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Welcome to the sixteenth edition of GS-insight, the quarterly newsletter from international executive search firm, Gillamor Stephens. In this issue we consider a variety of topics relevant to ...

Welcome to the sixteenth edition of GS-insight, the quarterly newsletter from international executive search firm, Gillamor Stephens. In this issue we consider a variety of topics relevant to technology companies and the investment community. Key figures from the industry provide insight and perspective on contemporary issues such as: reinventing corporate IT, in-sourcing, building effective channel alliances, leadership, driving change and “bootstrapped businesses”. In addition we explore the reasons behind the success of the Nordic region in producing exciting and successful “start-up” technology companies.

Gillamor Stephens is the leading executive search and selection company serving the international technology, media and communications sectors. GS-insight is published in both print and electronic formats, and can be viewed and downloaded from www.gillamorstephens.com.

We welcome your feedback at gs-insight@gillamorstephens.com

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    Gs Insight Magazine Gs Insight Magazine Document Transcript

    • GS- nsight people • i technology • business Issue 16 In this issue 1 Cover Story Reinventing James Stevenson, Citrix Systems Area VP UKI & S. Africa, explores securing an IT environment Corporate IT revolutionised by free James Stevenson, Area Vice President UK, Ireland and device choice South Africa, at Citrix Systems explores how to secure a 2 VC Economy flexible workplace Michael Elias, MD of growth equity G investor Kennet discusses the inherent lobally CIOs are under increasing environments on one machine. Using a appeal and challenges of “bootstrapped” pressure as a new generation of client-side hypervisor, multiple desktop businesses workers enters the workplace operating systems can coexist in demanding the same slick, personalised complete isolation on a single end user 3 SoundByte user experience as at home. To illustrate, device. This layer of separation between Citrix Systems’ James Stevenson Stevenson describes directors who require the operating systems enables, for considers the reinvention of corporate IT “an Apple Mac, a Netbook, an iPhone and example, a “personal” desktop and a through “Bring your own PC” schemes a Blackberry” to operate, and companies “corporate” desktop to reside on the where people have resigned over a same hardware, but completely 4 Global Economy Twitter ban. protected from each other. IT can place GS-insight brings together two Venture Stevenson believes that Citrix has the all requisite security, controls and policies Capitalists and the CEO of software answer to enable user’s complete choice on the corporate desktop, while still start-up Mamut to debate the secret of the Nordic zone’s entrepreneurial on the device they use to access their allowing personal space for the user.” success applications (see p.3 for Citrix’s “Bring Using a virtualised approach has the Your Own PC” scheme), but also resolves additional benefit of unchaining office 6 Leadership the perceived security issues: based workers from their desks. As the Andy Isherwood, VP & GM of HP’s “Providing users with complete choice threat of swine flu looms, this solves yet Software Solutions Group provides a over the device they use into a “locked another CIO headache as critical workers change agent’s perspective on down” environment would at first sight can be home based without losing management, career and the economy appear to be a security nightmare. productivity. However, CIOs should instead embrace it, Viewed like this, consumerisation of 8 Executive View and only secure what you absolutely have enterprise IT coupled with virtualisation Phil Pavitt, having driven to.” moves away from bowing to necessity, significant change in TfL’s “Citrix, in association with Intel, can and into the positive realm of IT IT strategy and operations, enable users to run multiple virtual evolution. discusses his next challenge; becoming CIO of HMRC Viewfinder Welcome to the sixteenth edition of GS-insight, the quarterly newsletter from 10 The Big Debate international executive search firm, Gillamor Stephens. In this issue we consider a Senior executives from Atos Origin and variety of topics relevant to technology companies and the investment community. Channel Dynamics examine the reality Key figures from the industry provide insight and perspective on contemporary issues of strategic alliances such as: reinventing corporate IT, in-sourcing, building effective channel alliances, 12 GS Opinion leadership, driving change and “bootstrapped businesses”. In addition we explore Gillamor Stephens Partners Paul the reasons behind the success of the Nordic region in producing exciting and Gillespie and Steve Morrison discuss successful “start-up” technology companies. the health of the recruitment Gillamor Stephens is the leading executive search company serving the marketplace, and how best to utilise international technology, online and cleantech sectors. GS-insight is published in stock options to attract talent both print and electronic formats, and can be viewed and downloaded from www.gillamorstephens.com Steve Morrison, Founding Partner 11
