Comic Relief recently raised an outstanding £78 million as part of its ‘Red Nose Day’ telethon. Their website was inundated with visitors. Far more than during normal periods.
How did they manage to afford all the extra IT equipment – servers, networks and so on – that is necessary to deal with such a huge increase in traffic and maximise donations?
With the cloud.
Cloud computing keeps costs to a minimum for non-profits so that they can focus their resources on their cause.
Software is “eating the world”. In the cloud even infrastructure can now be coded.
Your application is now your key business differentiator. Just look at the dominance of Uber or Airbnb.
As of fairly recently, Amazon.com kicked off a new software deployment on average every 11.6 seconds.
In one hour over 1000 new deployments were sent into the production environment.
They have load balancers on their side of the website just to deal with the volume of code changes coming from their developers.
That’s remarkable.
And I say “fairly recently.” That stat is from 2011.
Almost half of senior decision-makers in UK charities do not have an IT strategy that will support their future business needs.
Four in ten say they are unhappy with the priority IT gets in their organisation and that their trustees do not understand the importance of IT [1].
In a digital-first world, these statistics should be very concerning for charities that are looking to keep up with how their donors are using technology.
There are several reasons for this.
We’re in the middle of a software revolution.
Imagine what the business world looked like ten years ago. Could you have envisaged a taxi company rising to become the largest in the world, without at any point owning any taxis?
Uber achieved this in only six years.
Similarly, Chinese e-commerce giant Alibaba offers nearly a billion products. It doesn’t hold any stock.
Airbnb is the world’s largest accommodation provider. Not a single hotel room to its name.
“What we mean by a charity today will completely disappear by 2020” – Lucy Green, founder and director at Larato.
Falling cash donations, the rising popularity of debit transactions and the increased pressure on the third sector due to declining public services point firmly towards a future of change for charitable organisations.
Claranet’s Connecting your charity to the future conference, explored the two faces of this imminent transformation:
Goldman Sachs joins RBS, ABRY Partners, and Ares in long-term commitment to the expanding managed services provider
Claranet, the European managed services provider, today announced a refinancing agreement, securing a long-term facility for the company. Goldman Sachs’ Private Capital Team has joined Claranet’s existing and well-established finance providers RBS, ABRY Partners and Ares Management, L.P.’s European Direct Lending Team for the first time in a move that reflects the strengthening performance of the privately owned company in the B2B technology space.
Commenting on the new agreement, Charles Nasser, Claranet Group founder and CEO said:
Our new arrangements reflect the strength of Claranet and the confidence of our funders as we continue to expand both organically and through acquisition across Europe. Our financing now extends to 2020 and achieves greater flexibility for us as we plan for further growth and the development of our products and services.
RBS, Ares and ABRY, our existing funding partners, have shown long-term commitment to Claranet and our strategy. Additionally, we are thrilled to partner with Goldman Sachs to support our evolution.”
Ares and Goldman Sachs have provided a unitranche facility of £82m with RBS providing further support of a committed facility of up to £25m.The arrangement takes advantage of the lower cost of debt made possible from Claranet’s strengthening position, and gives greater flexibility to the company as it continues to grow across Europe.
Mohith Sondhi, Director, Structured Finance Corporates at RBS said: “We believe the market remains fragmented in continental Europe and hope with the support of committed facilities in what we regard as an innovative structure, that Claranet will carry on their impressive growth and the successful delivery of their strategy.”
Nicolas Massard, Partner at ABRY Partners and non-executive director of Claranet said: “We are thrilled about our continued partnership with Charles and his exceptional management team. Claranet is uniquely positioned to become the European consolidator of advanced network and hosting managed services.”
Graham Smith, Director at Ares Management, said: “We look forward to continuing our successful relationship with Claranet and to supporting the company in its next phase of growth.”
The latest refinancing follows a successful financial year-end in June 2014 that saw 24 per cent revenue growth across Europe reaching a total of £127.4m (€175.8m). The strong results demonstrate the success of Claranet’s acquisition strategy, expanding its product portfolio and increasing its customer base and overall market position. This led to an adjusted EBITDA figure of £23.0m (€31.7m) – 97 per cent up on the company’s 2013 result of £11.7m (€16.1m). The total contracted future revenue of the Claranet Group as of 30 June 2014 was in excess of £185.7m (€256.3m).
Charles concludes: “The refinancing is just the latest step to secure the long-term success of Claranet. We now have greater financial support that strengthens our hand in responding to the growing consolidation of the managed services sector in Europe.”
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Expertise in applications most important when choosing an IT services provider, research commissioned by Claranet finds
European IT leaders are putting their applications first when selecting their IT services providers, the latest independent research from Claranet has found. When asked about their reasons for choosing their IT services providers, application expertise came out as the most important reason, followed by support and security expertise. The findings, according to the MSP, highlight the critical nature of applications and data to business success today.
The pan-European research report, which surveyed 900 IT decision-makers from the UK, France, Germany, Spain, Portugal and the Benelux, from a range of mid-market organisations, found that application expertise stands as the most important factor in helping to select an IT services provider. 76 per cent of the entire sample felt that this attribute was either important or very important. Looking at the top end of the sample (organisations with more than 1,000 employees), this figure climbs to 79 per cent. The next most valued were security expertise and support, selected by 72 per cent, followed closely by price (71 per cent)*.
