Comms Dealer

Huawei's European R&D operations, currently operating across 13 sites with a total head count of 800-plus, are to receive a minimum of 10% reinvestment every year, according to VP of the European Research Centre Renato Lombardi.

"In 2012 we reinvested over 13% of our global revenue in R&D, one of the largest single commitments to R&D in the ICT industry by a private company," he claimed.

"Our investment in R&D in Europe also continues to grow. It doubled between 2010 and 2013 and we expect it will double again over the next five years."

Huawei's European development spans ICT hardware and software, microprocessing, optical data transmission and wireless networks.

"As Huawei expanded its sales operations internationally at the turn of the new millennium, it chose, like many other enterprises, to implement a distributed innovation strategy," added Lombardi.

"This led to the creation of R&D facilities in multiple geographies, each with a specific innovation focus. The majority of Huawei's R&D sites were located in established innovation clusters or centres of excellence. These decisions were driven by a number of requirements."

One of most important requirements was to locate R&D operations close to customers within the existing ecosystem and linkages with universities and research institutions.

This led to the location of R&D sites here in northern Europe where clusters had been established in mobile network and base station technology development as well as mobile device design," added Lombardi.
"For the same reasons, optoelectronic research operations were located in Italy, in Germany and in the UK."

Fast-expanding GCI has taken 75th position in The Sunday Times Fast Track 100 of top performing privately owned companies and entrepreneurs, building on its June 2013 ranking as the 19th fastest growing privately owned businesses in the HOT100.

GCI's Managing Director John Whitty commented: "We have found ourselves in a great position to maintain our quality service whilst continuing to expand the breath of products on offer and customer base here at GCI."

GCI offers the complete suite of ICT products ranging from managed IT solutions and connectivity to cloud-based services.

The provision of machine-to-machine (M2M) solutions is fast becoming a hot market opportunity with demand projected to grow significantly over the coming decade.

Although often seen as a nascent industry sector the market is already worth $10bn worldwide with forecasts for $88bn by 2023, according to a report by Analysys Mason.

M2M solutions have been less affordable to SMEs than to large enterprises and the public sector, but all that will change and affordability will not be a prohibitive factor in the SMEs segment as M2M solutions become less expensive to implement at the application layer, and operators and service providers start offering off-the-shelf solutions.

"Operators are already generating strong revenue, and Future growth opportunities will be realised in emerging regions as applications are tailored to local markets and the cost of solutions declines," explained report author Morgan Mullooly.

"The forecast predicts that SMEs will account for an increasing percentage of total M2M device connections. Excluding connections in the utilities sector, the proportion of SME M2M connections will increase from 14.6% of total connections in 2013 to 24.6% in 2023, representing a CAGR of 33%."

Operators have already been successful in selling productised M2M solutions such as fleet management to SME customers, he pointed out.

"We believe operators will find success in selling security and surveillance, some healthcare solutions and some retail sector M2M solutions to SME buyers," added Mullooly.

He also forecasts that the number of M2M device connections will start to increase in emerging markets by 2015.

"Developed markets' share of connections will decline from 68% to 62% during the forecast period as operators in emerging markets seek additional customer connections and the cost of deploying M2M solutions declines," added Mullooly.

"As operators in developed markets have learned, it takes 18 months or more to organise the various aspects of an M2M business. Operators that have assembled the appropriate teams and resources will be poised for greater success as the market begins to grow."

Emerging market operators are currently focusing on growth in the number of mobile handsets, he pointed out.

"Running an M2M business carries a higher risk than a traditional mobile handset and broadband business," commented Mullooly.

"However, we expect that M2M solutions in the utilities, automotive and security sectors will have more easily understood business models by 2016, and operators will be more willing to sell these M2M solutions."

Maintel's unaudited interim results for the six months to 30th June 2013 show a modest rise in group revenue of 1% to £13.6m (H1 2012-£13.5m) derived from organic growth.

Adjusted profit before tax is reported as up 0.2% at £2.36m (H1 2012-£2.35m); unadjusted profit before tax was £2.00m compared with £0.19m in H1 2012, the latter stated after the expensing of acquisition consideration of £1.79m

Adjusted earnings per share up 2% at 16.9p (H1 2012-16.6p); unadjusted earnings per share were 14.4p, compared with a loss of 2.8p per share in H1 2012, the latter after expensing the acquisition consideration

Period end cash of £0.7m and no debt following payment of the final tranche of the mobile acquisition and increased dividend payments.

