Comms Dealer

French technology consultancy Capgemini kept its full-year sales and profitability goals on Thursday as revenue returned to positive growth in the third-quarter amid improving demand in Europe, notably in its core French market.

Capgemini reported a 1.6% rise in like-for-like sales to €2.45bn, an improvement from a 0.4% decline in the second quarter.

"This year, we have reported steady improvement in our performance, quarter after quarter, a trend that should continue in the fourth quarter," Chief Executive Paul Hermelin said in a statement. Outsourcing services returned to growth in the third quarter, while Asia and Latin America posted 14.6% growth, and North America, the second-largest contributor to revenue after France, grew 1.3%.

France, which had returned to growth in the second quarter, posted a 3.5% increase in revenue in the third, but Britain and Ireland contracted 2.5% due to a fall in public sector revenue. The rest of Europe grew 0.1%.

Market conditions are gradually improving in Western Europe, where overall IT spending is on course for growth of 2% this year (1% excluding phones), and where economic momentum has taken a turn for the better in many countries. IDC assumes that this gradual recovery will continue next year, translating into IT spending growth of 3% driven mainly by strengthening sales of commercial software.

"Momentum in developed economies has been broadly positive since the start of 2013," said Minton. "The gradual turnaround in Europe is restoring business confidence, leading to a strengthening of our assumption that next year will be better than this year for most IT vendors. In Japan, some sectors have performed stronger than previously expected. But while the news from developed economies has been mostly positive since January, the drag on overall industry growth this year has been the slowdown in emerging markets."

The IDC Worldwide Black Book, just released, shows that worldwide IT spending is expected to accelerate next year after dipping to its slowest pace of growth since the financial crisis in 2013. Overall tech spending is on course to increase by 4% this year at constant currency, reaching $2.04 trillion, down from last year's growth of 5% due mainly to the slowdown in key emerging markets including China and Russia. IDC forecasts that in 2014, a rebound in China and continued momentum in the US and Europe will see a return to overall industry growth of more than 5% (reaching $2.14 trillion).

Cloud comms and collaboration solutions provider 8x8 has signed a definitive agreement to acquire privately-held Voicenet Solutions for $18.4 million in cash.

Voicenet Solutions provides a range of UC services supporting both SMB and mid-market businesses, including fixed mobile convergence applications.

"The acquisition of Voicenet clearly demonstrates the execution of our international expansion strategy as well as our move up market," said Vik Verma, Chief Executive Officer of 8x8.

"With its existing operational footprint, team of skilled and dedicated employees, solid mid-market and distributed enterprise customer base and reputation in the UK, Voicenet provides 8x8 with an opportunity to replicate in Europe the successful, profitable SaaS communications and collaboration business we've built in North America.

"We view this expansion model as a key component of our global reach initiative and, including this acquisition, we continue to target non-GAAP net income as a percentage of revenue in the high single digit range."

This acquisition provides 8x8 an operational presence in Europe to support its US customers with multinational offices and at the same time enables Voicenet to market a broader range of services to its installed base of customers.

"We look forward to welcoming our new Voicenet employees to 8x8 and providing their UK customers with our comprehensive, secure and reliable cloud communications and collaboration services," added Verma.

Kevin Scott-Cowell, CEO of Voicenet Solutions, added: "Voicenet has an established base of over 1,000 business customers and is well respected in the UK market.

"8x8 has a suite of cloud communications and collaboration services that will strengthen and extend our existing portfolio of services among our growing base of UK and multinational customers."

Mitel and Aastra are to merge creating a billion dollar company with one of the largest global footprints in the industry, number one market share in Western Europe, a $100 million cloud business and a global installed customer base ready for upgrade as the $18 billion business communications market prepares to migrate to software-based cloud services.

The agreement, unanimously approved by the Boards of Directors of both companies, sees Mitel acquire all of the outstanding Aastra common shares for $6.52 in cash plus 3.6 Mitel common shares per each Aastra common share.

Using the Mitel closing common share price on November 8, 2013, and a CAD/USD exchange rate of 0.9531, this amounts to CAD$31.96 per Aastra common share, a total value on closing to Aastra shareholders of CAD$392M and represents a 20.9% premium to the 30-day volume weighted average price (VWAP) of Aastra common shares as of November 8, 2013.

