[sims] Capita is trying to sell off non-core businesses (SIMS is for sale)

[paulkerton]

OneAdvance are probably better know as Advanced Learning. Their legacy product is CMIS, (sometimes called Facillity CMIS) and Progresso or Cloud School is there current cloud offering.

Ahhh now I know it from when it was Serco! Advanced clearly aren't doing so well on the marketing side.

 

To compare, when Advanced bought CMIS for £7.25m, it had 6% of the market. SIMS had 83% of the market. So some ugly extrapolation which is nowhere near reflective of markets and tech and how they work etc, but worth a bit of comparison:

 

£7.25m at 6% of the market would work out at £1.2m per percentage point, putting SIMS at around £107m ish then. Inflation has ran at 2.5% yearly on average since then, so that'd be £1,430,000 per percentage point now, and SIMS in 2019 had 75.13% to Advanced's 1.62%

 

So that'd be around £2.31m for Advanced in 2019 and.... £107m for SIMS

 

So even with that ugly bit of maths that has no real bearing, I'd still say that is telling. But Josh's analysis does show a price to earnings ratio of 10-14 times which isn't unrealistic in the business world. Education with a falling market share? Hmm. Not entirely sure.

I definitely wouldn't be taking that gamble myself. The Education market has got very used to getting incredibly aggressive pricing.

Edited June 22, 2020 by paulkerton

[Banjo]

ESS also cover Capita One which has the market share in LAs. Our LA pays in the region of £150k a year in AM. They have other revenue streams as well as SIMS.

[paulkerton]

ESS also cover Capita One which has the market share in LAs. Our LA pays in the region of £150k a year in AM. They have other revenue streams as well as SIMS.

I don't know if that's true. Capita One sits under Capita Business Services whereas Capital Education Software Solutions (I believe, don't quote me) is a division of Business Services.

Capita One encompasses way, way more than just education. They do bank transfers and payment solutions, housing, benefits and lots of other public sector stuff. That's not what they're talking about diversifying themselves of.

Edited June 22, 2020 by paulkerton

[PhilNeal]

Paul, you are correct. One used to be ESS but hasn't been for >3years

[ABC123]

It's never going to get sold for over £500mil. Everyone knows it would mainly be about buying a customer base rather than a product and that Capita are in trouble.

 

I checked their finance statements on their website from Dec 2019 this morning when I heard the news. They are basically planning on selling most of their market specific solutions to raise capital in the short term to then develop their services/consultancy areas and their more modern, sector agnostic products.

 

They have like £1.4b in debt and need to raise £750m before December if they can just to stay on track. Personally if I was a buyer I would wait a while to make them sweat a bit and then put in a lower offer. Now that they've announced this they can't take it back. Shows they don't see a future in the MIS market, if I was a competitor I'd be popping champagne right about now.

 

They had to make the decision between trying to get a high price full sale now or continue milking the sector whilst cutting development costs and stringing customers along. Capita has done loads of work on their reputation lately so the milking option probably would do more harm than good in the long run.

[chaplic]

Whilst I wholly agree with those who are less than complementary on this pile of .. I mean industry leading software, it would be very cool to find some way to buy it, run it cost neutral plus 10 percent and use that 10 percent to develop a proper cloud-scale equivalent that you might be able to monetize in a way to give it to schools freely..

[TechMonkey]

Whilst I wholly agree with those who are less than complementary on this pile of .. I mean industry leading software, it would be very cool to find some way to buy it, run it cost neutral plus 10 percent and use that 10 percent to develop a proper cloud-scale equivalent that you might be able to monetize in a way to give it to schools freely..

 

Depends on your definition of "Industry leading software" and if the company would spend all it's resources trying to placate current users and support until they could get the new version out, while not bleeding cash or customers.

