium service can search on the keyword 'acquisition' in the UKHotViews archive.

Lyvly is another company aiming to disrupt Britain’s dysfunctional property market. The London-based start-up which offers a “members-based shared living and rental service”, has raised $4.6m in Series A funding led by Mosaic Ventures.

Lyvly was founded by current CEO Philip Laney, Dario Favoino and Siraj Khaliq. Laney and Favoino have a 10-year background in real estate investment and property management at Deutsche Bank and Realstar, whilst Khaliq is a partner at London VC firm Atomico and was previously co-founder of Silicon Valley startup Climate Corporation.

At is most basic it’s another platform in a crowded market helping renters find living accommodation and landlords find good tenants. Where it differs is in taking a ‘renter centric’ view of the relationship offering fully managed properties. Whilst tenant services include managing household bills, replacing consumables and cleaning etc. all wrapped into one single monthly payment, the real difference is in offering a platform that treats renters as members of a club of “like-minded individuals who share a passion for shared living”.

Once you’ve applied to join the community, you have a call with a member of the Lyvly team to learn more about your “life stage and values” personalising the service and inviting you to community events and gatherings. Naturally this is all targeted to millennials looking for single occupancy in London where there remains a significant problem with grey and black economy of shared housing.

Lyvly is not looking to become a developer but scale its platform around the existing housing stock and then make its money via the managed services it provides. 

NHS Digital has released a prior information notice (PIN) for the GP IT Futures framework. The PIN covers the procurement of a new General Practice (GP) IT Framework to replace the GP Systems of Choice (GPSoC) agreement (see DoH issues new GPSoC framework) that is due to expire in December.

The new GP IT Framework will include a broader range of services than GPSoC. The PIN states the contract will cover the provision of applications to meet the business requirements of general practice and broader primary care, including: core electronic record and patient management systems for general practice, and a range of ancillary services including but not limited to, advanced document management and clinical support. The contract value is currently estimated to be £450m and NHS Digital expects to publish the contract notice in January 2019.

GPSoC took the approach of using a principal clinical system (provided by EMIS, TPP, INPS and Microtest Health) with add-on (subsidiary) tools. With the new framework NHS Digital wants to “pave the way towards supporting modularisation” so it is segmenting the requirements to make it easier for suppliers to provide targeted functionality and give buyers more choice.

The shift towards a more modular approach is, in part, designed to make it easier for new suppliers to offer services through this framework. NHS Digital also makes it clear that it is open to new suppliers entering the market by stating that patient record systems under the new framework “may or may not be General Practice (GP) Systems as currently accessed within the UK market”. NHS Digital now wishes to engage with potential suppliers to test, validate and refine the programme approach to the framework.

The new framework poses a threat to the incumbent suppliers (see here for further discussion), but as we have seen in Wales recently, asking GP practices to implement a new software platform has the potential to increase the pressure on an already fragile system (see here for more). NHS Digital will need to consider carefully the balance between innovation and disruption.

West Sussex-based OCSL has been acquired by German IT player, CANCOM. CANCOM is headquartered in Munich and is listed on the Frankfurt Stock Exchange. Revenues are in the region of €1bn, versus c£70m for OCSL (last full year before the transaction).

Terms of the deal were not disclosed but the intention is that OCSL – an established Microsoft and HPE solutions provider – will act as the “hub” for CANCOM’s future UK activities as part of its international expansion plan. For the past couple of years, former HP Enterprise Services Vice President, Martin Hess, has acted as OCSL's Chairman, brought in to help accelerate the company's services revenue.

The OCSL acquisition follows CANCOM's March purchase of unified comms and managed services provider, Ocean Intelligent Communications– rebranded as CANCOM Collaboration and Communication.

CANCOM and OCSL have a shared heritage in resale and both are transitioning to more cloud and hybrid-based services. Given that the OCSL business is set to become so strategically important to its new owner, it’s possible more resource and support will be given to the parts of the business focused on those key service and solution areas. And, while acquiring outside of Germany has been something of a strategic departure for CANCOM, it is of course possible that more bolt on purchases will be made to refine the UK offering.

