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

1. 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

2. 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

3. ??????????
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

4. 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

5. ??????????
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

6. 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

7. ??????????
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

8. 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

9. 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

10. 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

11. 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

12. 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