    • VC Economy A different kind of capital Why Michael Elias, Managing Director of Growth Equity investor Kennet, prefers “bootstrapped” businesses F or mature growth equity opportunity for Kennet to help such investors like Kennet, there companies, and often that help are companies in the market comes in the form of finding the that need help, but just don’t best people to take the company realise it. forward to the next level: Instead of concentrating on “A lot of bootstrapped businesses companies that have swallowed have similar characteristics. You their third or fourth round of will find a strong, capable founder funding and continue to consume at the top with twenty people cash, the smart search is on for reporting to him like worker bees. successful, entrepreneurial There is frequently very little in the technology businesses that have way of second tier management, built a solid foundation with little and the founder may not realise external funding, and need to take that these are important hires. So the next big jump in growth. To much of what we do is recruitment- keep ahead of their markets and related.” lead to greater value for The reality is that a lot of Michael Elias shareholders, they may need to “bootstrappers” are heavily reliant Managing Director of Kennet ramp up their sales force or expand on serendipity in hiring: internationally. Elias explains: “Most bootstrapped companies “A bootstrapped business often at creating shareholder value. It’s have not used search firms before, starts with the founder making all something we see quite frequently.” instead recruiting people through the sales. Once you get over that “Often, the less a founder is existing, sometimes opportunistic and show that you can hire and interested in raising capital, the relationships. When asking a train sales people in a reliable way, more we like the company. In some founder CEO how he found his VP then you have the capacity to cases we are pitching to them Sales, it’s not unusual to hear ‘We expand. At that stage, many rather than visa-versa. We often met on a plane/train/cruise, and business owners face a dilemma: establish long relationships with that although he didn’t have should they sell the company or companies before we invest. It’s not directly relevant experience, I liked take capital and grow it? We unusual to have a multi-year him, and sales are sales....” recommend a third path: sell a bit relationship before an investment is Looking ahead, Elias sees some of your company to us and take consummated.” challenging times ahead for the capital.” Elias feels that a key difference traditional venture capital model, That can mean adopting a regarding “bootstrapped” which Kennet abandoned in favour different attitude to cash flow. companies is that their founders of growth equity in 2002. “I think it “Activities that are great for near- have much more self confidence is going to be a completely term cash flow aren’t necessarily than early stage entrepreneurs. different landscape. In Europe, those that are providing the most “They have already shown that they firms are getting to the end of their strategic value for the business. So can build a company without our funds and the fundraising market is it’s not unusual for us to suggest help. Our relationship with them is dire. There may well be 50% fewer shutting down activities that are different.” VCs in four years than there are good for cash flow, but not so good There is nonetheless a clear now, in both the US and in Europe.” What is bootstrapping? Company built with little or no outside funding • Growth funded primarily through operational cash flow • Equity predominantly held by founders and key staff • Customer focus is in the “DNA”• Investment decisions are rational, not speculative • Business focus is on rapid, affordable growth 2
    • ?????????? SoundByte Bring Your Own PC James Stevenson, Area Vice President UK Ireland & South Africa, at Citrix Systems discusses the reinvention of corporate IT F acebook, Twitter, iPhone and choice over which devices they use. Netbook are hardly standard We can do this because we use our war cries, however applications own technology – the Citrix Receiver and devices such as these are allows users a simple, ubiquitous helping draw the battle lines for the access point to drive their biggest enterprise IT revolution applications on Mac, Windows, since the launch of the personal PC iPhone operating systems (and soon in 1980. Just as the ‘80s workforce Windows Mobile, Symbian, pampered at home by Lotus 1-2-3 Blackberry and Android) as they rebelled against a clunky, green wish.” screen in the workplace; so too are “Through enabling choice of today’s “technology natives”, spoilt device, and giving more control to by iTunes’ intuitive interface and the user we are moving toward a access to a plethora of consumer publisher-subscriber model, and devices, beginning to demand more delivering IT as an on-demand from corporate IT. James Stevenson service. By embracing SaaS and Stevenson believes that the Area Vice President at Citrix Systems Cloud-based technologies anyone consumerisation of IT is a pressure with network connectivity can that has been building for a number they want to supplement from their securely access to corporate of years and that this is something own pocket.” applications remotely. Despite this that the CIO will have to address: Part of the of the programme’s abundance of connectivity and “The question is how does the CIO criteria is that devices must cost at devices, IT still maintains control enable the user to have choice and least 20% less to purchase and over data, applications and security still keep the things that are maintain than devices managed ensuring a risk free and compliant important to him, such as delivering through the traditional system. environment. We are already seeing services which are effective in their Therefore Citrix has created a growing interest and adoption from environment? We think it's inevitable BYOPC website as a self-service our customers as they identify with – look at how the Mac is being application portal, interactive the user experience, control and introduced to the corporate support community (ensuring that management benefits.” environment due to widespread internal IT do not have to support Wide adoption could mean forced iPhone adoption. The bottom line is devices) and online shop offering change for the channel as Stevenson that CIOs are going to have to