2 Executive ViewMike Tobin, CEO of TelecityGroup, offers his views onleadership and much more

4 Sound ByteJon Temple, President andCEO of FrontRangediscusses the rise of HybridComputing

6 Boardroom InsightMike Hedger provides hisperspective on the role of aChairman

8 Sector InsightMicheal Gear, SVP Field Operations ofGoodData on “Big Data”

9 International InsightExecutives from Actiance discuss drivinginternational growth

10 Mobile InsightThomas Enraght-Moony,CEO of Lumata on trendsand opportunities in mobile

12 Megabuyte InsightIndustry Analyst IanSpence of Megabuyteconsiders AIM vs PE

14 VC InsightHenri Grundsten of FinnishIndustry Investmentdiscusses with GillamorStephens the reason forthe success of Finland as a

start up hub.

1

GS-insightp e o p l e • t e c h n o l o g y • b u s i n e s s

Issue 23

In this issue

Welcome to the latest edition ofGS-insight, the quarterlymagazine from international

Executive Search firm, GillamorStephens. Our clients are technologycompanies and the sector is enjoying apositive period of growth. The migrationto cloud infrastructure and servicescontinues at a pace and there is widespread adoption of cloud deliveredapplications. Traditional softwarecompanies are transitioning theirproducts to be accessible from anydevice over the web and are also movingto recurring revenue models. All of thisagainst a challenging economic climatemeans that new leadership skills areneeded: CEOs who are pragmatic anddisciplined but entrepreneurial in mindset and approach, able to drive changeand growth in lean customer obsessedorganisations; CFOs who have theproven ability to manage the relevantinstitutional or PE/VC investorrelationships,COOs who can implementnew delivery models and join up productdevelopment, delivery and support;Engineering VPs who can lead the agiledevelopment of innovative products thatcan be delivered across multiplechannels, Marketing Directors who canshape clear differentiated valuepropositions, embrace social media andaction campaigns within hours notmonths; Sales Directors who truly have aservice led consultative approach andcan sell solutions internationaly in afiercely competitive environment, andCIOs who can remove the fear of

externally hosted data and apps, andbring information to life in theenterprise. Against this backdrop wehave been busy; the demand forexecutive search services is high acrossour client base which ranges from earlystage VC funded business to large globalcorporations.

In this, the 23rd issue of GS Insight,we talk to Chairman of Mimecast,Conversocial and eCommera, MikeHedger about his views on the role of aChairman in small high growthcompanies; Telecity Group CEO, MikeTobin discusses delivering growth and hispersonal and company ethos and on theway he provides some fantastic quotes;Jon Temple CEO of ITSM companyFrontRange offers the view that cloud isnot necessarily fit-for-purpose in everysituation and provides insight intoHybrid Computing, one of Gartner’s top5 trends for 2013. Henri Grundsten ofFinnish Industry Investment talks aboutthe hot bed of start-up activity in theNordics, while Ian Spence of Megabuyteoffers his perspecive on UK technologyfundraising. We also explore thedevelopment of mobile with LumataCEO, Thomas Enraght-Moony and drivinginternational growth with KailashAmbwani, CEO of Actiance and wediscuss Big Data with Michael Gear, SVPField Operations at GoodData.

GS-insight can be viewed anddownloaded fromwww.gillamorstephens.com

I hope you enjoy this issue SteveMorrison, Partner, Gillamor Stephens

Growth, Transitionand OpportunityGS-insight explores some of the key trends in thetechnology industry and much more . . .

1

22

Executive View

Breaking New GroundGillamor Stephens spoke to Mike Tobin, CEO of Telecity Group, a successful FTSE250 company with a market capitalisation of £1.6bn about his views on leadership.

The transition to CEO afterjoining Redbus and thesubsequent merger with

TeleCity was something of abaptism of fire…

Joining Redbus in early 2002, ourdatacentres were a little ahead oftheir time and revenue was flat; itwas a fairly simple calculation towork out how many pay days wehad left. As Sales & MarketingDirector, I took a rough rescue planto the board and was made ChiefExecutive almost immediately todeliver it. It was probably one ofthe most painful things I have everdone, taking 480 people down to 80almost overnight and right beforeChristmas. It was a tough call butabsolutely the right thing to do.

Turnaround…I’d run businesses before, workingfor Fujitsu, but Redbus was my firstturnaround role and it certainlywasn’t what I’d arrived to do. 6weeks into the job I was deliveringthe message to the employees thatthis was the end of the road formany of them. I had abuse hurled atme like you couldn’t imagine, andnot one member of the then currentboard came with me. My previousexperience had been about startingand growing businesses – very mucharound sales - but this was aboutradically cutting down Redbus andgoing into survival mode.

Those decisions gave us somebreathing space, but we were stillstruggling and needed to look fornew investors. The journey taughtme a lot about luck. In the summerof 2002 we had just opened a newdata centre in Prague, and despitehaving just a few weeks of cash leftthere was nothing we could do tocancel the new opening. ThenPrague was hit by the worst flooding

in 150 years and our entire newbuilding was filled with 8m ofwater. So I went to the insurers andI said, “Ok, we’re insured for about£58 million, give me £10 millionnow and we’ll call it quits.” Thesubsequent insurance pay-out gaveme an extra four months ofbreathing space to engage newinvestors. That investment cameand from that period we started ourrecovery. Having got the businessonto a stronger footing we werethen able to consolidate theindustry through the merger withTelecity and the subsequentacquisition of Globix.

Moving the business forward…Our strategy is to grow organicallywhile maintaining a core focus onproviding premium enterprise classdata centre environments withsignificant levels of connectivity.Although there is of course greatdemand for data centres, it’s notjust about the financial capacity.Finding the right building in theright location with access to theright connectivity, and getting theright power to that building are allmajor hurdles I need to overcomebefore I even think about spendinga £50 - 100 mn to build one. My roleis to make sure we can get throughthose challenges to deliver the newcapacity our customers are askingfor in key markets across Europe.Just think, one of our data centresmight use the same power as 20,000or 30,000 homes; getting that sortof provision from the electricitycompanies requires a lot of planningand persistence, but we’re veryexperienced in this market so wecan plan our build roadmapaccordingly! In fact, we’ve morethan doubled our operationalcapacity since our return to the

main market in 2007, but rememberthe hurdles to adding new capacityare significant!

