I guess thats why their share prices have been dropping
Telecoms and Software News
says it all !!!RM: looking good and could get better
With £410 million of committed revenues, and without doubt more to come, BSF has turned out to be the cash cow the company expected
RM has now won 12 of the 28 BSF contracts to date (five of ten available BSF contracts - 49.5% by value during the year.)
I guess thats why their share prices have been dropping
Last edited by CyberNerd; 27th November 2008 at 12:27 PM. Reason: url!
Share prices dropping is happening everywhere due to current climate. But as whole due to fact that government putting more money into pfi and education they are in quite a strong position.
Also globally they are doing very well just increased usa market as they have brought out Computrac.
To me interesting bit of the article is
One thing about RM is that the board are very switched on which makes them successful as they see and take action long before other companies.f this logic is apparent to RM, as we head into recession, what is the competition waiting for? RM's competitive advantage rests on its deep knowledge of the market and its current dominance of the sector. There are certainly plenty of companies out there with pockets as deep if not deeper to make the long-term investment needed to enter the education market. There are also companies, including Capita, Civica, Northgate and Ramesys, that have at least some of the required educational expertise and could acquire the other parts of the knowledge portfolio.
Is it the scale of risk or their inability to assess that risk with a sufficient degree of confidence that has caused RM's competitors to adopt more modest BSF goals or to decline to enter the market? Ramesys (six wins), Northgate (three) and Civica (two), RM's closest rivals in the BSF rankings, seem pleased enough with their achievements. RM may have set its sights high but its competitors are setting their sights too low.
BSF is a reality, RM is an educational company that is bound to go for these contracts, if they do a good job of winning them then they get the money associated with them...
Perhaps I am missing the point.
I guess I might be a little naive but wouldn't "RM improve the education for all using ICT" be more to sing and dance about.
Don't get me wrong I realise that they are not a charity and no profit = no company but Massive profit = Monopoly.
I'm not anti-RM I just want to keep them on their toes after all that £410 million is your and mine money and if it is good value great but if it is not then why bother with managed services... time will tell
Key here it is open market companies going for contracts are as big and even bigger is some cases as RM.
Case of RM might be doing something right but is it their fault other companies are doing something wrong.
Oh yippee I can't wait for the schools in my area to be ballsedupforthefuturegenerations...
Last edited by tech_guy; 27th November 2008 at 05:13 PM.
bossman (27th November 2008)
RM are dominant because they always make profit. They make their profit because they don't seem to take risks, or when they do the financial risk is usually backed off to the customer. When I've seen them 'take on a risk' they got burned because, despite some very good RM people being involved, they are not a nimble organisation. This failure seems to re-enforce their opinion of their standard strategy.
End of the day, they are still afloat and profitable.
We're making them work hard for our shillings, if it's not perfect, its not good enough. The experience is eye opening.
I agree RM won't take risks for risk sake they take calculated risk sometimes. Key here is they know where the strengths are focus on that. But they know what works and what dosn't think that is the key to the success.
The fact is that if not RM it would be northgate or someone like that.
Also as for the article focusing on the money consider the source. As most of details was taken from end of year financial report which of course is going to focus on the money side.
No BSF ICT partner wins a lottery of instant cash when they win a BSF ICT Contract. They only get paid when a school is handed over, and profits are made over a (long) period of the ICT contract, from 5 years to 25 years. They'll be shelling out for some time before they start making money.
The cost of bidding for BSF is colossal and there is an expectation that the ICT partner offers to be a shareholder in the LEP (Local Education Partnership) and so shares the risk with the Authority. Its therefore a long term commitment rather than a short term profit. No ICT partner wins them all and competition for BSF contracts is intense, so profit margins are low and expectations high. They are held to a contracted payment mechanism that means they pay penalties of they don't fix in a stated time.
When an ICT partner bids they have to declare all profits and usually go low to win, and they have to have open-books with the Authority. They also have to calculate year on year reductions in their costs or profits (continuous improvment in technical parlance). Few (... and I would guess no!) ICT Contractor's in BSF have reached break-even.
My guess is that RM have solid cash reserves because they deal with schools who unlike commercial customers pay on time and don't default. This probably gives them the cash they need to take the long view. As far as I can see, RM are the only large supplier that stands to lose out to BSF. Each time someone else wins, a large number of schools don't buy from RM for a long time. Most other ICT players in BSF can only gain market share and not lose it. RM knocking is easy, but lots of schools have used them for a long time so they can't be as bad as all that, and if they're winning contracts in a highly competitive market, its probably because they are putting together winning deals.
I think RM are winning BSF business because they are a proven player in schools and offer low-risk 'more of the same' solutions.
Part of the brief for BSF is that ICT solutions should 'innovate', those LAs who prefer to take less risk may find RM suits them, others who want to push the boundaries of ICT will probably look elsewhere.
However, my fear right now is that too much 'innovation' effort is being put into the underlying ICT technology and not enough into how ICT can be used. I have seen too many ICT projects fail in the past because systems designers totally ignore the end user requirements and concentrate too much on choosing the underlying technology.
I see signs that this will be the case with BSF too......
Centralised server farms, virtualised PCs spring to mind...... these would seem to do little to enhance the end user experience.....
More of the same solutions ... Mmm, no bidder gets away with 'more of the same'. I'm not sure why centralised server farms, virtualisation etc. restricts the user experience. It does make it more reliable and consistent, and in the end the aim is to provide teachers and learners with high reliability, high availability and consistency, something lacking in a lot of schools.
The emphasis is shifting rapidly to the browser for delivery of applications, content and integration. Think Google ... centralised server farms and online applications. 'The network is the computer' as SUN would say. Once the infrastructure can take high frame rates, we'll all be using thin client with virtualised desktops, just like a TV, it will all be in the content and the screen presentation.
Its already a fact that the windows client doesn't cope well with multiple users on the same machine (profiles!). Shift this and all the network 'chatter' to the virtualised datacentre, and it all starts to slot into place. Check out Sun global desktop ... we're almost there.
Slightly off topic but certainly relevant - any comments on the roll out of CC4?
speckytecky (2nd December 2008)
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