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Direct sales of the IL3 platform in to public sector. Either way this isn't new and isnt getting adopted at anywhere near the rates people expected. See this press release from back in Mar 2013 from a UK IL3 G Cloud Provider: http://www.skyscapecloud.com/skyscape-press/g-cloud-expert-skyscape-awarded-highest-level-of-pan-government-accreditation Also see latest release about readiness for G Cloud 5 http://www.skyscapecloud.com/skyscape-press/skyscape-announces-availability-of-services-on-g-cloud-5 Now I don't know what their numbers look like but they also have a channel.

Just seen this and thought I would reply. I haven;t ever worked or would go to work at Out. I do know them well as I know well many other companies in this industry. So what is my problem. I love the IT industry and have worked in it for many years. I worked through the DOT com bubble and it was tough times and a lot of good people lost jobs when the bubble burst and a lot of SME companies suffered in the fall out with many going bust as a result. The people in the companies that got in early made huge money on listings and exits while many small businessmen suffered. Cloud is like DOT com mark 2. Yes the cloud absolutely makes sense and over time people will move their IT services to the cloud. The problem is in the industry for the last 3 - 5 years people have been saying that and adoption rates are nowhere near what people predicted. What annoys me about Out, and it isn't just them by the way, is all this "Leading cloud provider". And then you have the CEO on the TV labeling himself as "The Pioneer of Cloud Computing". Creating lots of hype and burning lots of cash and all these silly valuations leave the industry in a very bad place. How can anyone seriously make the above comments when they have spent £50m to build a business that turns over less than £10m and is burning cash at the rate of over £5m a year. That is what my issue is here and the reason I keep posting my views. I am fed up with all the smoke and mirrors and hype when the technology underlying can actually deliver real benefit. There are plenty of large companies and well backed companies doing this stuff and doing it well. For every one of these cash burning tin pots that makes it there are hundreds that run out of cash or provide crappy unreliable services that end up leaving small business customers high and dry.

http://www.intycascade.com/

http://office365.pinpoint.microsoft.com/en-GB/services/inty-ltd-12884923858-4295549142

Because Office 365 is a direct buy from Microsoft where they own the customer and you get the commission if you are listed as the partner of record. The only people that can sell through to channel partners are the syndication partners as they are allowed to bill out Office 365 directly and pay MS the same way that people do for any other service. The only independent UK syndication partner at the moment is a company called Inty. You then have about 20 syndication partners across the globe like BT, Vodafone and Telefonica You can buy office 365 not on subscription but annual fee using an open license but you can buy that directly from any of the UK license distributors in the same way you would buy MS office etc. They give you a code that you use on the website for an annual license.

Should add that most of their partners will also be selling Office 365, Windows Azure, Microsoft CRM online so they will now be competing directly with them in that space.

We are also hiring specialist and experienced public sector sales personnel to promote adoption of the platform and senior management are engaging directly with government. We have also successfully continued to win business directly in certain areas for O-Cloud deployment. In line with our strategy to be the leading provider of Microsoft cloud services whether deployed on our platform or Microsoft's, we are pleased to announce a win of a 3,000 end-user Office365 deployment. This has led to Outsourcery achieving 'Cloud Deployment Partner' status with Microsoft for Office365 related solutions, which we typically aim to integrate with our own solutions. Also they are looking to do direct sales of Office 365 as they cant channel that: https://outsourceryrecruitment.outsourcery.co.uk/VacancyDetails.aspx?FromSearch=True&MenuID=6Dqy3cKIDOg=&VacancyID=11

Half year MRR figures are going to be really interesting if they are already writing off the achievement of predicted MRR for the full FY. "This will have an impact in the short term on the growth of our Monthly Recurring Revenue ("MRR") during the year and, consequently, an impact on our reported revenue result for this financial year. "

Outsourcery looks to conjure up more cash Anthony Miller, 07:58, 27 June 2014 After announcing an unsurprisingly (to me, anyway) disappointing set of FY results in March (see Outsourcery conjures up growth, but losses linger), Outsourcery, the self-styled “leading Cloud Service Provider” cofounded by ‘Dragon’ Piers Linney, is looking to raise more cash after warning that its pipeline of enterprise (large scale) deals is (also unsurprisingly) moving to the right. Linney had tapped the markets for £4.2m last December (see Outsourcery magics up another £4.2m). Linney reckons that cost actions will keep ‘normalised’ (surely an oxymoron) pre-tax profit on track for the FY despite the revenue shortfall. Investors are unlikely to get any real insight as to how Linney and pals expect to pull Outsourcery out of the mire at the company’s Capital Markets day on Monday, which primarily features customers and partners telling the herd how wonderful they think it’s all going to be one day. Missing from the agenda is any ‘deep dive’ by Linney – or anyone on the top team (bar an intro from chairman Ken Olisa) – on any aspect of business operations. Really, what’s the point?

