Netcall’s 2017 acquisition of the MatsSoft low code platform (see Netcall bets on low-code) is turning out to be a decided boost for the customer engagement platform provider, driving higher profits and attracting more business. The latest is a MATs renewal with “a leading UK bank” worth a minimum of £1.6m over three years. It follows news of a multi-product £1.4m four-year contract with a US listed company earlier this month and a MATS renewal with Nationwide, announced in July.

The latest renewal is with a bank who has used the MatsSoft product for 11 years to support core business processes such as mortgage applications, customer notifications and a document management portal. Nationwide has a 14 year record with the low code platform. Contracts like these indicate a sticky product and opportunities for repeat, upsell and cross sell business. They also help cement Netcall’s position as a supplier to the financial services market, alongside its heath and public sector focus - all substantial markets.

Low code platforms are building a position as practical digital transform enablers, providing a solution to the need to develop rapidly to meet agile business aspirations, loop in citizen developers who can be instrumental to innovation within businesses, while augmenting traditional development approaches and teams.

Oxford-based healthcare technology company Sensyne Health plc has raised £60m in its initial public offering (IPO) with institutional investors. Dealings in its shares are expected to commence on the AIM Market this Friday. Based on the placing price (175p per share) the company will have a market capitalisation of £225m on admission.

Sensyne Health, formerly Drayson Health, is based in the Big Data Institute at the University of Oxford and is led by CEO Lord Drayson and Chairman Professor Sir John Bell. The business sees itself as operating as a bridge between NHS Trusts and pharmaceutical companies in a way that benefits patients, the NHS, investors and the life sciences industry.

Last year, it entered into a five-year strategic research agreement with the University of Oxford and with Oxford University Hospitals (OUH) NHS Foundation Trust to use artificial intelligence to analyse anonymised patient data to drive new clinical insights. To date the partnership has led to the development of four digital health products covering: charting for vital-sign observations; management of gestational diabetes; monitoring chronic obstructive pulmonary disease; and, most recently, management of heart failure at home.

In July this year it agreed an additional ten-year agreement with OUH, as well as five-year strategic research agreements with South Warwickshire NHS Foundation Trust and Chelsea & Westminster NHS Foundation Trust. In return for giving Sensyne Health the right to analyse anonymised patient data these three Trusts will receive royalties on income derived from any clinical discoveries. Post admission the Trusts will have a c.10% shareholding in the business.

There has been a huge amount of interest and investment in the potential of AI in healthcare (see recent examples here, here and here), but concerns about privacy, ethics and accountability remain (see Digital health: lessons from DeepMind/Royal Free for further discussion). Sensyne Health’s business model based on partnerships with a small number of NHS Trusts and a clinical-led approach is an interesting strategy and one that should provide additional reassurance.

First a TechMarketView Little British Battler and more recently a candidate for the TechMarketView Early Stage Partner Programme, Manchester-based cloud transformation startup Shaping Cloud is now well on its way to flying even higher on the back of a £1.4m investment.

The funding round comprised £750k from NPIF - Mercia Equity Finance, managed by Mercia Fund Managers and part of the Northern Powerhouse Investment Fund, along with £500k from the Greater Manchester Combined Authority and £150k from management.

You can read more about Shaping Cloud in our recent post TechMarketView Early State Partner Programme: Shaping Cloud and see a brief video interview with founder and CEO Carlos Oliveira here.

Many congratulations to Carlos Oliveira and his team; we are delighted to have helped him bring Shaping Cloud to the wider attention of the market.

The news that Wonga, the London-based payday lender has just raised £10m in an emergency deal which valued the business at only £23m (Source: FINSMES) is another sign that the Fintech market has evolved. Launched in 2007, Wonga was a Fintech pioneer, disrupting the lending market, having identified the specific needs of a poorly-served market sector.

