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Industry urges government to clarify IT reform agenda

2010-07-29T12:58:00Z

The industry has broadly backed the Cabinet Office Structural Reform Plan but feels greater clarity of some seemingly contradictory policies is needed, according to TechMarketView (TMV).

The government report last month set out a series of pledges to cut public sector spending with a specific focus on IT, including overhauling procurement, detail the development of projects over £1m and identify those to be cut.

The analyst surveyed 19 "key" IT industry players, 82% of which supported the government's efforts, said TMV research director Georgina O'Toole.

"Whilst the results of this survey demonstrate that the ICT industry is largely in agreement with the government's policies on IT reform and spending, some policy areas are seen as contradictory or unclear," she said.

]]> These include the plan to outsource on a wider scale while at the same time limiting the size of contracts which impacts economies of scale, decentralising power while imposing a common standard which SMEs may struggle to meet and reducing the use of consultants while making radical changes that require specific expertise.

"The government must go further to clarify their position before the key ICT suppliers will fully rubber stamp these proposals, especially on topics such as contract size limit [or] open source software," O'Toole added.

The requisite changes to reform IT is to mandate processes; the use of central framework agreements, the coalition's creation of a skunkworks - a loosely structured R&D team - and changing the machinery of government.

Slow buying cycles and caution hit Symantec Q1 revenues

2010-07-29T12:52:58Z

A picture of elongated buying cycles and continuing caution was the scene painted by Symantec's CEO as he spoke about the landscape that contributed to flat first quarter revenues year-on-year.

With revenue staying still at $1.433bn Enrique Salem had the task of describing market conditions that had caused that situation.

"This quarter, we saw lengthening of procurement cycles driven by continued cautiousness among IT buyers. In particular, this affected our storage management results," said Salem, who is president and CEO at the vendor.

He highlighted continued activity in the public sector and strong Software as a Service sales as areas that provided optimism going forward into its fiscal Q2.

Net income for the first quarter was $161, compared with $74m for the same period a year earlier and with currency fluctuations taken into account there was revenue growth across all territories.

James Beer, executive vice president and CFO said that it had cranked up its consumer business after making the move to an in-house e-commerce platform.

Earnings soar at BT Global Services

2010-07-29T10:22:00Z

BT's troubled IT services division, BT Global Services (BTGS) appears to have secured its recovery at long last after adjusted EBITDA soared to £130m in the first quarter, and overall losses continued to reverse.

Sales at the unit were down 3% year-on-year to £2bn, while operating loss improved to £54m from £124m this time last year.

BT said the modest revenue decline was mainly down to slowing UK calls and lines revenue and the impact of mobile termination rate reductions, with foreign exchange movements having no significant impact in the three months to 30 June.

BTGS upped its order intake by £200m year-on-year, signing services contracts with Unilever, Capgemini and Nationwide during the quarter.

The unit also reduced net operating costs by 7% and capital expenditure by 21%.

All told, BT Group sales were down 4% to £5bn, while pre-tax profit rose 17% to £446m, and net profit rose 33% to £284m after the firm took out £291m in costs during the quarter.

BT also said it had been in talks with the government over the planned scale of its public sector cuts; the telco owns a majority slice of the government telecoms business.

All the same chief executive Ian Livingston hailed an "acceptable start to the year".

"We hit the first major milestone in our fibre roll out, passing over 1.5m premises, and we are now running at an average rate of around 100,000 premises passed every week. In BT Global Services we continue to win significant contracts due to our ability to deliver a world class service to our customers."

Livingston said that in spite of the challenging macroeconomic environment, the Q1 numbers underpinned BT's overall outlook for the financial year.

Broken out by unit, BT Retail saw revenues slide 7% to £1.92bn, with operating profit down 1% to £331m, declines that were as usual attributed to the ongoing reduction in traditional telephone sales. The unit added 96,000 broadband accounts in the quarter, taking 40% of the market.

The b-2-b Wholesale unit booked a 6% decline in revenues to £1.05bn, but operating profit rose 11% to £185m, reflecting growth in managed network services deals.

Finally, BT Openreach saw sales decline 8% to £1.2bn, primarily due to a one-off internal compliance-related billing. Operaing profit at the unit rose 8% to £296m.

Watkins to quit Teksys as DiData integration wraps

2010-07-29T08:57:02Z

Serial entrepreneur Alan Watkins, who took control of Microsoft LAR Teksys in January 2008, is to leave the company to concentrate on his private equity venture, Blackhawk Investments, as the integration of Teksys by Dimension Data wraps up.