[localzuk]

If the numbers in one of the articles are correct, Capita has basically been ripping off schools with its pricing. Effectively a 50% profit margin. Imagine what they could have achieved with their SaaS version if they'd reduced that to 40% and given the dev team an extra £10m a year in funding to do their job. I can't imagine PupilAsset, ScholarPack or even Arbor have spent that much money on developing their MIS's. £5m a year gets you a team of 100 developers earning 50k each...

[synaesthesia]

Pretty sure

I will read my posts again , and decide whether its you or me who needs a trip to Barnard Castle.

I don't think I've defended Capita, I will have offended myself more than you if I have.

I simply pointed out that they had a SAAS product which might materially change who or for what reason they might be purchased.

I am sorry that a contrarian view is not welcomed.

I'll try and get into the spirit and say its awful but .. to be honest I haven't seen it ... so prefer not to pre-judge

 

Since then I have tried to defend some dedicated people I know who worked there in the past , but mostly ended up having to defend myself !

Don't work for Capita but feel like I have encountered a bunch of people here who work for Theresa May's Hostile environment home office department ...

 

won't waste anyone's time with further posts

 

Don't feel too bad - I don't think anyone here is taking the digs specifically at you, but we have mostly all become cynical and jaded with regards to Capita's offerings. I know many people who do or did work for Capita and some of them are the brightest minds in the game, people I'd go to for advice before anyone else on the planet. They're not the issue, the individuals rarely are but the boundaries they're met with working for corporations like Capita however are the problem. We as a whole only want what's best for our schools and you don't need to be technical to know who Capita are in education and aware of what a pain they can be as a whole to deal with. Data managers, exams organisers, timetablers for example across the country all have a special eye roll for when the C word is mentioned!

[Ditto]

If the numbers in one of the articles are correct, Capita has basically been ripping off schools with its pricing. Effectively a 50% profit margin. Imagine what they could have achieved with their SaaS version if they'd reduced that to 40% and given the dev team an extra £10m a year in funding to do their job. I can't imagine PupilAsset, ScholarPack or even Arbor have spent that much money on developing their MIS's. £5m a year gets you a team of 100 developers earning 50k each...

With the level of market dominance Capita have in the education sector, I wonder at what point any of the 'competition' regulations would be relevant. I'm not too familiar with this area of law, so much so that I have only just learnt the the 'Mergers and Monopolies' has renamed twice since I last referenced them. Wouldn't it be fascinating to see a claim that led to compensation to all SIMS school for abuse of market! Can't see it happening though.

[paulkerton]

Imagine what they could have achieved with their SaaS version if they'd reduced that to 40%

Last time I heard from Capita regarding SIMS Primary pricing, they told me that they were expecting the costs to be broadly similar and were espousing the savings that would be made by not having to license MSSQL, Windows Server and buying server hardware.

Of couse for that you would be requiring feature parity, but I can't imagine that was happening.

Edited June 23, 2020 by paulkerton

[paulkerton]

With the level of market dominance Capita have in the education sector, I wonder at what point any of the 'competition' regulations would be relevant. I'm not too familiar with this area of law, so much so that I have only just learnt the the 'Mergers and Monopolies' has renamed twice since I last referenced them. Wouldn't it be fascinating to see a claim that led to compensation to all SIMS school for abuse of market! Can't see it happening though.

 

Thats a tricky balancing act. The monopoly was born out of neccessity, as there wasn't an alternative to SIMS for many years. There was always Bromcom, but they were primarily a data capture device company. It's also difficult to see how you could break up that monopoly situation. I suppose unless you split the software down the middle and have separate primary MIS solutions and a secondary MIS solutions from the existing codebase ala an open source fork.

In fact, does anyone know when the first real alternative came out?

Edited June 23, 2020 by paulkerton

[TechMonkey]

Thats a tricky balancing act. The monopoly was born out of neccessity, as there wasn't an alternative to SIMS for many years. There was always Bromcom, but they were primarily a data capture device company. It's also difficult to see how you could break up that monopoly situation. I suppose unless you split the software down the middle and have separate primary MIS solutions and a secondary MIS solutions from the existing codebase ala an open source fork.