Since 2007, start-up numbers climbed rapidly to peak in 2014 and have since declined sharply (Source: Deloitte). In that time, some 7,500 FinTech firm raised over US$110bn. And while the flow of Fintech start-ups declined rapidly, the level of FinTech financing has been fairly stable at over US$20bn, with the 2017 outturn likely to be the second-best year ever (Source: FT Partners Fintech Insights Q3 2017). The value of Fintech M&A in 2017 is also expected to exceed the 2016 level. The geographical balance has also shifted, with the US market running out of steam since 2015 with faster growth in Europe and a volatile trend in Asia, which saw Fintech financing double to US$15bn in 2016 and probably more than halving in 2017.

The result is a smaller flow of new FinTechs, coupled with a ready supply of cash to fund and acquire more mature companies that have cut their teeth in their respective markets. Fintech managements now have a clearer view of the art of the possible. Many are looking to collaborate, rather than compete, with established financial services providers or other Fintechs. In our review of this year’s Money2020, we highlighted that the “next generation of Fintech providers is here”, with more “grown-up” approaches to the market and propositions. Fintech companies have changed – the way in which the larger Financial Services companies and the bigger SITS providers interface with them will have to change as well.

Just in case you missed it, this year’s edition of the UK Public Sector SITS Supplier Rankings report is now available. Subscribers to TechMarketView’s PublicSectorViews research stream can read our analysis of how the leading software and IT services (SITS) suppliers have performed in the public sector.

The report updates the Top 20 supplier ranking based on revenues from the latest available financial information (as at end of June 2018). It also contains Top 10 rankings for each of the subsectors we track (central government, local government, health, education, police and defence), as well as providing a snapshot of the ‘ones to watch’ from outside of the ranking tables.

Many major suppliers across multiple subsectors had another tough year operating in a market that continues to transition away from legacy contracts to smaller and shorter deals. Four suppliers in the Top 20 experienced double digit declines this year and just two had double digit growth. Only one supplier made in excess of £1bn from UK public sector SITS in its latest financial year. In central government the continued disaggregation of contracts sees a new name take its place at the top of the ranking.

The report is available for download by PublicSectorViews clients, here: UK Public Sector SITS Supplier Rankings 2018.

With the compulsory acquisition of any Fidessa shares that may have fallen down the back of someone’s sofa, we add another big UK tech company to our list of the “Dearly Departed”.

Fidessa had a very long history, having been a pioneer in the application of technology and the delivery of platform-based services to the world’s investment markets. The company was founded in 1981 as Intercom Data Systems (IDS), renamed royalblue Group after a 1996 MBO, and floated on the LSE main market in June 1997 at a value of £5.2m!!! With the group's core trading platform, “Fidessa”, being better known in the marketplace, the group changed its name to Fidessa Group plc in April 2007.

Over the past decade the company and its shares were subject to significant turbulence due to the Financial Crash and persistent “headwinds” as investment houses contracted and consolidated. But the company had a sound strategy, providing scale-advantaged market access and the tools to enable small and medium-sized players to compete with the “big boys”. As we wrote in various HotViews articles, Fidessa was building on solid foundations.

The strategically-sound bid from Temenos in February put the company in play and Irish-based ION Trading came in with a knock-out £1.5bn cash bid, see “ION-clad offer…” in April. The deal will see “Fidessa managed as a leading product line within ION Capital Markets division”, so the Fidessa brand will continue for the time being.

Of course, things could have been different. Fidessa’s growth stalled between 2011 and 2015, but management persisted in paying large dividends, rather than driving a more aggressive strategy. At the same time, privately-held and highly-geared ION was hoovering up businesses and building market share. With hindsight, are the Fidessa management rueing a missed opportunity?

London-based digital health start-up BioBeats has closed a £2.4m funding round led by Oxford Sciences Innovation (OSI) and previous investors White Cloud Capita and IQ Capital. This latest investment round takes the company’s total funding to date to over £5m.