Interim dividend proposed of 6.7p per share (H1 2012 - 6.3p), an increase of 6% year on year.

Eddie Buxton, CEO, said: "This has been a solid six month period in which we have consolidated in key areas and focused on both organic and acquisition-led growth for the second half of the year. The further development of the Maintel customer base in the UK and Ireland through the acquisition provides an excellent platform for growth as the economy recovers.

"Telecoms is, and will remain, a highly volatile and competitive marketplace and Maintel has a proven ability to capitalise on developing market sectors and deliver value to customers and shareholders.\"

Outsourcery has extended its market reach following an agreement with Ingram Micro UK under which the distributor's partners will sell Outsourcery's hosted version of Microsoft Lync. Piers Linney, Co-CEO at Outsourcery, said: "Many resellers are unprepared to meet cloud demand from customers and our partnership with Ingram Micro is an important step to address this."

The partnership signals Ingram Micro's strategy to develop its UK cloud initiative having witnessed the market shift to cloud, particularly in the United States.

Apay Obang-Oyway, General Manager, Enterprise Software and Services at Ingram Micro, commented: "We have created the Advanced Solutions Division to help channel partners identify and pursue opportunities within advanced technology categories.

"Through higher touch enablement programmes, dedicated resources and our strengths in the areas of specialisation and scale, Ingram Micro will help its partners to grow and diversify while facilitating development in the channel.

"The successful model Outsourcery has already established complements these objectives so taking hosted cloud solutions to market together was the natural next step."

The global PBX/IP PBX market continued to fall in Q2 2013, recording a decline of 4% year-on-year (period April to June 2013 inclusive) and a 1% decline sequentially.

The total market volume in Q2 2013 was the lowest witnessed in three years, according to MZA's latest report.

The largest declines were seen in the enterprise (solutions with more than 100 licenses) market, down 6% year-on-year, with a more moderate decline noted in the SME market (solutions with under 100 licenses).

According to MZA the greatest impact on the global PBX market came from the largest regional market Asia Pacific which suffered an 8% year-on-year decline in Q2 2013, influenced notably by a strong 15% decline in the 100-plus segment.

The markets in western Europe and Middle East and Africa fell relatively moderately, while the markets of Latin America and Eastern Europe suffered double digit declines year-on-year.

The north American market once again bucked the trend and grew by 7% year-on-year. The region also experienced a second successive period of sequential quarterly growth.

A strong performance in western Europe and north America has taken Avaya to number one position in the global PBX/IP PBX market, achieving a 13% volume share in Q2 2013.

Cisco, following several strong quarters, had a more challenging Q2 2013 and took the number two position with a 12% volume share.

"Avaya has a strong presence in both the SME and enterprise space, whereas Cisco's position is mainly attributed to its enterprise presence," stated Stephanie Watson, General Manager, MZA.

Meanwhile, Panasonic's performance, driven by its strong SME and Asia Pacific business, rebounded after a disappointing Q1 2013 taking the vendor to third position globally with 11% volume share.

NEC, with a good presence in both SME and enterprise segments, ranks fourth in the period with a 9% volume share. NEC's shipments fell back (most notably in its home Asia Pacific region) following a record Q1 2013.

Also in the running are Siemens, Alcatel-Lucent, Mitel, Aastra, Samsung and Microsoft. Siemens, Alcatel-Lucent and Aastra share a strong top four position in the European market but are placed lower in other global regions.

Mitel strengthened its north American position in Q2 2013, contributing to its market share growth.

Samsung's strong performance in Asia Pacific similarly contributed to overall market share growth for the Korean vendor.

Microsoft continues to make strong inroads into the enterprise market with a top six position in this segment already. But lesser presence currently in the SME space means its overall market share is lower.

Watson added: "The remainder of the market is fragmented and includes vendors Huawei, which has a strong position in both Asia Pacific and Middle East and Africa; and Ericsson-LG whose business is currently weighted towards their home Asia Pacific region.

"Similarly, Shoretel occupies a strong US position however its share at a global level is smaller resulting from its lower position in other global regions."

A growing number of customers are on the hunt for single sources of security rather than trying to make point solutions work together, according to market research firm Infonetics.

"There's never been a time when the world was more tuned-in to broad privacy and security issues, and with the recent revelations about the NSA's PRISM surveillance program, consumers and businesses around the globe are re-evaluating their security posture, preferred vendors, and deployment strategies," noted Jeff Wilson, principal analyst for security at Infonetics Research.

