Comms Dealer

The comms industry's most critical imperative is to offer faultless customer service, according to Inclarity Communications Director Enzo Viscito who leads by example.

It was Viscito's erstwhile deep attraction to fancy cars that ultimately drove him along the road to a career in comms. Seduced by the eye candy, Viscito has not looked back since he joined what was then a household name in the telecoms sector. "I got into comms purely by chance when I was looking for my first job in sales," he said. "Naively, I got an interview with a company called Norton Telecommunications without knowing anything about comms, but when I saw the sporty company cars the sales guys were driving I knew this was the job for me."

Fast forward to today and Viscito is comfortably in the driving seat steering Inclarity towards a new phase of growth based on sound business principles, spotless service, an advanced hosted strategy and impeccable technology. Inclarity has long been known as a trailblazer for hosted telephony, first taking it to market in 2002 when the company founder acted on his conviction that hosted would become a force in business communications. "It was early days, but he was right to turn his vision into strategy," said Viscito. "We now have a great channel model."

Inclarity's investment in the BroadSoft platform in 2010 created a new springboard to take more market share. A subsequent investment in the network is also certain to pay off with the year-long project nearing completion. "The network is state-of-the-art and fully resilient and will allow us to offer our channels more innovative solutions next year," added Viscito.

Most telecom VARs, SIs and consultants recognise the need to change and evolve along with their customers' requirement for innovation in solution delivery. But transformation can be challenging and requires dedicated support and resources from the hosted telephony provider. This in turn builds greater customer loyalty leading to lower churn and ultimately improved ARPU, believes Viscito. "As our partners look to develop new skills and adjust their business models to become more competitive, they need a compelling vision and roadmap from experienced best-of-breed vendors with strong financial incentives and clearly defined processes," he said.

Inclarity offers the full suite of hosted solutions through its channels including telephony, call centre, soft phones, SIP trunks, UC and video. The target market is predominantly SME but prospects in the large enterprise market are also bright with recent customer wins employing 500-plus staff. "One of the main trends we are seeing is customers wanting a flexible model that allows them to switch users on and off whenever they desire, with full disaster recovery built into every solution as standard," commented Viscito. "Customers are putting more emphasis on flexible SLAs rather than price, with customer support being paramount."

Customer service and growth strategies are two sides of the same coin and to flip-out on customer support is a gamble that is doomed to fail. "Customer service is everything to our channels and without it you cannot grow your business," added Viscito. "We invest heavily in our support team and our satisfaction figures are at 97.5 per cent, with 95 per cent of support calls answered within five seconds. Our growth strategy is dependent on our customer satisfaction level. We use a carrier grade best-in-class platform that provides 99.999 per cent reliability, achieved by using a resilient architecture with full redundancy built into both the hardware and software components. Outstanding customer service is the only way to do business."

Inclarity has a strong team that brings together decades of telecoms experience, a dash of entrepreneurial flair and a passion to empower the smaller business by using advanced communications technologies in a robust and straightforward way. "We are fortunate that our staff turnover is low," said Viscito. "We promote employee engagement across all levels of our business and encourage staff to adhere to Inclarity's goals and values. Every member of the Inclarity team has influenced and continues to influence the evolution and continued success of our business.

"Our mission is to help businesses use hosted communications to drive revenues and profits. We achieve this through innovation, hard work and investment in R&D and customer service. The challenge is ensuring that we all perform to the best of our ability every day. I like to lead by example."

The channel's focus on the market should be collaborative, not separatist, and to go it alone would be to remain in the shackles of doomed legacy, according to delegates at a round table debate hosted by Comms Dealer and supported by Entanet.

Today's ICT resellers operate in a market characterised by unstructured demand and fluid buying behaviours where, increasingly, customers are part-way through the procurement process even before their first sales meeting. "We were selling hosted 10 years ago," said Philip Donigan, Sales Director, STL Communications. "Back then it was a customer education process, today they understand hosted, and most people we speak to understand the technology, what they want to buy and the benefits. Now it's about us convincing the customer that we can deliver a workable solution. It's all about knowledge and the need for customers to partner with organisations that deliver and support solutions."