Commenting on the findings, Claranet’s UK Product Director, Neil Thomas, said:
The fact that organisations are putting their applications first when selecting an IT services provider suggests that the majority have got their priorities in order. The software revolution is in full swing, affecting every industry – applications and data, and the IT teams that manage them, are more important to a company’s success in the market than ever before. However, the modern IT estate is comprised of a whole host of different applications, each of which will have different requirements as to how and where they are managed. Most enterprises have a diverse mix of workloads – some heavily regulated, which might need to be kept in-house or on private infrastructure; and others for which public cloud might be appropriate.
Applications, and how well they operate, will make or break a business, so finding a partner that can help manage and support them is critical, as shown by this research, which highlighted support as the second most important priority for IT decision makers. The reality is that organisations will increasingly need to use a blend of services to arrive at the optimal solution. Service providers that have experience in working across different infrastructures can help with matching the availability, performance and security requirements for each application to the right infrastructure service, and can offer enterprises the support and guidance on what will work, and, importantly, what won’t,” he concluded.
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The latest research from Claranet suggests that as many as half of British organisations that look to their IT services providers to assist with innovation fail to have these needs met. The results point to a new imperative for Managed Service Providers (MSPs) to work more closely with their customers to ensure that they can help them meet their business objectives by bringing new ideas to the table.
The pan-European research report, which surveyed 900 IT decision-makers from the UK, France, Germany, Spain, Portugal and the Benelux, from a range of mid-market organisations, found that organisations overwhelmingly favour providers that can proactively engage with them over those that will simply follow orders. However, when asked about their actual experiences, it becomes apparent that MSPs have some work to do to match IT decision-makers’ expectations, with many falling short.
Looking specifically at the UK, there are large discrepancies between the expectations of British IT decision-makers and their experiences with MSPs: 62 per cent look for expert guidance, but just 35 per cent believe their MSPs to be expert guides; similarly, 42 per cent want their MSPs to be innovators, though only 23 per cent views them as such.
Michel Robert, Claranet’s UK Managing Director, commented:
Given the intense pressures on today’s IT departments, and the lack of available time to devote to priorities like innovation, organisations should be able to turn to their service providers for their guidance and expertise. But it’s clear that many users of MSPs are left wanting in this regard. While providers from all countries appear to have some work to do, it’s the British MSPs that stand apart as some of the most likely to fail to meet their customers’ expectations of innovation, expert guidance and advice.
Though there may be any number of reasons for this shortfall, I don’t believe it’s down to an inherent lack of innovation and expertise amongst British managed services providers. Rather, I’d suggest it’s down to lack of communication and speaks to a weakness of customer-provider relationships. Being able to support customers to meet their business objectives and move their businesses forward demands a level of intimacy not afforded to some MSPs. It’s only by working closely with customers, aligning themselves with their business strategies and establishing trust that this can be achieved. This is something we are acutely aware of at Claranet, and we have established a customer advisory board as well as other customer communities which allows us to gather direct input from our customers on our strategy and drive customer engagement,” he concluded.
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Mainstream use of mobile devices creates new opportunities for innovation in the Third Sector
Consumers are carrying less cash than ever before and Third Sector organisations need to adapt to their behaviour through introducing new ways of sustaining their income streams. Riding on the back of the cashless trend, charities must think ‘digital first’ if they are to maintain and grow their revenues, Claranet warns today.
According to the latest figures from the Charities Aid Foundation (CAF) cash remains the most common method of charitable giving, used by 52 per cent of donors in 2012/13 , accounting for 15 per cent of the total value of donations. However, with research suggesting the use of cash has declined by 14 per cent in the last five years , it is time for charities to look to new cashless methods to collect donations.
Recent research by Claranet has found that IT budgets in not-for-profit organisations increased on average by 3 per cent in 2014, and are expected to rise by 4 per cent of this year. In light of this, Claranet’s Managing Director, Michel Robert suggests that these budgets are used to innovate new ways to diversify income streams.
Cash remains the most common way that people donate to charities but with coins and notes gradually disappearing from our back pockets, potential donors will begin to expect to handle their donations digitally – in the same way as many of their other financial transactions. With not-for-profit organisations already facing a funding shortfall of around £1.7 billion a year , a failure to address the move away from cash could have grave consequences for the sector, creating a new imperative for charities to take a digital-first approach.
“Apps, SMS and micropayments, and personal charity fundraising sites have made it easier than ever for charities to engage with their donors, campaigners and fundraisers in ways not previously possible,” he continued. “Used properly, technology can transform relations with activists and donors, allowing charities to provide regular streams of news and information, video footage and forum updates from networks of campaigners direct to the devices of the increasingly tech-savvy support base.
“There is no doubt that mobile engagement is becoming more strategically important, but making the move to digital poses a challenge to many in the sector. The primary area of development for charities will be to find new ways to integrate donations and payment mechanisms with fundraising content available on mobile devices.
“Amnesty International works closely with Claranet to deliver its digital strategy – specifically its website and e-commerce platform – enabling the charity to effectively engage with its members. Working with a partner that understands the intricacies of managing complex, content-rich applications will therefore be vital for charities as they look to transition away from cash donations,” Robert concluded.
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