The combined company will be headquartered in Ottawa, Canada, and will operate under the name Mitel while continuing to leverage Aastra's strong brand recognition in select European markets. The executive management team will continue to be led by current Mitel President and Chief Executive Officer, Richard McBee.

"The business communications market is ripe for consolidation and on the cusp of a mass migration to cloud-based services. We believe that small competitors with narrow focus and limited global reach will quickly be marginalised," said McBee. "Aastra's solid financial structure, complementary portfolios, geographic reach, and large installed-base immediately augment and expand Mitel's market footprint, enabling us to capitalise on a unique opportunity to leap-frog the competition and lead the market."

Reporting to McBee will be Chief Financial Officer, Steve Spooner, and Aastra's Co-CEOs, M Francis Shen, who will assume the position of Chief Strategy Officer, and Tony Shen, who will assume the position of Chief Operating Officer.

Mitel will increase the number of directors on its Board from eight to nine. Two existing members of the Mitel Board will step down and Aastra will have the right to appoint three new board nominees to fill the vacancies.

"Our two organisations are tightly aligned culturally and financially with little product, geographic or channel overlap," said Shen. "We are stronger together, and combined we will be a major global player. We are confident that this merger will create value for our shareholders, customers, partners and employees."

The combination of Mitel and Aastra will enable the companies to significantly expand their organisational scale and scope with a combined market presence of over 60 million end users in more than 100 countries and a global network of more than 2,500 channel partners, ideally positioning the new company to immediately capitalise on several key strategic growth opportunities.

High tech home environments are outpacing technology adoption in the workplace where incoherent IT strategies have created a state of apparent bedlam, suggested panellists during a Comms Vision debate.

But according to Gamma CEO Bob Falconer the discussion should not dwell on the challenges faced by CIOs but focus instead on delivering to the channel a set of bundled products and services that are relevant and easy to sell.

"There has been much talk about the challenges faced by CIOs but the majority of the channel sells to companies with no CIO therefore we can't realistically position ourselves as a consultancy business or a trusted advisor," he said.

"The lower end is about selling packaged bundles, so our focus is to provide a comms service that can be taken to SMEs in a transactional way."

The channel must work hard to reinstate its control over IT procurement and management, believes David Hatley, General Manager Indirect Sales, BT Wholesale. "I've seen my family overtake in technology many of the businesses I work with," he stated. "Our challenge is to join the dots for our customers. The power lies in bringing IT together and engaging with our customers and their employees."

Jacob Morgan, Principal at Chess Media Group, urged delegates to be proactive and lead by example. "Many organisations make an investment but don't know what to do with it," he added. "You've got to focus far beyond the technology to make it work."

Kcom's response to harnessing and reining-in corporate IT bedlam is optimistic and clear in its outlook. "Technological development is like the growth of an unruly teenager, unpredictable and hard to control, but now it's more manageable, enabling us to pull together digital tools that create platforms to collaborate, share knowledge and engage," commented Sally Fuller, Director of Strategic Propositions.

"This is the new world we are moving into, and to open doors the conversation must begin at this level, offering trials that can be scaled up. It's about partnering and focusing on the customer in the context of an adaptation strategy."

Coms plc has agreed to acquire from Redstone plc its subsidiary Comunica Holdings and its wholly owned subsidiaries Comunica Group and Redstone Converged Solutions.

Founded in 1995, Redstone has grown to an over £30 million annual revenue base with 300 staff.

In the year ended 31 March 2013, Redstone reported turnover of £30.8 million and EBITDA of £2.5 million.

Redstone has a list of blue chip clients and partners including Cisco, IBM and HP, and Coms has identified potential for growth in new markets and industries for the enlarged Coms Group.

The initial consideration of £7.65 million will come from Coms cash resources and a new £2.5 million overdraft facility secured against the Redstone order book.

A further cash deferred consideration of £1.85 million will be paid on the anniversary of the date of signature of the Sale and Purchase Agreement.

Dave Breith, Coms CEO, stated: "This acquisition is earnings enhancing and provides us with the scale we need to further build the Coms group of companies.

"It provides us with a significant increase in income generation to fund the enlarged business and also establishes a sound infrastructure, which allows the Coms group to provide an integrated service for our customers from telecoms connectivity through to telecoms solutions.

"While Redstone will operate as a subsidiary of Coms plc we have identified significant commercial synergies and cost savings that can be achieved by bringing these two businesses together under the Coms umbrella.

