Posts

Cloud spending on the rise

According to a recent report published by the International Data Corporation (IDC), cloud spending represented nearly 30% of overall IT infrastructure spend during Q1 2015, rising from 26.4% during Q1 2014.

The market research firm found that vendor sales of private and public cloud infrastructure – including storage, servers and Ethernet switches – grew by a staggering 25.1% year-on-year during Q1 to reach almost $6.3bn (£4.02bn), CRN news reports.

Private cloud spending grew 24.4% to $2.4bn during Q1, while public cloud spending increased by 25.5% to $3.9bn. Kuba Stolarski, research manager of server, virtualization and workload research at IDC said the rise in cloud spending suggests that “customers are open to a broad array of hybrid deployment scenarios as they modernise their IT for the third platform, begin to deploy next-generation software solutions, and embrace modern management processes that enable agile, flexible, and extensible cloud platforms.”

In its Worldwide Quarterly Cloud Infrastructure Tracker report, IDC predicts that overall cloud infrastructure spend will rise by 26.4% this year, reaching £33.4bn and representing one third of overall IT spend. In particular, public cloud spend will grow by 32.2% year-on-year to $21.7bn, while private cloud spend will increase by 16.8% to $11.7bn.

IDC forecasts that cloud spending will rocket over the next five years and will account for nearly half (46.5%) of all IT infrastructure spending by 2019, reaching $54.5bn.

Meanwhile, according to Computerworld’s annual forecast survey, 43% of firms plan to increase their overall IT budgets this year, by an average of 13%. A total of 194 IT professionals were polled for the survey, with 40% stating that cloud computing will take the lion’s share of their budget increase, closely followed by software as a service (SaaS).

Cloud computing was rated as the most important consideration among IT departments this year, cited by 16%. Firms which have already adopted cloud strategies will this year seek to streamline services and improve functionality in order to reap the full benefits of the cloud.

Syscap can provide flexible finance plans for businesses looking to invest in new technologies, and can fund a number of aspects in one comprehensive payment plan including hardware, software, cloud based and subscriptions as well as training, installation and maintenance. To find out more about how Syscap can help to support your business’ technology ambitions, click here or contact us today.

A Look Back: How SME Funding For IT Has Evolved

There is no underestimating the importance of small and medium-sized enterprises (SME) for the UK: the market is a key driver of economic growth and contributes greatly to the GDP. Statistics released by the Department for Business, Innovation & Skills (BIS) last year found that 99.9% of the 5.2 million private sector businesses are SMEs, which together represent an annual turnover of £1.6 trillion. SMEs dominate the industrial market and account for 60% of private sector employment.

Needless to say, supporting SMEs is vital for economic stability and growth; something which has been addressed by all key political parties in the run-up to May’s general election. For our part, we have been committed to this market since our inception in 1990, helping business to acquire the finance they to need in order to succeed and grow.

Obviously, the financing climate has changed a lot since our business venture began. Here, we take a look at how funding for SMEs has evolved over the past 25 years:

A brief history

At the start of 1990, and indeed through to the start of the millennium, businesses like our own were experiencing significant growth. In a recent article, Dr Khaled Sofani, Senior Teaching Faculty member in Finance at the University of Cambridge, attributes this growth to a range of factors: the end of the Cold War, the removing of financial regulations, and China gaining significant economic power.

There were also two more reasons. The first, of course, was the rise of the internet. The world wide web helped facilitate business-consumer engagement and for the very first time, businesses could reach customers across the globe without having to establish a physical presence in those countries. The second reason was that it was relatively simple for SMEs to acquire funding at the time which, as Dr Sofani states, was due to the fact that private equity funds and venture capitalists were both able to seek funding from financial organisations with ease.

During this time, the banking market was overcrowded with companies wanting market share. And, with credit being easily accessible for SMEs, they were able to grow and succeed, creating more job opportunities and boosting economic confidence.

Then everything changed

But then, the financial crisis hit and everything changed. Many banks and financial organisations went bust, or at the very least found themselves facing severe solvency and liquidity issues. Banks and other funding houses were forced to become far stricter in their lending terms; they became much more constrained and risk averse, making it increasingly difficult for business to acquire the funding they needed. According to BIS statistics, bank lending peaked during 2009 and since then, it has been declining year-on-year.

In the years that followed the financial crisis, there was huge uncertainty in the market. Aware of this, SMEs were holding off investment plans: in the six months leading up to February 2011, there was a 19% reduction in application value for small businesses applying for new term loans and overdrafts. A total 3% of SMEs at that time admitted to delaying borrowing because of the climate.

At times of economic instability, SMEs are at a significant disadvantage. Whereas larger companies are able to cut costs by doing things like limiting their services, losing employees or restructuring, this is virtually impossible for smaller businesses with little space to manoeuvre. Plus, cuts to alternative finance solutions during these times leaves small businesses increasingly vulnerable, as they often rely on short-term credit, loans and overdrafts for their day-to-day operations.