The company, which was originally called Mindful Sounds, launched its first app, Pulse, in 2013, which played music based on the user’s heart rate. In 2015 it worked with AXA to offer BNP Paribas employees the opportunity to monitor stress in real-time using wearable devices. In 2016, after changing its name to BioBeats, it secured $2.28m (c.£1.6m) from White Cloud Capital, AXA Strategic Ventures, and IQ Capital. The money was invested in developing Hear and Now, an app that displays visuals and music that adapts to data from wearables and helps users to manage stress. Last year it secured a distribution agreement with AXA to roll out the app to policyholders.

The company intends to work with OSI to “embark on a new era of innovation and experimentation” and it now believes it has a platform that is ready to scale. Its latest product, BioBase, uses AI and its own BioBeam wearable to help provide a wellbeing course designed for companies to deliver to their employees. It intends to help users understand where their stress comes from and teaches them how to reduce it.

Stress is a major cause of workplace absence, it reduces productivity and increases costs. Technology certainly has a role to play in helping people monitor and manage their stress so that early interventions can be made. Many will be concerned, understandably, about their employers having access to real-time information on how they are feeling. However, BioBeats makes it clear that employers will never have access to personal data only anonymised information from groups of at least 50 people.

Growth of London-based data privacy and risk management company Egress Software Technologies continues apace. Driven by market demand for GDPR compliance, H1 18 (the six months to 30^th June) saw a 64% increase in new subscriptions yoy accompanied by a 164% rise in customer numbers. Renewal rates at 93% stayed reassuringly high.

A former TMV Little British Battler, Egress has quintupled in size over the last four years. The company exited 2017 with an annualised revenue run-rate of over £10m and expects this number to exceed £14m come the end of this FY.

In March, the company was selected for Tech City’s Future Fifty Programme and Egress also joined the latest cohort of the Microsoft ScaleUp Programme (see here). Furthermore, this year has seen the company gearing-up for expansion in North America. A new office has been established in Boston and Mark Bower has been hired from Hewlett Packard Enterprise as chief revenue officer to spearhead growth across the pond.

The progress at Egress continues to impress. On its current trajectory, it won’t be too much longer before the company begins to feature in our Top 20 Cyber Security Supplier Rankings.

You might be wondering why your tech stocks have taken a bit of battering today.  Tencent‘shocked’ the markets by revealing its first profits reduction in some 13 years and, as you might expect, its shares tanked. Given that Tencent is the 2^nd most valuable firm in Asia - worth nearly $600b - it dragged down both Asian stocks and other tech stocks around the world. Tencent shares are down 10% this week alone. NASDAQ lost nearly 2% from its day high.

I guess the closest I have come to reporting on Tencent recently was my post on the hit game - Fortnite. Tencent has a 40% stake in EPIC which developed Fortnite.  So interesting to note that, although Tencent’s major market is China, the Chinese Govt has still to allow Fortnite to be sold in China. Indeed they also banned Tencent’s Monster Hunter World this week a few days after its debut. All part of a big clampdown on computer games by the Chinese authorities. This hit Tencent hard.

Tencent’s biggest claim to fame is WeChat - the biggest social network in China. WeChat has 1.06b users - up 9.9% yoy. Indeed, the ‘We’ prefix is applied to many of Tencent’s offerings - WeChatPay, WeBank, WeGame... Tencent is essentially a giant global investment holding company. As well as that stake in Epic, other investments include a 12% stake in Snap. And that’s another reason for Tencent’s shares tanking. As we all know President Trump has a bit of thing about China taking stakes in US tech companies.

Commentators have been likening Tencent to the problems that affected Facebook a few weeks ago - See Facebook shares crash - when it too unexpectedly disappointed the market. The fact that both companies are big social media players gave more weight to the prediction of the End of social media Glory Days. But, as I have argued many times on Hotviews, there is a world of difference between Facebook, Twitter, Snap and the likes of Microsoft, Apple, Google and Amazon (the so-called MAGAs).

There has been a lot of movement among the Top 20 providers of Business Process Services (BPS) in the past year, reflecting the disruption taking place within a market continuing its move away from traditional BPO towards technology-enabled services.