Our M&A ‘bolt-on’ strategy isabout ‘time to market’ value andhas enabled us to capture revenuefrom ‘today’ in new or expandingmarkets rather than waiting foryears before we can create theconnectivity data centre hubs fromscratch. Aside from this, we aretargeting organic growth andsticking to the core of our businessinstead of broadening our serviceoffering. Our customers range fromthe large global system integratorssuch as HP, IBM, CSC and Atos Origin– to the web-based organisationsand established enterprise seekingto maximise the commercialopportunities and cost savingsavailable by shifting their missioncritical IT systems into our highlyconnected data centreenvironments. One of the reasonswhy they like us is that we focus onthe data centre - the core of ourbusiness. We focus on the physicalenvironments – ensuring extremelyhigh levels of physical security(using such things as iris scannersfor instance), temperature andhumidity control, fire suppression,resilient power and of course directaccess to hundreds of connectivityproviders but critically we don’tprovide the IT hardware.

Being CEO…The adjustment from running salesand marketing throughout mycareer to leading Telecity Groupmeant moving from being a verycustomer facing individual to alsoworking with investors. At thebeginning, I was spending 50% of mytime with investors and analysts.Fundamentally, it is my role tocreate space for people to deliver

??????????Executive View

3

and I push back on stakeholders forthe time and space to enable that.

I’ve always hired people whodon’t really need managing. I lead,and am always there for guidance,but ultimately it is my responsibilityto deliver value to our investors,which we achieve by endeavouringto deliver the best customerexperience in the industry. My teamunderstands this and it is an ethosthat runs through the business.

For many managers, the hiringprocess is about finding peoplethat tick all the boxes…I had to bring the team in prettyquickly because I was doingeverything at the start. I expectrecruitment companies to gothrough the due diligence of gettingthe right people CV-wise so I knowthey can all do the job; I’minterested in talking and buildingconfidence in a person, I have to beable to trust them. To be honest, ifsomeone can do the job we’ve hiredthem for when they arrive, they’reprobably not going to stay aroundfor very long because they wouldnot be sufficiently challenged. Inany case, if I’m breaking newground, by definition, any potentialemployee is not going to have doneit before. I like to take people outof their comfort zones and makesure that they are stretched. And itworks - the average tenure of mydirect reports is 10 years.

Opportunity…Giving people opportunity is soimportant. Our new UK MD, RobCoupland, is a great example. I methim in 2006 when I was looking for aHead of Media. Another individualtook that role but I liked Rob andconvinced him to join us to developand manage our Group services. He

was a hands-on network projectmanager from C&W and when hejoined did a great job consolidatingsome of our Group-wide services. Bythen it was February 2007, we werelooking to IPO and I asked Rob torun the entire process – only acouple of months after he hadstarted with the business. Hethought I was nuts, he didn’t knowthe first thing about finance andinvestors but the IPO neededexcellent project management and Iknew he had the intellectualcapacity to cope with the challengeof managing the float. Even thoughwe were trying to pull off an IPO inan economically tough time wheneveryone was pulling their ownlistings we persevered - the brokerssaid that it was the smoothest IPOthey had ever seen. And that waslargely down to Rob.

We encourage and pay for ouremployees to take on-going trainingand development. And we’ve alsoinvested in a major off-siteeducation programme with the top

business schools for themanagement team which is takingplace over the next two years.

Company ethos…In our head office we have anetching from every location wherewe have a data centre, and we havea quote by a famous person fromthat location, that captures theethos of Telecity.

So for example, Amsterdam isJohan Cruyff…“Speed is oftenconfused with insight. If you startmoving before the others, youappear faster.” My two favourites,with a little bit of geographiclicense in both, are Milan - we usedSophia Loren, she came from theSouth of Italy, not quite Milan ….“Mistakes are the fees we pay forliving a full life.” That’s veryimportant to me, I try to inspire myteam – I want to encourage them topush the envelope, to breakboundaries. If you’re doing that,you can’t be afraid of screwing itup. There’s no reference point; youcan’t say, “How did he do it?”because you’re doing somethingthat’s never been done before. Soyou should not fear failure; you canlearn from failure but you shouldnever ever fear failure.

And we used Napoleon for Paris – Iknow he came from Corsica! But hesays “In victory we deservechampagne; in defeat we need it.”

But that is not to say we arecavalier in our attitude to work. Farfrom it! In fact, while our ethos isto be nimble, challenging anddynamic, the way we run ourbusiness hangs on our fundamentalmantra to deliver ‘controlled,sustainable, profitable growth’. It isthe combination of these dynamicswhich drives the success of thebusiness.

Mike TobinCEO of Telecity Group

. . . you can learn from failure but you shouldnever ever fear failure ‘‘ ’’

4

Sound Byte

4

Welcome to the post-CloudEraJon Temple is President and CEO of IT Service Management provider, FrontRange. Aswe move into 2013, Jon talks to Gillamor Stephens about the macro trends drivinggrowth and innovation in this sector and the wider Technology arena

The IT Service Management(ITSM) category has beenaround for a long time – it’s a

couple of decades since theseapplications were first deployedacross the enterprise – but, unlikemost technology arenas, it remainslargely unchanged.

Now however, we are starting tosee renewed top-down pressurefrom the CEO and then the CIO tohold the wider organisationresponsible for improved servicequality with greater efficiency andreduced cost. This is creating acouple of interesting phenomena forthe marketplace and forFrontRange.

Firstly, it’s forcing everyone totake a second look at their ITSMapplication portfolio and askwhether it is fit for purpose. Asthese applications have gonethrough very little innovation,people are looking to kick out theold and bring in something new.

Secondly, we are seeing thedevelopment of enterprise servicemanagement platforms from theoriginal ITSM platforms as the widerorganisation, human resources,finance, operations etc. look totechnology to help them improveservice quality back to the business.