Today

Yet now, years on from the financial crisis, the economic climate has significantly improved, and confidence in the market is returning. SMEs have the tools they need to grow and succeed, and individuals that were perhaps apprehensive before now feel encouraged to begin their own business ventures. In fact, the number of SMEs has increased by 1.8 million since 2001, up 51%. And these businesses aren’t just confident in the market but in lending, too, with the government’s latest SME Business Barometer report showing that 77% of SMEs seeking finance last year thought they would be successful.

Despite the numerous challenges, the SME market soldiers on relentlessly. What is needed going forward is assurance by the government, banks and financial providers like ourselves that we are able to continue supporting this market in any way we can. SMEs are the lifeblood of the UK economy and we must ensure that their needs, both financial and other, are met.

Syscap is a leading provider of finance solutions to this market. If you are a small or medium-sized business, we are able to offer short-term business loans, finance for your new assets, and provide finance for your IT needs. Contact us today.

Happy Birthday to Syscap! 25 years old!

There’s certainly cause for celebration this week, as Syscap officially turns 25 years old! We’re extremely excited to reach this milestone and as our birthday approaches, we’ve been reflecting on how far our company has come since its inception in 1990. We have been thinking back to all our major achievements, and to the challenges we’ve faced and managed to overcome.

Over the years, we’ve tapped into new markets, extended our services and acquired new businesses. We’ve experienced buyouts and major reshuffles to our infrastructure; we also fell head first into the economic crash and came out the other side. Yet, through it all, our principles and values have remained the same – perhaps that’s why we’re still here today.

At the start

When we first entered the market, the technology landscape was drastically different to how it is today. It was rapidly evolving and much of the demand was driven by SMEs. However, the challenge those small businesses faced was the high level of investment needed for technology. Many businesses couldn’t afford paying in full for tech, and banks didn’t make it easy for them to acquire finance. And so, we saw an opportunity.

From the offset, our value proposition has been the same: leasing made easy. We saw huge benefits in this model – a high-touch, value-driven engagement model. Banks didn’t understand the IT channel, the SME or technology markets, but we could provide that level of knowledge and expertise needed.

At this time, we were a modest business that had limited access to capital, and we didn’t want to take any real commercial risk. Our next safe bet was focusing on areas of commercial growth, which resulted in us embarking on our most successful industry-leading campaign to date. Coinciding with the release of the Labour Party manifesto, we spent 12 months researching how technology could be effectively implemented into UK schools, and it wasn’t long before we became a trusted advisor to the education sector.

Into the new millennium

Entering the start of the millennium with confidence, we decided to extend our services to offer IT finance solutions for paper and medical professions. We researched thoroughly in order to understand why the sectors invested in technology and how we could extract value from the marketplace. To aid our efforts, we acquired Professional Finance and Leasing; a company with deep-domain knowledge of funding technology in our target sectors.

Offering these services proved incredibly successful and Syscap was growing year-on-year. We became specialists in our field and had three main competences: finance experience, IT and technology experience, and vertical market experience.

Yet, we still felt that we didn’t have enough access to capital, and we needed increased support in our back office infrastructure. So, after much deliberation, in 2006 we underwent a management buyout from AnaCap. The fund, which was new with no investors, was committed to financial services and concerned with operational management: it was the perfect choice for us. The company helped us to transition and in 2008, we had our best trading year to-date. But then, the business world imploded.

Hitting the credit crunch

The economic downturn was extremely hard for us and we were forced to make some tough decisions, cutting our workforce by over 30% over a 15 month period. However, then and now, our company is blessed with some of the most talented employees in our industry. It is not only their skill, but their ethics and camaraderie that pulled the company through its darkest days.

We managed to pick ourselves up in the years that followed. Some services fell by the wayside, while others remained stable. In 2010 we acquired Exclusive Benefits Ltd, a specialist commercial finance provider with extensive experience in the professions sector. This improved our access to funding and allowed us to move through into 2010 and beyond.

The here and now

Fast forward to 2014 and we fulfilled our potential for further investment and access to capital. Last autumn, we started a review for exiting our investors, knowing that we needed to partner with a company that had proven access to funding on a quantum scale.  So, in February this year, Syscap was officially acquired by Wesleyan Group.

Wesleyan was the perfect choice for us: established in 1841, the company has proven vertical market knowledge and £6 billion worth of assets under management. Wesleyan felt that its company’s values were culturally aligned with our own; it wanted to invest in long-term growth and not short-term gain. The services we offer are different, which means we can leverage their expertise and combine it with our own to provide our customers with exceptional service.

Following the acquisition, we can’t help but feel extremely optimistic about the future. We’re looking past today and tomorrow and planning for the long-term. Through the hard work and dedication of our employees, and loyalty of our customers, Syscap is liberated to move forward. Here’s to many more happy birthdays!

Software isn’t as easy as it looks

When it comes to IT investment, many SMEs view software as somewhat inferior to, or less valuable than, hardware. These businesses allocate large portions of their IT budgets to purchasing tangible hardware products, often neglecting software investment in the process.

