IS FREE BROADBAND THE KEY TO A MARXIST GOVERNMENT?

IS FREE BROADBAND THE KEY TO A MARXIST GOVERNMENT?

The word 'free' lost its meaning and credibility sometime during the last decade. But most people already knew it was a complete misnomer and should be devolved to a mere footnote in the English dictionary. So, it came as quite a shock to hear Jeremy Corbyn on the radio on November 15th discussing how a Labour government would deliver fibre optic broadband to every home in the country for 'free', and it would cost around £20 billion. There's the first simplistic paradox of the word 'free' immediately - 'and it will only cost £20 Billion'. So, someone IS going to pay the cost of delivery after all, so it can't be free – and that someone is us!

Then the lies were exposed about the true cost of providing such a 'free' fibre broadband service to everyone. Later that day, the CEO's of Britain's largest broadband providers (BT, TalkTalk and Virgin Media) went ballistic in the Evening Standard newspaper, outlining that the true cost of delivering this promise would be closer to £100 billion. BT Openreach – which would be nationalized in the process – went further. Who would then pay the annual BT cost of its pension scheme (billions) to former employees when the company will no longer have any income coming in? Of course, it would be us again!

The knock-on effect could be catastrophic for competitive fibre broadband providers such as Hyperoptic, Gigaclear, Cityfibre and Zooom. These companies have invested hundreds of millions to deliver fibre broadband to people's homes. What is to become of them if the price of broadband in the market is zero? Further knock-on effects will impact every competitive fibre provider (including us) endangering many thousands of jobs in our industry. Since this Labour policy announcement, there has been dozens of articles deriding this policy as absurd at best and extremely naive at worst. One designed simply to fool the people in exchange for their valuable vote.

For those interested, one of the best articles is by Phil Carse of Megabuyte and he states:

"In conclusion, we estimate that the plan to give away broadband (which currently attracts estimated revenues of £10bn) would basically wipe out two thirds of UK telecoms industry EBITDA profits of £16bn (and hence the funding for current capex of around £8bn) as well as cause untold disruption to a very competitive, innovative industry that provides a crucial underpinning to the emerging digital economy, endangering many thousands of the estimated 200k jobs in the industry."

His article Costing Labour's 'free' Broadband can be read in full here.

The unpalatable truth is that if Jeremy Corbyn and John McDonnell are elected, the British economy will – for the first time in its history – become a Marxist run state. Two former Labour Prime Ministers (Tony Blair and Gordon Brown) know how dangerous this is more than most and have advised voters to abstain or vote for the Conservatives. You couldn't get a more knowing and authoritative warning about the current Labour leadership than the last two Labour Prime Ministers . . . 


Looking forward into 2020

We began the process of business planning for 2020 back in August of this year. Since then, there has been several Executive Management meetings to discuss the main investments we shall be focusing on for the new year ahead. And there are many options vying for the investment funds we will have at our disposal.

Our approach has been to assume in the first instance there will NOT be a Labour government on December 12th. (But who knows what the polls may bring?). On that basis, we have exciting plans in place for job-creation and capital investments. Some of the cornerstone elements are summarized below in Fig.2:

Fig.2 Focus on Strategy and Investments

As you can see, we are lining up investments in areas such as implementing a Global SD-WAN infrastructure stretching into 10 global cities followed by a further 10 cities should the first 10 prove successful.

Each of these areas require substantial investments in both people and infrastructure/hardware, and those are the foundations for the strategy we intend focusing upon. But the plans submitted so far by each of the departmental heads amount to an extra 180 people! Clearly, we cannot stretch our budgets to a 33% increase in staff, however, the election result will feature heavily in these investment decisions.

But for now, let's just focus on two very important areas shown in Fig.2: M&A and then Futures and Relevancy.

