Industry news

The growth of IT SMEs

Small and medium sized businesses within the software and technology industry are growing in London as the government begins a campaign of measures designed to open up department contracts. At the same time the growth of Silicon Roundabout reflects the economic potential of SMEs and their contribution to the GDP.

In the past weeks Whitehall has focused on SMEs as an area ripe for expansion. A range of measures have been introduced including advice to government departments designed to provide SMEs with an increased chance of winning government contacts.

The IT industries including SMEs are set to benefit from the redevelopment of the IT GCSE, replacing an outdated model which had contributed to the UK IT skills gap and shortages of software developers. Tech City software developers have also been supported by tax breaks and low-interest loans from the National Loan Guarantee Scheme to promote growth.

SMEs account for 60% of new job creation in the UK and the new guidelines for government departments reflect the importance placed on SMEs in the current economic climate. This week Silicon Roundabout announced that 800 IT positions will be on offer in the coming months. The Roundabout has been a success story for the IT industry and the UK economy as a growing collection of new and innovative companies situated around Shoreditch and Old Street.

The success of SMEs within the IT sector has seen the introduction of government initiatives seeking to ride on industry growth. Public sector guidance has been used promote SME IT companies for medium seized contracts capped at £100 million. The uses of IT SMEs are promoted to increase efficiency and reduce risks of project failure.

The growth of Silicon Roundabout developers has prompted Canary Wharf to move in order to attract up and coming IT companies as they aim to emulate Shoreditch’s based Silicon Roundabout success.

George Osbourne, said in regard to IT SMEs during the release of 2012’s budget: "We shouldn't be shy about identifying our successful industries and reinforcing them”. This certainly seems a sentiment which will continue in the upcoming months.

105 developing businesses including Moo.com, Last.fm and Twitter will be opening up developer and design positions at a talent fair this May with over 800 jobs on offer.

The last job fair in October saw the attendance of 1,500 job hunters with 168 achieving job placements. Where previous events had focused on software engineering, the new event will focus on user interaction design, visual design and analytics,

Ian Hogarth, Songkick co-founder, said: “Because all the start-ups are working together on this, we're able to present a career category to people”.

A study by The Centre for Economic and Business Research (CEBR)and SAS shows that big data analytics could add £216 billion to the UK economy and create over 58,000 new jobs within the next five years.

The report showed that big data bolstered the UK economy in 2011 by £25 billion with a forecasted increase of £40.7 billion by 2017.

Charles Randall, analytics product manager at SAS, said: "There is a need for skilled workers and that's why SAS are investing in the grass roots level of students at school to support them with their education in subjects like maths, science and engineering".

Yahoo has announced in a statement that it is set to carry out cuts and ‘phased transitions’. The company expects to make savings of £236 billion from the layoffs.

The layoffs come as part of a major business restructuring as Yahoo moves to redeploy resources to protect the core business.

Scott Thompson, CEO of Yahoo, said in the statement: "Today's actions are an important next step toward a bold, new Yahoo - smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require."

Transport for London will extend its 2007 contract outsourcing IT support to CSC for an additional 27 months in a deal worth $33 million.

The contract will see CSC continue to provide IT services including service and desktop support as well as providing real-time customer information to a number underground stations.

The extension of the contract comes as Tfl begins the first stage of a three stage programme of redesign its IT infrastructure, with focus being placed on improving the quality of commodity services.

Leeds City Council has attempted to reduce the pressure on the helpdesk by creating a portal and apps store for council staff smartphones.

The construction of the portal will allow council staff members to use phones with Apple and Android operating systems for work in conjunction with MobileIron device management. The move comes as the council switches from an existing Windows Phone strategy.

Marcus Hunter, strategic services manager at Leeds City Council, said: "The central management functions of the platform mean that operational overheads will reduce.”

The Met Police have released details of a new contract for a radio services network estimated at £160m.

The contract is with thirteen suppliers including Arqiva, Motorola, Thales, Capita, Peter Jones and Sonic Communications who will provide radio equipment and services for authorities using the national Airwave network.

The contract is to last 4 years and is divided up into three separate lots, which includes Airwave radio terminals, radio managed services and Airwave radio accessories.

Information Services Group (ISG), a leading technology insights, market intelligence and advisory services company, have launced a new Consumption Management service offering to help enterprises address the challenge of IT asset management and reconciliation.

The new service incorporates technology from ISG strategic partner Blazent, whose SaaS-based IT intelligence solutions provide a consolidated source of information on IT assets and uncover hidden opportunities to optimise IT operations, lower costs and reduce risks.

“It is becoming increasingly clear that many CIOs of both large, global companies and smaller enterprises have a knowledge gap between the IT assets they have and what services are being delivered on those assets. As this knowledge gap grows, so too do the costs and risks to their companies” said Colin Craig, UK Service Line leader, Governance Services, ISG.

HM Revenue & Customs has cut the cost of an IT upgrade by up to £50m by awarding a contract to a start-up IT company, rather than a major systems integrator.

Redmond-based company Browsium was chosen to upgrade HMRC from Internet Explorer 6 to IE9, after large IT suppliers were unable to offer a cost-effective solution.

Browsium quoted a figure of around £1.28m to complete the job, compared to quotes from £35m to £50m or above from large system integrators, revealed CIO Phil Pavitt, last week.

HMRC, which has generally favoured framework contracts with large systems integrators, had some initial concerns about using an SME to complete a major project on the UK's tax infrastructure. HMRC has mitigated the risk by requesting that Browsium team up with a second company, CDG, to provide an extra layer of backing and financial security.

The deal between the Department of Health and CSC concerning the National Programme for IT which was due to be signed by the end of March, is still yet to be finalised.

This delay is yet another setback for the National Programme for IT plan which has been blighted with delays and missed deadlines since its inception.

According to stock market documents filed in the US: "Progress continues; however, discussions on the interim agreement have not yet concluded and are still on-going at this time."

The filing notes that this means Lorenzo implementations remains at a standstill through until 1 June at the earliest. CSC also reminds investors yet again that there is no guarantee that an interim deal with the NHS will be struck.