discount purchases through the notes: embrace this new environment.” Citrix channels. Interestingly, it was “If you are a reseller which sees This has led to a struggle for CIOs found that the productivity the main bulk of your business regarding budgets, maintenance and increased for the majority of coming through laptop or general how to safely allow users to bring employees, that better care was end-point device sales, BYOPC could unmanaged devices within the taken of equipment due to a pride impact your pipeline. However, with secure corporate domain (see p.1). of ownership, and Citrix has a fairly consumers driving the device side of Stevenson explains how Citrix is unique edge in wooing technically IT, it frees IT decision makers to addressing through an innovative savvy employees. focus on the strategic, “bring your own PC” (BYOPC) Stevenson feels that this infrastructure and service delivery programme: programme represents the beginning aspects of their role – a real “Citrix is in phase one of rolling of a fundamental change to how IT opportunity to add greater value for out a programme to enable is supported within the corporate our channel with virtualisation and employees to buy their own machine environment, and that this is networking technologies.” running a PC environment of their something which Citrix can support BYOPC is part of Citrix’s strategy choice - the concept is similar to a from a user experience and IT to reposition IT as a service provider company car allowance. Staff can management perspective: rather than an over-controlling even buy a top of the range Mac if “We have given our employees a obstacle to progress and innovation. 3
    • Global Economy The Nordic Alternative Despite the challenging economic times, the Nordic zone continues to produce exciting technologies and successful start-ups. Is there a secret to this success? T he Venture Capital Practice at Gillamor capital from people and funds that they know, Stephens has worked with the Nordic and therefore many companies are funded start-up scene for nearly four years, locally. So in that sense one might say there is hiring CxO, VP and Director level executives a “community”. The Governments across the into a broad array of technology companies – Nordic region provide capital financing from PCB manufacturing processes to through funds such as Argentum (Norway), enterprise software. We have noted with Finninvest (Finland) and Vækstfonden interest that where other geographies’ (Denmark). The fact that a number of growth tends to have slowed over the last 18 established technology companies have been months, the Nordic region continues to Bjørn Stray global leaders in their space provides produce an increasing array of successful Partner at Northzone individuals with a technology and market start-up companies. Ventures insight essential in helping create companies To take the investment temperature of the which can quickly take unique propositions to Nordic zone, we have sought the views of “There is a high the market.” Venture Capitalists Helge Hellebust, Partner degree of risk Hellebust feels that the Nordic approach to at Ferd Ventures in Norway www.ferd.no and willingness among start-ups also affects deal flow: Bjørn Stray, Partner at Northzone Ventures in entrepreneurs and “The quality of deal flow is relatively high, Sweden www.northzone.com, and also investor” partially due to the cultural heritage which spoken to Eilert Hanoa, CEO of Mamut, a dissuades establishing a new company unless successful business software company, you have a “really good idea”. As more and founded in Norway www.mamut.com. more “classic” venture success stories become known, the positive development is likely to The VCs continue. But we still have a long way to go Whilst examining the Nordics start-up scene, and a lot of untapped potential.” Helge Hellebust finds that native conditions Both of the VCs can also see that the have helped foster native entrepreneurs: marketplace has been affected by today’s “The relatively high education level, social economic climate: welfare system and growing private equity “VCs are still active, but with a stronger industry contributes to the start-up scene appetite for later stage investments. The developing in a positive manner. State funded strength of the downturn is difficult to gauge, Helge Hellebust seed money is available, as is support from Partner at Ferd however it would seem to be stronger in other organisations such as Innovation Norway and Ventures parts of Europe than in the Nordics” states various incubators to help many start-ups Hellebust. through the initial stages... And importantly, “VCs are still active, “The best companies can still get funding. it is viewed as socially acceptable to but with a stronger However there will be a shakeout of establish your own business and take on an appetite for later companies and investors alike. For the long element of risk to earn money.” stage investment” term the fundamental is that there is Bjørn Stray reinforces this impression: continuous technology development and that “There is a high degree of risk willingness start-ups will solve problems, grow and create among entrepreneurs and investors, and a value and will secure a living space for players community of experienced entrepreneurs, in the industry” confirms Stray. capital sources and service providers that can support early stage companies in the The Entrepreneur Nordics. By instinct, entrepreneurs seek Eilert Hanoa started Mamut in 1994 with a 4
