Comms Dealer

Logitech International, based in Switzerland, has announced preliminary unaudited and unreviewed financial results for the second quarter of Fiscal Year 2015, showing Q2 sales were $530m, essentially flat compared to the prior year, with retail sales up 2%.

Q2 non-GAAP operating income was $59m, up from the same time last year. Q2 cash flow from operations was approximately $33 million, doubling year-over-year and the highest Q2 in the last five years.

"Our performance in Q2 shows continued progress toward our full-year objectives, with growth in retail sales, better-than-expected profitability and improved cash generation," said Bracken P. Darrell, Logitech president and chief executive officer.

"Sales in our Growth category PC Gaming, Mobile Speakers and Tablet and Other Accessories grew by double digits for the sixth quarter in a row, increasing 27% year-over-year in Q2. It was our sixth consecutive quarter in which Mobile Speakers sales more than doubled.

"We've entered the second half of the year with a robust product portfolio and a pipeline of compelling new products set to launch in the coming quarters. This is our strategy of delivering fewer and bigger products in action."

Logitech confirmed its outlook for fiscal Year 2015 of approximately $2.16bn in sales, assuming relatively stable currency exchange rates, and approximately $170m in non-GAAP operating income.

The business intelligence (BI) software market is on pace to exceed $50bn by 2018, as line-of-business (LOB) buyers prioritise analytics purchases to obtain business insight while maximising the efficiency of their total spend, says researcher TBR.

Vendors covered in TBR's Business Intelligence Software Vendor Benchmark are closing the revenue gap with the overall market. It says, due to the market continuing to mature and large multiline firms including IBM, Microsoft, Oracle and SAP continuing to acquire to drive BI revenue growth.

TBR believes the BI software market is at an inflection point: Following rapid acquisitions and IPOs, the market is continuing to mature as demand in high-interest segments including data visualisation and predictive analytics increases.

TBR projects an average of 5% annual growth in the BI software market into 2018. Rapid growth in BI applications and platforms continues to accelerate BI software revenue growth.

Further integration of advanced analytic capabilities into BI applications and platforms, most notably data visualisation and content analytics, will sustain revenue growth in this segment into CY15.

Data warehousing remains a year-to-year growth laggard relative to other BI software segments, as the market is significantly contingent on the mature database market. However, TBR sees the heightening discussion around and adoption of in-memory technologies as a critical driver of customer purchasing and a factor that will stimulate revenue growth in data warehousing sales across 2H15.

"This is a market that is continuing to change. Though growth is continuing to slow overall, you're really looking at a market where there is opportunity to be had at someone else's expense - specifically from a vendor-centric point of view," said TBR Principal Analyst Matt Healey.

"This is where you start to see vendors looking at how they can invest to change their businesses to not only ensure they're continuing to support the IT personnel but also the line-of-business stakeholders."

Oracle, Microsoft and SAP are examples of vendors targeting one another to accelerate growth. TBR expects all three to prioritise sales and marketing over research and development in the near term to take mindshare, while Teradata's increased focus on S&M and stable R&D spend signal a firm monitoring the SAP-Oracle-IBM-Microsoft 'database wars' closely, in the hopes corporate investments will lift everyone in this market.

Relative overall improvements in operating margins for aggregate BI software businesses emphasise the increasing positive growth trajectory of smaller pure-play firms atop a divergent set of high-profile customer wins and Tier 1 partnerships designed to extend and increase visibility and sales in large enterprise vendors' customer bases.

Multiline BI revenue and margin leaders Oracle and SAP are capitalising on broader corporate initiatives (e.g. Database 12c launch, SAP Fiori) to streamline and integrate their broader portfolios - which stands to benefit business intelligence portfolios as the leading edge of customer interest and the driver of broader portfolio sales over time.

Pure-play vendors including Tableau, Splunk and Google are monetizing segmented approaches to the BI software market successfully and expanding alliances and industry-led use cases to stabilize footprints and create long-term growth opportunities.

Chinese vendor Huawei is stepping up procurement in Europe as part of its investment strategy.

Also, the company has highlighted the importance of its partner ecosystem and awarded 14 European suppliers for their 'outstanding contribution', it says.

Over the next five years, Huawei is going to hire extra 5,500 people and also wants to double its R&D staff in Europe within the next three years. By 2015, it is expected to make direct purchases of $4.08bn. Last year, Huawei spent $3.4bn on components, engineering and logistical services in Europe, it says.

"Europe remains our top investment destination. The solid ecosystem of trusted partners that we have built up enables us to ensure that these investments deliver sustainable growth for the local economy as well as for our company," said President of Huawei Western Europe, Kevin Tao during its Partner Convention in Dusseldorf.

