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I was looking at 13 - 20p bottom and time will tell if the market sees value or there is just a bit of temp interest on the latest dragon interview and the $1Bn company. I am looking forward to seeing the HY results and the outcome of the investor beauty parade before i decide whether the bottom has been found and growth can be had or if this is just a temp bump.

"ITK ……… $1 billion is as near as damn it £500m …… just as well you IT guys don’t look after the numbers!" At current exchange rate I make £500m about $850m.....that £150m is significant by anybodies standards and as for "near as damn it" you sound as deluded as Piers Linney himself.. Don't believe the hype. I notice in his recent article the irony that he blames the over valued IPO's of recent times (of which OUT) is one for the fall of the share price. No mention of the investors who have list a shed load of money and what tangible plans they have to go recoup that and over what time frame.

Also worth noting that when Microsoft bought Skype it was obvious they would some integration with Lync. Office 365 Lync will get full voice breakout this year and allow you to make calls I any number in the same way as Skype. Out still have a little more functionality but won't take long before their value add in this space is reduced from the gorilla in the room. That is without all the other Lync as a PBX replacement offerings that are already out there from much larger established providers.

Based on the current number if issued shares I made my prediction in an earlier post of 13-20p. I did caveat this by saying if they have made it to break even and are not still burning a significant amount of cash each month. H1 nearly over so we will see some results. I am expecting them to be littered with more comments similar today about partners we have signed and potential etc etc. If they are so strategically aligned with Voda and spent 2 years integrating you have to ask why they sold their Vodafone mobile base to Daisy? You could argue not core to what they do and wanted the cash to find core business. But then why did they sign up with O2 and become an O2 reseller? Also the core product they push is Lync as a replacement for a traditional phone system. In some circumstances this can work but functionality gaps ie call centre requirements are bridges using 3rd party products. There is also the issue of connectivity which makes running business grade voice expensive and still doesn't match the quality of traditional voice. This isn't an issue for some and will improve but that will take years. If you look at hosted voice, still giving people handsets but hosting the system in the cloud. This providers very little change to the end user and had been around for years but despite all the hype no one has made a real success of it. My view is wait for results and see how badly diluted this gets after the market beauty parade at the end of the month and go from there.

I am sure Simom Newton will be pleased about being referred to as Sam. They can't even get that right. Good to see the ambitions have gone from a £500m company to a 1bn$ company while the share prices has dropped 80% I'm not sure how anyone can take these jokers seriously.

No I don't.

The reason in mention Monthly Recurring Cost is. Every user has a monthly cost of licensing to Microsoft on top of the monthly platform license cost to MS. Platform costs are monthly for every instance of Winddows Server, hyper V, there will be a lot to support the platform. Adding a Lync user then attracts a Lync user CAL ( client access license) per user per month. Same for email and SharePoint and CRM. Every instance of IAAS spun up in O Cloud had a monthly cost for the windows server, widows user Cals and then user Cals for any specific MS apps. All of this paid monthly to MS and the prices have gone up between 8 and 25 percent depending on product. If you look at others in the market even the giants such as Amazon a lot use open source Xen server so save the whole underlying platform and zero license cost.

Early to market for general cloud services and switched focus a lot form SharePoint, Email, CRM as primary before settling on LYNC and OCloud with some CRM focus. CRM is a mistake as Microsoft CRM online is so cheap and they offer very little value add. They also started with a direct sales model before finally settling on a channel only approach. That cost a lot in time and money and they didn't get any first mover advantage while trying to decide what to sell and whether to go direct or channel. The market is more mature now and late to market is ref to G Cloud specifically. While they were wrestling with legacy on their generic cloud services new entrants were coming to market and focussing on a GCloud specific strategy. A lot of companies have benefited from seeing the mistakes of others over the early years and having the ability to build government certified cloud platforms without having to finance standard platforms at the same time. Doing both white such a low customer base is only ever going to achieve one thing, huge cash burn. I know the costs because I work in the industry and am very familiar with the SPLA pricing model.

This is a first phase of 1500 users and at £10 a user adds £15k of MRR. Take out MS license costs of about £3 and then platform, storage and connectivity costs then profits aren't huge here. What would be useful is to to see the Monthly Recurring Cost to support the MRR, excluding people costs of course. No dragon slaying at all just being realistic with my knowledge of this sector.