ICT purchases no longer follow a formal procurement process based on predefined needs, and the ability of reseller sales staff to perform effectively in such conditions may now be in question. For example, their first hurdle could be to deconstruct the prospect's preconceived ideas about what they want in order to guide them towards a better solution. "Customers understand far more about the technology, but they don't know how to put a solution together that gives them exactly what they need for their business," said John Teague, Managing Director, ITEC. "Sales people have to start understanding the customer's real requirements. We don't sell kit so we can have a frank conversation and discuss their needs which ultimately might be a million miles away from their initial perceptions."

Increasing deal sizes and win rates in an environment where more customers want integrated services presents a number of challenges for resellers, such as properly identifying customer requirements, aligning product portfolios with those requirements, qualifying deals and bringing the elements of an integrated solution together seamlessly. "Customers are much more educated which is a challenge for partners," commented David Dadds, Managing Director, VanillaIP. "Resellers were once advisors, and for the most part, vertical in their product set. Now they are part-advisors and have to be more knowledgeable across different verticals. Customers have even told us about applications we didn't know existed. We are not always the givers of knowledge, and partner education is one of our biggest challenges. In the old days resellers provided a single solution, now they're providing multiple solutions and customers need advice."

The impact of these trends is already being felt and greater collaboration between partners could be the only option. "The shift from selling boxes to selling business needs is a quantum leap for our industry," commented Teague. "You cannot do it all on your own. If you haven't got the processes in place how are you going to deliver the service properly? Customers are more demanding than they have ever been. They have insights into how these things are done and react adversely when they're not done to the letter. The way forward for our industry is total collaboration. Stick to what you're good at, be best at it, and work with other people who are just as good in their particular field."

Resellers have interface points with a number of other parties and they need to approach that middle ground more collaboratively, according to Martin Taylor, Director, Redwood Technologies. "Resellers need to know more about networking so they can have the IT-telco discussion," he said. "They need to know more about the business needs of customers, and they need to know more about the product side so they can interface better with people sitting above with the technologies.

"Just as importantly, we need to know more about their sectors so we can train project managers to have more valuable conversations with the reseller. Further upstream, as well as computer scientists we have mathematicians working on future models. Everyone needs to build out and extend their positions by upskilling in order to interface more closely and collaboratively with other organisations in the chain."

To say that the market bears little relation to its form of just a short time ago would be to greatly understate the speed of change, and Donigan pointed to a stark sign of the times. "The minute is neither here nor there now, but 18 months ago it was important," he commented. "For us, it used to be a case of being good at selling PBXs, or more latterly good at selling a hosted seat, or broadband line or Ethernet connection. That was it, the customer brought it all together.

"Now we are involved in delivering a solution. We are expected to configure the LAN, plug it into a firewall and make our way to the Ethernet service and manage everything. It's far more complex now so to deliver our solution cost-effectively it's necessary for us to invest in IT skills and take-on networking engineers. This is a logical step."

Such notable shifts are taking place across all levels of the comms industry but one constant factor is the customer base, which if managed properly will keep resellers' feet dry in a sea of change. "The channel has those all-important relationships with the customer and knowledge of their key market sectors," added Taylor. "We have knowledge of the technology and we see more resellers bring prospects to our demonstration area where our project managers and application engineers spend time helping customers shape their requirements. Resellers already have these relationships, they are providing a service, they understand the customer's requirement for additional services and they want to show them the technology that is available."

Collaborating with customers to uncover their real needs will also prevent pricing issues becoming the legacy of a technology revolution that has unleashed an information free-for-all. "The Internet is almost crushing the channel," said John Larkin, Managing Director, The Kenton Group. "There is so much information available including transparency on pricing. With connectivity, for example, customers have access to Openreach prices and may be able to calculate your margin based on what you're charging them. But business is about relationships. Now, it's about collaboration, knowledge, consultancy and added value. These are critical."

