FY24 Annual Review

Sector Trends

Luella Martin, CMO at Qodea and Rich Radley, Director of Customer Engineering UK & I at Google, share their thoughts on key trends and their impact on different industries.

Cross-sector trends

The three topics that have dominated our market in the past financial year match the solution areas that we focus on to generate business impact: 

1. GenAI. Now that consumer tools like ChatGPT and Dall-E have been democratised, we’re in the middle of a second wave of interest in GenAI as corporations get their heads around how to put this tech to work for them. Whether they’re bringing in consultancies or running hackathons in-house, what they all have in common is a desire to unlock the GenAI dividend. What’s going to be essential is having the enablers in place to make it work – there’s a world of difference between using GenAI tools to write documents and changing workflows with a GenAI engine. The path to production is key. How do you embed the tech while maintaining scalability and security? Everyone is looking for where the first-mover advantage will be strongest.

2. Security. We’re in a period where risk factors – elections, wars, cyberattacks, state-sponsored terrorism – are layering and accelerating. And when everything is in online domains, attack surfaces scale too. But the paradox of cloud is that if security is done right, it’s more secure than any on-premise solution. I’d make an analogy with aircraft: they are the safest mode of travel as long as everyone involved is highly professional and knows exactly what they are doing.

From a security governance perspective, the EU’s AI Act will introduce strict requirements on organisations that leverage AI models, adding hurdles for internal decision making. This is a topic that needs focus, also in light of the fact that the UK’s  more laissez-faire policy makes it an outlier in this area.

3. Data Activation. There is a pressure for companies to leverage data in a way that delivers more efficiency and better margins. Although many have expensive data platforms and large stores of data, these assets are underutilised: for example, customer data isn’t being exploited for targeting and financial data isn’t being adequately used for planning. Dashboards aren’t enough. There’s a huge opportunity here to transform with data.

Sector trends

Telco. We’re seeing network transformation in this sector as telcos start to think beyond 5G. They are looking at moving core functions to the cloud and shifting others to the edge to reduce latency and to support capabilities such as data analytics, IOT and AR/VR applications. Telcos are using AI and machine learning to drive some of this transformation, exploring how the tech can help optimise network operations or create personalised experiences. Reducing costs is an overarching priority for these programmes, as is cybersecurity – here, partnerships with hyperscalers such as Google help telcos present a more robust security posture.

We're continuing to see developments in content delivery heralded by the Apple Vision Pro and with media players looking to more immersive content formats such as AR, VR and 360-degree video. At the same time, the streaming space is fragmenting and becoming more competitive, driving a need for unique or personalised content. Data, cloud and AI all have a role to play in providing that level of personalisation, and even generating highly specific content.

Gaming. There is growing demand for a cross-platform experiences, with games and purchase histories available on any device, and the community aspect of gaming similarly available anywhere. Discord’s upcoming release of a gaming platform on top of its community underlines the importance of this social aspect of gaming.

Financial Services. Companies in this sector are using AI and ML to improve personalisation, understand customers better and manage them throughout their lifetime financial journey. They can also use emerging tech to simulate these customer journeys and build products based on the simulations.

As the “crypto winter” thaws, we will start to see the re-emergence of blockchain, with interest in its application for secure transactions and cross-border payments. There is also a trend towards embedded finance (for example with payments built into Discord) and banking-as-a-service, pointing to a continued convergence of social platforms, digital services and banking products.

Cybersecurity, regulatory compliance and ESG will all continue to drive the adoption of cloud and related technologies such as AI and ML. Organisations that don’t pursue these technologies to improve their services and reduce risk will fall by the wayside.

Public Sector. Organisations here are looking at how to use cloud and data analytics to improve citizen engagement and participation, remove as much friction as possible from citizen services, and modernise legacy systems. We’re also seeing heightened interest in cybersecurity and resilience, particularly in relation to critical national infrastructure and intellectual property, and in light of emerging threats from nation-state actors. There is a desire to take a more data-driven approach to policy making, while underpinning everything is a general trend in the public sector towards more automation and digitisation. Public sector organisations are also focused on sustainability, improving the digital skills of the population across demographics, especially in light of the growing impact of AI on white-collar roles.

Retail. Personalisation is the key here – delivering a tailored experience through increasingly diverse channels. The question for retailers is how to bring the bricks-and-mortar and digital experiences closer, for example so a physical store reflects the personalisation that’s possible online. Data and AI can also drive better decision making around inventory management and logistics, and can assist the sector’s sustainability focus by supporting ethical sourcing and helping retailers to understand supply chain risk.

Manufacturing and Industry. Using technology to understand supply chain risk is a priority for manufacturers, too, especially in the aftermath of Brexit and in light of current global conflicts. In the UK there is a strong focus on circular economy and net zero, with manufacturers looking to digital tools to support performance in these areas and demonstrate their net zero agenda to investors. Data-related technologies are also key drivers for Industry 4.0 initiatives and the need for workforce upskilling in the sector.

B Corp and ESG

We take great pride in the B Corp certification that both Appsbroker and CTS earned in 2022 and continue to strive to abide by its values as part of the combined business. Alongside B Corp status, we have a series of internal initiatives in place around DEI and environmental topics. These are part of our culture and our desire to grow in the right way, with a strong sense of social and environmental responsibility. We’re a young organisation with a vibrant, modern, forward-thinking talent base for whom ESG issues are increasingly important. Our focus in this area is not about appearances – it comes from a place of authenticity and is led from the top.

Financial Review

Bill Bates
CFO

Our clear market focus

Qodea has established itself as Europe’s leading Google Cloud Partner. We pride ourselves in our technical excellence in delivering complex digital transformation projects leveraging Google Cloud. Strategically, we want to consolidate our #1 position in this space through a combination of organic and acquisitive growth. Given the size of the total addressable market for cloud services in Europe, and the fact that Google is the fastest growing cloud hyper-scaler and investing billions in its infrastructure and offerings, this presents us with a unique growth opportunity. Google has clear strengths in data tooling, ML and security, where its capabilities are superior to AWS and Microsoft - these are strategically important growth opportunities for us.

Our European reach currently includes a dominant UK presence, customers in Germany and the Nordics, operations in the Netherlands and a near-shore delivery center-of-excellence in Romania.

We will continue to focus on corporate and enterprise-scale accounts, delivering large, complex cloud transformation projects into the businesses. Some of the organisations we currently work with include the Office for National Statistics, NatWest, Santander Bank, HSBC and JaguarLandRover - our client base is unrivaled in the Google Cloud space.

Continued investment

FY24 saw Appsbroker and CTS come together to form the largest dedicated Google Cloud practice in Europe. We spent the second part of the year integrating the businesses to ensure we have the right commercial platform and delivery propositions to launch ourselves into FY25. This was done against a more challenging economic backdrop, but sometimes it pays to invest when others are scaling back. We are already seeing the commercial benefits from this and as our pace of growth builds further, we will continue to invest in attracting, retaining and developing talent, and a push for organic growth in new markets. We’ll invest further in M&A, looking for high-quality targets that are in the right geographies, with the right scale and with enterprise-level customer accounts. Finally, we’ve invested in new office space in London and Swindon, UK. All of this investment is part of a continuing cycle to support our growth ambitions.

Future positive outlook and direction

We’re cautiously optimistic about the coming financial year - we had a record bookings quarter in Q4 and a record delivery order book to carry into the new financial year. The macro-economic climate appears to be easing, albeit there will no doubt be some bumps along the way. That said it does feel like the economy has turned a corner and that is starting to free up budgets for digital transformation again.