Got it thanks.

I am stunned that a business so small as this can make £1m PA of savings. What have they been doing all this time. Looks like they are getting what they need from the channel so are looking to hire their own sales people and try the direct model as well. They did this before and channel and direct always creates conflict as you are competing against each other. A lot of companies in the industry have done this and many still do but a lot use Channel only as a USP as they pass you out leads seeing as they don't have a direct sales force dealing with inbound enquiries. The office 365 win of 3000 seats is just desperation to give some good news. Anyone can sell Office 365 hosted by Microsoft, you can even go to their website and buy it direct. As a reseller you only get 6% of the monthly revenue as commission and some one off services. I am genuine struggling with the last part about funding. They appear to say they have enough cash and then they say they are looking at ways to raise some. Can someone explain how i am misreading it (Genuine question) The Board believes that the Group has sufficient cash resources for its immediate needs. The Board expects that the Group will achieve monthly cash flow breakeven during the course of H2 2015, at which point the Group should become strongly cash generative and see margins expand due to the high operational leverage inherent in the Group's business model at scale. The Board is prudently reviewing a number of options that may improve the Group's cash resources over the medium term as the delay to the expected revenue growth will push out our monthly cash flow break-even point despite the additional identified cost savings.

Shares go down and shares go up and this is a great revival of the share price at the moment. My fundamental views don't change and I have made them clear. I am pleased for all those making cash on this sudden rise but I still believe it will be a long time to see any serious return from this or if they can fund it all the way through....

Based on figures we guesstimated yesterday and the agreement they probably need to raise more cash you would have to assume this is what it is all about. Asa you have quite rightly stated before they said they listed to get investment and this is just the next phase.

Is "Awareness" a code word for "Cash" lol You run customer events for awareness and investor events for cash

When i saw all the small deals coming in I thought lots of personal investors who want to be part of the dragons business as after all he is a dragon so must know what he is doing. But there are some decent size deals coming through so something is happening to change sentiment. Other than the fact the large seller must have finally got rid of all they wanted I am not sure anything has changed. Be interesting to see how much they raise out of the 30th.

You are entitled to your own views as am I.

I never worked at Outsourcery but have been in this industry a long time and followed them from the start. When they first setup you couldn't miss them. They had a great marketing machine and spent an absolute fortune plastering their brand all over the trade press and industry shows. I was always intrigued as there seemed to be a lot of hype and it wasn't until they listed and I saw their actual numbers that I was shocked by ho small they were. Since then had a keen interest in following them to see how they progress and whether the smoke and mirrors can actually turn in to a viable business. I have pretty strong views on this as there are a lot of companies now in this industry like OUT who are doing the same thing and IMHO there isn't room for all of them and you need really deep pockets to fund this through to profitability. I just don't think OUT have a unique enough offering or the management team to pull it off. All my own opinion and if I am wrong I am wrong. Never turn down a good opportunity to make money so if i am wrong and things start to swing and they can fund it I may even have a dabble.....

At least we agree on something lol. Now just have to wait until the numbers come out so see if I can carrying on moaning about the hype or you can keep trumpeting the fact they are hitting the numbers :0

Average cash burn for the year was £800k and MRR went up so should have gone down throughout the year meaning it ended below average. Between the HY and FY end the MRR went up by £300k so if the investment has already been made (apart from IL3) I am not sure how you will be happy with cash burn going up.

A quick view on my thoughts: I will take a rough high level punt on what we know: End of year revenue was up 50% to £5.2M with an exit rate MRR of £600k. Over the course of the last FY the cash burn was £800k a month on average although would have been less at the end of the year due to increasing MRR. Let’s assume £200k of the MRR came towards the end of the month and cash burn ended the year at £600k Exit rate of MRR if remained flat would mean HY 14 would show a HY recurring revenue of £3.6M and recurring revenue makes up 80% of revenue so that would put HY rev at £4.5 m. The plan is to double year on year so let’s look at the last HY results: MRR at 30 June 2013 of £300k (even if they haven’t grown this year they have managed to double the MRR) (But we need to take in to account Rise which isn’t organic growth and another base integration, as far as we know, be repeated in the first half of this year) MRR grown to over £400k 31 August 2013 So this would imply that Half on Half they did indeed double although a lot was at the start of the half judging by the August comment being over £400k. Cash ended the year at 6.3M and being generous and dropping the average cash burn from £800k to £600k it means they have still burnt £3.6M which leaves them cash of £2.7m from which they need to invest £4m (that is what they raised) in the IL3 platform so in my mind they have already run out of cash so long term liabilities should have increased somewhere. For me a good result and showing growth of doubling MRR this FY I would want to see: MRR up to £900k (HY Recurring of £4.5M) with revenue up at £5.6m. I would also want to see cash burn down below £300k. All my own opinion…..