Watkins' business partner, Teksys finance director Kevin Lewis, who came on board at the same time as Watkins, is also to make his exit.

DiData bought Teksys in 2009 to bulk up its nascent Microsoft services business. The systems integrator was itself bought earlier in the month by Japanese comms outfit NTT.

"We have worked steadily to grow the business. This process was accelerated by becoming part of the Dimension Data group, and we have been delighted with the support that we have received," Watkins reflected.

He added: "Our job is now completed and it is time for Kevin and I to move onto the next challenge with Blackhawk."

The investment vehicle focuses primarily on undervalued assets and is expected to remain active in the channel.

Arrow Electronics Q2 numbers surpass pre-recession highs

2010-07-28T15:56:29Z

Arrow Components has surpassed pre-recession revenues and profits in a bumper second quarter during which both divisions returned to double digit growth.

Sales for the period ended 3 July were up 36% year-on-year to $4.61bn as profits soared to $116.2m from $21.1m in 2009.

Operating margin reached the highest level since the end of 2007 and return on capital employed rose more than two times on the year ago period.

The enterprise computing solutions division - which recently acquired Sphinx - pushed up sales 21% to $1.35bn, the distributor revealed.

"Storage, software services and industry-standard servers grew at very strong double-digit rates on a year-over-year basis," said Arrow CEO Michael Long.

The marked improvement was also evident in the global components unit as sales climbed 44% to $3.26bn.

"Exceptional sales growth in all of our components regions led to record-levels of sales and operating income," Long added.

For the third quarter, Arrow has forecast sales of between $4.39bn and $4.79bn.

IBM breaks silence over distie strategy

2010-07-28T14:15:34Z

IBM has confirmed it is tweaking its UK distribution line-up to increase the number of partners carrying the Unix and storage range.

As reported earlier this week, Big Blue will give Specialist Distribution Group (SDG) rights to the Power and storage franchises from October and Arrow ECS will get its hands on the Unix boxes.

"IBM is always looking to expand in the Power and storage marketplace," said Jaqueline Davey, IBM vice president of the Business Partner Organisation, in a statement sent to MicroScope.

"There are many opportunities for distributors and resellers in this area, for instance around x86 consolidation and the new Power 7," she added.

The plan is to pilfer rival's reseller channels including disgruntled Sun Microsystems partners that have become disillusioned by their role in Oracle's future plans, to bolster IBM's presence in the mid-market.

In recent second quarter results, Big Blue grew its System and Technology group 3% to $4bn, driven by a 30% rise in x86 sales and a 5% climb in storage.

However, continuing the downward trend in the Unix space, Power System revenues fell 10% - despite 225 competitive displacements worth $225m- but drove mid-range growth of 11% and Power blade growth of 65%.

Arrow ECS and SDG were unavailable to comment.

Wireless spend forecast to return to growth

2010-07-28T14:00:00Z

Increased deployment of 4G networks in the coming months will reverse two years of declining revenues in the wireless infrastructure market, according to stats from analysts at iSuppli.

Global capital spending will reach $40.3bn (£25.8bn) in 2011, up 6.7% from 2009, when the market declined 5.7%, said iSuppli. It is currently forecast to slip a further 2.3% this year.

Senior director and principal analyst for wireless research at iSuppli, Jagdish Rebello, hailed "renewed commitment within the wireless industry to move on expansion plans that had been delayed or put on hold because of the global recession".

"Wireless carriers in industrialised countries will start to deploy 4G in order to attain faster speeds and to unclog the heavy data traffic generated by the exploding use of smartphones," said Rebello, adding that this spend was set to continue through 2014.

Early figures from iSuppli back up growing suggestions that Long Term Evolution (LTE) will become the dominant technology for wireless, with WiMAX relegated to a niche role.

Virgin Media Business ups sales, buys back shares

2010-07-28T13:46:10Z

Business communications provider Virgin Media Business has reported a 7.2% increase in sales during the quarter ended 30 June, hitting £152.7m after booking stronger than expected growth in data revenues, up 26.3%.

Declining voice and telephone usage saw its voice sales fall 6.2%, while LAN sales and wholesale revenues were relatively flat during the period.

The wider business saw sales grow 7.1% to £964m, with year-on-year operating income up to £80m from £9m. Virgin said it had seen the highest number of new customer adds since its merger over four years ago.