Both of these phenomena areleading to heightened categorygrowth within traditional ITSM andproviding renewed opportunity forFrontRange. Certainly the focusremains improving service quality inIT but it is transcending the otherfunctional areas – 30% of our

pipeline in 2013 is attributed toemploying service managementcapabilities outside traditional IT.

Hybrid Computing More widely, our opportunities as abusiness are developing around whatwe see as a very exciting new model- Hybrid Computing. Traditionally,people chart the evolution ofapplication deployment from the‘90’s which was a time of on-premise IBM mainframes and theclient server revolution. In thefollowing decade, Salesforcevalidated the era of Cloudcomputing and millions of dollarswere invested in new businesses inSilicon Valley which were going toleverage the Cloud model.Salesforce clearly cannibalised theenterprise CRM segment but not allfirms were as successful – Cloud isnot necessaraly fit-for-purpose inevery situation.

IT Service Management is part ofthat category. The primary reason isthat cloud deployed applicationsrequire a higher level of operatingexpenditure. This may be all rightfor sales and marketing, which oftenrun at 35% or 40% of revenue, but ITexpenses typically run at 2% or 3% ofrevenue so their ability to invest inCloud deployed applications is muchsmaller. Whilst there are certainlyoccasions when Cloud makes a lot ofsense, IT has an increasedpropensity to default back to thecapital model to free up operatingexpenses and Cloud becomes amuch less attractive option. It

requires a good look at the businesssituation to determine whetherdeploying over Cloud, on-premise ora hybrid of the two, is mostappropriate.

And so, welcome to the post-Cloud era – an era of HybridComputing. By this, we mean theability to deploy in the Cloud, on-premise or being able to movebetween the two. A globalorganisation will want tostandardise their ITSM platform.Many parts of the world haveaccessible internet bandwidth so aCloud deployment would beappropriate but what about themore remote regions? They willwant to use the same technologybut Cloud is not an appropriate wayto access it, in parts of Africa or Asiafor example, with limited reliableinternet access. Hybrid Computing isabout being able to deploy on-premise for these territories butfrom a single vendor so that acompany benefits from having onetool to deploy and train their userson.

Hybrid Computing is one ofGartner’s top five trends for 2013,and importantly they believe thatthe on-premise model is not goingaway. Unlike CRM tools, Gartner ispredicting that, by 2015 newpurchases of ITSM will be 50% in theCloud and 50% on-premise.Additionally, Gartner has predictedthat by 2014, 30% of companieswhich moved to the Cloud forservice management will actuallymove back to on-premise

??????????Sound Byte

5

deployment. This may be becausethere were financial constraintsaround Cloud deployment.Additionally, due to business changeand M&A activity where businessesare brought together with differingsecurity requirements or becauseCloud caters much better to an out-of-the-box application – companiesrequiring more sophisticated ITSMplatforms, higher levels ofcustomisation, configuration andintegration are more likely to trendback to on-premise systems.

As early adopters of Cloud moveback to on-premise, the segmentmatures towards this 50/50 split.This is a scenario we welcomebecause we’re actually one of thefew providers who can cater todeploying the platform in bothmodels. It will be interesting to seehow pure SaaS players react asHybrid Computing becomes morewidely recognised as a hot trend for2013. It’s very possible that theywill start delivering an on-premiseoffering, but of course there will besome restraints for those companieswhose public valuations arepredicated purely on the SaaSmodel. Perhaps the biggestconstraint though is the verydifferent set of pressures that theon-premise deployment method willhave on a software company –different business model,management model, support model,and customer expectations.Uniquely, at FrontRange, we’vegrown up with both modelsorganically. In a larger organisation,

it would be much harder to makethat change to be able to provideITSM across both models.

Future GrowthThere are wider factors which, ofcourse, will have an impact uponthe growth plans of companiesacross the Technology sector, notjust ITSM players. In the run up to

the New Year in the USA, there wasa lot of worry about the Fiscal Cliffissue which was due to come to ahead at the end of the year.Fortunately, a resolution wasachieved and already we’re seeingthe economic benefits - the marketshad their biggest gain in over a yearat the beginning of January and mysense is that this will be reflected inaccelerated IT spending. The trendsspecific to IT Service Management,however, will be the biggest growthdrivers in this segment and firms arefocussed on aligning themselves tothat. ITSM is growing globally at arate of 8% or 9% (compound annualgrowth) but between 50% and 60% inthe Cloud as we accelerate towardsthat steady 50/50 state of HybridComputing. For us, our aspirationsare to transcend that growth – aslong as we continue to grow fasterthan those markets overall, we areincreasing our market share which iswhat we are focussed on over thenext three years.

The IT Service Managementsegment is not often at theforefront of people’s minds whendiscussing exciting, ‘sexy’technology marketplaces and, to befrank, a lot of the traditional serviceproviders are guilty of creating thatimage as products have lackedmodern innovation in the lastdecade. But that is certainlychanging, in fact as a result of thesemacro trends and the historic lackof innovation in this segment, therehas never been a better time to bein service management.

Jon Temple

Jon Temple has more than 25years' experience in the softwareindustry with an impressive trackrecord of leading and acceleratingthe growth of both established andemerging software companies. Hehas held executive roles atLiveOps, Hyperion and BusinessObjects.

Gartner has predicted that by 2014, 30% ofcompanies which moved to the Cloud for servicemanagement will actually move back to on-premisedeployment

‘‘’’

6

Boardroom Insight

66

The Independent ChairmanMike Hedger, Chairman of Mimecast, Conversocial and eCommera is a veterantechnology executive with a track record in building market-leading companiessuch as KVS and Forte. With an earlier career in larger corporations such as Oracleand IBM, Mike is now lending his expertise to three very different businesses.

You’ve worked across aspectrum of global techbusinesses but what was the

appeal of chairmanship in smallerorganisations?What I’m looking for are businesseswhich offer excitement anddynamism. The IT industry is full ofcompanies that have been around along time and become verymonolithic. I moved out of thatenvironment in the early ‘90s ascorporates meant politics to me:spending more time looking inwardthan looking outward. So, I look atcompanies of various sizes but inlarge addressable horizontalmarkets; that are dynamic , andgiven the right level of thought andfocus have the potential todominate a market. They have goodpeople and they understand whattheir value proposition is.

