IT Services discussion forum

  • Oct 2012
  • Media & Technology

We and our co-hosts, CIL, were delighted to gather a stellar group of industry leaders at our recent IT Services round-table at the Delaunay in London. The debate was chaired by Martin Leuw (chairman of Lyceum-backed Clearswift and former CEO of IRIS), and with representation from large corporates, PE investees and owner-managed businesses, we had a great cross-section of views from across the industry. Some of the topics explored were:

Cloud: There was consensus that Cloud remains a major driver of change and demand in the industry. Its impact is evident across the sector, from the eye-watering multiples applied to pure-play data centres to the commoditisation driven by Amazon EC2 and others, and the ongoing move to SaaS delivery. Cloud, however, is seen as more of a new ‘badge’ to an old service.

Data Centres – own or outsource? While there was consensus on the Cloud, there was disagreement on the need for a service provider to have its own data centre infrastructure. The transfer of data off-site is gathering momentum, although it clearly doesn’t suit all customer groups. One of the knock-on effects of this and the move to BYOD is the increasing demand for security services, with businesses finally focusing on disaster recovery and business continuity as strategic imperatives. Certain clients could be encouraged to move more to the Cloud if the service provider had control of its own physical assets.

Private Equity Investment & Exit: Although some private equity houses have historically had their fingers burnt in the sector, the majority of attendees felt that the high levels of PE interest remain justified and that investment in buy-and-build platforms would continue. The fragmented nature of the market offers ample acquisition opportunities; the question then becomes exit. The most likely routes are sale to an overseas trade buyer or secondary MBO.

Building Shareholder Value: A broader debate on value creation ensued, and it became clear that IP and service differentiation and scale remain key to generating strategic interest and premium valuations from acquirers.

Opportunity: Attendees were unanimous on the scale of the opportunity; by the end of the discussion, the question on many lips was when does a business become too big to attract a suitor? A high-quality problem to have, and testimony to the strength of the IT services sector.

Our IT services roundtable lunch was held at The Delaunay, and was attended by:
Mark Brooks-Wadham, Managing Director – Charterhouse Voice and Data Plc
Carmen Carey, CEO – ControlCircle Ltd
Charles Davis, CEO – The SAS Group of Companies Ltd
Mark Howling, CEO – Pulsant Ltd
Justin Keatinge, Managing Director – Version 1
Steve Lamey, COO – Kelway (UK) Ltd
Gordon Matthew, Chairman – Intrinsic Technology
Alastair Mills, CEO – Six Degrees Group
Vin Murria, CEO – Advanced Computer Software Group Plc
Brad Shore, Finance Director – Pervasive Networks

Share this page