In some ways third party support provider Rimini Street is just getting started. Having begun with Oracle and SAP implementation support it has gradually been expanding the portfolio. It has added selected IBM and Microsoft products and in Q2 extended support offerings to Salesforce Sales and Service Clouds. Having previously provided additional Rimini Street extension services around database security it has just added mobility and analytics. With its merger-enabled public listing in late 2017 it is into its next phase of development, additionally boosted by the refinancing of its debt structure that completed in July.

Q2 (to 30 June 2018) continued its growth streak with revenue up 20% to $62.6m but the rate of growth has been moderating – from 41% in the year ago quarter to 22% in Q1. The company has a plan to address that – the funds freed up through the refinancing will be used for sales and marketing and to increase service delivery capacity and capability. Positive results are expected in 2019 but the company has also raised 2018 revenue guidance to $240m-$250m.

Net loss was largely consistent at $25.4m but the $6m operating loss contrasted with operating income of $7.5m in the year ago quarter, due to legal costs and increased sales and marketing.

Customer numbers continue to increase (up 21% to 1622 in Q2) and with support for more vendors’ products its addressable market is growing. Updated accreditation for the UK government's procurement system and selection as a third-party support provider under the Technology Services 2 (TS2) Framework for IT support procurement can only enhance its credibility. There are some adjustments to be made within Rimini Street but it has places to go and appears to have the means to get there. 

London-based fashion industry software platform provider Unmade has landed $4m in new funding. Led by Felix Capital, with Connect Ventures, LocalGlobe, Carmen Busquet, Backed VC and C4 Ventures, the investment will be used to accelerate business expansion and further build the company’s roster of senior talent.

Established in 2013 as Knyttan, the company rebranded as Unmade two years later. Its core platform links to a fashion brand’s production processes down to machine level allowing consumers to customise particular items to their own preferences. This enables on-demand clothes creation so that clients only produce garments that are actually sold.

To date Unmade has exclusively targeted the knitwear segment and counts three of America’s top 10 fashion brands amongst its clients. The company has begun to widen its market focus and has recently secured a partnership with cycle wear outfit Rapha Racing. The latest cash injection will support Unmade’s plans to grow its business across multiple brands, factories and geographies.

With one third of fabric currently going to waste from clothes production and between 10%-25% of garments ending up as landfill, the fashion industry’s focus on increasing its efficiency and sustainability has never been greater. Unmade appears well positioned to capitalise upon these growing concerns. Not surprisingly, other companies have spotted this opportunity. Amazon, for example, was awarded patent last year for an on-demand clothing production system. In a global apparel market worth c.$1.8b, however, Unmade has plenty of room to make its mark.

I - and TechMarketView - have tried to stay out of the politics of BREXIT. Other than to say, many times, that it has become the most divisive issue of my long lifetime. And ‘it ain’t over yet!’.

But I was incensed when Sir Bernard Jenkin MP compared the fears over what would happen in a ‘Hard’ BREXIT to the fears about Y2K/the Millennium bug.

The two events really couldn’t be more different.

The run-up to 2000 had been planned for many years. Indeed 1998 was the peak year in the whole history of the UK SITS sector with a 20%+ growth (in real terms) as many companies replaced ageing systems with new 'Y2K compliant' systems or spent huge sums to update and test old code. There was then a ‘lockdown’ in 1999 causing growth to reduce substantially. Midnight 1999 arrived and there were no outages of any magnitude. This happened BECAUSE of great planning and much investment. Almost the exact opposite of the situation we face on 29^th Mar 2019 if we do, indeed, crash out of the EU with no deal.

To compare the two demonstrates a complete lack of knowledge and understanding. Mind you I think that could apply to the whole BREXIT campaign.

A short time ago TechMarketView caught up with Howard Beggs, CEO of Dublin-based Clanwilliam Group. After acquiring 14 healthcare businesses in the last four years the business shows no signs of slowing down (quite the opposite), so we wanted to learn more.

From Howard’s first step in healthcare technology with Medicom Medical Solutions in 1995, through the launch of Helix Health in 2007 and the acquisition by Eli Global and the creation of Clanwilliam Health in 2014, the business has seen a huge amount of change. Since being acquired by Eli it has grown rapidly through an acquisition strategy that mirrors the “buy-grow-and-hold” approach of its parent company.