"As a result we will achieve a significant uplift in gross profit, access to European markets currently served by Redstone and a significant value add to customers of both businesses.

"This acquisition fundamentally changes the dynamics of our business and positions us for the next phase of growth."

Data creation is a challenge for all businesses, ushering in a fundamental change to the way businesses interact with customers within a new commerce paradigm.

And there is no advantage in believing that Big Data is a future development because high-speed growth burns at the core of this new ecosystem.

"Big Data is not just about volume and variety, it's also about velocity," explained Peter Conquest, Managing Director, Hybriss.

In an address to Comms Vision delegates, Conquest, a telco specialist with 25-plus years experience under his belt, explained that Big Data is approaching fast and gathering speed and its velocity is also emblematic of many organisations that are looking for fast ways to get into new markets via different channels.

"This represents a big IT challenge," he added. "We are experiencing rapid change which needs to be managed. It is important to know who your customers are, where they are in their lifecycle journey and manage this information effectively. Customers are adopting new touch points and they demand a cohesive experience using one interface.

"These demands, combined with the massive data that is created via social mediums and Internet usage, for example, has prompted the emergence of a new product category, a scalable commerce platform architected for the Internet that accommodates new technologies as they emerge and controls data from various touch points."

Such platforms unlock the potential to enhance and personalise customer engagement, build customer profiles, view preferences and track online behaviours in a way that enables companies to offer relevant products and services. Nor is that all, the potential seems without boundaries in terms of the minute specifications that can be leveraged to target offers and promotions to individuals.

"Big Data enables organisations to gain a 360 degree view of their customers which empowers them to predict the likely next steps that individual consumers will take," added Conquest.

"These customers may be B2C or B2B, they are your staff, family, they are all around us, fickle by nature, always connected and uncaring of which channel they use, therefore we need a single view of the customer. The big challenge is managing the three 'Vs' - Variety, Volume and Velocity."

Attractive cost factors associated with the deployment of cloud solutions have catalysed a resurgence in UC, laying the foundations for a growth phase in collaboration solutions that build on this trend, claimed Christian Szpilfogel, a Chief Architect at Platinum sponsor Mitel.

The market's response to virtualisation should ring every alarm bell, he suggested, noting that many organisations are now ready to move into the cloud and take advantage of UC interacting with collaboration, mobility and the consumerisation of IT.

"What does this mean to IT organisations?" he asked. "By 2017 CMOs will outspend CIOs. We have entered an age in which organisations have a community of people underserved by the current IT model."

Szpilfogel also noted that an 'inversion of IT' is evidenced by generation X and Y employees importing their IT preferences from the home environment into the workplace. And with aggressive cloud growth in the mix this trend can only gain in locomotive power.

"These are complicated times for CIOs," added Szpilfogel. "They have a new mandate and we need to lead them to the path of enlightenment."

Szpilfogel has witnessed organisations move to data centre consolidation as a first step along this path, followed up with a virtualisation plan that leads to an off-site strategy.

"The push towards applications and cloud represents huge revenue resource," added Szpilfogel.

Going 'lite' on Big Data is a big mistake and resellers risk being robbed of an opportunity if they fail to see how smaller companies can work with Big Data.

That's according to Sally Fuller, Director of Strategic Propositions, Kcom. "Market entry to Big Data is easy," she claimed. "In the first instance it's about experimentation, and it's easy to set up a trial quickly. There is no real barrier to entry, but finding a data scientist to make sense of the information is a challenge."

Gamma CEO Bob Falconer has helped to send talk on 'convergence' to the bottom of the industry dictionary charts – now, its all about 'business comms', he believes.

"We are not converging as an industry, we are overlapping," stated Falconer. "And heated debates on the merits of becoming a specialist in one area of the market versus being a solution provider are now dead. From as proposition point of view everyone is selling business comms."

Gamma has famously evolved from its beginnings as a wholesale provider of voice selling lines and minutes. Its business transformation is characterised by the firm's on-boarding of next generation products and services; and such actions have, believes Falconer, brought into question the real and divergent meaning of the terms 'convergence' and 'business comms'.

In a bold attempt to clear up the confusion he proposed the following definition - voice, data and mobile overlaid with software services, all joined together.

"A key focus for us is to provide more joined up services with price bundling, plus added software related services that add value," he explained. "The proposition needs to be more straightforward, enabling resellers to more easily sell business comms."