Knowledge is the product of learning and imposing an upward ratchet of education has enabled 8x8 Solutions to significantly drive sales through its channel. "We had a number of partners who struggled to articulate and position UC," said Charles Aylwin, Director for Channel and Public Sector. "They had spent many years selling PBXs so we set up an academy in 2011. It took almost nine months to get people trained to the point of being effective and accredited. The academy has now accelerated our growth. We also measure churn very carefully. Churn comes from bad customer experiences. If we do a brilliant job on a wet piece of string the customer still has a bad experience so we focus hard on getting it right. We have forward looking conversations with customers and qualify every stage of what we are doing, not just in terms of selling the solution but also living with it."

It is clear that a time-worn sales pitch is no longer the solution to a prospect's needs. Doing so is to tread a familiar - and doomed - path. But the scope for ICT suppliers to win deals based on broad collaboration is widening. "We don't sell, we do solutions and help other companies that can't," stated Teague. "You can operate in specialist markets but extending into unfamiliar areas could see resellers become mediocre at everything. We're now talking about unified and collaboration, which is every aspect of an organisation's life. It's not just about the infrastructure, it's about how they run their business and what the solution does for them. It's far better to partner with someone who is good at their particular area and add the two together."

Ian Calder, Managing Director of Centrix, has defied all temptation to go it alone. "I'm a great advocate of collaborative working to add value," he said. "In the past we collaborated through necessity but now we do so by design. For example, we outsource to software developers. But when you partner with someone they may be delivering on your promises so its important to have good processes and to choose your partners carefully."

Partnering is an accepted success factor and for many channel companies sticking to a policy of selective collaboration has become the number one priority. "There are certain people we partner with in all spheres," noted Enzo Viscito, Director, Inclarity Communications. "Whether it's connectivity or UC, you gain their expertise. If we can do it well ourselves we will, but sometimes speed to market, getting people trained and even the cost of employing staff is prohibitive. It's far easier to partner. But if the infrastructure beyond our control doesn't deliver reliability we are left in the mire. We may have done everything for the customer, but it's our name that's tarred and that's what frustrates me. That's the biggest challenge we face. But we're in a situation where we all need to partner."

Combining respective skills should become the master of all supplier and reseller partner relationships, with all parties driving towards a common goal, agreed Entanet's CEO Elsa Chen. "As a wholesaler, it's right to do what we do best and strive to make it even better," she said. "Executing processes that add value for the channel is what we do best after all. For example, for the connectivity element of a solution, our specialism in providing the network, the resilience and the support removes the hassle for delivering these from channel partners. They can rely on us to deliver that efficiently and accurately. More widely, relying on collaboration with another organisation is a key challenge when you have to respond to opportunities quickly. In terms of reliability, people need to think carefully about their choice of partner. It's not about cost."

Philip Carse, Analyst at Megabuyte.com, reports on the recent performance of leading companies in the comms space during the last quarter.

The highlight of the last three months has undoubtedly been corporate activity among the business comms service provider community, with Daisy accepting a take-private bid from founder Matt Riley and private equity investors Toscafund and Penta, Gamma successfully listing on the London AIM stock market, and XLN changing owners. There has also been plenty of M&A activity in networks, with Interoute buying Vtesse and euNetworks being in talks.

The Daisy cash offer was at 185p per share, or £494m for the equity, valuing the company at 11x historic EBITDA, a full price for a business whose EBITDA actually fell 10% in the first three months of the current financial year according to the offering prospectus. With the aim of the P2P being to undertake larger acquisitions than in the past, we consider Phoenix IT a potential target given its mid-market focus and also having Toscafund as a significant shareholder.

Gamma's successful IPO at 187p per share for a £165m market capitalisation represents second time lucky for the company. It is intended to raise the profile of the company, with no new monies being raised, but existing shareholders selling down 50% of their holdings. The IPO valued Gamma at 8.7x historic EBITDA, an interesting contrast with Daisy particularly given that Gamma grew revenues and EBITDA by 16% and 42% in the first half of 2014. There is no news on Timico which had to abort an IPO earlier this year, while rural broadband provider Gigaclear is currently attempting to IPO.

XLN, which focuses on the very small end of the business market, undertook a buyout from ECI Partners, backed by debt from Blackstone's GSO Capital Partners. The reported £140-150m price values XLN at about 8x historic EBITDA. We wonder whether XLN will use Blackstone's greater firepower to attempt to buy Universal utilities/Unicom.