"While it's too early to say if the NSA debacle will have an impact on security spending, one trend in the security sector is clear - buyers are looking to consolidate security platforms wherever they can. The resulting contraction in standalone security products is directly attributed to 2 things: customers moving to integrated product solutions that support the functions of the original standalone products with adequate performance and security, and customers transitioning away from product-centric security rollouts to hosted/SaaS solutions."

Worldwide network security appliance and software revenue totaled $1.6 billion in 2Q13, an increase of 4% sequentially, and integrated security appliances have gained share every quarter since 4Q11, and Infonetics is forecasting quarterly share gains through 2Q14

Cisco, Check Point, Fortinet, HP, and Palo Alto Networks all posted strong revenue results in the network security market in 2Q13 as Juniper's revenue declined for the 4th straight quarter; however, Infonetics believes that 2Q13 will be Juniper's bottom quarter.

Distributor Tech Data says it intends to file its update as soon as possible in response to a NASDAQ reminder. The distribution giant has had to redo its financial results for the last three years after discovering errors in its UK subsidiary's accounts. The company reported mistakes in "vendor accounting" by its UK arm Computer 2000.

It says it has been sent the expected "10-Q Notice of Deficiency" from the NASDAQ Listing Qualifications Department stating that it is not in compliance with NASDAQ Listing Rule 5250(c)(1) because the Company has not timely filed its Form 10-Q for the quarterly period ended July 31, 2013. 

NASDAQ requires TD to file an update to its plan of compliance with respect to the Second Quarter 10-Q no later than September 26, 2013

The First Quarter 10-Q, the Second Quarter 10-Q, and the Fiscal 2013 Form 10-K filings are delayed pending completion of the restatement of prior financial statements announced on March 21, 2013.

Maintel has diversified its revenue base and increased its presence in new markets following the acquisition of Datapoint's UK and Ireland operations for £3.5m in cash. Eddie Buxton, Chief Executive of Maintel, commented: "It has been our long established goal to acquire a complementary asset to add to our growing base of existing revenues.

"We have been tracking Datapoint's progress for some time, and this acquisition will materially improve the breadth of our product offering while also providing clear momentum for the next phase of Maintel's growth.

"We anticipate the acquisition delivering clear shareholder value over time. The acquisition is expected to be earnings accretive for its first full year of ownership to December 2014."

The Datapoint UK&I companies provide consulting and professional services in Unified Communications to a base of approximately 100 customers, with a particularly strong presence in the contact centre sector. Other services include maintenance and equipment sales.

Maintel has paid £1.0m in cash to the Administrator of Point-On Holdings Limited, the parent company of the Datapoint UKI Companies in respect of the Acquisition, and has settled the overdraft of those companies at completion to the sum of £2.5m.

This equates to total consideration, excluding any professional fees incurred, of £3.5m. There is no deferred or contingent element to the consideration for the Acquisition.

In conjunction with the acquisition, the company has secured a £3.0m term loan, repayable over three years and a £1.0m overdraft facility.

The Datapoint UKI Companies were acquired with no cash and no debt. The aggregate unaudited revenue of these companies in the year to 30 June 2013 was £15.8m, although it is envisaged that revenues will be approximately £2.5-3.0m lower in the current financial year due to lower levels of non-recurring business and a degree of attrition.

Soccer aces at Communicate Better lifted their game to score a 4-2 victory over Elite in the final of this year's annual Comms Dealer Five-a-Side tournament held at the Goals Soccer Centre in Leicester.

Communicate Better's top performers produced a masterclass to overturn three times trophy winners Elite in a thrilling match. Welcomm Communications narrowly missed a place in the final clash, coming third overall.

The event, sponsored by Nine Group, also netted £4,500 for Comms Dealer charity Sparks.

Communicate Better CEO Wayne Cartwright said: "This is our first Comms Dealer tournament so it was extremely pleasing to come home with the Silverware. Our football at times was superb.

"This is a fantastic event that supports a worthwhile charity and we will definitely be back next year to defend our crown!\"

Comms Dealer Editorial Director Nigel Sergent enthused: "Congratulations to Communicate Better on a fabulous victory! And a big thank you to Nine for supporting the event, and all of the teams that contributed to this fantastic tournament to raise such a magnificent sum for our charity Sparks."