Colt Enterprise Services (CES)
"Our alignment to the customers agenda and our continued investment in services and assets, combined in a seamless suite of deliverables, will allow us to take advantage of the market opportunities created for integrated network and computing solutions, and provides us with a platform for profitable future growth."
Simon Walsh / Executive Vice President
We are focused on directly serving medium to large sized enterprise customers. We provide a range of technical solutions that address the business needs of our customers through network, IT and communications services.
Through our solutions we serve the needs of medium to large-sized multi-national companies. These customers are experiencing an increasing operational dependence on their ICT systems and therefore require more services than can be supplied by a typical 'cloud' provider. They also want their solutions to be configured appropriately for their size, operational, financial and technological needs, more so than they might achieve from a global systems integrator.
Through our comprehensive enterprise-grade services offerings, we have broadened the range of verticals we serve from outside our traditional customer base of financial services and broadcast/media sectors by adding new clients from on-line & retail as well as manufacturing, travel & logistics and business services.
We help our customers to address their issues and priorities through the delivery of enterprise-grade ICT services. We have aligned our services to provide support around the following areas of focus for our customers:
- Cost control
- Business transformation
- Speed to market; and
- Risk and compliance management
Our capabilities are packaged into a suite of enterprise-grade ICT services, offerings that we refer to as the 'information delivery platform'. Through the information delivery platform we combine our assets, processes, people and tools, to deliver a fully integrated, seamless service. We flexibly configure the various elements of the information delivery platform irrespective of whether we are providing managed services, or simply reducing customers' capital expenditure through the use of virtual/shared/dedicated compute, storage, network, applications, data centres, virtual desktops or communications services.
Symptomatic of the ICT sector, we have seen a number of recurring themes within our target markets. Our customers are:
- Increasingly considering outsourcing models and shifting away from internally designed and run services
- Breaking up large global contracts, replacing them with more regional or business unit specific contracts
- Increasingly seeking the benefits of 'cloud' services (reduced capital consumption, increased speed to market, greater utilisation, transformation of their service delivery approach). However, they are finding that most X-as-a-Service (XaaS) offerings are not capable of delivering an enterprise-grade service that meets their business needs
- Experiencing a growth in demand for bring your own device (BYOD) across all geographies and sectors; but security, data protection and employment and data privacy laws affect adoption
- At a crucial stage in considering the future of their ICT departments, which are either embracing the shift in transparency, service variability and business enablement, and therefore attaining a seat at the top-table; or potentially face becoming marginalised and thus confined to mere technology operations
- Evolving from merely requiring traditional transactional products and services towards a more solutions-led approach.
Our alignment to the customers' agenda and our continued investment in services and assets, combined in a seamless suite of deliverables, will allow us to take advantage of the market opportunities created for integrated network and computing solutions, and provides us with a platform for profitable growth.
During 2012 we took several steps towards improving our customer alignment and intimacy. We:
- Invested in end-to-end customer services helping increase our consistency and customer satisfaction across all geographies
- Enhanced our sales' teams focus on customer needs through the segmentation of our customer base and associated re-alignment of our sales force
- Developed our service & contract management function which has led to an increase in approved customer references
- Strengthened our commercial team, enhancing customer intimacy through improved commercial insight and cost/price transparency
- Realigned our portfolio with the needs of our customers and extended our external market awareness through our portfolio and strategy team
To address the transaction/solution evolution in our markets we have aligned our resources (financial, people, technological) according to the market potential. We are making it easier for customers to order, consume and upgrade our transactional products and services. The challenge with our solutions is for us to maintain our current growth rates at levels ahead of the market, and our competitors, on an increasingly larger base. The shift to more solutions revenue brings longer contract terms, larger contract values and greater forward visibility for our revenue and earnings.
CES competes against a range of different providers, depending on the solution and the geography. These include network service providers, systems integrators, hosting providers and computing hardware and software providers. What sets us apart from our competitors is our ownership of the information delivery platform, facilitating our ability to seamlessly deliver technology, processes, systems, tools and people across geographies to deliver end-to-end solutions for our customers.
CES financial performance
Overall revenue declined by 0.5% to €600.0m (2011: €603.1m) compared to a decline of 2.1% in 2011. Looking at the underlying trends, we are experiencing a similar diversity of performance as the macro competitive landscape. That is, legacy telecom services continue to decline, whilst newer transactional products, such as Ethernet, as well as our solutions offerings for communications, IT and network services, are all experiencing growth. EBITDA declined to €96.0m (2011: €100.8m), as we continued our investments in skills and alignment to serve enterprise customers. EBITDA was also impacted by the decline in more transactional-based historical revenues, which happened faster than the on-boarding of more solutions related new revenues.
In 2012 we were awarded 23 contracts of greater than €2m total contract value (2011: 12). These 23 contract wins added €132m to our total contract base, €72m more than 2011. We delivered bookings growth of 9% on 2011. Most of these 2012 contract wins have yet to realise their full revenue potential, supporting our plans for revenue growth in 2013, as long as we reduce the decline in the legacy transactional portfolio. In addition to winning more larger contracts, we have also extended the average contract term. Increasingly, our more solutions-orientated contracts have signed for a minimum period of three years. This improves forward order book visibility as well as contributing to reduced churn in the solutions business.
In our first full-year of ownership, MarketPrizm grew revenues to €8.8m from €3.4m in 2011 (as a result of eight months of ownership). Growth was impacted by the challenging market conditions impacting our customer base in Europe and slower timing of customer uptake in Asia. The business did however secure a number of new contracts with significant names in the industry. These companies outsourced part of their trading infrastructure to MarketPrizm and rely on us to enable their trading applications and direct market access infrastructure. We signed a total of 25 contracts in 2012 and grew our customer base by eight to a total of 16.
In addition to on-boarding new customers, the business executed on a number of key roadmap initiatives that enhanced our value proposition and helped position us as a provider of trading infrastructure services in EMEA and more recently in Asia Pacific. We have expanded the business on three fronts: (i) we grew the number of markets and asset classes covered by adding derivatives, commodities and FX venues, (ii) we established a footprint in Asia in Singapore, Tokyo and Australia, and (iii) we expanded our partner ecosystem. MarketPrizm now offers complete direct market access in 34 markets globally, including Chicago and Asia across the majority of high volume exchanges.