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2 weeks ago I would have said yes but the recent news of re forecast and more cash I would say too risky for me and not sure I would make a major upside at any value. This will eventually be taken private or sold at a low premium by the time they burn through this £5m, which by my real word reckoning will be by this time next year.

I assume the revenue has grown but by how much who knows. I would be surprised if they made the £12m turnover considering how early in the year they declared the revision but the HY results will give some idea. The fact EBITDA break even isn't until 2016 tells you that the MRR wont cover the cash and they will continue to burn, IMHO the £5m they are asking for now wont be the end of it........ I have pointed out many times that at some point they will need to invest in refreshing the original HW they put in. Even f they phase this over a period it will continue to cause an outward cash flow. Replaced roles in some shape or form with internal candidates. IMHO they still don't have the right people in the right roles except for maybe the Head Of INF. He was from the company we don't talk about (rise) because Out don't want you to know that most of last years MRR growth came from them taking over the Rise platform.

I have said before that between £5m and £7m market cap they become value to me because they had £600k recurring revenue at the end of last year. Every provider now wants MRR and needs to show MRR growth so that has a value and I am sure some of the players would pay over £5m and just engulf it to their own platform. It is a bit like what OUT did when they took over the Rise platform. They closed it all down and integrated services to their own. The difference is they didn't mention it and the base wasn't large enough to make a significant dent in their ongoing costs. What niggles me now and we wont know until next month when we see the HY results is why the revised revenue forecast for FY14 and FY 15 so early in the year. My view is that they have some contract losses and the bigger contracts are not proving as fruitful as they may have once thought / announced. They have had a lot of issues and not to mention an entire clear out of staff: Product Director, Sales Director, Head of Channel, head of Infrastructure, Head of operations and Head of Marketing. All the issues with the platform and the personnel shift, with which a lot of relationships would have gone, Will make large companies feel uneasy and may have slowed or even halted progressing in the cloud with Out. They made a load of noise about Pearsons and how they were going to expand globally to support this contract and since the original announcement there has been nothing. If this was going really well and producing increasing levels of MRR you would think a follow up announcement rather than another unnamed larger customer full of potential. As I have said all along. The cloud is the way to go and it will eventually become profitable for some but the problem always comes in funding it to break even. So many large companies with deep pockets and alternative revenue streams to fund the investment are already there and OUT are now lagging behind. HP are one of the IL3 G cloud suppliers and Vodafone have a whole load of their own offerings. Out did have the jump on most people with Full Enterprise Voice on Lync but now there are much bigger, well funded companies doing it better and cheaper. If they can fund it then long term they will eventually get to break even and get bought but the PR and Bull from Piers may just have backfired on him and this wont get anywhere other than a fire sale or get taken back private. I will keep a keen eye but in the words of Theo Pathitis "I am not giving you a penny of my kids inheritance"

Just sharing the benefit of my knowledge on this sector and especially this company. When they launched I knew it was all smoke and mirrors. When they listed I still knew it and have been posting the insight i have to give people a clear view so they can make their own decision on top of doing their own research. Seeing the share price go from £1.30 to 22p my insight and value may have helped some people make a decision not to invest and they would have been right.

Yes they do. It is exactly the same.

‘We will be the first Microsoft-validated partner to build a cloud platform for the Government,’ he says. ‘The City does not quite grasp the scale of the opportunity.’ We have established many times that the quote above is completed bull. there were at the time he made that comment and still are, 4 companies already operational and in the G-Cloud store selling IL3 certified services that Out are building. By the time they get this live that number will be at least 6 and who knows what Vodafones plans are.

We can all spin a story but how much of it is true: When he left the city in 2000 Doctorsworld was where he and others invested and then went under. He then had a string of failed investments before buying Genesis Communications, using external funding and they run that business and used the profits to build Outsourcery, that was the plan. The problem came when the profits from Genesis would no longer fund Outsourcery and they needed cash. They sold the Genesis business to Daisy (approx £12m) and used the cash to fund Outsourcery which should have seen them get to profitability. They soon ran out of cash and listed on aim to raise a further £13m which should have seen them through to profitability and meant they would build a business worth £500m. Piers words not mine...... They then decided to build a secure cloud for G - Cloud and raised another £4m. But they had also almost burnt through the £13m. We are now in the position where the Secure Cloud isn't launched and wont be until at least the end of this year and they need another £5m. This will see them through to break even in 2016.....Piers Words not mine. No further mention of the £500m business...... The business has a market cap of £8m and according to Piers ramblings over the year has already sucked up £50m in cash. Another £5m makes that £55m in total so hardly a success. A s for being a successful private investor. He has been involved in over 15 businesses all of which have folded and according to companies house has had no business success. Two of the business he invested in, but doesn't like to be linked to as he was only an investor, went bump owing over £500k. Try reading here: http://www.mirror.co.uk/tv/tv-news/new-dragons-den-star-piers-1777744 And here: http://www.shareprophets.advfn.com/views/6803/dragon-s-den-star-piers-linney-a-career-of-business-failure-revealed-and-the-sham-projection-of-his-outsourcery-flotation By all means do your own research and apart from words stating "Look how successful I am" "Entrepreneur" "Private Investor" "Tech Sector Expert" Point me to one company he has made an investment or run in the tech sector, or any sector for that fact, that has been a huge success? I have been in this sector for 20 years an now a lot of very high level people, private equity backed and public business leaders and apart from the last 5 years I have never even heard of Piers. I also don't know anyone, or can find on Google, anyone else in the tech world that has.