As Clanwilliam’s M&A capability matured we saw six deals completed in 2017, including NHS clinical correspondence and dictation business Medisec Software (see Clanwilliam Group acquires another NHS technology provider). Further deals have been completed in 2018, including NHS predictive analytics provider Informatica Systems (see Clanwilliam Group acquires Informatica Systems).

Clanwilliam’s total investment in new businesses since it was acquired by Eli now totals c.€150m, but it’s not resting on its laurels, in fact we can expect to see it ramp up its acquisition ambitions. PublicSectorViews clients can read more about Clanwilliam’s history, strategy, its approach to acquisitions and what it plans to do next, here: Clanwilliam Group: Ambitious Plans in Healthcare.

For further information on becoming a client, please contact our Client Services team: dseth@techmarketview.com.

Michael Dell and Silver Lake are looking to take Dell Technologies public again in the final quarter of the year (see Dell to go public again). To enable this move, holders of the VMware tracking stock (created to facilitate the 2016 Dell/EMC/VMware deal) will be able to switch into Dell stock or cash. At the end of this latest turn of the wheel, it is intended that VMware will still have considerable operational independence and autonomy, even though the Dell business will own 81% of the VMware common stock.

While the “bigger picture” is sorted out, it looks like the management teams want to tidy up the organisation somewhat and align the assets to serve growth markets. VMware is set to acquire Dell EMC’s Service Assurance Suite platform. This platform enables communication service providers to monitor the performance of the network and to support fault diagnostics and root cause analysis. VMware will integrate the suite into its Telco NFV portfolio, adding to the ability to analyse across both physical and virtual networks and cloud environments. It will come as no surprise that the terms of the deal are confidential.

Both user companies and operators are looking for more sophisticated and robust tools to monitor service level agreements and utilisation across increasingly complex networks and multi-supplier clouds. The forthcoming launch of high-performance 5G networks will add significantly to demand and to the pace of deployment of SDN (software defined networks) and NFV (network function virtualisation). Having access to a comprehensive portfolio of network management tools will be crucial.

Over the last couple of weeks, TechMarketView has published must-read Supplier Rankings across every one of our research streams. If you have not yet downloaded your copy, here are the links to the reports:

Each report ranks the Top 20 suppliers to the sector and analyses their performance relative to the market and their peers. Each of the Research Directors also identifies those suppliers jostling for position. It is clear – across the board – that diversity of performance is a common theme. And often it is those further down the rankings that are performing the most strongly.

Our in-depth reviews highlight how differences in strategy and approach are determining the comparative success of the various suppliers. Which suppliers are best dealing with digital disruption in the market and, in line with our 2018 research theme, breaking their boundaries to remain relevant and take share in a shifting market?

If you would like to read any of these reports but your organisation is not a subscriber to the relevant stream, please contact our client services team to find out how you can gain access.

You can also reserve a place at TechMarketView’s Annual Presentation & Dinner on 13th September 2018 to hear more on how the shift from the ‘legacy’ to the ‘new is impacting software & IT services suppliers – to find out more click here.

SenSat, a London based start-up using visual and spatial data to simulate reality has raised £3.3m in seed funding. Backers included Force Over Mass, Round Hill Venture Partners and Zag the venture arm of advertising agency BBH.

SenSat was launched last year by founders James Dean (CEO) and Harry Atkinson (Head of Product) to help companies that operate in areas such as infrastructure construction use AI (or “Visual Intelligence” as it calls it) to make better decisions through simulating various scenarios.

The company does this by creating digital replicas of real world locations, then adds in real-time spatial data-sets with a high degree of statistical accuracy from both open and proprietary data sources. Its platform Mapp, has already been put to use on civil infrastructure projects with the likes of National Grid, High Speed Rail 2 (HS2) and Highways England helping them more efficiently track key project variables such as safety and progress. 

The company already has research streams looking at applications for 5G roll out and autonomous vehicles and will use funds to develop the technology further and invest in its San Francisco office.

It's TechMarketView's 10th anniversary year and to celebrate we have announced a formidable line-up of speakers to enlighten, inspire and surprise you at our annual 'Evening with TechMarketView', sponsored by InterSystems and Brands2life. 