What is the role of a Chairman foryou?What I wanted to do was help thecompanies in many different ways.When I was a CEO, it was difficultto gain impartial advice. Investorsare investors; they look after theirinvestments, so by default youcan’t always be as objective beingan investor.

I see the role as independentChairman as working with investors,and working with either themanagement team or the founders.In all the companies I work with atthe moment, founders arefundamental. They’re not hired,professional management; they arepeople who started the business.The three different businesses thatI Chair require very different thingsof me.

Mimecast was founded eight years

ago and I’ve been Chairman foralmost six . We’ve just raised $60million for the next phase ofexpansion and as a 500 personcompany it is fairly mature now.When I started the challenges werevery different – it was about howbest to support the CEO on anoperational basis but now I focus onmanaging expectations of theinvestors. The role has evolved.

On the other hand, Conversocialhave all the problems of an early-stage start-up – how do you scalevery quickly? I joined them early2011 when they were 8-strong. TheCEO is half my age and on a verydifferent journey to Mimecast. Theyare Facebook veterans andoperating in a very exciting,dynamic marketplace – SocialMedia. I spend a lot of time talkingthrough their challenges, helpingthem to see things in a differentlight and also bring in people whocan help. I have a network ofpeople who will work a few days amonth for them, saving themunnecessary costs; it’s a pay as yougo model! Every month we sitdown, take a look at the businessand focus on the next piece of thejigsaw.

eCommera is another story again;a mature business, a globalecommerce platform provider that Ijoined mid 2012, as they looked toreposition the company. They haveto transform themselves from beingservices based to product based.Principally I came onboard to workwith the CEO and Investors on anaggressive growth strategy aroundNew Product, US expansion, andAcquisition, which is movingforward at pace.

All these companies are on a very

different evolutionary path, there isno overlap between the businessesbut they have very similar businessproblems…albeit at different times.We have to address obstacles togrowth, decide on the direction ofour growth and keep a handle onour unique selling proposition. All Ineed to do is remember whichcompany I’m in!

Are you on a learning curveyourself, working in these newlyevolving marketplaces, or are thedisciplines and experience yougained at KVS, Forte etc. stillapplicable?The answer is yes and no. Thelearning curve is the newtechnology, new requirements andthe change in social behaviour. Theguys at Conversocial are Facebookveterans and on the forefront, notjust of business change, but of achange in the way peoplecommunicate or in the case ofeCommera, how they buy.

People aren’t talking to customerservice any more, they are voicingtheir opinions on Twitter orFacebook and we are feeding offthat whirlwind phenomenon. Butbusiness principles haven’t changedeven if the way that business istransacted has evolved. At the mostbasic level, you don’t run out ofcash, you make sure you hire goodpeople and understand yourcustomer and the value proposition.Make sure the product works ormake sure you fix it pretty quick!

Do you think the expectations of aChairman have changed?My version of being a Chairman isoffering management anotherdimension. I’m not interested in

??????????

7

Boardroom Insight

just attending a board meeting oncea month. I want to participate inthe business. I can sit on both sidesof the fence and help the board andthe management work together butmy primary goal is to findcompanies who need my help anddo just that. I understand strategy,marketing, selling; I understandhow to raise money, and just asimportantly, the cost of raisingmoney; I understand all theprinciples of good business so I amChairman, Advisor and Consultant.I’m also somebody who is onlyconsidering how we can make this asuccess, offering a plug-and-matchrange of skills and available todiscuss what’s appropriate for thebusiness today.

Every business goes through thesame cycle: raising money, going tomarket, raising more money,opening new markets. But there aregood ways and bad ways of doingthat. You don’t want to raise moneyat the wrong price or raise toomuch and lose control. Companiesare a function of management;they’re not a function of investors.Investors can facilitate with moneybut no more than that; you have toinvest in management. Give themgreater skill in the game and theinvestors get a better return.

My job is to work in the bestinterests of the company whichnormally means I protect theinterests of management andemployees; and I protect theinterests of the investors and of thefounders. But at the end of the day,if you make the right decisions forthe company then everyone shouldbenefit. As soon as you start makingdecisions based on anything otherthan what is best for the company,you compromise it.

Does that create challenges insituations where you areintroduced by the investors, whereyou’re their man on the board?I’m not their man on the board – Iuse the word independent and amnot under pressure to be anythingelse. It is in their interests to be at

arm’s length. I sit between the twogroups and the whole idea is that,sometimes, somebody has toconsult with both and broker asolution; keep the harmony andkeep everyone going in the samedirection.

You have meetings at the board,and you have meetings outside theboard. Anybody who says thatdecisions are made at boardmeetings is telling you lies, becausethey’re not. Decisions are ratifiedat board meetings, but they’remade outside board meetings

Mimecast has just raised a roundof funding with investors in theUSA. Does that reflect youropinion of the venture scene inthe UK?That was a very specific exercise tohelp us establish a bigger footprintin North America, to give us greatvisibility in the US market which theguys in London can’t always helpwith. The decision depends on thestage of the company and itsambitions; if your strategy is toexpand quite aggressively in the USthen you’re going to want investorsthere.

There is some discussion aroundwhether valuations are ‘better’there; I’m not totally convinced. Ithink investors in the US are moreopen to risk. They talk about biggernumbers but, as I said earlier, youshould only raise the money youneed.

Do you have any strong opinions

about the make-up of a board?It’s got to be something betweenfive and eight people; any more andit just gets crazy. In terms of boarddynamics, you need one or two non-execs and typically most investorsget a seat on the board if they ownmore than 10% of the business. Youneed to balance the number ofpeople and think about votingstructure so that decisions can bemade but also so that everyone hasan opportunity to talk about theissues. I feel those issues should bemore about the shape of thebusiness on a month to month basisand bring in the key stakeholders todiscuss, rather than worrying toomuch about strategy.

Your executive roles were mainlyin large corporate businesses butnow you’re solving problems formuch smaller companies. Howeasy is it for someone from a bigcorporate background to add valuein those environments? How didyour experience prepare you?The KVS business was mytransformation to small start upCEO, we grew from a few to 225over 4 years, selling to Veritas for$225m having raised capital 3times, so I have that hands onexperience.

