Member Info for ITKnowledge

Contract win very good news but don't get too carried away yet. You mention "Good cash position" They have already said in their revised forecast for the year, which is down 33% on initial projections. They will need to raise more cash and are looking at options with more detail to follow in July. This win is nicely tied but expect to see news on debt being taken on or cash raised from somewhere as they are still burning through cash at a significant rate.

PS: CO - CEO and self styled Pioneer of Cloud Computing, Piers Linney, Invested in some shoes that kids can draw on :)

A lot of changes happened in the last 6 months and will be interesting to see how the new cheaper structure performs compared to the old. A lot of senior posts gone which may or may not have an impact on the way they go to market and deliver.. A few updates of changes in the last 6 months starting with new to old. The ex CTO of rise is now the head of infrastructure at OUT. Head of operations and head of Infrastructure have gone in the last 3 weeks and haven't surfaced to date. Sales Director and Head of Channel (approx 3 months ago) have setup on their own (Zest4) doing fixed line for telephony and data, mobile with Voda and 02 along with the Hosted telphony service (Horizon) from Gamma. No mention of them doing OUT products. Product Director left and now works for IRIS.

Obviously not going to be released in the press as no good will come of that. A big industry in which we all use a small amount of partners so doesn't take long for these things to spread.

Infrastructure director and customer services director gone...... Wonder the impact that will have on current platform and IL3 platform delivery timescales.

Mark is a bright guy and it was his hosting business that OUT acquired to form the start of their hosting business. He then went on to design and build the platform before moving on to setup again. I don't know the company too well in terms of what they do but he has credibility in this space and has actually built a business in this space before. They also have decent all round management team with real experience in the technology sector. Rather than a fame hungry, ex city banker who is a self styled expert but with no real previous experience or knowledge of the technology sector. Just read the rumors on the SNTY board about the two merging. I would be very surprised as Mark built the platform so he could build another one for a few million and take that to market. I wouldn't be surprised if they bought them though.

I had another thought on cost savings last night. For a company that is all in the cloud that sells services to encourage mobility giving people the ability to work anywhere. You have to wonder why the need for such large offices in Manchester and London. Both will be very costly and surely there staff can use their own technology and work anywhere. I expect this will give them a decent reduction. I am guessing the reason they took such large spaces was due to the expected growth of a £100m business by 2015........

Great. More posting of old news. had to laugh at your last post as well. You are either completely deluded or just hoping that you may encourage some buyers so you can bail out of your losses. In case you hadn't noticed the price is going down and the shares are soon to be diluted when the placing happens. They have very little cash left and have downgraded their projected figures for this year and next year by a 3rd.

This is all old news and I am not sure why you keep posting these articles. I can only think you are trying to create more smoke and mirrors. The story never changes but for the last 3 years all we keep hearing is the opportunity is massive and Microsft, G cloud blah blah blah the fundamentals remain the same. They are a sub £10m turnover business that has spent over £50m and is burning cash at a rate of knots. There are plenty of bigger players in the market doing what OUT do already and they do not have any uniqueness. They are going to need more cash and with the current downgrading of turnover for this year and next It is laughable to be talking about a £bn business.

I guess what I hadn't appreciated was the FY forecast of £8.5m revenue. We are only half way through the year so they are either not predicting any MRR growth for the remainder or they are losing it quicker than they bring it on and may have gone backwards. If the exited with MRR of £600k last year that would give them revenue of £7.2 before they started. For the majority of deals they do direct and some on behalf of partners there will be some pro services revenue. Genrally this will be a large up front amount for onbaording and smaller amounts going forward. I read from this that on 8.5m revenue MRR will be about £650k at then end of the year.

http://www.channelregister.co.uk/2014/06/30/outsourcery_direct/

They are a reseller and they have been since 2009 according to the OUT website. They are also a competitor as both companies sell Microsoft services such as O365 to end customers. I wonder how much business they have done in the cloud since 2009.

Do you think they would put a member of their own team up at an analyst event and say he is the Chairman of a competitor? Even if he did both roles they would have made that clear. Looking on IP Solutions website to see if they ever made an announcement of him becoming Chairman. I noticed this in the list: http://www.ipsolutions.co.uk/dragon-chooses-ip-solutions-cloud-transition/

Hi Ka, I have no idea if that is a decent turn out or not. I notice for the SMB section they had Simon Howitt Chairman of IP solutions. He is ex sales director and ex board member of Outsourcery. Lots of large sales going through. Could that be the investor who wanted out didn't finish unloading and they are dumping the rest now?

Does anyone know anything about it. Who and how many turned up? When would you expect to see some people deciding this is a good place to invest off the back of it?

Hi Ka, Zinga is right that it is not about the DC. However they will have built the platform they currently use to handle a certain load. What they may be able to do is sweat some of the servers a bit harder and use less physical servers and storage. Although the cost to purchase the equipment is sunk they could save on Opex. When you buy space in a DC you usually pay a price per month for a physical rack and then you pay for the power you require to that rack. You then load your own physical hardware and license your equipment with whatever software to build your platform. If OUT have lots of spare capacity and don't plan to fill it so quickly they could remove some kit and ultimately bring down costs. The way technology moves on you can get a lot more compute per rack using new equipment and consume a lot less power. If you built a platform 4 years ago you could build the same compute and storage today using half the space and hence your Opex costs would be less. That would mean the IL3 platform could need less space than planned or they could build it a bit larger and move some existing platform over and reduce overall opex. Bandwidth out of the DC can be expensive especially if you are using voice services such as Lync. That traffic has to be prioritised and guaranteed bandwidth so calls don't break up. Once you have an idea on use you can play around with this an throttle accordingly to manage costs.

Yes people are and that is down to them and if all goes well that will be fine. Imagine if you recommend them to lots of your customers and they go bump. That is a lot of relationships for other products you sell down the drain. Personal opinion I always assess financial credibility of any supplier i deal with

I appreciate your comments. Technology and personal thoughts aside, would it be right for someone to advise their customers to place their business critical systems with a small company that has such a low turn over, burns cash and needs to raise more funding? Or would it be more sensible to advise they consume the same technology from a larger provider who has a decent turnover, good profitability and are well funded?

Doing some more G-Cloud research and came across an article from March I hadn't seen before. This is interesting: Linney has a two pronged strategy for 2014 : “consolidating our market position, consolidating the market channel”. The channel has been where Outsourcery has made a number of new announcement including agreements with both Vodafone and Ingram. However, neither of these has yet contributed to sales and this is something that Linney needs to address. The lack of sales from partners is not the only issue as Linney targets the enterprise market. This may well leave partners like Vodafone wondering what the value is in the relationship between the two companies as it would mean Outsourcery competing with Vodafone’s cloud services division. This is not just about the enterprise, with Vodafone shortly due to join G-Cloud it will be interesting to see how Outsourcery will fare in that face of additional competition. To make matters more interesting, as of February 2014, Outsourcery has made no sales through G-Cloud. https://www.business-cloud.com/articles/news/when-will-lightning-strike-outsourcery

Was interested to see how many offerings there are for IL3 G cloud and I found there are actually 6 including HP Direct. http://govstore.service.gov.uk/cloudstore/iaas/compute/where/actual-il-level/il3