This is a first phase of 1500 users and at £10 a user adds £15k of MRR. Take out MS license costs of about £3 and then platform, storage and connectivity costs then profits aren't huge here. What would be useful is to to see the Monthly Recurring Cost to support the MRR, excluding people costs of course. No dragon slaying at all j

But even at £1m MRR they will still burn cash. Need to factor in at he rise in Microsoft license costs recently and the fact the platform has to be nearing refresh. MS licenses affect monthly costs as they are paid for monthly on SPLA agreement and the platform will need an injection of capital. I have said all along I but the cloud but they started way to early and haven't had sufficient cash or presence to take advantage of being early to market. The market had matured and loads of companies who started later have invested in different ways and have now outpaced them. Add to that all the big boys coming to the party now and they just haven't got a hope in hell of scaling this business. GCloud isn't taking off anywhere near like the predictions and many have had and continue to have their fingers burnt. Out are so late to market with a platform that is costing millions in a market that isn't seeing any traction and this will just add to their monthly cost woes.

You seem a sensible guy so not so sure why you are happy if you have invested in this at higher figures? You have claimed to top up at lower values as well. I understand you believe in the company and they have achieved what they said they would so far. But for what they spent they set the bar ridiculously low and the valuation at float was wildly inaccurate. With no trading announcement and. I directors hoovering up shares this doesn't scream value. The real risk to you and everyone is that the market cap is just over 10m. If this gets down to 5m - 7m and they can't raise it external funding they may just decide to take the company back private... Then doesn't matter how much you topped up your investment is dead.... So I get you want to buy in cheaper but celebrating drops because it allows you to do so is just plain dumb as you risk losing it all on an illiquid stock with a tiny market cap.

Starting with CRN, Comms Dealer, Comms Business and Tech Week Europe.

I wonder why one of the industry press have run the story yet? Loads of noise about the company and even recently someone published and article referring to OUT as a cloud giant. I am off to go mail a few of the people who have published articles to see if they want to do a follow up. Anyone want to add wait to my emails by doing the same?

I have read a lot of your posts and you seem very clued up and informed in the decisions you make. What I am struggling with is why the unwavering loyalty? If the directors were coming out with bullish statements and pumping in their won cash to show support I would get it. With the silence and no signs of any director investment I just don't get the certainty that makes you keep jumping in as the price is falling.

I meant to add: If not breaking even and still running at a loss then the bottom could be down in the pennies.

Lets just assume at best they are now breaking even. If they were to be acquired and someone took out high level management costs and back office costs you could probably get EBITDA to somewhere in the region of about £500k. Need to take account of the debt but I assuming for purposes of this exercise it wont impact valuation and will be paid off at sale or transferred over. You would normally see a 7 to 10 times multiple so we could say between £3.5m and £5m in value to be sold. You would need to add whatever someone would be prepared to pay on top of that for getting access to Market share and MRR quickly and that may be in the region of £1m to £2m. This all depends on how much people want to buy in to be part of the story now if they really believe this can fund itself now to become a huge player in the market. Overall value of £4.5m to £7m. based on 35m shares in circulation that makes a share price of 13p to 20p Some assumptions in there and no idea how the current figures look but that is my guess. I don't see them going bang and if the share price does go that low then I do see someone trying to take them over. What really puzzles me is why no trading statement update or directors piling in to show some support for the company. Both practices are quite common where the share price is taking a dive.

It seems to be OK that they hit their year 1 target and that makes it a viable investment. They did what they said they would... Trouble is what they said they would do is ridiculously low for the amount of cash they have spent. £50M to generate £5m turnover is not a good business. You can argue they have built the infrastructure now but hardware generally works on 3-5 year refresh cycles so at that rate they need to refresh soon. And to be honest I have to question WTF did they spend £50m on? And why the hell do you need 125 people in a £5M turnover business when you don't even do direct sales but run everything through partners...

Also this makes me so angry... We are the first company to offer an integrated unified communications solution on a global scale..... Where the F@@@ is that then??? And where are the global customers that are using it??? Piers, you are running a business that has burnt £50m in cash and is yet to turn over &10m and is losing cash at the rate of over £500k (Generous at least) a month.... Wake up man and smell the coffee because people ain't buying it anymore.....

Lol at 10 m each, what bull****... That means they have burnt even more cash but I know for a fact they didn't have 10m each to put in....even if they did it means they have burnt over £50m in cash to generate £6m of recurring, that is rubbish by anyone's standards... Also let's be realistic. 125 staff at an average of 30k each (low for the industry) means their salary bill is £3.75m per year which is not far off their recurring revenue before all infrastructure, rent and licensing costs.... Smoke and Mirrors....