From the KVS platform comes myversion of chairmanship – which is'we can discuss any problem'. I’vedone almost everything in business,I’ve succeeded and I’ve failed.Sometimes failing is just asimportant as succeeding but it hasgiven me this vast knowledge,competence and ability tocommunicate and make it happen.The golf guru, Bob Rotella says,“Golf is not a game of perfect.”Business isn’t a game of perfecteither and you have to accept thatalong the way you will makemistakes, and that you will learnfrom them and not make themagain. The biggest thing that I’velearnt is that you should never let aproblem linger. If it is wrong, fix itotherwise it becomes a much biggerproblem.

Mike Hedger Chairman of Mimecast,Conversocial and eCommera

8

Sector Insight

8

Are so-called “Big Data”software applicationsactually effective now at

turning data into usefulinformation?Big Data software applications aregetting better at turning massiveamounts of data into actionableinformation. One major successcomes from recommendationsengines. Wal-Mart handles morethan 1 million customertransactions per hour, whichgenerates 2.5 petabytes of data –the equivalent of 167 times theinformation contained in the USLibrary of Congress. Like Amazon,Wal-Mart transforms that customerdata into a high-poweredrecommendations engine,presenting customers with itemsthat they’re likely to buy based onpast purchases. Companies likeTarget have demonstrated successusing Big Data to increase brandloyalty. Target recognizes thatwomen often switch brand loyaltywhen they have children so targetspregnant women.

At GoodData, we’ve beencollecting customer success storiesof our own. Our partner Zendeskuses GoodData to help thousands ofhelpdesk managers better measuretrends in ticket volume, supportperformance and backlog.

The Economist calculates thatsoftware companies specializing indata management and analyticsare now worth more than $100billion and growing at 10%, twicethe rate of the software overall.Will this continue/accelerate?The volume of business dataworldwide doubles every 1.2 years,so companies will continue todemand management and analytics

solutions to handle massive volumesof data. Not all the value tobusiness is around storage andprocessing. The rest is about gaininginsight from your data. How can BigData be converted into meaningfulinsights that can help companiesrethink success? How can Big Datahelp you cultivate a more effectivesales team and spend yourmarketing dollars more wisely?

Why is Good Data different? Canyou explain the marketingproposition around monetizingdata? Rather than just providinganalytics, GoodData offers Bashes,business mashups of reports,analytics, metrics and bestpractices rolled into one visually-stunning user interface. Bashesanalyse and interpret data fromcloud applications, the web, socialmedia, mobile devices and legacysystems at the same time.

Instead of tables and reports thatdon’t translate into value, Bashesturns data into insights and businessadvantage. You can immediatelygauge the status of your markets,customers, employees,competitors, products, financialsand brands, taking action in real-time to maximize opportunities inthose areas. For example, you cansee your global sales pipeline andfocus on where to increase salesand revenue.

When you integrate Bashes intoyour daily decision-making, you cancontinually adapt your strategybased on the information youreceive real-time,  as aresult  minimizing pipeline risk,highlighting changes inopportunities and enabling a laser-like focus on high-value activities..

You appear to market yourselvesto business users in sales,marketing and businessdevelopment rather than ITexecutives – is that working?Businesses users can benefitdirectly from what GoodData has tooffer. We’ve made GoodData souser-friendly that anyone can adoptit with one click over the cloud.Traditional business intelligencesystems would get stuck in the ITdepartment for an 18-month cycle,because they were complicated andtime-consuming to implement.

International expansion strategy –the take up of these technologiesseems stronger in the US thanEurope or Asia Pacific. What’s yourexpansion strategy?GoodData is following the typicaltechnology adoption pattern,starting with the strong US market,seeing increased demand across theAsia-Pacific region and planningmajor European growth in 2013/2014.

Any predictions for the sector?How do you think it will evolve?We are seeing not only phenomenalgrowth in the volume of data butalso in processing power. 2.5quintillion (2.5 times 10 to thepower of 18) bytes of data arecreated daily. The computationsthat took 10 years to decode thehuman genome can now be done ina week. Business intelligence isevolving exponentially as well.We’ll be able to pinpoint exactlywhere our processes are weak andimprove on them in real time.Rather than being confused by theamount of data at our fingertips,we’ll have advanced platforms likeGoodData that will give us moreinsights than ever before.

The Era of Big DataInterview with Michael Gear, SVP Field Operations of GoodData, an excitingbusiness analytics platform provider

International Insight

9

Managing Growth CEO, Kailash Ambwani and VP International, David Oates from the high growthprovider of security, management and compliance solutions, Actiance, discuss theirchallenges and opportunities

Actiance has grown to almost300 employees from 160 thistime last year; most are in

Sales and Marketing as products gaintraction in the marketplace butgrowth has been global (40% in theUS, 40% in India and 20% elsewhere.)Last year revenues grew 85% andsimilar growth is expected this year.

Primarily, Actiance addressesGovernance and Risk – delivering aplatform to help large companiesmanage all form of electroniccommunications. 15-20 years agothat just meant email…these daysit’s email, VoIP, blogs, wikis, social,unified comms, IM, Facebook,Twitter, Yammer, collaboration toolsetc; some of which the enterprisehas deployed itself like Chatter fromSalesforce.com and others that endusers have brought in such as Skype.

The challenge: how do you trackwhat is being communicated? Howcan you ensure inappropriatematerial is not allowed in andconfidential data is not allowed out?Are you satisfying corporategovernance and regulatorycompliance requirements?Historically this was addressed byimplementing several pointsolutions, although coverage wasincomplete. Actiance is the onlycompany that addresses all mediaon a single platform; managing andstoring all content; simplifyingcomplexity. Their competitors arelargely point solutions addressingindividual media.

And there are new mediaplatforms emerging all the time, forexample Google+. Vendors areresponding by integrating social intotheir core design offering to recordthose conversations. Autodeskintroduced social collaboration and

Actiance will add voice capability bythe end of the year.