Mergers & Acquisitions

We stated earlier in the year that for the first time ever, we would look at acquiring another company following 17 years of organic growth. The rationale for this is set out below:

  • Acquire the skills and experience we need (and struggle with to recruit) to supplement those we already have
  • Extending our regional geographic reach in the UK - will also help with recruitment
  • To enhance and complement our existing Product and Services set
  • Relevancy – delivering new services into buoyant markets – see the next section
  • Access to new customers and markets – gain market share
  • Clearly, such a move will also boost our top-line revenues and EBITDA performance

As expected, the search has been long and hard. Ultimately, if we could find such a company that meets most of the selection criteria above whilst also having a similar culture, ethos and values to our own, then that would be fantastic. However, it is a very tall order just identifying such targets, never mind finding one where the owners are willing sellers.

Following a number of approaches we made throughout the year, we have actively engaged with two such companies. However, it's all I can say at the moment because of the strict confidentiality required. What I can say is that both companies have around 120 employees and are outside London. Both companies would complement Exponential-e in ways that could take us 5-10 years should we choose to build them organically. So, if we proceed to a conclusion with one of these contenders, we would hope to be in a position to announce it publicly during Q120.

Futures and Relevancy

Our new 'acquisition' approach will help us in a number of ways if we can pull off the deal. One of the ways to remain competitive is to ensure the products and services we take to market are both timely and relevant in the market place. Time-to-market is critical. Miss the window of opportunity and you are merely an 'also-ran'. But what is 'relevancy'?

Today, we live in a time of constant change and heightened customer expectations. The greatest danger facing most brands today is loss of brand relevance. People are ultra-connected. Markets constantly shift. New trends emerge. Competitors enter and shake things up. And customers expect more from the brands they buy from. As a result, many businesses struggle to stay relevant – trying to get ahead of competition, adapt fast enough, and maintain their position in the market. These are the real challenges we face in attracting new staff and customers, and indeed, keeping the ones we have already.

We have already started the conversation about future services and relevancy as can be seen in Fig.3 below from Jonathan Bridges:

  Fig.3 Slide from 'Futures – Relevancy' presentation by Jon Bridges

 However, there is much more than just new products and services that drives relevancy. We must simultaneously address the issues around our brand, purpose and culture. These are the complementary drivers that will help deliver relevancy. All three work together to drive one another - and each are interdependent if you want to stand out from the crowd. Simply embracing purpose is necessary, but not sufficient. Even the most talented people aren't going to drive you into the future without a clear vision of what that future looks like. Likewise, a highly strategic and perfectly designed brand won't succeed without purpose-led people who can bring it to life.

Alas, there is great depth to the topic of futures and brand relevancy, and I shall be discussing this in depth in the January issue of Innovate.

What Differentiates Us

Our Brand


Exponential-e is a company that stands for trust, integrity and customer service excellence.

 Our Culture

The company is driven by our model of delivering Applied Innovation and Dynamic Disruption.Our culture is based around the premises of learning, meritocracy and shared-success.

 Our Purpose

Sustain the status whereby Exponential-e is acknowledged among our peers, competitors and clients as the most advanced and innovative business technology enabler in The World. A 'world-class company...'

And finally...

November Sales Update

The sales teams pulled off another remarkable performance during November – beating the sales forecast by 6.34% and smashing November 2018's sales figures by a whopping 10.85%.

November sales forecast = £3.165m

November sales achieved = £3.567m

Given the on-going, turgid state of the economy and the markets, November's result means we have clawed back more of the ground we lost in September (see table below) to being just 11.56% off of 2018 (Year-to-Date) which was a record sales year. This is a great start to Q419. But as mentioned last month, let's see if we can repeat this collective effort again to beat Q418's £11.343m. This is a big ask given the further uncertainty we face with the impending General Election in December. November and December will both be formidable mountains to climb, but it won't be the first time we've planted flags at the summit, so to speak . . .

Table 1: Overall Sales Year-to-Date

Once again, a big thank you to all our staff members for your tremendous efforts during November. Every area of the business has worked so hard to drive a very good result against a very difficult and constrained market place . . .

Best Wishes

Lee

Procurement Update

Procurement-onboarding

The Carrier Category mission

  Nic Boucher - Carrier Category Manager

At our core, Procurement seek to save Exponential-e money which contributes directly to EBITDA growth. We do this by getting extra discounts on high-value customer projects or negotiating reductions on existing invoices over time.