In fact, does anyone know when the first real alternative came out?

 

I'm pretty sure there have always been alternatives but they have either never gained traction or found niches, so Independent or SEN schools. This was never helped by LEAs basically forcing schools to go down the SIMS route.

[bobsmith]

When I first got into schools IT in 2002-ish, We were running RM Integris and making the move over the Facility CMIS - the whole local authority was moving from RM to Facility at the time.

 

SIMS didn't get a look-in until 6 years ago.

 

So yeah, there's always been alternatives, but SIMS are really good at tying you into contracts and not being super helpful when migrating away.

 

However it's never been the job of the private company to avoid the monopoly - the state has to jump in to stop that from happening - which in this case they never really tried to do.

 

That said I think a big change is coming in schools MIS - the competitors are circling around the old toothless lion of Capita SIMS.

Edited June 23, 2020 by bobsmith
spelling!

[enjay]

One problem with a move to SaaS-SIMS which hasn't been mentioned yet is the link to other products. Off the top of my head, we use at least 5 other products which take an automated feed from SIMS via Groupcall, Wonde or their own application. Indeed, I've previously not adopted a particular product specifically because it didn't have an automated extraction and relied on CSVs.

[paulkerton]

One problem with a move to SaaS-SIMS which hasn't been mentioned yet is the link to other products. Off the top of my head, we use at least 5 other products which take an automated feed from SIMS via Groupcall, Wonde or their own application. Indeed, I've previously not adopted a particular product specifically because it didn't have an automated extraction and relied on CSVs.

APIs.

Wonde works with other MIS's than just SIMS and integrates with many different cloud delivered solutions.

Bromcom is in the cloud, and it integrates with G Suite just fine. Logins, calendars, etc.

[TechMonkey]

Yep, iSAMS uses API's and integrate with a massive amount of third party systems. It is only because SIMS has been lazy that they are still using older methods to integrate.

[psydii]

The problem with MIS (and more generally ERP) products is that they are almost exactly what products like on premesis SQL Server were designed to support.

 

The cloud stuff at scale is solving a completely different set of problems. As a result most/any Cloud MIS is basically just running in a VM with a web front-end. Running SQL servers in VMs on the cloud providers cost more for the vendor than running a sql instance on premises costs a school, and because it is at scale, inefficient queries really hurt their bottom line.

 

Much like firewall/filtering for schools - its a relatively easy problem to solve per-school but a centralised system has challenges dramatically different from traditional IT and you are competing with Facebook, Google, Microsoft and Apple for the engineering skills.

 

It doesn't help Capita that they were probably looking at a UWP / web based client and UWP got ripped out from under them. Something similar happened with EclipseMLS and SilverLight. In more recent times I did wonder if the backend of the SIMS Parent app was an attempt to develop cloud MIS functionality built out of SIMS7 using Agile methodology, but even that seems to have stalled.

[jthompson]

I should imagine that most schools will ultimately end up better off after this all shakes out and refreshes the MIS market.

[TechMonkey]

The problem with MIS (and more generally ERP) products is that they are almost exactly what products like on premesis SQL Server were designed to support.

 

I'd say that is more the problem with an MIS that hasn't been updated in many, many years. There are MISs that use SQL in the cloud and work fine. We also musn't forget that "the Cloud" is a very broad term and doesn't necessarily mean using Azure, AWS or Google offerings.

 

I would agree with you that if you were to shift SIMS directly to the cloud it would cause all kind of issues, as everyone here knows and many have commented, the SIMS backend just hasn't been designed to be nimble or efficient. It comes down to design and shifting legacy code as is to the cloud to try and compete with modern code written to operate on cloud systems will never be a winner.

[supportman]

I guess their Sims 8 will now be delayed again!!

 

Glad we just moved away from Sims!

[paulkerton]

I should imagine that most schools will ultimately end up better off after this all shakes out and refreshes the MIS market.

