IndustryViews Quoted Sector Q3 2009 Review

Sorry to our subscribers who yesterday rushed to download the latest IndustryViews Quoted Sector Q3 2009 Review. It would have helped if we had loaded it onto the website before announcing it! It is now there. Sorry for the inconvenience.

Telecity – building for the future

(By Philip Carnelley, 2 Nov 2009, 08:30) Data centre/hosting services provider Telecity has issued an upbeat trading statement for the last 4 months, saying that trading is strong across all markets. Revenue growth across the business is yielding ‘strong’ operating profit growth, as the cost base is largely fixed, pricing is robust and pipelines are healthy, continuing the trends we have previously reported on (Telecity shows how ‘boring’ can be profitable).

“Telehouses” suffered greatly in the early 1990s when the dotcom boom turned to bust and the industry suffered from massive overcapacity. But now, the continued move into the ‘Cloud’ that we comment on so often is continuing apace, and is of course exactly what Telecity is set up to provide. Consequently, the company is continuing to expand capacity: having already upgraded London, Frankfurt, Milan and others, it will deliver a new centre in Paris in December. The upgrade programme stretches out to 2011 - when capacity will be up 25% on today - as the company anticipates demand growing as far as the eye can see. Telecity says it can fund the expansion programme without further borrowing facilities.

Sanderson reports 'increased trading momentum'

(By Richard Holway 7.00am Monday 2nd Nov 09) Sanderson has issued a positive IMS saying that, since they concluded a new debt facility with RBS in Aug 09, they have experienced ‘an improvement in trading’ and expect the performance in the year to 30th Sept 09 ‘to be slightly ahead of expectations’. The new FY has seen ‘increased trading momentum’.

I wrote in Aug of the frustration the Sanderson directors had experienced with their bank. This had put a cloud over the whole operation for a year and seen their share price collapse from 30p to 7p. Once the new facilities were in place, the directors were free to ‘vote with their wallets’ and went a buying. Since then the share price has doubled.

(Note – I have been a Sanderson shareholder since their 50p IPO…)

New from TechMarketView

It’s been one of our busiest periods ever for new research from TechMarketView.

SoftwareViews – our new research stream – was launched with Philip Carnelley's report on the State of the UK HQed Software Industry. See TechMarketView launches new Software Research Programme. We are very pleased with its reception. It created some great media coverage including BusinessWeek – See British Software Industry is still Alive.

IndustryViews. Last week we published the IndustryViews Quoted Sector Q3 2009 Review. IndustryViews also includes quarterly reports on M&A and Private Equity funding which were published the week before.

AnalystViews. Tola Sargeant, our new Research Director and one of the UK’s leading experts on IT in the Public Sector, produced two new AnalystViews on the UK Public Sector 2010 – Threats and Opportunities.

- In Public sector spending cuts: Which contracts are at risk? Tola identifies over £26b worth of major UK public sector SITS contracts at risk of cancellation, curtailment or ‘de-scoping’, and calls out the suppliers most exposed.

- In UK Public Sector 2010: Spotting the opportunities, we tell you the good news. Tola identifies the many opportunities for SITS suppliers to the UK public sector market in 2010 and where to find them. This research features Tola’s unique ‘heat map’ showing at a glance where the opportunities are and which are the hottest.

Plus an AnalystView entitled Clearswift eschews the Cloud.

Since the launch of TechMarketView in April 2009, we have attracted a superb group of paying subscribers including HP and Microsoft. Indeed, companies representing nearly 50% of the revenues of the SITS sector in the UK are now paying subscribers.

Only paying subscribers get access to our full research programme – including the reports listed above. Our subscriptions are ‘per company’ not ‘per user’. So the cost of providing this invaluable research to ALL your employees is extremely modest. Can you really afford to be ‘out of the loop?”.

Just email Puni on prajah@techmarketview.com and could soon be enjoying the privileges of being a TechMarketView subscriber.