NetApp is acquiring Riverbed's SteelStore backup/recovery storage appliance line for $80m in cash.

NetApp expects to start offering the products in January 2015. SteelStore systems use both deduplication and compression to cut down on storage usage and work with primary storage systems from NetApp and 3rd-party vendors, as well as various cloud storage platforms.

The purchase arguably plugs a hole in NetApp's product line relative to EMC, which has been offering its Avamar backup/recovery appliances (also supports deduplication and compression) for a while.

NetApp and EMC once waged a bidding war (won by EMC) for leading deduplication system vendor Data Domain.

Riverbed, meanwhile, is in the middle of a strategic review that reportedly includes mergers and acquistions.

Ingram Micro shares rose +6.5% as it reported Q3 figures and Q4 guidance.

In addition to beating Q3 revenue estimates (while posting in-line earnings per share), the distributor says it expects Q4 yr/yr revenue growth of 8%-12%.

A near-50% Y/Y increase in mobility product sales (boosted by a new Verizon channel deal in the US) to $2B helped drive the Q3 revenue but earnings were squeezed by a 15 bps drop in gross margin to 5.75%, which was caused by the mix shift towards mobility and systems sales.

Alain Monié, Ingram Micro CEO, commented: "We delivered strong third quarter financial results as we continue to take advantage of market opportunities to drive very solid revenue growth, improved returns and robust earnings growth and leverage.

"Revenue grew 11% and strong operating leverage led to a 19% increase in non-GAAP operating income. We are benefiting from new wins and strong market share and we are enhancing earnings power through disciplined cost management and execution on our global organisational effectiveness program.

"We also maintained our focus on optimising the balance sheet, generating cash flow from operations for the quarter while growing the business significantly. I am very pleased with our third quarter performance, which reflects the strength of our diversified geographic reach, solutions portfolio, partnerships and strong execution."

Worldwide sales increased by more than $1bn to $11.2bn from $10.2bn in the third quarter last year. Worldwide gross profit was $646m, compared with $599m in the 2013 third quarter.

Gross profit increased by 8% year-over-year benefiting from strong sales across most regions, it says. Gross margin was down versus last year as revenue growth was led by a greater mix of high volume sales, particularly in mobility and systems.

Europe's revenue of $3.2bn was up 9% year-over-year in dollars and up 8% in local currency. Non-GAAP operating income increased 8%, and non-GAAP operating margin was relatively flat at 64 basis points as revenue growth was driven primarily by sales in high-velocity products.

The region is benefiting from cost savings as a result of the initial implementation of the organisational effectiveness initiative, and it expects to see improvements in Europe's cost structure in 2015. Europe Technology and Other Solutions revenue grew at mid-single digits in local currency.

Solid growth in Germany, Ingram Micro's largest country in the region, was led by strength in retail markets. Spain and Italy experienced robust growth, benefiting from double-digit increases in both SMB and retail. The UK had another solid quarter of growth in SMB, it says.

Europe Mobility delivered solid double-digit local currency revenue growth, led by strong smartphone sales in Germany across all leading vendor lines, primarily into retail markets. Spain and Sweden also contributed well to the region's Mobility growth.

AKJ, the billing software solutions specialist, has been working closely with Ofcom and industry groups to ensure that its Affinity billing platform is fully compliant for Ofcom's 'simplifying Non Geographic Numbers' legislation which comes in to force in June 2015.

Primarily, these changes are to restore confidence among consumers using 08 numbers, but will also provide commercial transparency for companies and organisations using Non Geographic numbers.

AKJ has regularly engaged with Ofcom to ensure that Affinity is compliant for the new legislation changes which finally come into force next year.

In turn, AKJ is also working closely with its customers to understand how it will be presenting NGCS call charges and will be drawing upon this research in continued configuration of the Affinity billing platform.

Derek Watson, AKJ's Managing Director said: "Clearly displaying the NGCS access and service charges will be a top priority next year throughout the telecoms and ICT industry and we want to reassure our entire customer base that the Affinity billing platform will be fully compliant in line with Ofcom's changes.

"AKJ is carrying out individual customer research asking how customers want to display this new information. Feedback will be taken into consideration to ensure the Affinity final update is both simple and user friendly."

AKJ advises anybody who is unsure what the legislation means to their business to contact Ofcom or the Federation of Communication Services.

tIPicall has set the dates for a brace of product launch roadshows (to be staged at the 8 club in Moorgate, London) that will showcase the company's latest proprietary hosted PBX (11th November); and highlight how international numbering and international SIP works, and why tIPicall believes this is the fastest growing opportunity in telecoms (18th November).