    • ?????????? Global Economy ‘‘ the local economy is strong, innovation is high, cash has been available, knowledge workers are available and infrastructure is well developed Eilert Hanoa, CEO of Mamut vision of simplifying the way smaller organisations do their business by offering software, services and knowledge. Today, Mamut has more than the Venture Capitalists regarding the supporting infrastructure surrounding the entrepreneurial community in the Nordics: ’’ for entrepreneurs that helps them plan and start up their own business. We also engage in seminars and training, both through Mamut and than 400,000 customers in 16 “There is a huge political focus on through my role as Chairman of ICT countries. Hanoa recollects his supporting start-ups in the Nordics, Norway.” company’s humble origins: but to actually succeed in starting-up “I established my first company as a company, the main success factors The Recruiter a 15-year-old in 1986 and after 10 are the willingness and true passion Gillamor Stephens supports venture years in the software industry, I from the founders. Start-ups often backed businesses across EMEA - from incorporated Mamut in December succeed despite the lack of early stage University spinouts to 1994. We started without any external governmental support, not because of later stage businesses. Paul Gillespie, funding or any kind of governmental any support offered. In fact, the a Founding Partner, follows the adage assistance, local VCs joined in 1998, social security network is well “good companies will always get including Northzone Ventures and developed in the Nordics, so the risk funding” and this is true wherever other co-investors, and our of failing is low and success is they may be in Europe. development from 1995 to 2009 has rewarded with high taxes! The social “However the Nordic region does largely been based on long-term security system is more of a barrier have a strong infrastructure in place investors.” than a catalyst for starting up.” to assist the creation of start-up He feels that today’s start up Although Hanoa does also speak companies, and maybe the market is a much more challenging highly of its benefits: somewhat isolated location of the environment for the entrepreneur: “When expanding regionally, a Nordics makes the region more self- “Today, 15 years after establishing Norwegian based headquarters has reliant and therefore more likely to Mamut, the entry barriers are even provided a real advantage as the local operate as a community than other bigger than they were then. It is more economy is strong, innovation is high, parts of Europe. What is clear is that difficult to get full funding at the cash has been available, knowledge across the Nordic region there is a right terms in the early start-up workers are available and vast array of early stage companies phase. The result is fewer start-ups infrastructure is well developed.” that have an opportunity to become and that very few companies are able Hanoa is also working to give successful global players in their to go global. In contrast my something back to the market. If the local Governments, company’s business plan from Day entrepreneurial community: VCs and corporations continue to One was to conquer our home market, “We are actively supporting start- work together the Nordics will then expand internationally.” ups in our seven core markets by continue their international success Hanoa has a slightly different view offering a complete software package story.” The Nordic Venture Forum The Nordic Venture Forum (NVF) plays an active role in the European and Nordic innovation scene, fostering start-ups and high-tech, high-growth entrepreneurship and promoting Denmark, Sweden, Norway, Finland and Iceland as countries to do business or invest in. The NVF showcases the 50 highest potential companies in life sciences, ICT and clean technologies – The Nordic Venture 50. v Now in its 7th year, the NVF has established an impressive history of over 60% of presenting companies raising new investments following participation. 5
    • Leadership It’s not a spectator sport Andy Isherwood, Vice President and General Manager for HP’s Software Solutions group, discusses the need for people to step up, get involved and be change agents H aving joined HP more than such as Opsware, Peregrine and 20 years ago, Andy Mercury.” Isherwood has long been a key change agent within the Unique cultures and values with a company; as can be seen through unifying HP foundation his integration of the Mercury and “HP has a simple philosophy Peregrine acquisitions during his regarding how to integrate new time as VP and GM EMEA for the companies. If you go back to the software business. He is now using Compaq days, a $40Bn business these foundations to address with c. 80,000 people, we didn’t today’s uncertain economic march in raise the HP flag and tell climate. them the answers, it was very collaborative, and we have My view on the current climate? I become even more so with time. don’t read the papers. With the Software business, our “My view is simple. Whether you philosophy has been to go believe Gartner, IDC or Forrester, acquire really good assets that Andy Isherwood take the worst case scenario, and customers want, then do a Vice President and General Manager then focus on where the money is HP’s Software Solutions Group thorough evaluation, and access being spent. If you become the talent. We don’t assume that focussed on what is not being Consolidation in the technology an HP person will run the show, spent, you can talk yourself into a marketplace and this has been very effective. I recession and have a real There has been a lot of have legacy-Mercury and confidence issue. I won’t read the consolidation in the technology Peregrine people working for me, general gossip about the economy marketplace. Andy believes that and in fact I have only one as the tabloid negativity can lead this consolidation will only be “classic” HP person on my your confidence into downwards accelerated by the current management team.” spiral. Instead I focus on the fact climate, as now is a good time to that customers are still spending, be acquisitive if you have a strong Has the culture changed with all just in a different way. They are balance sheet. of the acquisitions? looking at every purchase with a “HP is