Networks remains an M&A focus area, following Zayo's acquisition of Geo networks earlier this year. The most recent deal has seen Interoute buy Vtesse Networks, substantially boosting its UK footprint and bringing more data centres on-net. The deal adds about 5% to Interoute revenues.

Meanwhile, Singapore-listed but UK centred euNetworks has admitted to being in M&A discussions. A potential buyer is Zayo Group, which coincidentally achieved a US stock market listing, albeit after having to cut the price by 15% due to weak markets. There were also several small M&A deals, including by serial acquirers such as Chess (Parachute IT) and GCI (CommsXchange).

In share price terms, the sector has had a torrid three months in line with a general stock market collapse, with an average share price decline of 5.6%. However, the average 8.7% rise over the last 12 months is well ahead of the FTSE's 4.6% decline. The only stocks to have shown significant share price rises over the last quarter have been Daisy, due to the take private, Redcentric and Telecom Plus, both due to solid trading updates. Most other stocks have fallen 5-10%, with the exception of TalkTalk (-14%) and Pinnacle (-32%).

The out performance over the last year has been led by Redcentric (+43%) due to the company demonstrating organic growth and significant synergies after the acquisition of InTechnology. Other notable performances have come from Daisy, Alternative Networks, Maintel and Coms (+19-26%), while the main fallers have been Pinnacle (-69%) and Adept (-17% despite decent results).

Results and trading updates released recently show the usual mixed picture with market hotspots and notspots. The pick of the bunch were probably Gamma's very strong first half performance and the decline in Daisy EBITDA in its first quarter, while Alternative Networks and Maintel reported solid trading, aided by acquisitions of Control Circle and Intercept IT (Alternative) and Datapoint (Maintel). Among private companies, we would highlight strong performances by Fluidata and Spitfire and less impressive numbers from Charterhouse Voice and Data.

IS Research publishes www.megabuyte.com, a company analysis and intelligence service covering over 200 public and private UK technology companies.
philip.carse@megabuyte.com

The dream of a ubiquitous network is in need of a reality check and it's time for the industry to properly assess the connectivity landscape and settle on a true vision of what the future of networking will look like, according to delegates at a round table debate hosted by BT Business Partner Sales at the BT Tower.

Arguments in favour of the growing importance of networks to manage flows of data (and even relationships) are unassailable. Networks have become embedded, they are changing our lives and the drivers of change have combined to create an unstoppable force. It is now clear for all to see how network usage will evolve, but what about the enabling infrastructure? There is a mass of evidence to show that hosted communications is becoming mainstream with more customers than ever snapping at the heels of resellers able to give them what they want. This craving for bandwidth will only become more rampant, but all is not equal in Britain's networked landscape.

"The challenge is aligning business strategy, applications and topology with cloud-based services," commented Robert Sturt, Director, The Network Union. "Having cloud-based services is one thing, but getting them to work correctly is another and requires well engineered networks. The perception of connectivity as a commodity is changing because of the cloud. You need resilience, diversity and correctly engineered networks or it won't work."

Networks have changed the way we work and have become integral to our daily lives, empowering organisations and individuals as never before within a new networked world. "Financial challenges have prompted a change in business practices and how applications are used to drive out costs," said Charles Davis, CEO, SAS Global Communications. "Apps drive everything around the infrastructure and we have seen a centralisation process with on-premise apps such as voice and video moving to a cloud platform based on the opex model. With home working, mobile working and virtual teams, we need to provide connectivity for those people wherever they are."

How possible is it for everyone to take part in this new joined up vision? The answer could be innovation in the design of hybrid networks. "Consumerisation has raised expectations about business communications, but we have to navigate customers through their perceptions towards the reality of hybrid solutions," commented Davis. "There is hybrid networking now with 3G and 4G and satellite services. Those price points will come down and you have to mix and match that solution together. There's never going to be a vanilla networking offering anywhere within the country. For us, the future is going to be hybrid networking - fixed line, mobile, satellite, with commercial and contractual flexibility being significant. It's important for our industry to make clients aware of this."