The company also announced that following its recent refinancing exercise and on the basis of strengthening cashflow, it would be embarking on a planned repurchase of £375m worth of tis common stock over the next 12 months, of which £125m will come from an Accelerated Stock Buyback programme beginning immediately.

The repurchase forms part of a wider scheme to target a leverage ratio of net debt to OCF of approximately 3.0 by 2013. Virgin believes this will allow for more flexibility to invest and expand its operations.

Additionally Virgin Media was yesterday revealed as one of very few ISPs that came close to providing the broadband speeds that it claims to - mainly as a result of its investment in fibre-optic cable services - in an Ofcom survey of the UK's national infrastructure.

"We'll continue to differentiate our propositions by proactively explotiting the advantages of our network and mobile capability," CEO Neil Berkett said today.

FAST campaign targets pirate Google listings

2010-07-28T12:03:05Z

The move to fight online piracy continues to gather pace with FAST following the examples of the likes of Microsoft to target those selling illegal software via the web.

In an anti-piracy campaign FAST coordinated on behalf of its member anatomy software specialist Primal Pictures online listings of the firm's software were targeted.

Over the course of last month efforts were made to take down links to sellers of the specialist 3D human anatomy software and the experience has been successful enough to act as a template for future FAST operations.

"This was one of the most exciting initiatives we have launched in recent years, aimed at taking down listings on the web that claim to be selling legitimate software. Not only were we successful in taking down 63 from Google, we eradicated 41 forum postings and tackled a host of images containing infringing representations of the Primal product," said John Lovelock, chief executive of FAST.

The campaign had a two-pronged programme of first taking down the illegal listings and then repopulating the web with legitimate links.

Peter Allan CEO of Primal Pictures, said that it had wanted to clear the first three pages of Google listings of illegal products.

"It simply cannot be right that a company such as ours, which invests heavily into new product development over a great many years, should become prey to someone who thinks it is acceptable to just rip us off. We have taken the risk, we have done the work, and we need to protect our intellectual property," he added.

Carphone Warehouse sees strong start to year

2010-07-28T10:46:23Z

The Carphone Warehouse Group (CPW) this morning reported that growth in sales of smartphones and good initial trading at its newly-launched Best Buy JV helped like-for-like revenues grow 3.7% at constant currency rates.

The three recently-opened UK Best Buy stores enjoyed a "successful launch", CPW said in a statement.

The firm plans to open three more stores in the format, alongside an e-tail outfit, during 2010

"We are benefiting from the increasing penetration and usage of smartphones and the cascading of smart features into phones at all price points," said CEO Roger Taylor.

"We've had a good start to the year, meeting our expectations and enabling us to reiterate the full-year guidance we gave in April," he said.

Speaking to Dow Jones Newswires this morning, Taylor said he was increasingly optimistic that the UK would avoid a double dip recession.

McAfee cans Arc Technology as it concludes distribution review

2010-07-28T10:38:45Z

The security vendor has concluded its seven month review of its distribution partners deciding to go down from four to three on its roster.

Arc Technology has missed out on the cut leaving McAfee using Computer 2000, Ingram Micro and Arrow which acquired Sphinx one of the existing players.

Jill Henry, UK and Ireland channel director at McAfee, said that it had wanted to ensure it had distribution partners that covered different parts of the market and it had ended up with a couple of broadliners and a VAD, with Arrow working to the Sphinx contract selling the secure product line on an exclusive basis.

McAfee started its review at the start of the year and looked at tenders from nine companies that bid for the business. But with consolidation, with Avnet buying Bell and Arrow acquiring Sphinx, it changed the landscape and extended the process.
]]> It also had a change in senior management with a new global head of distribution joining the vendor who wanted a closer strategy across all strategies and had an input into the review, again having an impact on the length of time the process took.

Having made the decision to settle on Ingram, C2000 and Arrow there will be a further review of the products that each partner is selling next year.

Sphinx is selling the secure product line until March next year and that will provide an opportunity to reappraise the way the portfolio is split between partners.

Henry said that the decision to part with Arc was not a reflection on its performance and it did not rule out working with the distributor again.

Stuart Reay, UK managing director of Arc Technology, said that it had enjoyed workjing with the vendor and had shown with its relationship that it could deliver value to the security market.

"Our partnerships in the security industry are testament to the strength of the business and although the McAfee brand has been good for Arc, we are not a one-trick pony. We have a diverse portfolio of vendors and we will continue forming strategic partnerships in the future, but as a solid and trusted vendor to work with, the door for McAfee will always be open," he said.

