Lights, camera, action! It’s a phrase that Piers Linney, the co-chief executive officer (CEO) of Outsourcery, a cloud services and business-to-business (B2B) telecommunications provider, is well used to hearing as the newest investor on UK TV’s Dragons’ Den television programme. Linney recently spoke to bobsguide’s Neil Ainger about his firm, the growing prevalence for cloud computing-delivered services, and how it feels to be the technology representative on the Dragons’ Den panel of bosses interrogating entrepreneurs pitching for start-up money.
I didn’t mean to end up on TV explains the joint CEO of Outsourcery, Piers Linney, as he discusses his first appearance on the medium at the turn of the decade for Channel 4’s UK TV programme ‘The Secret Millionaire’. “I spent some time at a young offender’s institute as part of the C4 show learning about the challenges that many young people face, and I guess the BBC saw me on that and approached me this year to join the panel of bosses in Series 11 of Dragons’ Den because of it,” he explains.
The Comprehensive Schoolboy is a self-made man who came up the hard way and qualified as a solicitor with SJ Berwin in 1997, before going on to work at a number of investment banks, such as Barclays de Zoete Wedd and Credit Suisse First Boston, where he specialised in mergers and acquisitions (M&A) and leveraged buyouts. He left banking as the new millennium dawned to start up an internet business and went on to join a corporate finance and venture capital firm, before becoming a fund manager providing structured debt and equity finance to small cap publicly traded companies in the UK, many of them in the technology world.
All this experience has stood him in good stead on BBC TV’s Dragons’ Den where as the primary technology representative now on the panel, and CEO of a firm that specialises in providing cloud-hosted telco and other services, he has to decide who is worthwhile investing in and who isn’t. Dragons’ Den is after all essentially the venture capital process and pitching procedure writ large. “It is not easy,” he admits, “but generally you get a good feel for people, as much as their idea, and it is this information upon which you make your investment decision.”
Technology a Passion, but Finance Dominates
Linney has been recognised by the JP Morgan-sponsored 2013 Power List as one of the UK’s 100 most influential black Britons, but he admits his real strength is in finance, rather than technology innovation. “I like tech don’t get me wrong, and I am a real enthusiast for it and I’ve had a string of investments in the sector, but my particular expertise - and background - is in finance. The internet has fascinated me since its rise in the 1990s, and combining this enthusiasm with my numbers knowledge lead to the establishment of Outsourcey in April 2007. My business partner, Simon Newton, and I led a management buyout of Genesis Communications from DSG International plc (Dixons), from which the firm was ultimately set-up.”
Realising that the future was not in vanilla mobile services the new owners of the Dixons DSG business-to-business (B2B) unit quickly refocused the business on telephony hosting services in the cloud over the next few years. Outsourcery was chosen as the new name when the firm was incorporated in 2011 after a number of divestments and additions. A total of about £30m has been invested into its rebirth as a cloud-based firm that can directly meet the unified communication telco needs of Pearson, which owns the FT newspaper and of the BBC, among other clients. There are a large number of effective reseller partners as well, such as Virgin, Vodafone and many small-to-medium sized enterprises (SMEs), which all sell their own services but reply on Outsourcery to provide the capacity, functionality and infrastructure in order to do so.
Outsourcery has one data centre itself in the middle of England to power its services and it co-locates in a number of other DCs throughout the UK run by firms such as Telecity, Equinix and so forth. “We may well add another data centre ourselves in future to cope with demand or co-locate further, but we are currently alright capacity-wise because we’ve rolled out Hyper-V virtualisation technology on our mainly Windows Server estate [Microsoft apps being a core business for us]. This has allowed us to get more efficiency and capacity out of our existing data centre anyway to handle our growth. Co-locating also has an ancillary benefit too in that it can help latency performance. Where this is a concern for certain clients, perhaps in the media or financial services (FS), it means we can offer them a range of options.”