The market can be segmentedinto Public Social and EnterpriseSocial. Forrester define EnterpriseSocial Software as growing at 60%plus into a $6 billion market. Theyhave partnerships with the mainplatform providers: IBM, Jive andMicrosoft.

The Financial Services vertical hasbeen an early adopter of Actiance’ssolution as with othercommunication platforms, giventheir strong governance structure –70% of our business today. They havelarge engagements with engineeringcompanies, manufacturingcompanies using collaborationplatforms for product design to keepthe data secure and accessible, forlitigation purposes. Three of the topfive independent oil companies arecustomers as well as majororganisations in Government, Retail,Technology, Telecommunications,Pharma and Healthcare.

David: “My biggest challenge isoptimising sales with the resourceconstraints that any VC-backedcompany is going to have. Whilst wehave strong direct sales capability,we are focussing on building thepartner base to grow faster andspread risk across other territoriesand verticals without high levels ofinvestment, in the shape of 15-20resellers. The UK economy is beingtalked down by the media, theNordics and Benelux regions arestable but Southern Europe is weak.There are no compliance drivers inAPAC (apart from India) so we aredriving deals based on best practiceand governance, but the growth ofSocial is even higher than in EMEA,albeit with some unique platforms

such as QQ in China, which is thefastest growing social networkglobally. We are not expecting quickreturns and we are cautious aboutnot over-resourcing.” [GillamorStephens placed David as VP EMEA –he was recently promoted to runAPAC as well]

Kailash: “Our biggest challengeand where I spend a lot of my time,is managing growth, in twodimensions. We are moving fromgrowth based on tribal knowledge toinstitutionalising that knowledge onour own platform so we experiencethe benefits first-hand. The seconddimension is where GillamorStephens and Access Search Partnersadd value – scaling by hiring qualitypeople, especially in leadershippositions and the sales function.

We’ve also innovated by creatinga Social division. As our customersdeploy social networking, theirSales, Marketing and lines ofbusiness have increasingly beenapproaching us about maximising ROIfrom these platforms in addition toour interaction with their ITfunction. For example, in the US twoof the top three wealth managementfirms have put their FinancialAdvisors on our Socialite platform toincrease social engagement withtheir networks. They can distributecontent, measure the resonance ofthat content, monitor the growth oftheir network – then clearly trackback to the ROI.

Beyond our core business, we arealso investing heavily in Big Dataand Analytics to give insight into the petabytes of data managed.There’s lots of capital available inthis space in Silicon Valley at themoment but competition for talentis fierce.

10

Mobile Insight

1010

Upwardly MobileThomas Enraght-Moony has spent 15 years in high-tech, mobile and internetbusinesses in Europe and the United States where he held executive roles at bothAT&T Wireless and Clearwire as well as serving as CEO of Match.com. In 2011, hewas approached by Francisco Partners to become CEO of Lumata. Thomas shareshis thoughts on the mobile marketing industry and some observations on managinga global, private equity backed business

How would you describeLumata?Lumata is an end-to-end

software and services provider tobusinesses that want to manage themobile channel. Our typicalcustomer is the CMO who knowsthat consumers are spendingsomewhere between 12% and 20% oftheir time on mobile. We provide astrategy for reaching consumers viamobile and the technology to bringthat strategy to life.

For example, one of ourcustomers is Orange. Their vision isto use the mobile channel to deliverOrange Wednesdays (two-for-onecinema tickets). They use ourmobile marketing expertise, oursoftware and our services to bringthat to life every Wednesday.

What attracted you to Lumata?Mobile is a landscape of unrealisedpotential. If you look at the mobilemarketing sector you see somethingmassive and extremely high growthby almost any measure. You alsosoon realise the category hasn’tfully developed yet. There are anumber of B2B software andservices providers but none haveemerged as the clear market leader.

I spoke to Francisco Partnersbefore Lumata was carved out ofBuongiorno. It was clear that therewas a really interesting businesshere with all the makings of aplatform on which you could buildand invest to create the global

leader in mobile marketingtechnology and services.

What do you see happening inmobile at the moment?Firstly, consumer uptake of mobileis huge. In the US, more than 12% ofinternet access is through a mobiledevice but in India, that percentagerises to over 50%; it has becomemore important than the ‘wired’web. This shows no sign of slowingand is fundamentally reshaping theworld as we know it.

Secondly, the development ofsmart phones means that people areno longer carrying phones - theyhave computers in their pockets.This doesn’t just refer to iPhonesand Galaxy SIIIs but to low costsmart phones in developing marketslike India; adoption is incrediblyhigh.

Third is a trend still in theinnovation stage: how companiesmake use of the mobile channelwith new ideas and technologiespopping up all the time. This comesback to what we do – where forexample a CMO sees 15 differentways for payments and transactionsto go mobile, we have the expertiseto say, ‘This is how we can find theright strategy for you and this ishow our technology can implementit.’

What are your views on how best tomanage a global business?

The last global business I ran wasMatch.com which grew to $350million revenues across 38countries. Lumata also has a strongglobal footprint. When you read themanagement literature onglobalisation, they talk about allthe differences but I’m alwaysstruck by the similarities. There arecertainly nuances in the way you dobusiness around the globe anddifferences in the way you mightsell to a German, Italian or Indiancustomer but the core problemremains the same: their customersare going mobile and they need astrategy and a product to deal withthat.

The same applies to theindividuals within the business;there are certainly culturaldifferences but everyone is therefor similar reasons and motives.

There are challenges to running aglobal business but I focus on threethings to make it work. The first istravel. I think it’s really importantboth to get out to the markets tomeet the customers and to spendtime in person with the employees;you can build relationships in a waythat is near impossible over thephone. This has to work in the otherdirection as well – all my local MDscome to London. It makes everyonefeel like part of the core team andremoves any ‘us vs. them’mentality.

Secondly, every executive at

11

11

Mobile Insight

Lumata acts as an ambassador. Ifour CTO is in India to meet with thetech team or for a client visit, he’llhold an all-hands meeting foreveryone in the office. As a seniorleader of the company he will standup and talk about anything peoplewant to discuss, be it strategy,finance, product, sales, whatever.He’s an ambassador for themanagement team. There are onlyso many places one individual canbe but when there are several of usconstantly travelling and speakingfor the group, it has a multiplyingeffect.