not trying to be biggest “It has evolved; but we have kept sharp eye on ROI (return on software business in world, instead our strongest themes from when investment); therefore you need we want to be relevant to the company was set up. As we to adapt your selling style to customers, and try to bring have built out different business, address the pressures which together those assets that the we have created unique cultures customers are now under. customer wants to have under one and values with a unifying HP Customers also require shorter umbrella, which is why HP has foundation, each tailored to the terms in order to reach ROI, and built out a comprehensive IT demands of that business. If you they don’t have capital, therefore Management portfolio. HP has look at the software management you must adjust your strategy to successfully bought in either the team, almost everyone has come what the customer requires, and #1 or #2 software solutions in from a software background, and focus on where they are spending every category of its portfolio, as this has led to our own specialised money.” can be seen with key acquisitions culture.” 6 6
    • ?????????? Leadership Management Style leaders who share this philosophy down to be competitive; if you When considering how his and perpetuate this practice.” have a palatial office environment management style has been and your competitors are home- formed, Andy gives credit to the Career Management based, your cost structure is wrong lessons he has learnt from his “I always think two jobs ahead. I and you are dead in the water. You mentors, previous members of HP’s plan ahead, knowing the attributes have got to have aligned cost senior management team: and qualities I will need for the structures and economics in order “I have tried to learn something future. Once you have this in your to compete in the marketplace. I from each of my mentors. It is mind, you can focus on building look for people who want to drive from them that I have seen the the skills you need for that job, this leading edge, bleeding edge ‘‘ importance of rigorous philosophy towards business practices, so I It’s easy to be a spectator, but running a business place a great deal of rather than just emphasis on having I don’t want people in my managing and outstanding operational rigour, strong execution organisation to sit on the sideline; maintaining. With all of the and maintaining strategic drive. I want my people to get involved, current uncertainty, learn to shrink the Following their example I make it a point to stay yet informed culture.” Connecting the dots be players, be change agents in touch with my team, walking the floor and fostering an informal and the network of people you will need to support your bid. We have an excellent talent team, however in a 300,000 person company, if you don’t tell people what you ’’ timescales. I think about annual plans and keep the “big plan” in mind, but I also look at our position against the P&L every single day. We make monthly adjustments as a management team in order to stay “Fundamentally I am a pretty want to do next, and focus your ahead of the curve, rather than direct person. My philosophy is attention on where you want to waiting for the next cycle, if I wait that people need to know what go, they are not going guess.” until November we might not still you are doing and why, and the be here.” role that they play in this big Tip for success? Execute like hell picture. I am a clear communicator “Deliver on what you are doing, It’s easy to be a spectator in terms of what is expected of execute like hell. Focus on getting “After a couple glasses of wine, I’m people, and I share the profit and a job which is part of your career an expert on the economy and could loss of the business with everyone. plan, and then deliver against it be the Chancellor. I can tell the This is because I believe that the giving you the right to move England rugby team why they are more you can connect the dots onwards and upwards. When hiring, doing a bad job and how they can between what you are doing with I’m looking for people who have improve. It’s easy to be a spectator, the shape of the P&L, the more executed and driven change. These but I don’t want people in my people can understand why certain tough times necessitate more organisation to sit on the sideline; tough decisions are made, and invention, so always be one step I want my people to get involved, be “buy into” your strategy. This ahead of the game, and don’t wait players, be change agents, because open, direct communication adds for a difficult period. Do the heavy these environments necessitate context, and I recruit strong lifting now, get the cost structure more change than ever before.” 7
    • Executive View Balancing the books Phil Pavitt, the incoming CIO of HM Revenue & Customs (HMRC) talks about the challenges IT faces in balancing the demands of insourcing, outsourcing and security whilst getting the most out of our taxes T his September, Phil Pavitt, contracts have been brought back IT actually do.” formerly CIO at Transport for in-house, cutting costs by 40% and “If the contract has the right level London (TfL), has taken on desktop and support costs by 61%. of flexibility, this encourages the biggest challenge of his career. Pavitt’s arrival at HMRC will business process change, thus As the new CIO of HMRC, Pavitt has therefore prompt questions as to enabling contracts to become one of the most influential IT jobs whether the organisation will structured agreements which in Europe, responsible for budget of consequently be taking a different encourage shared infrastructure - over £1bn with 1,400 staff. Pavitt approach to outsourcing. However you can therefore save money will also play a pivotal role in he rejects suggestions that he is a whilst retaining control. For shaping how the Government serial insourcer, instead stating that example IT across