A Cloudy Future As Sun Shines on Growth
Linney’s firm is regulated by the UK telco regulator OFCOM as a cloud service provider of IT and communication services that offers Platform-as-a-Service (PaaS) and Infrastructure-as-a-Service (IaaS) capabilities; a growing field. Outsourcery exists so that others can provide Software-as-a-Service (SaaS) tools in the cloud such as telepresence or roaming VoIP phones to end user clients on demand, and there are applications they can provide too if firms want more than just hosting services.
“We are a company that sells services and hosting capabilities on a subscription basis. We are not a technology company as such, but rather a B2B services firm,” explains Linney, who goes on to add that they are “channel-focused because we want a big sized operation and economies-of-scale savings, so necessarily we have retail clients, phone companies, media firms and many many other end users. Back when we started - before the rebrand - what we do was known as hosted IT but now of course it is known as the cloud, reflecting the move away from firms’ hosting their own back-end and staff towards using large-scale, cheaper outsourcing firms and shared capacity.”
“There is a permanent systemic shift away from little managed islands of infrastructure [doing firm’s own internal IT]. Increasingly this means companies’ telecoms, data and everything else is moving towards a common cloud computing model, where shared services and hosting enable larger-scale operations and greater savings,” he continues. “We are getting traction from large firms, SMEs, and the public sector, and I find once clients move to the cloud they rarely go back. Sometimes it is their telephony that moves first and/or their email, but other functions soon follow once the cloud methodology is adopted.”
Any Remaining Obstacles to Widespread Cloud Adoption?
In response to questioning about what obstacles, if any, still remain to widespread cloud adoption - with concerns about ceding authority over security, operational control and data protection laws often cited - Linney is adamant that all these worries can be addressed by strong service level agreements (SLAs) and professional partners. “When I started out in this area these fears were often mentioned and perhaps they were valid a few years ago but they are less relevant now. Indeed, the reality is that we typically have better security than many of our clients because our systems are bigger, newer and better - we use the same network security as PayPal, for instance - so clients should be reassured. Outsourcery also has ISO 27001 security accreditation,” he adds.
Linney concedes that for some FS firms, banks and others, which are particularly concerned about protecting transaction flows or sensitive customer data, some of these fears may still be prevalent. “But you don’t have to move everything to the cloud,” he says. “You could just move an internal helpdesk or communication system, for instance, even retaining control of customer-facing call centres if you so wished. Cloud services can be as comprehensive or as selective as end users want.”
Dragon’s Den TV Series & Technology’s Place in Society
Moving on to his recent participation in his first ever series of the BBC’s Dragons’ Den TV programme, which has been syndicated around the world after initially launching in Japan, Linney says that he has just finished viewing the first six 2013 UK episodes live on air, and he is looking forward to the remaining six episodes being aired before Christmas. “Of course, we film them over a couple of weeks in one intensive block but it’s been fun seeing the reaction to my first series [Series 11 in the UK -Ed] and I’ve thoroughly enjoyed the experience, as well as being thankful to have the opportunity to support some entrepreneurs.
“On Dragons’ Den we grill the pitchers for about two hours, but you only ever see about four minutes of that on TV and once out of the studios there is a lot of due diligence and entrepreneur support required. It is well worth it, however, and I am hopeful about being asked to take part in a further series.”
In regard to what is the best / worst pitch he’s ever seen, Linney plays the gentlemen and says that he would rather not say, having only just recently joined the programme as a replacement for Theo Paphitis, “but I have seen a lot of technology entrepreneurs compared to previous series’ of the show and I am glad about that as I want to see more technology on the programme.
“Peter Jones is involved in technology a bit himself, of course,” he continues, “but traditionally Dragons’ Den in the UK hasn’t been regarded as a tech haven. I am hoping to change that.
“If you think about it technology bleeds into every aspect of the modern society and the 21st century business world, which is why I think you’ll see more and more technology-related concepts, pitches and products on Dragons’ Den in the future.” There is nothing cloudy about that strong prediction, but inevitably cloud computing will no doubt play a part of the technology-infused future that Linney envisages.