Thirdly, clear communication isessential in an environment wherenot everyone is a native Englishspeaker, in the same room or eventhe same timezone. I can be fussyabout the wording of ourcommunications, about whom it isaddressed to and even who iscopied on an email. It is the smallthings like this that really matter.

What are the advantages of workingwith private equity investors?Lumata is backed by FranciscoPartners, a global private equitybusiness with about $7 billion undermanagement. They’ve been afantastic partner in acquiring andbuilding Lumata. There are manyreasons why but most importantlyfor the business, they provideinstant credibility to a newbusiness. When I’m recruiting, the

individual knows that we have thecapital, the know-how and theresources to make it happen.Equally, our customers are some ofthe biggest brands in the world.They’d quite naturally be hesitantabout working with a smallcompany but when they hear thatyou’re properly backed, it dispelsthose doubts.

It seems obvious but FranciscoPartners acquires and transformsbusinesses for a living. Any problemthat we encounter, they havealready been through. They canshow me how another firm hasdealt with an issue or they will putme in touch with one of their other

CEOs to discuss ideas. Those are tremendous assets.

Their input will cover everythingfrom sophisticated strategydiscussions to tactical things likesetting up a KPI dashboard for thecompany. You don’t need to spend amonth thinking that throughbecause Francisco Partners have gota template; it’s worked for the last20 businesses they’ve backed andmade successful. We can bringthese kind of things on boardimmediately and move quickly.

How do you balance the short termperformance of the business withlonger term strategic development?There is no straightforward answer;the role of CEO is to create abalance between the two. You haveto do both; create structures forevery day decision making andcarve out time to think aboutstrategy. Setting out clearobjectives which allow your team tomake decisions will free up time forthe strategy side. That is theeveryday challenge but it also goesin phases. At the start we spent alot of time thinking about strategy.Then we had to make a tacticalplan around organisation andpriorities. In the midst ofdeveloping processes and buildingthe management team, we made avery strategic acquisition and a lotof the focus was on that. It is aconstant balancing act.

Thomas Enraght-MoonyCEO of Lumata

Mobile is a landscape of unrealised potential. Ifyou look at the mobile marketing sector you seesomething massive and extremely high growth byalmost any measure

‘‘’’

Megabuyte Insight

121212

Pretty much anyone who isactive in the UK technologysector will be aware that the

number of technology companieslisting on the London exchangeduring the downturn, either on themain market or AIM, has been verylow indeed. Over the last two yearswe have registered just 4 IPOs inthe sector and, even looking at thebroader category of tech-enabledbusinesses, that number would stillbe fewer than 10. However, thereare now signs that the IPO marketmay finally be opening up againafter its longest dormant period fora generation. Meanwhile, we seesome interesting trends developingin the private equity market withnew entrants and the likelihood ofgreater exit activity. So what willthe balance be between stockmarket and private equity activityin 2013?

While IPO activity has been mutedto say the least over the last fewyears, there were some clearindicators during 2012 that theinstitutional investors are onceagain warming to technology newissues. First, while the downturnhas seen a steady flow of secondaryfundraisings, this trickle turned intosomething of a flood in the secondhalf of 2012. Overall, the London-listed companies we track raised£315m during 2012, three timesthat raised in the previous year. Andthe trend has continued withAdvanced Computer Softwareraising a £44m war chest just lastweek.

Another reason to be optimistic isthat, while there was the samenumber of tech IPOs in 2012 as in2011, the performance of one inparticular has certainly grabbed theheadlines. Shares in WANdisco wereadmitted to AIM in June 2012 at180p, valuing the company at £37m,and have subsequently shot up to735p valuing it at over £150m. Andthis for a company which isexpected to generate revenues ofjust £5m in 2013.

While one swallow a summer doesnot make, we should not underestimate the sentiment impact ofthe early success and valuation ofWANdisco as a listed company. Manysmaller privately owned techcompanies seeking funding,especially those without VC or PEbackers, may well now consider AIMas a viable alternative whereas, ayear ago, it wouldn’t even havebeen an option. Also, with small capbrokers desperate for business andinstitutions experiencing meaningfulcash inflows into their funds for thefirst time in years, the City isactively courting and ready toinvest in these businesses.

On a broader note, there is anacknowledged gap in the privatecompany funding market in the UKbetween the super-high growth techand internet companies favoured bythe VC community on the one handand the established mid-marketplayers, sought by private equityinvestors on the other. We can seeAIM becoming the choice ofcompanies which are still too

immature to be of interest to theprivate equity market but not rightfor VC investment either. Whetherit is appropriate for companies inthis category to be listed is adifferent question, the answer towhich will only become clear overtime.

Meanwhile, on the private equityside of the equation, we have seenan interesting dynamic. Havingsuffered the same post-Lehman’shiatus as the capital markets, theprivate equity segment reboundedmuch more quickly. Consequently,since the start of 2010, we haverecorded 73 UK private equity dealswith a total enterprise value of£4.5bn compared to just a trickle ofIPO activity in the same period.

Looking a little deeper into thisactivity, we can see that there havebeen a couple of key segments ofthe market which have particularlydrawn investor interest and,furthermore, we can see that thesethemes are broadly tied into thekey megatrends of Cloudcomputing, Software as a Service,and mobility.

In Cloud computing we have seensomething of a dash for hostinginfrastructure and managed servicesassets while, at the same time,demand for the security andinfrastructure software vendors thatunderpin Cloud infrastructure havealso been high. Meanwhile, on thesoftware side of the equation,investors have been looking toinvest both in newer SaaS pureplays as well as established vendors

AIM vs PE in 2013; where doesthe balance lie?Ian Spence of Megabuyte offers his perspective on this key issue

13

1313

Megabuyte Insight

looking to capitalise on the move toSaaS.

While the new generation ofmobile services companies, ofwhich Monitise is perhaps the posterchild, have been feted byinstitutional investors, we have alsoseen a number of private equitydeals in the sector, especially infast growing niches such as machineto machine (m2m) communications.