The shift in delivery models away from ‘lift and shift’ BPO towards tech-enabled BPS is accelerating with platform-based BPS winning an increasing share of the business and with vendors putting ever greater emphasis on partnering, acquiring, building and ‘uncovering’ IP. The blurring of the boundaries between BPS and enterprise software and application services is continuing whilst the deployment of maturing Intelligent Automation solutions is delivering even greater market disruption.

Subscribers to TechMarketView's BusinessProcessViews research services can read the full analysis of who's hot and who's not, and why, in our new report UK BPS Supplier Ranking 2018.

If you are not yet a BusinessProcessViewssubscriber, please contact Deb Seth (dseth@techmarketview.com) to find out how you can access the research. 

Cisco edged past financial analysts’ predictions for FY18 with Q4 generating the highest quarterly revenue of the 12-month period ($12.84bn, up 6%). Total FY18 revenue was up 3% to $49.3bn and EPS (adjusted) was $2.60. Momentum came from across the portfolio, customer segments, and geographies.

Cisco is getting some key things right that in combination are supporting revenue growth. Firstly, across a range of strategically important offerings (for example multi-cloud, security and software-defined products), the firm is reporting “strong” customer adoption rates. Cisco’s ongoing investment (including acquisitions such as Duo) is helping to sustain the rate of innovation, which in turn is being warmly welcomed by customers desperate to digitise and modernise. Secondly, the firm is executing well, with consistently good performances in its various customer segments and geographies. This combination of fueling innovation on the one hand while performing well from a sales and delivery perspective on the other is essential in today’s market.

Back at the half point of FY18, Cisco finally managed to reverse two years of revenue decline with its Q2 results. The firm’s investments in areas such as security and cloud, and its shift towards software and services more broadly, have been playing out over a period of time. This year’s results reflect that in multiple areas Cisco is keeping pace with the evolving demands of organisations that crave more simplified but much more agile and powerful infrastructure.

Read more about Cisco’s cyber position in Cyber Security Supplier Ranking 2018.

Australian BPS player Computershare’s full year results show revenue up 6.3% to $2,248m and recorded its largest ever profit with EBITDA up 12.7% to $610m. Growth in profitability is being driven principally by its mortgage services business where EBITDA was up a whopping 65.4% to $122m with a 22.4% margin. Computershare’s combined UK operations now accounts for approximately 20% of global revenues worth some £335m in revenue to the business.

Ever since its UKAR win (see - Computershare beats Capita for ‘bad bank’ BPS) Computershare has become a very significant player in the UK BPS space. Integrating UKAR accounts onto its existing platform continues and combining this business with its other mortgage operations has given it a very strong position in UK Mortgage Process Outsourcing (MPO). The UK mortgages business has tripled in the last couple of years and is now worth some £189m. The business continues to evolve (see - Computershare to administer £5.3bn of mortgages sold to Barclays) with a particular focus on delivering organic growth through targeting challenger banks.

Computershare also plays in the employee share plan and register spaces with UK businesses worth £55m and £41m a year respectively. The acquisition of Equatex should certainly enhance scale and capabilities here and is expected to complete in the first half of the new financial year.

Computershare remains one to watch in UK BPS and has been one of the most significant movers in our recently published UK BPS supplier rankings.

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Tribal Group has made steady progress in the first half of the year. Although revenue fell compared to the same period last year, profit improved markedly.

Revenue for the six months ended 30 June 2018 was down 4.9% to £42.0m (H1 2017: £44.2m). The decline was largely the result of Tribal’s Ofsted Early Years contract concluding in March 2017. If this contract is excluded, revenues were up 0.5% or 3.2% on a constant currency basis. Adjusted operating profit (excluding the Ofsted contract) was up 27% to £6.3m (H1 2017: £5.0m), with margins improving to 15% (H1 2017: 11.2%). Statutory profit before tax improved by 79% to £4.1m (H1 2017: £2.3m).