three or four addresses IT, and different must ensure that every penny spent is a cost effective investment. Pavitt is no stranger to a challenge. At TfL he ‘‘ my job is not to ‘reinsource’, but instead to redraw the line and find the best vehicle for what the organisation is trying departments can all bind their mobile messaging platforms together, optimising the heavy lifting of fix, install, resolve and engineering, conducted an allowing the to deliver ’’ exhaustive review business to start into how the business seeing IT as a broker structured IT with and facilitator. In one mantra in mind: “What’s the he adopts the required solution for TfL this corporate approach was cost, what’s the numbers, what’s each unique situation: used externally, customers can look best?” This resulted in a “I try to get the best for the at their mobile and see where the fundamental shift in the negotiating organisation I work for - my job is latest tube train is to the second, of outsourcing contracts, with the not to “reinsource”, but instead to and be able to look at a GSM map.” emphasis moving away from a redraw the line and find the best Looking forward to his newest headline number and towards vehicle for what the organisation is challenge, Pavitt admits that HMRC flexibility; creating a shared trying to deliver. I used to be part is an organisation facing some tough infrastructure (placing 65% of TfL's of ITNet so I see it from both sides. requirements: systems on a shared common I’m not a serial insourcer. What “HMRC has to collect tax technology platform) and business annoys me is that in the massive efficiently, whilst targeting and processes ultimately resulting in an rush to outsourcing 10 years ago we paying credits to the appropriate optimised system with a leaner often lost the commercial ability to customers as efficiently as possible. budget. manage the project. The strategy, The pressure is on to make sure Prior to his arrival, TfL spent 60% the architecture, the governance, that every penny is spent as cost of its IT budget on 17 outsourcing the thinking, the intelligence were effectively as possible. My job is to contracts covering the bulk of its IT all outsourced, so after a year you get the right level of cost infrastructure and services, from sit back and think “Every time I effectiveness into the IT desktop management to helpdesk. breathe I’ve got to pay extra for organisation, and more importantly Upon his departure, 15 of the 17 it”, and CEOs begin to wonder what to enable the business to perform 8
    • Executive View ‘‘ We are so busy looking for the next ‘sexy’ thing sold to us by Gartner, Forrester or the IT providers that we haven’t wrung the potential out of the technology currently available better – be that in enforcement, collection or granting credit. These are large volume jobs where IT can play a pivotal role.” ’’ problem with any data is the “human factor”; this can be negated to some extent by processes (education on When asked about the future responsibility, repercussions etc) - Pavitt speaks of a “massive and lack of tabloid headlines does frustration” within the IT sector indicate that this is having an effect that we have not yet been able to - but the risk will never go away realise the full benefits of the last unless you can get rid of human five years of technology: intervention”. “We are so busy looking for the Given all that Pavitt has achieved, next “sexy” thing sold to us by it is interesting that when asked Gartner, Forrester or the IT about his proudest accomplishment providers that we haven’t wrung at TfL, he immediately points to his the potential out of the technology Phil Pavitt team: currently available. The 101 of IT is CIO of HM Revenue & Customs “The thing I’m most proud of is making it work effectively, with the culture of the IT team, and how projects being broken down into resources, then I believe that we the broader organisation’s manageable chunks – I think that IT can face the future on much perception of my guys has changed should take the time to focus on stronger foundations.” completely. Before the team felt Thin Client, Virtualisation and VoIP Whilst looking forward, Pavitt has marginalised, with the emphasis on for the next few years before the following thoughts on data outsourcing and back end support, businesses get frustrated at security: there was little recognition from seemingly unending investment “At a technical level, the the rest of the organisation. Now without the promised return, realisation around data we are very visible, implementing starting to think inside the already management has become much the most up to date technology, purchased ‘box’.” more important in organisations and bidding for services and taking on “A lot of people bought Oracle or in IT. You must be able to significantly more work across the SAP licenses and got massive consistently classify data types, Greater London Authority. There is a functionality, yet never took the manage them, put in place huge demand for our services, and I time to use it. If businesses become protocols, enable access and then have a tremendous pride in what we more willing to change process in restrict it with passwords. The have achieved.” order to exploit current strength we will be able to fully cash the cheque Phil Pavitt CV written over the last five years before we start writing the next. 1996: International CableTel, Director of Commercial Support The industry is currently clamouring 1998: NTL, Director of Internet TV launch about Cloud computing, predicting 2003: NTL, CIO 2005: Centrica Onetel & ICICI Onesource India, CIO and IS Transformation that if we do not invest “then the Director world will end”. You know what, it 2007: Transport for London, Group CIO probably won’t, and if we can 2009: Her Majesty’s Revenues & Customs, Group CIO & Director General consolidate our current costs and 9