You'd hope so! SIMS is just one example of the dangers of having massively dominant player in a market, rather than a healthy competition. It's the (well, a) reason Microsoft still hold a massive monopoly in the UK EdTech market whereas every other major market has a mature mix of Google, Apple and Microsoft. If Capita selling SIMS means they can get SIMS 8 done quicker, and release the market reliance on having to have Windows in order to have their MIS, then that can only be beneficial. (Yes, I know SIMS Parents exists for iPad, but we all know it was a sticking plaster on a wound, as was remotely hosted SIMS)

 

I guess their Sims 8 will now be delayed again!!

 

I'm still thinking it was announced to slow down people churning away, rather than because it was close to being released.

I'd guess it would definitely be delayed whilst others are doing their due diligence and feasibility studies in regards to taking over.

 

Who will go for it though?

I'm starting to think it won't be an existing player in the MIS space, or a tech company, it'll be a company like Atos or Accenture.

Edited June 23, 2020 by paulkerton

[Ditto]

Thats a tricky balancing act. The monopoly was born out of neccessity, as there wasn't an alternative to SIMS for many years. There was always Bromcom, but they were primarily a data capture device company. It's also difficult to see how you could break up that monopoly situation. I suppose unless you split the software down the middle and have separate primary MIS solutions and a secondary MIS solutions from the existing codebase ala an open source fork.

In fact, does anyone know when the first real alternative came out?

 

I agree, in the early days SIMS was massively successful for a good reason. Even without an alternative MIS, I think the idea behind the legislation is to prevent unfair practices, such as gross over-pricing or restrictive by those that have a market dominance. From legislation it states must not:

 

"directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;"

 

I'm not sure 50% profits alone would count as unfair.

[DODICT]

One problem with a move to SaaS-SIMS which hasn't been mentioned yet is the link to other products. Off the top of my head, we use at least 5 other products which take an automated feed from SIMS via Groupcall, Wonde or their own application. Indeed, I've previously not adopted a particular product specifically because it didn't have an automated extraction and relied on CSVs.

 

interesting pov - id suggest that's one of the hidden weaknesses of sims - the need to bolt on pretty much every valuable use of your MIS at cost. there are many many popular 'add ons' to SIMS that other providers have within their product and these days there really aren't many products that dont talk to the Api's of the other cloud providers. And where they do again its an advantage - its a direct connection to the api rather than having to maintain some middleware, on your hardware, to pass data on. So its a much more efficient means of tapping into your data. And you have much more control - creating individual credentials with granular control of access rather than giving groupcall access to the whole shooting match.

 

A cloud MIS with a freely available API is MORE accessible than a local DB not less and its again only probably down to the market monopoly that some providers have historically not integrated with other MIS but that is rarely the case now.

 

I just look forward to this forum in a few years being about using your MIS not amending ini files or how on earth to deploy solus - IT managers alert you can go back to doing what you're paid for . . .

Edited June 23, 2020 by DODICT

[supportman]

interesting pov - id suggest that's one of the hidden weaknesses of sims - the need to bolt on pretty much every valuable use of your MIS at cost. there are many many popular 'add ons' to SIMS that other providers have within their product and these days there really aren't many products that dont talk to the Api's of the other cloud providers. And where they do again its an advantage - its a direct connection to the api rather than having to maintain some middleware, on your hardware, to pass data on. So its a much more efficient means of tapping into your data. And you have much more control - creating individual credentials with granular control of access rather than giving groupcall access to the whole shooting match.

 

A cloud MIS with a freely available API is MORE accessible than a local DB not less and its again only probably down to the market monopoly that some providers have historically not integrated with other MIS but that is rarely the case now.

 

I just look forward to this forum in a few years being about using your MIS not amending ini files or how on earth to deploy solus - IT managers alert you can go back to doing what you're paid for . . .

Bromcom has an open API and works great with Wonde