Hope is not a strategy. He has never made a single business work in his life so what makes you think this would be different? He doesn't even have a tech background so doesn't really understand technology or the sector.

Still think it has a little bit further to go.

I wouldn't say you are not being brave but more you are being very sensible. This will drop to sub 20p when the debt and equity deal is announced, if not before. I would be surprised to see it get close today as people attempt to get out ahead of the imminent bad news.

You have to admit though that is a ridiculous release. We said we would update you so here is the update. We are moving forward and will update you again shortly but this time we wont commit ourselves to a time frame as we are incapable of making a prediction on Revenue, MRR or dates we will achieve something. we find if we do commit we always miss them and then have to offer revise dates and look embarrassed.

For me this just goes to show the only people that are profiting from this......... In terms of remuneration I note that the two main chaps Piers Linney and Simon Newton earned £167,438 and £164,216 respectively. Simon also got a £15,807 contribution to his pension fund. But it gets better. In 2013 they were both awarded bonuses of £42,000. For what FFS? For sending £9 million to money heaven? For presiding over a company that within 13 months of listing was going to have had to issue a profits warning and seek a rescue bailout? For presiding over share price catastrophe? - See more at: http://www.shareprophets.advfn.com/views/6798/outsourcery-when-s-the-rescue-bailout-crony-capitalists-at-work#sthash.1X9zUEet.dpuf

You have to fear for SME's now that the dragon is assisting the government. They don't good enough job of screwing things up without his help. Goes to show what a bit of TV fame can do ahead of real experience. Piers can't even get his own business selling to SME's and had no history of success. All a bit of positive PR for the government who are seen to be doing something. There are plenty of business in the IT sector that sell to SME's on scale that could she given them real world advice. That would be more value to all than the wild dreams and ambitions of someone who actually has no idea what the SME market need from IT.

Some very interesting views in these articles and goes along with my general theme about this stock and the "Pioneer of Cloud Computing" Thanks for correcting my point on the share as not saying a bargain now but at half this price it would be a bargain. They do have MRR of £600k and a larger company would swallow that up and get economies of scale and make a healthy profit on it so it does have a value. The trouble here is they just can't get the sales engine working, even with their reported 500+ partners. Because in my knowledge of this sector and OUT as a business they do not have anything unique and are well behind other more established players. The dragon can keep telling you it would take others years to follow. We will be the first iL3 provider. I am going to build a £100m by 2015 business, no make that £500m. When the reality is it won't even break even until 2016 and that will be on a turnover of less than £20m. At the end of the day talk is cheap but the reality is he just can't deliver and never has been in able to in all if his 15 entrepreneurial attempts. The big problem for Mr Linney this time is he has put himself in the media limelight and a big fall from grace is coming. How can you have a business that sells through 500+ partners that include HP, Virgin Media and Vodafone that doesn't even turn over £10m? Maybe the goose isn't so golden.

Can see the headline but don't see any story behind what company and when..

This in my view as stated before is now getting close to the real value of the company. If we get to a market cap of around £5 - £7M I might actually buy some. This will become a bid target and could make a quick double your money.

Interesting view from the industry press regarding OUT and G Cloud. Apparently Outsourcery haven't sold anything on G Cloud yet, since it's launch in 2012. http://www.channelregister.co.uk/2014/07/29/linney_gcloud/

EBITDA break even has moved back until 2016......all this talk of others would need to play catch up is rubbish. I know plenty of suppliers that do what OUT do and make a profit. Also secure O Cloud won't see an order until Jan at the earliest.

The problem with forums like this is that some people focus just on the positives and come out with phrases like "Absolute Bargain" If you look at the reality this drop is not a surprise. Yes they announced a contract win, but it is just one and will take time to come to fruition. The Pearsons deal was supposed to be global and give them access to 20,000 users but that doesn't seem to have added huge value over the year. You can't get away from the fav they have spent £50m to build a business that is sub £10m turnover and burning cash at a shocking rate. Growth forecasts have been cut for this year by 33% and we aren't even halfway though the year. That suggests they must have lost some significant customers as the new ones aren't going to get them anywhere near the growth they need. They have also cut forecast for next year. With the G Cloud coming surely they need to be more ambitious or are they making sure they don't keep disappointing the market? They said in a recent RNS that they were going to need cash so that won't be a surprise. I can't see them doing a placing and any borrowings are going to be very expensive due to risk. Also if such a great company and they believe in it why aren't the directors adding more funding? Piers brig a dragon surely knows a good deal when he sees one so why doesn't he pile in?

Probably because July is coming to an end and the update on how they intend to raise the additional funding they need is about to land. It is very unlikely they will do another placing as price too low and would dilute the shares too heavily. I assume they will take on more debt at a very high rate of interest in line with the other loan they already have. The problem they have is by recently downgrading this year and next years forecast by 33% the funding is going to be very expensive as the risk is now so much higher. The contract win will help and if they have more to follow then they may get some takers who can see the progress starting to bee made. But at current forecast figures the returns in the next 2 years aren't going to be great. I also find the recent announcement around joining a special government cabinet for SME interesting/ Are they channel or direct? Are they SME or Enterprise? Are they serving private or public sector? If you ask me the strategy seems a little all over the place and needs some definitive focus.