Interestingly however, after 18months of frenetic investmentactivity, the number of privateequity deals slowed significantly inthe latter part of 2012. However,we do not believe that this shortterm reduction in deal flowrepresents the start of a longerterm trend, for a couple of reasons.

First, over the last year, we haveseen a significant increase inprivate equity interest in thetechnology sector, much of it fromfirms which have previously notbeen particularly active in thesector. Anomalies such as the recentcollapse of 2e2 aside, the resilienceof the technology sector throughthe recession has forced manygeneralist UK private equityinvestors to look again at the sectorand revise their cautious view.

At the same time, we are seeingan ongoing increase in interest inthe European market by US basedprivate equity firms. Driven byintense competition for deals in thetheir home market, US firms areactively looking to deploy capital inEurope, driven by the view thatvaluations are often lower and

competition for deals is lessintense. The most obvious sign ofthis interest was Vista EquityPartners’ audacious P2P of Misyslast year. But we have also seen twoof the larger deals in recentmonths, Kewill and ThomsonsOnline completed by US firmsFrancisco Partners and ABRYPartners.

All of this private equity interestin the sector leads us to concludethat the slowdown in the secondhalf of 2012 was anomalous andthat we will continue to see anactive private equity market in 2013and beyond. Indeed, we havealready seen increased activity in2013 with the afore mentioned£100m secondary buyout ofThomsons OnLine, funded by ABRYPartners and the £70m investmentin Truphone by Roman Abramovich’sinvestment vehicle Minden.

At the same time as ongoingprivate equity investment in thesector, however, we also expect tosee a much greater level of exitactivity on 2013 than we have seenfor a number of years. With manyPE firms’ portfolios pregnant withcompanies purchased in the yearsrunning up to the downturn, andwith them in need of some exits toprovide hard return stats to supportthe next fundraising, all theconditions are right for a markedincrease in exit activity this year.Indeed, we are aware of at leasthalf a dozen likely mid-market exitsthis year with a deal value well inexcess of £500m, and that figurecould easily be over £1bn by thetime 2013 is over. Ironically, thisexit activity may well be a driver ofincreasing IPO activity as some ofthese private equity exits may endup on the stock market.

All in all then, 2013 is shaping upto be another active year in privateequity land and, for the first time infive years, we may see a meaningfulnumber of tech IPOs in London. Ofcourse, much of this, especially there-opening of the IPO market, isheavily dependent on a stable orpositive overall stock marketperformance. Things are lookinggood at the moment, but they werelooking equally good this time lastyear and look what happened. If theEuro crisis reawakens from itscurrent slumber or concerns aboutthe global economy in generalresurface then all bets may be offonce again.

Ian Spence

for the first time in five years, we may see ameaningful number of tech IPOs in London‘‘ ’’

VC Insight

141414

There is lots of news beinggenerated in the UK throughthe Government initiatives to

help start-up companies, with TechCity being the beacon of hope. Butthe UK is still slow off the mark,especially when compared tocountries like Finland, which isrecognized as a highly active hotbedof start-ups. This has been createdand supported by the FinnishGovernment and is underpinnedwith multiple funding vehicles tosupport pure academic programsthrough to growth companies.

Henri Grundstén is a Director atFinnish Industry Investment, whichinvests in both VC Funds as well asdirect investment into early stagecompanies, with nearly €700munder management. He gives hisperspective on the success andfuture for Finland’s start-upecosystem.

“The recent “Slush” start-upevent in Helsinki was a huge successgathering over 3 000 people and 500early stage companies to get thefeel of Finnish, Russian and Balticstartups. Slush reflects in a veryconcrete manner the change in theentrepreneurial climate in Finland,especially around universities andamong young talented students.

Finland has spent a great deal oftime and effort in building afavorable ecosystem and operatingenvironment for start-ups andyoung innovative growthcompanies. Investments intechnology, innovation as well as inresearch and development areamong the highest in the world.Another important contributor isthe education system, which hasbeen evaluated as one of the most

advanced in the world. It providesFinnish technology companies withhigh quality engineers, designersand business developers to buildsuccessful growth businesses. Alsothe beneficial socio-economicenvironment in Finland togetherwith stable social order providesentrepreneurs with favorablecircumstances to grow theirbusinesses.

The Finnish government has put alot of emphasis on developing thenational innovation system tosupport and promote technology-based, high growthentrepreneurship. This policy hasbeen successful and wasinstrumental in, for example,Finland’s development in to thevanguard of mobilecommunications. The Government’sfinancing arms Tekes (€500m+ ofannual R&D program funding),Finnish Industry Investment (€700munder management, 70 directinvestments and 90 investmentsinto other venture funds andFinnvera (early stage fund, €120mand over 100 portfolio companies)form together a well-functioning

financing system for innovationsand growth businesses, whichoperates in concert with the privatefinancing market.

This has attracted internationalventure capitalists to Finland duringthe last three years and there havebeen a number of investments inFinnish technology firms. Finland’sown venture capital industry is alsowell established and the venturecapital market there is currentlyranked as one of the most activeones in Northern Europe.

A couple of recent Finnish successstories, game developers RovioEntertainment and Supercell, areexcellent examples of young,ambitious and innovative firms,which target global markets fromthe very beginning. At the sametime these firms are excellentexamples of Finland’s capability tore-invent its industrial excellencetime and again travelling fromforestry and shipbuilding viatelecommunications to gaming andentertainment. The future is brightfor Finland, but we need tomaintain our investment levels andensure that our companies are seenby the global investment marketswhen it comes to later stagefunding.”

Paul Gillespie comments, “Wehave hired executives from aroundthe world to join early stagecompanies in Finland. The fact thatCxO talent from the US and Asia willcome to Finland – despite the colddark winters (!) – underlines theinnovative nature of thesecompanies and the fact they havetrue global potential.”

For more information please visitwww.efvf.fi

Finland – the Startup Hub ofNorthern EuropePaul Gillespie, Partner at Gillamor Stephens looks at the success of the start-upinfrastructure of Finland

Henri Grundsten, Director at F.I.I.