To enforce the 'five rights' of procurement (ensuring we buy inputs of the right quality, delivered in the right quantity, to the right place, at the right time and for the right price!) I leverage carrier infrastructure to ensure a firm commitment from them to consistently achieve the best rates available, and end-to-end support for Exponential-e.

How is this achieved?

  • Using available tools such as Outlook, Sharepoint, Teams, SNOW and Salesforce to effectively communicate and track carrier pricing requests with all stakeholders (please see the benefits and risks below)
  • Hotdesking around the business to close the communication gap
  • Testing the APIs that are currently in development, which will largely reduce the reliance on the above mentioned tools (we are nearly there!)
  • Reporting on quote volumes, SLAs and savings that are achieved on the carrier pricing desk
  • Carrier relations – ensuring that I act as a point of escalation alongside Ray to leverage the best service from our carriers' end-to-end.




 Benefits of using Salesforce for Carrier RFQs

  • There is no lost information because your RFQ is linked to your opportunity
  • It is user friendly - you can add to and edit your RFQ and @ the relevant people to leave a comment and to seek solutions and commercial approval (where applicable). The instructions are online as well
  • The Returned Pricing Section provides an alternative quick view for returned costs
  • For bulk RFQs, the process has been streamlined to help keep better track of bids
  • You have a clear view of the live carrier activity with Procurement
  • The live stats that we gather helps procurement analyse the carrier activity and pricing to keep them accountable
  • These live stats also keep Procurement accountable against the volume of RFQs at any given time

Risks of not using Salesforce for Carrier RFQs

  • Via email, pricing can be misplaced or disappear and potentially is much harder to view and collate because it is not tracked on a single case
  • Procurement is up to date on the peer-to-peer escalation list, so you risk not getting the support that you need to receive a quick response to a query via email
  • The data that we collect from Salesforce informs the relationship with carriers, so you risk working on assumptions rather than facts and data

 Current Pricing Desk Challenges

  • Our transactional procedures have not kept up with the growth of the business. Salesforce was developed to mitigate the latter and to streamline carrier pricing with opportunities, but this is becoming obsolete. We are working tirelessly to implement the Colt and Zayo APIs into Cloudport, which will cover the US, EMEA and APAC, more to follow…
  • We are quoting large bids more frequently and the pricing desk SLAs are increasingly challenging to achieve and manage because of how manual the transactions are:
    • UK Site (L2, Broadband, 10Gb, Radio) = up to 2 working days
    • International Connectivity (L2, DIA, IP VPN, Wavelength, Radio) = up to 5 working days
  • Automation will help to chip away at the live average SLAs below (incl. quote volumes): 



 Benefits of using Sharepoint to access Procurement information

  • The Procurement section on Sharepoint is a work in progress, you have access to key carrier information, such as the company summary and status, what we use them for, product sheets, key contacts, rate cards, terms of business (Inc cancellations), user guides and other valuable info.
  • So far there is information about Openreach, BT Wholesale and Colt with more to follow
  • Layer 2 and DIA budgetary pricing (where applicable) will be available for indicative pricing only, not sale. Our priority in 2019 is to implement international APIs to speed up pricing and reduce the need for budgetary costs.

Risks of not using Sharepoint to access Procurement information

  • Relying on Procurement to answer BAU queries about carriers and vendors that are standard
  • Missing out on key carrier information that could better inform your solution 


International Carrier Pricing on Cloudport

  • Carrier Application Programming Interface (API): We have them set up for Openreach, BTW, VM and TTB. Looking to pursue an international carrier API in 2019.
  • Commercial team support: The commercial team are the gatekeepers to all things Cloudport and manage its functions. Anything that falls outside of their scope, we can help to guide and support you. 

Customer Wins

Key-Wins

Here you'll find the best of the many new deals our sales teams close for us each month, including what customers we've won, which Exponential-e people have worked on these deals and the TCV.

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Q319 PRIDE Awards

Q2-2019-Pride-Awards
Congratulations to the winners, the runners up and nominees for the Q3 PRIDE Awards.
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Customer Comments

b2ap3_large_Customer-Comments

We all work hard at Exponential-e, and we are not the only ones that notice this! Our customers are always leaving us positive feedback - and you can read some of the comments here.