The first event, sponsored by Yealink, will focus on tIPicall's hosted PBX and UC solution OnePBX and Yealink handsets (the first handset manufacturer to be accredited for meeting ITSPA security recommendations).

Other focus areas include getting hands on with a variety of applications such as softphone, iPhone, iPad, Android, Windows Mobile; along with new hosted bundles being launched including UK and international calls.

The follow-up event will reveal how international numbers work, the capabilities tIPicall has with these numbers, and discuss international SIP, how it works and reasons to sell it.

Planet Hippo Internet (part of The Network Selector Group) has acquired i4 Visual Media's hosted services business.

Essex-based i4 is a provider of web design services and will immediately migrate all domains over to Planet Hippo's servers.
 
Darren Lavender, Managing Director of Planet Hippo, said:  "This is the latest in a series of strategic acquisitions that will enable Planet Hippo to expand its reach across the UK. 

"We are making significant investments in new data centres and expect to make further acquisitions over the coming months."
 
Grant Horsfall, Managing Director of i4 Visual Media, added:  "We have been impressed by the professionalism and commitment to customer service shown by the Planet Hippo team and are confident that it will continue to meet the needs of our customers on an ongoing basis.

"This deal with Planet Hippo will allow us to focus on the delivery of high quality web design solutions and ensure our customers have a reliable and resilient hosting service for their web operations."

Maintel has acquired Proximity Communications and its subsidiary Achilles Professional Services for £9.6m. The acquisition boosts Maintel's data, wireless and network security capabilities, adding to the enlarged group's UC, data and wireless portfolio including managed and cloud-based services.

Proximity grew EBITDA in excess of 20% per annum over past three years. Approximately 50% of revenues are recurring.

Eddie Buxton, Chief Executive of Maintel, commented: "We are delighted to have acquired such a high quality and respected business which complements and builds on Maintel's expertise and skills in the unified communications, managed services and networking space.

"Proximity boasts a diverse customer base with well developed, long term relationships across a range of medium and large enterprises.

"The acquisition is expected to be earnings accretive for its first full year of ownership to December 2015."

Philip Carse, Principal Analyst, Megabuyte, commented: "In calendar year 2013 Proximity grew EBITDA 25% to £1.3m on revenues down marginally at £12.4m, generated £1.7m of operating cash flow and spent just £67k on capex.

"Maintel more often than not makes an acquisition in the Autumn (Datapoint in September 2013, Totility in October 2011 and various Redstone assets in October 2010), and this year is therefore no exception.

"As with the previous deals, this one looks well considered, adding a nicely profitable and cash generative business, customers, complementary skills and scale, and strengthens Maintel's Avaya relationship, for a reasonable price (the 7.4x EBITDA compares with Maintel's own 9.9x 2013 EBITDA at £5.00 per share).

"The deal should boost run rate revenues by about 30%, somewhat lower than last year's Datapoint deal, which added 45%. It is, however, by far the company's largest deal in financial terms, given that the larger Datapoint was acquired out of administration."

C4L is now running its MPLS network coreTX in parallel with their existing Cisco network, a significant milestone in the rollout plan.

C4L has raised additional funding to deploy coreTX on new, privately owned dark fibre routes between key data centre locations across the UK, installing Juniper MX480 or MX960 routers at each PoP.

Having already migrated all external connectivity and upstream Tier 1 providers from their existing network to a new 100Gb dedicated fibre ring, C4L's capacity planning, stability, traffic management and DDoS mitigation strategies which were not previously available, are now live positioning them able to commence planning for full customer migration to coreTX.

It claims a new suite of diagnostic tools have closely monitored and seen no outages on the coreTX network, despite fibre failovers, site reconfiguration and various real and simulated network traffic events.

As well as creating several shorter paths for traffic and utilising all the available fibre to keep latency to a minimum, C4L state they have commissioned new fibre links, each with N+2 failover paths configured by default to ensure it is carrier grade.

Their aim is to provide levels of network stability, security and scalability that are in excess of both their current network and the connectivity market as a whole.

Simon Mewett, CEO of C4L, said: "As a result of some limitations in our initial rollout, we have creatively redesigned the network and taken important strategic decisions to raise the additional investment necessary.

"Although this inevitably caused a delay in rollout completion, I am pleased to confirm that coreTX will now be upgraded to a 100% Juniper network, removing all interoperability concerns between multiple vendors.

"coreTX has been thoroughly tested and proven, validating both our design and selection process and demonstrating that the Juniper MX core delivers a truly carrier grade network".