RM see BSF as "CASH COW"

[Face-Man]

Telecoms and Software News

 

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.)

 

says it all !!!

[CyberNerd]

I guess thats why their share prices have been dropping Edited November 27, 2008 by CyberNerd
url!

[russdev]

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

 

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.

 

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.

 

 

Russ

[sparkeh]

says it all !!!

 

Not entirely sure what it is that you are trying to say in this thread?

 

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.

[Face-Man]

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

[russdev]

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.

 

Russ

[tech_guy]

Oh yippee I can't wait for the schools in my area to be ballsedupforthefuturegenerations... Edited November 27, 2008 by tech_guy

[psydii]

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.

[russdev]

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.

 

Russ

[bossman]

Hi just an update from our neck of the woods County Durham:

http://www.thenorthernecho.co.uk/search/3917049.Schools_face_axe_in_spending_cuts/

 

don't know if this will affect us though but here's hoping.

[asynchro]

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.

[broc]

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.....

[asynchro]

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.

[speckytecky]

Slightly off topic but certainly relevant - any comments on the roll out of CC4?

[webman]

Slightly off topic but certainly relevant - any comments on the roll out of CC4?

 

There are problems. They are aware of these. Don't touch it for another 6-12 months.

[somabc]

The future does not look bright for SUN it has a plummeting share price and has laid off 6,000 jobs?

 

FT.com / UK - Sun seeks ray of light in open-source turnround

 

Sun's stock has plunged from an adjusted high of more than $250 at the start of the decade. A year ago, when the stock was trading at about $5, the company executed a one-to-four reverse split that made shares worth slightly more than $20. But the stock was again below $5 in recent weeks

[broc]

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.

 

Don't get me wrong... I am not against centralised servers or virtual PCs/thin clients in principle (I spent 30 years working on mainframe server solutions and understand the real benefits of centralisation to a large organisation probably better than most), it's just that the principal BSF ICT focus in some LAs seems to be more on the core technology 'they' want to deliver rather than what applications/services/facilities schools want or need.

 

If this translates to a more reliable service delivering the 'same' applications to the desktop then from a school perspective this is 'more of the same'. In some cases where the level of provision is reduced compared to what schools have today it may be 'less of the same'. Throwing in a VLE or similar as a 'bolt-on' does not change this much.

 

I have come across a prevailing attitude amongst those people employed as BSF Consultants that they 'know best' and they don't want to waste their valuable time having to dumb down talking to schools. I suspect it is because they have existing pre-conceived ideas about what they want to deliver, what they can deliver within budget, and what they think schools need by way of ICT. Talking to the schools would only cloud their vision

 

As a consequence I fear there is a missed opportunity to change the shape of ICT delivered to the end-user in schools.

[webman]

I'm not sure why centralised server farms, virtualisation etc. restricts the user experience.

 

Schools lose control of what students and staff need - they know what is best for their school - not these highly-paid 'know-it-all' consultants. As everything has to be centrally managed, desktop images will be standard and so on. Gone are the days of the flexibility of having locally-installed apps upon request for certain educational applications.

 

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.

 

That's all very well and good until: your ISP fails, cannot maintain the bandwidth required to support 50,000+ concurrent users, the central server farm is ran or managed by muppets and is not fit for purpose, etc etc...

 

The emphasis is shifting rapidly to the browser for delivery of applications, content and integration.

 

But not that quickly. We still have ex-teachers churning out hideous applications developed in VB6. But to teachers, they have educational value.

 

Think Google ... centralised server farms and online applications. 'The network is the computer' as SUN would say.

 

Google is an extremely wealthy company with some very clever people working for them across many countries. At the other (bottom) end of the scale, you have your RBCs and private companies wanting their piece of BSF cake with less money and less experience than Google.

 

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.

 

But it just can't do that yet! Bandwidth is not infinite, and bandwidth costs money.

 

Its already a fact that the windows client doesn't cope well with multiple users on the same machine (profiles!).

 

It works well for us - enough flexibility to generally do what we want, and enough security to ensure the little darlings don't adversely affect the rest of the network.

[psydii]

Fair points all, but how many of us here can except that the solution we are currently in charge of needs radical change?

 

Personally I want more fat clients everywhere, but some people here think that many many more 'thin' clients everywhere is better. (educational merits of both opinions not presented here for sake of brevity)

 

Compared to some RM is actually more aligned with my world view than I'd usually care to admit (oops). But they seem very wary of one piece of technology that could vastly improve access - I'm thinking running connect workstation in a VM on a mac or other 'specialised' desktop/notebook.