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HR Update

HR Update

Just like that we are into the final Innovate of 2019. Personally, I have found this year to be one of the fastest during my working career, however, my parents did say the older you get the quicker they go. I, like many others are currently in the planning stage, reviewing what has been rolled out or completed this year and putting the plans in place to hit the ground running in 2020.

In the Employee Survey this year we had a 69% positive response to Exponential-e offering a comprehensive benefits package. Our benefits package is not just the obvious ones like annual leave, healthcare and birthday day off, but we also have access to great discounts on 1000's of shops on the high street as well as online, reloadable cards and cashback to name a few. I am a fan of Medicash Extras, but there's plenty more sites so when you have a minute go and visit our benefits portal ViaNabo for all the details and links to these savings i.e. My Advantage and My Active.

To those that are currently members of Vitality you would have recently received communication on a variety of enhancements and replacements to the Vitality Reward Programme. I have provided some of the details below but head to the Vitality Member Zone to find out more.


Vitality American Express Credit Card

You will be able to earn up to 1% Cashback from American Express and up to 1% Vitality cashback booster based on your monthly activity.

Effective from: 2nd December 2019

Waitrose (will replace Ocado)

Waitrose will replace Ocado as the healthy food partner. Individuals will be able to get up to 25% cashback on the Waitrose Food Health range (excluding drinks) based on monthly activity – both in store and online.

Effective from: end of January 2020

Caffé Nero (will replace Starbucks)

The regular hot drinks will now be via Caffé Nero. Once you have earned 12 activity points in a week, you will benefit from a hot drink of your choice in any Caffé Nero across the UK. Also, once you have unlocked the benefit, you will receive 25% off food for that whole week.

Effective from: April 2020

Expedia

Vitality have partnered with Expedia to give individuals access to hotel discounts around the world. Depending on your Vitality status, you can receive between 10-20% off worldwide hotel stays and be able to make up to a maximum of four bookings per a plan year. The discount is on top of any seasonal or loyalty offers run by Expedia.

Effective from: February 2020


Virgin Atlantic (will replace British Airways)

Individuals will get a 15% discount on all fares, classes and cabins with Virgin Atlantic Airways. You will be able to make up to four bookings per a plan year depending on your Vitality status. The discount will be on the fare only, taxes will not be discounted.

Effective from: Spring 2020

SuperCarers

Vitality have teamed up with SuperCarers to ensure that individuals can get advise on both care and care services for them and their loved ones. As part of the SuperCarers services, individuals and their immediate family will have access to the comprehensive service known as CareSolved at no additional cost. Individuals and their family will receive a 20% discount on the first £1000 of ongoing care.

Whilst on the subject of health cover, just a quick reminder that Medicash renewal is from 1st March SO you have three months left to use your Medicash allowance under the current plan before all amounts refresh in March, they do not carry over so please use it up!

Medicash is a healthcare cash plan to help you claim back the cost of treatments such as eye tests, dental treatment and physiotherapy. Our annual benefits under Medicash include:

  • £130 routine dental cover (checkups and treatment)
  • £400 dental accident and injury
  • £150 optical cover (glasses and contact lenses etc.)
  • £40 prescriptions, inoculations and flu jabs
  • £350 PMI excess cover (or specialist consultation and diagnostic tests)
  • £250 complementary therapies (physio/osteo/chiropractic/acupuncture/sports massage)
  • £150 alternative therapies (as part of a treatment plan)
  • £175 health screening
  • £40 chiropody
  • Doctor online - online GP service
  • Best Doctors – 24/7 second medical opinion service
  • Medicash Extras discount portal (online discount scheme)

I would like to take this opportunity to wish all of you and your families a happy and safe holiday period. I look forward to working together as a team in 2020 continuing to achieve our personal and business goals.

Merry Christmas

Sarah.


