Category: News

BT Global Services is causing its parent company a few headaches.

The wider BT business saw revenue for the six months ending 30 September drop two per cent year on year to £11.6 billion, mostly due to regulated price reductions in Openreach and struggles in its enterprise businesses.

The outfit said that its Global Services arm was the “main contributor” to the overall revenue decline, with the division’s sales for the six-month period dropping to £2.3 billion.

Outgoing CEO Gavin Patterson said: “We continued to generate positive momentum in the second quarter, resulting in encouraging results for the half year.

“We are successfully delivering against the core pillars of our strategy with improved customer experience metrics, accelerating ultra-fast deployment and positive progress towards transforming our operating model.

“Our strategy is delivering, with benefits evident from the steps we’ve been taking to simplify and strengthen the business and improve efficiency.”

The company has been restructuring this year to cut costs in Global Services “significantly”.

So far that has involved getting rid of 2,000 people mostly from Global Services.

It added that the cuts are so far saving it £350m annually, but the costs of the cutting programme currently stand at £206m.

BT also flogged off its German VAR last month, which sat in the Global Services arm.

Education reseller Academia has taken a third of the device-as-a-service (DaaS) outfit Vital York.

The deal, which values Vital York at over £1 million, will see Academia invest in the firm to help it scale its DaaS business.

Academia boss Mike Bacon said Vital York was ahead of the market and had been doing well selling to York schools

It had 70 or 80 per cent of the primary schools and 40 per cent of secondary schools, but they haven’t got the ability to scale in the timescale they want.

The problem is that a DaaS outfit needs shedloads of cash and you don’t get the money back quickly.

Academia partnered with Vital York a year ago, in a move that helped the Enfield-based firm service partners further north.

Vital York business will continue to run as a separate entity under its current management.

Computacenter warned that a slowdown in the infrastructure managed services market could hamper future growth.

The outfit saw sales declines in its third quarter results and Group revenues, excluding acquisitions made during the quarter, shrank by three per cent year on year to £900 million.

While Services revenues grew by a per cent, the outfit’s  Technology Sourcing segment, which alludes to its supply chain business, declined by five per cent.

The UK was Computacenter’s poorest performer in the third quarter. Revenues shrivelled by nine per cent to £296 million, as Technology Sourcing revenues tumbled by 12 per cent and services by four per cent.

The next worst was France which had a six per cent dip in revenues to £119 million. Technology Sourcing revenues decreased by eight per cent, or seven per cent in constant currency, while services declined by one per cent.

Only Germany did well and continue its upward trend established in the first six months of the year. Even it saw its growth slow dramatically in third quarter. Sales grew by one per cent to £451m, or two per cent in constant currency. Services and Technology Sourcing sales both grew by one per cent during the quarter.

Computacenter warned that channel partners have a tougher year ahead as revenue growth from reselling product begins to slow down.

The channel giant said that while its pipelines for professional services is “building nicely”, growth for its infrastructure managed services business is “somewhat more challenged” due to tougher market conditions.

Hitachi Vantara has completed its acquisition of REAN Cloud a global cloud systems integrator, managed services provider and solutions developer of cloud-native applications across big data, machine learning and emerging internet of things (IoT).

Thanks to the deal Hitachi Vantara gains critical capabilities and industry-leading expertise in cloud migration and modernisation, instantly elevating its cloud offering portfolio and managed services capabilities.

The big idea is that it will plug a market gap where clients are facing the challenge of adopting public cloud services while maintaining existing IT responsibilities for on-premises infrastructure and private clouds. To meet this challenge, the IT departments have to broker of IT-based services by blending traditional services with public and private cloud services  or  ‘hybrid IT.’”

Hitachi Vantara aims to address this gap with its new offerings, providing cloud migration and managed services that enable customers to operate across hybrid and multi-cloud infrastructure. 47Lining which was acquired by REAN Cloud last year gave deep capabilities in cloud-based analytics and machine learning that powerfully expand Hitachi Vantara’s ability to maximise data-driven value for its customers focused on vertical IoT solutions.

Hitachi Vantarachief executive officer Brian Householder said: “In the last year, we have expanded our investment in agile and flexible infrastructure as an engine for driving our customers’ digital transformations. This acquisition underscores our commitment to meeting the ever-changing needs of the digital enterprise, as well as pioneering offerings that set the standard for excellence within intelligent analytics.”

The cloud market is dominated by four players who made about $17 billion in the third quarter according to Synergy Research Group.

Amazon Web Services, Microsoft, Google and Alibaba all grew faster than the cloud market. Overall spend increased 45 per cent year on year in the quarter, with AWS maintaining its huge market lead.

Synergy said that AWS has a market share of 34 per cent with Microsoft its biggest challenger at 15 per cent.

Synergy places IBM as the third-largest player, with a share of seven per cent, ahead of Google and Alibaba.

John Dinsdale, chief analyst at Synergy Research Group, said: “This is another really strong set of numbers both for the leading cloud providers and for the market as a whole.

“The growth rates are tailing off at some of the leading cloud providers but that is just the law of large numbers kicking in. You cannot keep on growing at 100 per cent when you reach massive scale.”

The role model for sustainable growth is market leader Amazon. Over the last 10 quarters the AWS year-on-year growth rate in these markets has been steady and has averaged just a little under 50 per cent. Given the need for huge scale, most cloud providers outside the top five are being forced to focus on market niches or specific geographic regions.”

Synergy’s $17bn revenue estimate includes infrastructure and platform-as-a-service sales, along with hosted private cloud services.

Public IaaS and PaaS make up the “bulk of the market”, the firm added, with growth in these areas hitting 51 per cent.

The top five providers (AWS, Microsoft, IBM, Alibaba, and Google) hold around three quarters of the market, Synergy claims.