    • The Big Debate Helping David team up with Goliath Derek Ward, Atos Origin EVP UK Markets & Strategic Relationships, Tim Barnsley and Richard Griffith co-founders of Channel Dynamics discuss the reality of strategic alliances. Derek Ward Atos Origin, EVP UK Markets & Strategic Relationships T he creation of a strategic sales corporate for a quick fix rather than the key to success is in the alliance between companies – taking responsibility themselves.” preparation: whether large global Ward agrees that it is simplistic for “If you can structure your corporations or small innovative start a small company to view an alliance proposition taking into account up – is an incredibly attractive as an effortless answer to all of their matters such as the corporate’s time proposition fraught with difficulty. sales problems, and provides some to market, how their current product Atos Origin’s Derek offering is shaped and ‘‘ Ward describes the then highlight how appeal: It is important to research you can mutually add your potential alliance “With the right value to each other, partnership everyone then you have a can win. The client gets the best solution partner’s goals, and align your compelling pitch. It is important to research proposition to match ’’ at a competitive your potential alliance price. The partners partner’s goals, and can share costs and Richard Griffith align your proposition customer contacts and to match this – the ultimately increase sales. If you can insight into the frustration corporates small company has to do the hard gear other people’s sales force to sell are faced with: work and provide the intelligence for you, then you can realise your “Everyone comes to the party with which will generate enough numbers a lot easier than if you tried a slightly different agenda, with enthusiasm to continue the to do it all yourself.” small companies thinking we have the conversation.” The attraction for small companies magic key that will unlock the world This level of preparation is vitally to form an alliance with a large for them - they can see retirement important for a small company in corporate is clear; however this is not coming through a sell-out and securing an alliance with a major a simple solution. Richard Griffith, flotation and of course get corporate, as is shown through Ward co-founder of Channel Dynamics - a disappointed when that doesn’t highlighting the difference between company which provide strategic happen. Equally the large customers an alliance of equals, and how a business management advice to find that the fantastic innovation sold small company must approach clients - outlines a common to them by the small company is agreements: difficulty: actually not as robust and resilient as “At Atos Origin we have some very “Often we work on projects with it seemed, so we are left wondering successful large scale alliances – small companies to look at how they how on earth it can be embedded in including SAP, Oracle, Microsoft, IBM can convince a large corporate to our technology stack.” and HP as examples. These are take their product to market. It can So how does a small technology founded on the huge amount of sometimes seem as if they don’t have company with a strong piece of business that we do with each other, the capability or capacity to do this technology build a relationship with a and both sides can afford to throw a independently and so look to the Tier 1 company? Griffith feels that lot of money at an alliance to make it 10
    • The Big Debate work. Once you drop out of the the recent work which is being done government is challenging. It has “mega league”, and get to the more to put a mature structure around enabled us to have commonsense one-sided investment of a “David and collaborative business relationships to conversations with our major Goliath” situation the corporates help create and maintain successful customers.” can’t justify this level of expenditure business-to-business collaborations. The final piece of advice which for all potential candidates. Here I Tim Barnsley, Channel Dynamics co- Ward has to offer for all companies think that the best advice I can give founder explains one such innovation, seeking an alliance, whether small or you is not to overestimate the PAS 11000: large, is as simple as it is critical: sophistication of the large company “PAS 11000 is a Publicly Available “One of the mistakes often made is that you wish to target. Ultimately it British Standard concerning to forget the customer. At Atos Origin is just a series of individuals with collaborative relationship we always adopt a Client First specific jobs to do. So throwing management, which is due to go live approach and, in our experience, if brochures at them doesn’t work, next year. It will be cross industry, you can bring the customer into the instead talk to the right people and will lay out some best practice alliance then that’s very powerful. A regarding a specific opportunity if principals regarding how good example is the Government you think that you have something to organisations should work together, Gateway which Atos Origin delivers help us achieve us our objectives. define the customer-vendor's with Microsoft as a partner. We want Track down the person who has the relationship and how to manage this to be adopted as the common most interest in seeing that valuable business relationships within authentication service across programme be successful, and then the supply chain. In the fullness of government, and through initially target them with a very specific, very time it will be refined for individual bringing the Cabinet Office on board short message along the lines of ‘We industries and will highlight how we as our champion, this has now been know you’re doing this. We know can become smarter and more adopted by HMRC, the Department of you’re doing that – our product will professional.” Work and Pensions and many other help you achieve this because....’” Griffith points to