Finance Update

Financial-Update

​Revenue

  • We added £12.0m of revenue in October, so year-to-date, after 9 months of trading (i.e. from February 2019 – October 2019) we have accumulated a total revenue of £106m.    
  • This is £11.5m more than the same point in time last year (i.e. October 2018).   
  • On the positive side, this represents growth versus last year of 12.1%, of a pure organic nature, in a challenging market.    
  • As you can see in the chart below, the blue bar which represents this year's performance, i.e. FY20 is taller than the orange bars, the orange bar representing last year's performance, i.e. FY19.   
  • On the negative side, this is a performance that is considerably below the business plan we set at the beginning of the year, when we set a stretch target to close the year on £150m.   
  • Our latest forecasts suggest we will finish the year around the £142m mark.

Capex Investments

Last month I made the point that we invest considerable amounts to employ great people. This month, I want to underline our investment into technology, which you can break down into three parts:

  1. To meet our customers' demand
  2. To feed and water our existing infrastructure… making the necessary enhancements and upgrades to future proof our customer offering
  3. The new investments which open up new markets or give us new assets.

This year we have invested £1.5m every month into technology, so year-to-date, that makes a total of £13.5m.

Where does this money go?

To meet Our Customers' Demand

  • We have invested £9m (67%) into buying the necessary technology solutions to support the delivery of new services for our customers.Broadly, you can split this investment into thirds:
    • £3m for tail circuits
    • £3m for network hardware
    • £3m for cloud/UC /security hardware and software

Feed and Water the Existing Infrastructure

  • £3m (22%) is spent to deliver business as usual core engineering capacity projects such as:
    • Network future-proofing/capacity upgrades
    • The LD1 migration from the DC closure
    • Cloud compute and storage capacity
    • UC BroadSoft software licenses

New Investments

  • The remaining £1.5m (11%) represents investment expenditure across many projects:
    • The facilities works to upgrade 5th floor
    • Research and development- the engineering costs associated with the design of new products
    • Software defined data centre- the foundation of SD-WAN
    • DDOS toolsets for core security offering
    • New PoPs (not cafes) to expand geographic reach 

Spotlight on the IT Team

Spotlight on the IT Team

This month we're turning the Spotlight on the members of the IT team!
Q1: Do you prefer Apple or Android?

Q2: What show/s are you currently streaming?

Q3: What is your favourite place in the world, and why? 

The Legal team is responsible for all Exponential-e's contractual relations with customers and suppliers. We draft, negotiate and amend contracts, undertake dispute resolution and litigation, and regularly deal with police and security services with respect to prohibited usage of our services.  

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Marketing update

Marketing-Update

Previous Events

  • VMworld 2019 Europe (attendance and hosting senior contacts), Barcelona: 4th-7th November 
  • Security IT Summit, London: 5th November 
  • IT Leaders DX Roundtable (SME), City Social: 12th November 
  • ILTACON Legal IT event, London: 13-14th November 
  • CRN Awards, London: 14th November 
  • CMP Demo Webinars with John Burton: 14th Nov – 5th Dec 
  • IT Leaders DX Roundtable (Enterprise), Lucky Cat: 19th November 
  • Digitech 19 Public Sector event, Manchester: 19th November 
  • Education Security Breakfast Morning, Devonshire Club: 20th November 
  • IT Leaders DX Roundtable, Café 21 (Newcastle): 26th November 
  • IT Leaders DX Roundtable, Gaucho (Manchester): 28th November 
  • HOSPACE Hospitality event, London: 28th November  

 Upcoming Events

  • Charity IT Leaders Data Roundtable , The Ritz: 2nd December 
  • IT Leaders DX Roundtable, The Savoy(Pre-Sales): 5th December 
  • Channel Partner Christmas event, Kitty Hawk: 5th December

​Campaigns

  • Turkey Cyber Security campaign – a revamp of our summer seaside security campaign, which includes emails, social posts, paid Google Adwords advertising and directing individuals to sign up to our Cyber Security vulnerability test here: https://www.exponential-e.com/turkey


Culture Club

Culture-Club_July19

Our Culture Club is always working hard behind the scenes to make sure we have fun company events to enjoy. Find out what they've got planned for us (asides from their usual Thirsty Thursday events).


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New Starters

New-Starter-Banner
At Exponential-e, we welcome a new group of starters every month. In this section you can put a name - and job role - to all those fresh faces.
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