Sage trading in line despite wobbly economy

2010-07-28T09:42:44Z

Sage has reported that trading is in line with expectations despite continuing uncertainty in the macro economy.

The UK flagship software firm provided little colour in this morning's third quarter interim management statement, just days ahead of its expected bid for Italian software maker TeamSystem.

The improved trading performance Sage reported at the half year point had "continued" said outgoing CEO Paul Walker, who will be replaced by Guy Berruyer, currently boss of Sage's mainland Europe and Asia operations.

"However, the economic environment remains uncertain and we continue to manage our cost base prudently, while investing to enhance our competitive position," he said.

Net debt fell 8.2% to £280m from 31 March to the end of June with £200m of the debt raised in the private placement market with it due to mature from 2015 to 2017.

Juniper buys mobile security vendor

2010-07-28T08:31:44Z

Juniper Networks has picked up smartphone and tablet computing security software builder SMobile Systems for $70m (£44.9m) barely a week after CEO Kevin Johnson told analysts the firm planned further market consolidation.

Back in April Juniper bought video streaming outfit Ankeena to enhance its enterprise content delivery proposition.

SMobile's product line, which protects devices running the full gamut of mobile operating systems, from Android to Windows Mobile, will be folded into Juniper's Junos Pulse mobile connectivity, security and acceleration platform.

]]> "Juniper already secures the majority of smartphone traffic in the United States," said Juniper Services Layer Technologies executive vice president and general manager, Mark Bauhaus.

"Integrating SMobile's portfolio into Junos Pulse will provide users with the most comprehensive mobile security solution available on the market," he added.

Juniper plans to move 30 SMobile employees into its Access and Acceleration business unit, including the firm's CEO and CTO, Neil Book and Daniel Hoffman.

Banks urged to increase lending to SMEs

2010-07-27T15:55:11Z

The government is stepping up pressure on the banking community to increase lending to cash strapped SMEs.

A white paper unveiled yesterday, Financing A Private Sector Recovery, explored a number of options to finance the sector including private equity deals and debt capital markets as well as initiating at more transparency in bank loan applications.

Business Secretary Vince Cable said it was in the "national interest" that banks started to lend again to mitigate the risk of a double dip recession

"We are making it clear that we have identified a problem, growth could be choked off by a lack of business finance unless we are very careful.

"There are different ways of dealing with this, partly bringing into play new sources of finance, equity, loans, micro finance, all kinds of things," he added.

A Forum for Private Business poll has indicated that just 1% of members reckoned access to finance had improved in the last six months, while 15% said it had deteriorated and 67% had seen no change.

"Demand is certainly there but lenders are not providing the funding or levels of service they should be," said Head of Policy at FPB Matt Goodman.

The banks were blamed for the toxic debts that led to a global recession but their lending criteria had become too stringent said Eddie Pacey, director of credit services at Bell Microproducts.

"Bank lending to small businesses has to ease up," he said.

The closing date for the consultation period is 20 September.

IBM in the dock as EC investigates mainframe market

2010-07-27T13:02:45Z

The European Commission has confirmed it will launch formal several anti-trust investigations against IBM following complaints that it abused its position in the mainframe market.

This is not the first time the spotlight has been placed on IBM's activities in the big iron space following allegations made by small player Platform Solutions, which was then swallowed up by the corporate leviathan.

The EC said the first complaint from emulator software vendors T3 and TurboHercules centred on Big Blue's alleged tying of mainframe hardware to its OS.

"The complaints contend that the tying shuts out providers of emulation technology which could enable the users to run critical applications on non-IBM hardware," said the EC in a statement.

]]> However, the EC said it also intends to look into IBM's potentially illegal behaviour in shutting out mainframe maintenance service providers.

"The Commission has concerns that IBM may have engaged in anti-competitive practises with a view to foreclosing the market for maintenance services, in particular by restricting or delaying access to spare parts for which IBM is the only source," it added.

In a statement send to MicroScope, IBM said it would fully co-operate with the regulators but denied any wrong doing and accused Microsoft of driving the allegations made by TurboHercules and T3.

"[Microsoft wants] to further cement the dominance of Wintel servers by attempting to mimic aspects of IBM mainframes without making the substantial investments IBM has made...in doing so, they are violating IBM IP rights.

"There is no merit to the claims being made by Microsoft and its satellite proxies...IBM will not allow the fruits of its innovation and investment to be pirated by its competition through baseless allegations," it added.