roundtable 25


Nice said his company‘s office in China had taken some time to establish itself. “This year things have really started to move, and that‘s because the Chinese market is exploding. They are beginning to look at companies that are not homegrown. It‘s natural in a growth market: you look inside your own country first before looking outside.“


Dan Havercroft: “Undoubtedly the nervousness out there has caused corporates to delay decisions about entering new markets. The UK is a good open market economy and when China sees real growth, I don‘t think the UK will be too far behind.“


Staunton: “A lot of our clients are pushing out overseas and being very competitive against the US and other Europeans.“


“Technology is a constantly developing, buoyant sector that needs finance people who understand it, who can answer the issues about revenue recognition and cash generation when a business needs to lend some money.“


Partnering and patenting


Evans: “We partner with large and small organisations, but there has been a shift. Though we are a managed service provider we tend to procure far more managed services from our partners nowadays. There is a real position of trust required but if you get it right, it works really well. That trust becomes even more important when you try to push out internationally.“


Cousins explained how Peach Telecom had partnered with the Hampshire Chamber of Commerce to offer a suite of products and services they could market to members as a Chamber income stream. Other industry groups were now approaching Peach to do similar ‘white-labelling‘ schemes, boosting Peach volumes in the process. “These are non-core revenue streams for us, which complement our business.“


Sue Staunton


Nice highlighted the need to build business relationships with customers, particularly in the emerging Far Eastern markets. “We have a foothold there now, so people are starting to trust us, but it is a little like when I started selling. You have to build a relationship before you can do business. Our China office manager will probably meet a prospective client around 3-4 times before ever talking about our products.“


Evans also noted greater project collaboration and investment coming into the UK from the Middle East.


Staunton mentioned that, with China now investing more in the UK, the University of Oxford has set up a permanent Technology Transfer office in China.


Murray wondered if some Chinese companies were now trying to take on the UK market with their own branded products.


Finance for the technology sector


Barclays banker Havercroft accepted that financing criteria were still challenging for start- ups with little track record and cash generation evidence. “The canons of lending really haven‘t changed, but we are definitely growing market share (£5m-plus turnover businesses) in the technology sector, and part of that is the geographic area we are in, and part is M&A pick-up in the cloud and niche software areas, IT services, video-conferencing, call centre management and any mobile-based contactless technology.


Atkinson: “When you try to deliver on a global basis, partnering is virtually mandatory to get the best leveraging out of your growth investment. It allows you to reach out internationally while also localising some of the services, which to gain such a footprint would otherwise double or triple your overall investment.“


Pitmans lawyer Philip James stressed the need to ensure any partnership arrangements were legally covered. Ironically, while austerity had currently reduced expenditure on legal services, today‘s ‘cost-conscious‘ partnership might lead to tomorrow‘s costly litigation.


James also suggested fresh opportunities for international partnerships would be engendered by Jubilee (Commonwealth) and Olympic activities this summer, not least through the technology that will be on display to global audiences. “We should be proud of our innovation and technology and get behind the sector at this time.“


James and Staunton praised the government‘s Patent Box initiative with its ultimate10% corporation tax rate, attracting both innovation and foreign companies to the UK.


Darren Atkinson


Evans said Airwave had put a lot of effort into patents “… because it‘s a trick that we tend not to make enough of in the UK. There is an enormous amount that you can do to protect your work and give yourself a real foothold internationally. We are very good at being creative in the UK, but pretty poor at making the best of our creativity. The US are really hot on patents, but I don‘t think they are any more creative than we are.“


The problems of procurement


Procurement of government contracts was still often tortuous, but becoming less bureaucratic, the Roundtable agreed.


Admitting that the Government is Airwave‘s primary customer, Evans said, even so, he recognised that public sector staff were operating under “huge price pressures and I feel a sense of responsibility to work with them, help them get through it, because frankly it is in everybody‘s own interests“.


Dreesden has been involved in reverse auctions in the past which lost him 50% of his business during a round of government tendering. “Logic and consistency needs to prevail, but bureaucracy can take over.“


Cousins: “A lot of the problems with procurement are about risks. Why would I want to take six to eight months trying to procure a government deal for £100,000, when I could get £250,000 from five new private-sector customers during the year – customers who may grow their business with me?“


Landew: “Whilst we are signed up to the G-Cloud, along with many other companies, we see the greatest potential in the private sector. People like to buy from people they know in their network, and the perception is this is easier to do in the private sector. However, we‘ll continue to monitor developments in the public sector“.


James warned about legal concerns arising from public sector procurement with some companies, in these austere cost-conscious times, using Freedom of Information requests to ascertain competitors‘ tender details. Legal help would help avoid such breaches of confidentiality.


Peter Nice THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – JULY/AUGUST 2012 Continued overleaf ... www.businessmag.co.uk


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