ASAPTech (the central and local government ‘‘ Over recent years, Ward has organizations. Always seen a major change in the world of alliances. “The never underplay the remember that alliances essentially rely on the people human element ’’ traditional alliance has been involved, including your seen as one that would come customers. An Alliance together with a joint go-to- Derek Ward Manager gets out of bed because he market proposition. But now enjoys his job and he wants to make there's another borne out of one it work, and with all of the best Channel Dynamics founded party understanding that they don’t practice in the world that’s difficult Association of Strategic Alliance have all the capability themselves if the person on the other side of the Professionals) as another important and having to find a partner to come relationship is someone you don’t get driver of change: and help deliver”. on with. So never underplay the “ASAPTech positively influences the Channel Dynamics also highlights human element.” ability of a partner manager to articulate his case more powerfully within and across his organisation and the more people that can do that, the more these people network among themselves the more powerful the possibility of partner.” Ward also feels that the UK technology industry group Intellect is doing more for the Alliances sector that just providing a networking forum: “With Intellect’s help Atos Origin has worked together with our competitors in order to try to make things more efficient, especially in the public sector. We have created a Richard Griffith standard form contract, although Tim Barnsley Channel Dynamics, Co-Founder trying to get this rolled out across Channel Dynamics, Co-Founder 11
    • GS Opinion Are stock options still a compelling way to attract talent? Paul Gillespie, a Founding Partner of Gillamor Stephens S tock options have always been at led to a more pragmatic acceptance Executives, options can help leverage the heart of compensation that stock options are not a ‘slam a reduction of base salary or in lieu packages offered by early stage dunk’, and instead should only be of a benefits package. It is important venture backed companies. They act viewed as a long term incentive to that each individual’s personal to offset the cash component and attract a certain profile of person situation is considered, as a married recognise the personal commitment into the company. Therefore it is not candidate with children will have made by joining a higher risk just Executive hires qualifying different priorities to a bachelor. company at an early stage. preferential shares, dilution, tax Never forget that options are not Ten years ago, the very idea of efficiency etc – these questions now just a hiring tool, but also an options was sufficient to motivate, come from every level. important retention device. If but following the hard lessons Early stage ventures will always use someone is looking to leave, options learned from the tech bubble stock options in remuneration; can be used to help reinforce their bursting, candidates take a more however the ability to “offset” the commitment to the company. educated, cautious approach. The cash element of compensation will be Personally owning a stake in the current generation of start-up limited by the individual’s base salary business remains a key factor in veterans might be working in their “pain-threshold”. When larger developing and maintaining the second or third venture and this has volumes of options come into play for employees’ commitment. 2009 Technology Sector Healthcheck Steve Morrison, a Founding Partner of Gillamor Stephens, provides a GS view of the current recruitment market I f levels of recruitment activity encompassed a broad spectrum of candidates to “productise” their indicate the health of an industry, technology businesses from PCB offering, optimise product then Q4 of 2008 saw the manufacturing processes to lifecycle management and deliver a technology sector being rushed to technology enabled services and quality product on time and on A&E. The global financial crisis and cloud computing. Location has been budget. resultant lack of business confidence equally diverse, with assignments As 2009 has progressed, renewed ensured a hiring paralysis was conducted across the UK, Ireland, hiring activity within the European pervasive across the industry from Finland, Spain, Holland, Germany, corporate technology sector could “early stage” VC backed businesses France and Switzerland. indicate increased levels of through to large global corporations. Proven CEOs are in particular confidence. However appointments Due to this diagnosis Gillamor demand; with experienced individuals tend to be selective and strategic, as Stephens approached 2009 with the capable of delivering top line and companies seek entry to new expectation that it was going to be a EBIT growth being much fêted, verticals or to build new service very challenging year. However nine especially those whose track record lines. It seems that from a hiring months on we have been pleased at includes leading companies to a perspective, the green shoots of the number of search assignments successful exit in challenging times. recovery in the corporate technology that have been conducted. Other companies have sought Sales companies may be a little later in Most hiring activity has been with Directors to galvanize sales teams, developing than in the VC technology the VC backed businesses, despite bring structure and rigour to the sales sector. limited levels of new funding, as the process, shape value propositions and For examples of our recent work investors have sought to change and deliver the revenue number. The VP and a snapshot on current strengthen the boards of their Engineering has also entered our most assignments please visit portfolio companies. This activity has wanted lists, as clients seek www.gillamorstephens.com 12