Comms Solve Managing Director Ty Gardner displayed great enthusiasm for the device as numero uno in any consideration of networking. "We see more and more wireless deployments because people want to use the device," he said. "We don't talk about the connectivity because the biggest driver is the devices. It's about the business, how they operate and contact clients. Only then do we put the plumbing in to support the way they want to work. But the idea of one carrier and one solution is dead in the water. People need more bandwidth but the networks are still designed around cities and towns. Every bit of network we need in the future has to be a form of data Internet - mobile or fixed. We need good sized pipes in the right places at right time."

Bandwidth hungry consumers are feasting on a menu of connectivity options that are far from coherent, and the sticking point is a lack of ubiquitous connectivity. While there are clear matters to be addressed about rising customer expectations on what is technically and regionally possible in networking, just as influential is a lowering of service expectations led by the usage of Apple, Skype and FaceTime, believes Davis. "Rather than high-end video conferencing people are happy to use an iPad," he said. "They have become used to a poor service and this experience has an influence in the corporate market. You have to steer clients through that whole swamp."

The depleting service expectations of end users will reinforce the widening gap between traditional comms and the Internet era, and clinging to old values could prove to be a grim legacy, warned Keith Harvey, Head of Sales, Partners and Channel, TFM Networks. "There is a perception in our marketplace that the phone must work, but in the case of a computer-click that fails it is natural to simply try again with no questions asked. That perception is also generational. The younger generation don't see this differential in service requirements and there is a danger that we could get side-swiped by someone coming along with a different way of doing things. There are plenty of people asking for 3G, for example. It's not going to be about five-nines reliability, it will be about ease of use and the application, and because it's hosted users will just want an interface. This is a totally different perception."

Changes in the perception of what constitutes good service is a sure sign that the Internet age is advancing in leaps and bounds but for those beyond the fringes of coverage ubiquitous superfast connectivity will remain a pipe dream. "The connectivity is so poor in most rural areas, and the response and lead times in providing services are such that the tin versus hosted argument in the countryside is for the most part irrelevant," stated Giles Ecclestone, Sales Director, Ocean Telecom. "We can't cost-effectively deliver hosted in some areas. It's got to be about the service and what the customer wants to achieve with their business. Small businesses generally get a better deal with CPE if they are under served by poor connectivity. People will still want tin, although enquiries about hosted have risen this year. The key aspect is how we support the network, and the tricky bit is making it work properly."

The rise of hosted is blatant and Michael Thornton, Sales and Marketing Director, Frontier Voice and Data, believes that the progressive move towards bigger and more reliable networks will open the hosted floodgates. "Every product we sell is predicated by the fact that we need a good network service," said Thornton. "In hosted telephony we've gone from one per cent to 15 per cent of revenue in 20 months. Prior to this growth period we were stuck at one per cent because of poor networks. People ask for assurances and guarantees and you have to deliver that. The product to deliver hosted is here now and the demand will get massive. Look at the adoption of video: Not so long ago you needed a costly camera, but now a device is all that's required. The adoption rate is high and it will be the same with hosted telephony."

A sign of this technological advance can be clearly seen among the generation leaving school and university who are not interested in fixed line, don't use email, are immersed in the digital age and for them hosted is the only option. According to Rainbow Global's Sales Manager Fred Barton there is an unbreakable link between Generation Y and the future uptake of cloud models. "Graduates coming into companies expect services like FaceTime," said Barton. "We have seen a big shift to hosted telephony. Voice is now a service. At one time we sold many PBXs, now it's just four or five systems a month but we're doing 200 seats a month on hosted. The connectivity is better, the pricing has come down, the porting agreements are better, SIP is improving and the engineering is much easier. You don't need to ask about hosted now, customers know about it and it's exciting to sell."

There is a lot more to be said on the future of networks. They do, after all, provide the ability to harness data for detailed research and analysis. The exploitation of Big Data to gain new insights is where the network is heading, and Harvey is already engaged in putting the power of hybrid networks into the hands of customers who want to understand data and use it to make a difference. "We are starting to fill in networks with Wi-Fi, most notably selling to marketing analysts who, for example, want to measure footfall, gain an understanding of who's walking past and what that means in terms of marketing the information," he commented. "In such cases the conversation is not about coverage. We talk about what customers want to achieve and how we can help them through networking."