Welcome Attenda

We are very pleased today to welcome Attenda to our growing band of Banner advertisers on HotViews and the TechMarketView website. Attenda is Europe's leading specialist in the provision of managed services solutions for operating Internet and enterprise applications. I’ve known Mark Fowle, the CEO and founder of Attenda, since its formation about 10 years ago. Attenda is a private company with revenues (to Nov 2008) of c£26m. I’ll bring you an update on the current FY soon. They really are ‘in the right place at the right time’ to ‘Ride the Cloud’.

And what better way to get the message over to you? By a TechMarketView banner, of course. Puni on prajah@techmarketview.com would be delighted to supply you with more details of our advertising rates.

Share indices in October 09

(By Richard Holway 12.00pm Sunday 1st Nov 09) Was October the ‘Start of the Great Stock Market Correction’? Or merely another minor blip in one of biggest ‘Tech Bull Rallies’ I have ever seen?.

I was intrigued to read of a new ‘’shape’ to describe the 'recovery' – LUV. L-shaped in markets like the US and UK, U-shaped in markets like Germany and V shaped in the BRICs. Certainly, in all the conversations I have had recently with the CEOs of our major players, none has detected any increases in IT spend – merely the continued desire for ‘More for Less’ -coupled with outsourcing contract churn (good for the winners, bad for the losers but usually meaning a lower amount spent on IT overall)

The ‘problem’ is that the stock markets seem to be reacting to good earnings results (which have been achieved by cost cutting) thinking that they represent IT revenue growth revival. They are then highly selective; pointing at the ‘winners’ (like Apple) as evidence of a tech rebound whilst ignoring the ‘losers’ (like Nokia).

Personally I think the tech stock rebound has been overdone and just must be due a correction. As I have said countless times, tech trends towards the FTSE100 over any medium term. YTD the FTSE100 is up 14% but our FTSE SCS Index is up 55%.
October did see a first, albeit minor, correction towards that trend line with the FTSE100 down 1.74% but the FTSE SCS down 6.4%. The FTSE SCS Index is weighted – the largest companies have the greatest effect. So it was Autonomy (down 17.6% - See For Autonomy growth seems easy; profitability less so), Computacenter (down11.5% - See Computacenter exits distie business), Logica (down 10.9% despite winning a £110m deal at CPS) and Sage (down 8.5%) that really ‘done for it’. Outside the FTSE SCS constituents, Morse continued its power run with another 20% to 38.5p. See Morse’s margins march on. I take my hat off to Mike Phillips for the turnaround that him and his team are achieving at Morse – making himself a well deserved packet in the process!

Outside the UK, results from SAP caused a 8% slump in their share price (See SAP software decline slows). Capgemini (down 11.7%) and Steria (down 16%) joined the UK SITS bears. Adecco slumped 16% as it Goes shopping again. Sopra bucked the trends with an 8% increase – See Sopra flying high with Easyjet. In the US Microsoft put on 7.8% as everyone (except us) interpreted their outlook as pointing to a resurgence in corporate IT spend. See – Microsoft all in the outlook. However NASDAQ overall was down 3.6%.

Twitter ye not

(By Richard Holway 12.00pm Sunday 1st Nov 09) So Stephen Fry might be resigning from Twitter. All because a fellow Twit suggested his posts were ‘boring’. So Fry ‘blocked’ him.

As readers know I am continually trying to ‘get into Twitter’. We post many of the TechMarketView pieces on Twitter. But so do all the other researchers. Bluntly, I get a better service on this via their RSS feeds. Everyday, I wade through a morass of Twitter posts which usually saps my will to live.

With the risk of depressing Mr Fry even further, I do find the vast majority of his posts ‘Boring’. But he shouldn’t take it too badly, as I find the majority of ALL Twitter posts Boring.

For business, I can get my news feeds from other, better sources. For personal stuff, I find Facebook much better. I think it’s because of the ‘convention’ that ‘one post a day is about the max’. So the posts tend to be more interesting as a result.

So, my view would be that Twitter is a passing fad (just like it was for Mr Fry) but Facebook is probably in for the long run.

Views? Via @TechMarketView on Twitter if you wish!