Hello folks, Howard Nicholls and Steve Smith of Alchemy went on a market scoping exercise in the UK in June/July. Steve reports: We visited Bath, Manchester and London and had pre-arranged meetings with companies that had either complementary or overlapping skill sets. Meetings had been set up by a UK-based consultant (an ex-colleague of Howard's) that we had brought to Christchurch some months earlier and via contacts we had established on a previous trip in October 2000. Trade NZ provided some support for both trips because of Alchemy's export focus; we have set up an export network of four companies with complementary skill sets (software engineering, advertising, marketing and portal development and management). The UK is a significantly different place now than what it was in late 2000. As financial advisors we spoke to in London put it "the dot com bubble is still bursting and there are some big players yet to go under". Other observers are more optimistic, stating that the trough has been reached and it has levelled off. The biggest casualties have been new media companies - those developing basic websites, glitzed up with Flash and Shockwave, etc. As in New Zealand, every new graduate sets up a company and gets in on the action with Cold Fusion, Shockwave and FrontPage, etc. These businesses appear to have been the biggest casualties along with those whose ideas were more flash than substance. Some observations ... Everyone wants to find an excuse to come to New Zealand!! Outsourcing to India and the Philippines is quite widespread (Nokia sends a lot of work to the Philippines) where chargeout rates for bespoke software development is still lower than NZ. There is no longer a shortage of IT personnel in the UK - the dot com crash and some serious shakeouts by corporates in the contracting sector mean more people are walking the streets. While were were in the UK Shell fired 400 contractors. We're told the big corporates tend to do this periodically - new broom stuff! There is still strong demand at the "high end" of the software engineering sector for delivery of back-end corporate systems funded on traditional business model benefits - this is particularly true for technologies such as Java, J2EE and XML We were told that it is difficult to get funds for IT investment at present and that companies are in a cash preservation environment. There is strong pressure in London especially to bring down costs - hourly rates of �120/hr are falling to nearer �70/hr. European and US investors look for companies with clearly discernable markets with a greater than 10% share. Depth rather than breadth leads to best value. Office space in London runs at about �45/sq foot We remain optimistic about opportunities in the UK and are continuing to pursue them via the establishment of JVs and other arrangements with companies we met in all three locations - we are still deciding when our people will set up there. Steve -- Dr Steven M Smith Alchemy Group Limited Level 6 Royal Sun Alliance Bldg PO Box 2386 Christchurch New Zealand Phone +64-3-962-0396 Fax +64-3-962-0388 Mobile +64-21-336 387 [EMAIL PROTECTED] Internet/Intranet Business Solutions cheers, peter ============================================ Peter Hyde, SPIS Ltd & WebCentre Ltd , Christchurch, New Zealand * http://BusinessDailyReview.com - daily analysis, strategy, ideas * http://TurboNote.com - sticky notes and instant messaging * Web automation for online periodicals: http://TurboPress.com --> via Canterbury Software email forum: Success through Connections Email your messages to [EMAIL PROTECTED] Searchable list archive: http://www.mail-archive.com/[email protected] Leave or rejoin the list: http://canterburysoftware.org.nz/forum.htm