However, contrary to popular belief, software is just as important as IT hardware. Businesses must remember that quality software is needed to run their hardware, so it should be viewed as an equally worthy investment.

So, why do so many businesses prioritise hardware? Well, firstly, when businesses purchase hardware, they have visible proof of investment. Within many companies, IT managers find it easier to get approval for buying hardware, as those in control of the budget often want to see physical proof of where the money went. There is also a common misconception that software is ‘simpler’ to create: if software such as apps can be created from a bedroom, then why does it deserve such a significant investment?

Software includes everything from operating systems and application servers, to databases and apps. In reality, the software market is extremely sophisticated and complex; programs require a huge amount of time, money and effort to create.

Not making timely investment in software could negatively impact your business. For example, delaying necessary software upgrades and using outdated systems will inevitably result in increased costs in the long term. What’s more, using older software could affect staff productivity and pose a security risk.

There is no doubt that software delivers good business value. Companies must understand that business value is created through investing in exactly what their business needs, and not just cheaper alternatives.

Companies often struggle securing a finance package for their IT investments, as many funding houses only provide financing for hardware and not the intangible aspect of these investments. Syscap, however, offers both hardware and software funding, allowing you to purchase the technology you need today. Not only that, but Syscap can also provide funding for subscription services, support and maintenance, training and installation. This allows businesses to finance the full IT solution, spreading the cost over time and maintaining working capital.

Click here to find out more about the benefits of financing your next technology solution.

UK’s Tech Businesses Set To Soar

2015 is predicted to see an increase in IT equipment finance, as UK tech businesses expect to grow four times quicker than Gross Domestic Product (GDP), according to an article on the Asset Finance International website.

Members from the Finance & Leasing Association (FLA) reported 5% growth in IT equipment finance during 2014, taking the total to £1.624 billion. During the final quarter of last year, however, the pace picked up significantly: a total £570 million of IT equipment was financed, which is a 25% increase compared with the same period in 2013. It is expected that this growth will continue throughout this year and beyond.

Meanwhile, Barclays’ Fast Growth Tech survey revealed that UK tech businesses are expecting solid growth this year. After polling CEOs and owners of tech firms, the results revealed that the average company predicts 11% growth during 2015 – four times the GDP prediction for this year (2.6%).

Over half (58%) of firms expect growth of up to 10% this year, while 18% predict growth of between 10% and 20%, and 9% predict notable growth of more than 20%.

IT firms remain optimistic about the state of their business, with many expecting growth beyond 2015. The average company in the survey expects additional growth of 15% in 2016, while 16% predict growth of over 20%.

Sean Duffy, managing director of Barclays’ Technology, Media and Telecoms division, said that the growth predictions “reveal the optimism and drive of the UK’s work-leading technology sector,” before adding that the UK is a “real launch pad for innovative tech businesses.”

“Investors are seeing the UK as an international talent magnet and a platform to grow or launch their business for a number of compelling reasons, including the culture, light-touch regulation, supportive Government policies and access to finance,” he added.

When asked the reasons behind previous growth, 79% of companies cited strong leadership. Going forward, those companies saw strong leadership and a focus on marketing and advertising as both critical factors for growth.

According to the companies, the two main challenges that could impede growth are increased competition (29%) and the ability to attract and retain talented employees (25%).

How Vendor Financing Can Help You Close More Deals

There are many reasons that resellers might be interested in a finance partnership. Essentially it comes down to efficiencies; sales teams converting more deals at a higher value. A good finance provider should be a door opener to increased sales whilst at the same time providing incentives to do more business; whether financial, social, through training and promotions.

Embedding finance into the core of the sales process is key to making this happen.

If you are a vendor or reseller looking to close more deals, Syscap’s Partner Programme can help. Through our programme, you will gain access to tailored IT finance solutions, making your products easier to sell and buy.

The programme helps to give you a competitive advantage, allowing you to drive revenue and increase margins. Along with closing more deals, sale cycles will be reduced, thus making your business more efficient. Some of the programme’s benefits include:

Training

Organisations signed up with the programme have access to their own tailored suite of tools and training materials. Sales teams receive specialist training through the portal, helping them to sell better and close more deals as a result.

Rewards

Through Syscap’s S-League rewards programme, sales teams are rewarded for good performance. They are incentivised to work hard as the more deals they close, the more points they’ll earn. The best-performing individuals and companies will receive some great prizes.

Knowledge and support

By collaborating with Syscap, you will be given expert knowledge and support around the clock. You will have your own dedicated account manager and will have access to expert financial advice whenever you need it.

Syscap has access to a wide range of funding panels, making it easier for your customers to finance IT acquisitions of all varieties and sizes. We are on hand to support you through the whole process; from helping to generate demand with bespoke marketing campaigns, to performing rapid customer credit checks so you can close the deal quicker.

Efficiency

Through our programme, you have instant access to all the necessary tools, and all in one place. You will have a single point of access to a range of funding options, which will enable you to easily create or provide IT solutions to your clients.

If you would like to find out more about the Syscap Partner Programme, click here for more information.