Revenue in Tribal’s Student Management Systems (SMS) business improved by 0.7% to £29.1m (H1 2017: £28.9m) or by 4% in constant currency. Cloud revenue increased by 21% to £2.2m (H1 2017: £1.8m), but it still only represents c.8% of SMS revenue. During the period it won significant deals with Canterbury Christ Church University, University of Portsmouth, and Colleges Northern Ireland.

Despite the loss of the Ofsted contract last year (see Tribal delivers a profitable H1 for further discussion), Tribal’s Quality Assurance Services (QAS) business had a positive start to the year. Excluding the Ofsted contract, revenues were up 10% to £9.6m (H1 2017: £8.7m), or 12% in constant currency, largely driven by its operations in the Middle East. It was also chosen by the Department for Education in the UK to provide quality assurance for the new National Professional Qualifications. However, Tribal’s i-graduate business didn’t perform as well, with revenues down 21% to £3.3m (H1 2017: £4.2m), which was behind management expectations. Improvements are expected in H2.  

Performance is expected to remain stable for the remainder of the year. Although revenue recognition in the SMS business will be impacted by the adoption of IFRS 15, management believes the company will achieve market expectations.

In my 8^th Aug 18 post - Musk to take Tesla private? - I commented ‘If Musk now doesn’t take Tesla private and the price sinks…Well, he could be in all kinds of trouble and face legal action from aggrieved shareholders’. After that c10% initial rise, Tesla has since given up practically all of that gain.

Musk has already had several class action suits filed against him. But, last night, it got more serious as the US SEC subpoenaed Tesla according to the FT which, itself, was quoting Fox Business News (Yes, seriously…).

The ‘facts’ backing Musk’s famous tweet - 'Am considering taking Tesla private at $420. Funding secured’ - is murky, to say the least. There is no real confirmation of how much backing Musk really does have from the Saudi Sovereign Wealth fund. Goldman Sachs has confirmed that it is advising Tesla on the matter. But Silver Lake has said it ‘could not deny or confirm’its involvement.  

My concern about Tesla is more related to the fast growing competition it faces from the long-established automotive industry. I can’t think of a single automobile brand that doesn’t now have an all electric version - as well as the probably more useful hybrid versions. It is now difficult to buy any new car without some kind of driver-assist features. Cars - to me anyway - are far more than its propulsion unit. Comfort, quality, reliability, how close is my nearest dealer/service centre, can I get the car in the next few months etc are all crucial in my buying decision. Companies like BMW and Mercedes Benz, with their vast experience and resources, tend to score highly here - higher than Tesla on many scoresheets.

Amazon Web Services is clearly making its presence felt in the UK market. However, the speed with which this now sizeable organisation continues to grow might still surprise some.

Available now for InfrastructureViews clients is the latest Infrastructure Services Supplier Ranking report. This must-read research looks at the performance of AWS and the other leading players in the Top 20 Ranking. It follows several months of research by the TechMarketView analyst team to understand supplier performance in the UK.

It is a complex set of market shaping trends that is molding the evolution of the c£14bn Infrastructure Services market, and both buyers and suppliers face many uncertainties. “Transformation” is more than a buzzword, but both the journey and the destination are not well defined. Very few organisations are starting with a ‘clean slate’ and successfully dealing with legacy systems will be an integral part of creating the right strategy going forward.

OUT NOW, Infrastructure Services Supplier Ranking 2018 gives details of how each of the Top 20 players performed in the last financial year, examining the trends around their performance.

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 providers and the valuable lessons for tech suppliers. You will also benefit from our analysts’ insight into what it takes to be a leading supplier with double-digit growth and more.

Guest Speaker - Andrew Johnson, Senior Manager, Shell

Andrew is a senior manager at Shell Retail, part of the team responding to the digital challenge at Shell. With 43,000 sites across the world Shell is one of the world’s largest retailers, serving 25 million customers a day. 