Hosted by TechMarketView Chairman Richard Holway MBE, the evening focuses on TechMarketView's theme for 2018, 'Breaking the Boundaries', and you will be hearing from:

• Tola Sargeant, TechMarketView Managing Director, who will bring the theme alive and challenge the way you look at the UK tech market by illustrating how buyers and sellers of enterprise technology are breaking their own boundaries to try to keep one step ahead of the pack
• Chief Analyst Georgina O’Toole showcasing brand new TechMarketView analysis that examines the contrasting performances of the ‘legacy’ and the ‘new’ segments of the UK SITS market and ask the question: ‘what needs to happen to return to the halcyon days of double-digit growth?’
• TechMarketView’s Martin Courtney hosting a ‘fireside chat’ with our special guest Andrew Johnson from Shell. One of the world’s largest retailers with a significant UK presence, Shell is three years into its digital transformation journey and Andrew will share his experiences, which touch everything from digital payments to autonomous vehicles
• Kate Hanaghan, Chief Research Officer, who will unveil TechMarketView’s Market Readiness Index to share findings from our new end-user analysis and explore how buyers and suppliers can work better together to Break the Boundaries
• Anthony Miller, TechMarketView Managing Partner, who will be putting his own inimitable slant on the changing fortunes of the leading UK tech suppliers over the past decade and what the future may hold for them over the next.

The TechMarketView Evening is the only event where over 200 leaders from tech industry giants, mid-market specialist suppliers, aspiring 'Great British Scaleups' and innovative early stage companies, as well as advisors, investors and end-user organisations, get the chance to meet and form new friendships and partnerships – and learn what TechMarketView believes the future may hold!

Event Details:
Date: Thursday 13th September 2018
Venue: Royal Institute of British Architects, London 
Registration & Drinks Reception: 6:30pm. An extended networking drinks reception commences from 6:30pm and is sponsored by InterSystems. This will be followed by the speaker sessions and a first-class silver service dinner.

To Register:
You can book individual seats for the event, or why not recognise your key clients and partners by booking a table for ten. For more details and to book your place click here or contact our event management partner, tx2events on T: 020 3137 2541.

TechMarketView Event Rates for:

• Subscription clients
• UKHotViewsPremium clients
• Or if you're one of our Little British Battlers, Great British Scaleups or Early Stage Partner programme companies

UKHotViewsPremium - An Individual Subscription

If you’re a keen UKHotViews reader - who isn’t fortunate enough to have access to a corporate subscription to TechMarketView research - you can now subscribe to UKHotViews Premium, a new service for individuals.

Until now, this invaluable resource – the combination of our searchable UKHotViews archive and our more in-depth UKHotViewsExtra analysis - was only available to our corporate subscribers as part of a subscription to one or more of our focused research streams. But we recognise that there are many individuals that would benefit from access to this rich, searchable source of insight too, so we’ve launched a new service, UKHotViews Premium, especially for you.

Sign up to UKHotViewsPremium & gain access to:

• TMV's repository of 15,000+ UKHotViews & UKHotViewsExtra articles for news and views on suppliers, market and industry trends
• 50% off your first TMV report
• Annual discounted client rates on TMV events
• 1 year for £395+VAT or 2 years for £650+VAT

Browse the analysis online or, if you wish, select multiple articles to print or PDF on demand. Quickly build up an informed picture of a supplier of interest; spot trends in share prices over time; identify start-ups you should be talking to; or mine the archive for insight on areas of opportunity in the UK public sector IT market.

For more details or to sign up to UKHotViews Premium today please click here.

Established suppliers and individuals looking to chart their way through technology disruption and identify the partners, acquisition targets and technologies that are positioned to impact the market should be looking at startup funding patterns for insight. This is all the more so when the startups making extensive use of AI/machine learning within their products are top of the funding list.

If you want to:

·        understand the UK AI/ML startup funding landscape,

·        identify the sectors attracting the highest levels of funding,

·        determine the types of startups gaining funding and why,

·        develop insight into the AI/machine learning money trail,

you should be reading the recently published Funding Trends and Patterns: UK AI/Machine Learning Startups research note, which provides a snapshop of UK AI/machine learning funding activity. You’ll see where the investment money is flowing and what new types of businesses are emerging on the back of digital data.

Click to download Funding Trends and Patterns: UK AI/Machine Learning Startups.

This research is available to eligible TechMarketView subscribers. If you do not currently take a subscription and would like details please contact Deborah Seth.