 

Both these 'ideas' are 'mine' and therefore 'right'. When a bidder disagrees with me they are 'wrong' when they agree with me they are 'right'. There is very little scope for discussing the centralised/full managed clients/thin/thick with a bidder; they have their solution (i.e. in house expertise) and that is pretty much what you are going to get. Unfortunately there simply isn't enough money in the programme for them to re-invent the wheel and innovate on every bid.

 

Since in house staff aren't under pressure to make a profit from our budgets, may I ask: what would you do differently to now if you had the BSF ICT contract?

Edited December 1, 2008 by psydii

[Face-Man]

Having been involved with the discussions around transforming ICT in our local schools. The problem as I see it is political. I listen to companies spell our what they could do and surprisingly agree with a lot of what they want to do. The problem is that the people who decide are worried about two thing "exam results" and "money". This means they chose the safe option anything they don't understand get shelved and rather than transforming ICT you get more of the same (if a little more reliable) only shiny and more expensive.

 

To give you an idea about the differences one LA with a similar demographic to ours has gone for RM. Great but I can't help wondering is part of this because they only agreed to spend £120 per pupil per year on ICT where as we are looking at double that.

 

As for thin/fat client and virtualisation I would look at a mixed economy after all it is about getting the best tool for the job.

[Butuz]

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.

 

Exactly. My school has a 30 year relationship with RM, and frankly we've been let down by countless other companies both big and small, who have tried and failed, but RM have always been there. RM were helping us (and making money out of us) here before our LEA, before the Welsh Assembly, before the many govt organisations such as BECTA, ESIS, etc. They've done alot for education as a whole.

 

Yes, we have had a few rocky periods, you can't expect every deal and decision to be rosy over a 30 year period.

 

The question is - if not RM then who who would you have take on these BSF contracts? RM have a fair amount of experience with large projects (e.g, Ireland, Scottish GLOW).

 

At least RM is and has always been dedicated to education - I'd rather an Educationally biased company make money out of BSF than some random company who just see it as a cash cow. I honestly don't think RM see BSF as a "cash cow" they see it as a way to continue doing business and continue serving the education sector. Lets face it - there is no market for selling PC's and box shifting. Dell can do that much more efficiently. RM are the largest PC builder in the UK and they have not moved their hardware assembly to taiwan or china, or gone bust.

 

They are dedicated to education, and they also seem dedicated to keeping jobs in the UK. I respect them for that!

 

Butuz

Edited December 1, 2008 by Butuz

[CyberNerd]

Exactly. My school has a 30 year relationship with RM, and frankly we've been let down by countless other companies both big and small, who have tried and failed, but RM have always been there. RM were helping us (and making money out of us) here before our LEA, before the Welsh Assembly, before the many govt organisations such as BECTA, ESIS, etc. They've done alot for education as a whole.

 

I'm glad you had a good experience with RM, but many schools didn't.

We used to be an RM school, but we aren't any more because they were sh!t. We used to have RM computers, but they were too overpriced. We used to have RM do our internet filtering, but that so poor we opted for something else. RM used to provide an email solution to us, but it was unreliable we got our own system. In every situation the school saved money and had a better system. I appreciate some say how they have 'got better recently' but TBH any bunch of monkeys could deliver a reasonable service given the amount on offer for BSF.

[MYK-IT]

Doesn’t BSF monopolise the ICT provision to just one supplier / manufacturer?

 

For example, if RM win a BSF contract does all the school get kitted out with RM workstations only?

 

What about Dell, HP / Compaq. IBM, others etc etc??

 

Building Clones for Future

[sparkeh]

Doesn’t BSF monopolise the ICT provision to just one supplier / manufacturer?

 

For example, if RM win a BSF contract does all the school get kitted out with RM workstations only?

 

What about Dell, HP / Compaq. IBM, others etc etc??

 

Building Clones for Future

 

I guess it depends on what is in the winning tender, if RM say "we will kit the schools out with CC4" and they win then it will happen. If the LA makes it clear that is not what they want in the tenders then this wont happen.

[Face-Man]

For example, if RM win a BSF contract does all the school get kitted out with RM workstations only?

 

No, even if RM win a contract they may well provide Dell,HP or any other branded box as RM own Ranger they could even provide a Ranger solution.

 

The key is all ICT spending is routered and supported via the managed service so any computer bought will be at the price RM specify in the contract this should include all the costs in deploying the hardware (ie support,disposal, networking etc).

 

There should be a provision to allow for the fact hardware get cheaper over the lenght of the contract but basically any extras will cost more than market prices as this is where they will make their money. Basically it pays to get it right first time.