With the market turning on its head it should come as no surprise that customers expect a different conversation with their ICT supplier. "Before the recession IT directors took the purchasing lead, but there has been a big change in who calls the shots around the applications," added Davis. "Now it's more the remit of business analysts, knowledge workers and the CIO - the people who understand value. Once the decision has been made it's the IT director's job to make sure the infrastructure can deliver the solution. There is a change in who you talk to."

If we want to set the networking world to rights we should do it with total commitment and that means all parties in the value chain having a new conversation based on close collaboration and a shared vision. In a move that advances the value of quality relationships BT has set up a new team to drill into the SME and corporate sectors and find ways to better engage with customers. Georgina Williams, General Manager for Cross Product, BT Business, is the woman tasked with plugging the gaps. She commented: "Were focusing on understanding how we can bring products together in a seamless way, with one person to deal with and one bill. This means understanding the pinch points when customers buy multiple products. They expect a better price, a better service and a SLA that covers everything."

Williams' extended role testifies to the fact that our networked future needs more than just talk. It is right to debate the issues, but a deep commitment is required if we are to strive towards the goal of connected digital ubiquity, pointed out Martin Clarke General Manager, BT Business Partner Sales. He said BT's strategy will ensure that we are not lost in a morass of disconnectedness, highlighting hybrid networks as the tour de force. "The work we've done with our mobile strategy is a sign of our strategic vision around a combination of fixed terrestrial networks with 4G and Wi-Fi services seamlessly integrated for voice and data," he stated. "It's about hybrid networks. This is where BT's investment will be in the core network."

The future of networking will draw on the best of ingenuity and innovation in the channel and will show a wide divergence of options brought together into a single networked solution, and the ability to disentangle the impact on customers will be the measure of resellers, according to Steve Rathborne, Field Sales Director for UK SME, BT Business. "Hybrid networking is a double edged sword," he said. "It means greater complexity but there is a real demand from customers for trusted advice from their partners. It's important we don't lose sight of the crucial role of resellers in the success of networking today and in the future."

Click here to download the BT Business Partner Sales Proposition

JMC IT is set to host one of the UK's largest IT business events at Manchester Airport's Concorde Conference Centre on 11th November.
 
The IT Strategy Briefing 2014 (ITSB14) will see Salford-based JMC joined by Microsoft in presenting the latest technologies and applications to business people from across the region.

Over 300 attendees have registered to attend from national organisations and suppliers including Microsoft, Dell, Citrix and Symantec will be exhibiting.
 
Taking place beneath the wings of the iconic Concorde aircraft, the event will also showcase JMC's 'Re-engineering IT to empower people and business' vision and feature a demonstration of Microsoft's Azure cloud platform.
 
JMC's MD Andrew Burgess said: "We want to show business leaders how innovation through IT can bring about massive cost reductions and enhanced profitability for businesses - especially through off-premise cloud solutions that reduce capital expenditure.

"ITSB14 will be a fantastic opportunity to make connections and gain such insights from top industry thought leaders."
 
ITSB14 will take place between 8:30am-2:00pm on Tuesday 11th November.

Mobile airtime distributor Daisy Distribution has added HTC to its hardware portfolio with the aim of increasing HTC's share within the business' handset mix by 5%.

The introduction of the HTC partner programme is the latest step within the Ipswich-based company's objective to grow its handset sales.

To achieve the growth target, Daisy Distribution's teams undertook a training exercise to ensure that there is a high level of knowledge when discussing HTC handsets.

The launch of the partner programme will also be supported by a series of promotions and sales-driven incentives to its partner base.

Julien Parven, Marketing Director at Daisy Distribution, commented: "Although we have offered HTC handsets for some time, we have now entered into an agreement to actively promote the device range across our business.

"HTC currently only represents a small percentage of our handset mix, but we would like to grow this number in line with the handset manufacturer's overall market position."

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.