Starting his career in predictive analytics, Andrew’s experience grew into being one of the first to lead the development of cloud, real-time processing, big data and many other disruptive technologies into the Retail sector. 

For the past ten years this has included shaping and driving Shell Retail’s B2B global approach, creating and launching new innovation into territories across North America, Asia and Europe.

Most recently Andrew has led the launch of a new payments product in China and is working on some inspiring digital solutions for Europe.  He has a passion for pushing the boundaries of technology and has developed a reputation for innovation and delivery through a pragmatic and practical approach. 

Sponsors: InterSystems, Aqilla and Brands2Life

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!

Another significant milestone for UK RPA leader Blue Prism with this week’s announcement that it now has more than 1,000 organisations using its software.

It’s not just the number of customers that is so impressive but their spread across pretty much every industry and major geography worldwide. Marquee clients now include ATB Financial, Bank of the West, Coca-Cola, Constellation Brands, Fannie Mae, Henkel Global, IHG, Johnson & Johnson, Mashreq Bankand TD Bank Group. 

To serve this demand Blue Prism has opened four new office locations so far this year including Germany, France, Hong Kong and Singapore.

The demand for RPA at the moment is such that all of the big players, Blue Prism, Automation Anywhere, UiPath and WorkFusion have all recently raised huge sums with market valuations of $1bn plus. Indeed, the recent Blue Prism World 2018 felt more like a rock concert than a software conference.

The market for RPA started just ten years ago and has matured from educating customers as to what the software can do, to scaling its capability and now moves onto increasing the intelligence of what can be achieved and a future virtual workforce. As such there is no sign of things slowing down anytime soon as intelligent automation gets deployed much more strategically within organisations and continues to replace traditional BPS operating models.

Rinicare is a digital healthcare company receiving new investment from Catapult Ventures and NPIF – Mercia Equity Finance, which is managed by Mercia Fund Managers and part of the Northern Powerhouse Investment Fund.

Proceeds will go to support the ongoing commercialisation of its two main solutions – a wireless physiological signs technology (PRIME) and a falls prevention system (SAFE) both based on proprietary wireless comms, predictive algorithms and artificial intelligence (AI) helping tackle the all too familiar problem of keeping healthcare affordable in an environment of rising costs and ageing populations.

In addition to its existing solutions, Rinicare is developing an AI predictive system, Stability, which is initially focused at intensive care and will target the rapidly growing market for predictive healthcare analytics.

The company is headquartered in Alderley Park, Manchester and has R&D capabilities in Lancaster and Ramada, Portugal.

Shearwater Group has announced its proposed acquisition of secure networking and cyber security solutions firm, Brookcourt, for £30.3m (£22.95m in cash, £7.35m in consideration shares).

Shearwater is proposing to raise c£25m-£30m through a placing of new Ordinary Shares, and up to a further £1m by way of an open offer of new Ordinary Shares.

TechMarketView started its coverage of Shearwater in September 2017 when the Group began its transition from being a holding company for natural resources investments (recently gold and tungsten) to a specialist supplier of digital resilience solutions and services.

The company has since pursued an intensive acquisition strategy to build out its assets/customer base. Before Brookcourt came GeoLang (£1.7m), SecurEnvoy (£20m), and Newable Consulting (£600k) – and it’s all happened within an 18 month period. Given Brookcourt’s financial size and track record (latest year shows revenue of £22.2m and EBITDA of £2.8m), the firm represents a step-change for Shearwater in terms of scale and would become the new ‘core’ of the Group. There are of course plenty of cross-sale opportunities, and we have no doubt Shearwater has more acquisitions planned. 

Since it was founded in 2005, Surrey-based Brookcourt has expanded beyond its initial focus in the Financial Services sector to cover most major industries. Its CEO and COO are expected to stay on once the acquisition has closed.

TechMarketView’s SecureConnectViews research stream provides comprehensive coverage of the issues surrounding security and networking. Please contact Deb Seth (dseth@techmarketview.com) with subscription and engagement enquiries.