Down the Procurement Pub with Cloudbuy, Richard Beaumont, the Ministry of Justice and Heterotic

It didn’t seem appropriate to publish our down the procurement pub regular feature on Good Friday, so it’s here today. (There will be some light posting over the Easter weekend, but a reduced quantity until Tuesday).  I have had a very quiet time after the excitement of Jason’s visit and the Dutch Sourcing Awards last week, so little to report on the actual ‘pub’ front. So last night was a curry at home with some of my wife’s lovely relatives, including the best under 14 chess player in the UK ... and a nice drop of Ned, a very acceptable New Zealand Sauvignon Blanc, on special offer at Majestic wine now!

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Last week’s article in the Daily Telegraph about Cloudbuy, the eProcurement and marketplace firm, caused a bit of a stir in the industry. It’s worth reading the comments under the article – including a couple from me – to see why. For a start, there was confusion between  revenue and market capitalism, then there was Ronald Duncan’s views that “Cloudbuy could become the biggest technology business in the world, beating Apple, Google and Microsoft. We started the cloud wars, and we’re going to win them.”

I don’t know whether this scary optimism is what you need to show in this market, or whether it is counterproductive. Saying you will be bigger than Amazon, that your product is better than that of salesforce.com – is that good positioning or riding for a fall? Time will tell. It’s very different from firms such as Procserve, that run what is probably a larger marketplace in terms of volume going through it, but keep a low profile, or BravoSolution, which analyses more UK health service spend than Cloudbuy. Brilliant marketer  though Bravo is, it doesn't tend to use such hyperbole. We’ll see how Duncan and colleagues do anyway. They have some good products but a look at their latest results shows they have a way to go yet.

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Wow. So Richard Beaumont, VP Central Purchasing at Rolls Royce really has left to become Director of Commercial Services at the  Co-operative Bank . I don’t know him well, but from a few meetings at conferences and hearing him speak, I’ve been very impressed with him as an individual and a senior procurement leader. But my goodness, that is what you might call a brave move. The Spend Matters Gold Star for Valour and Boldness in the Face of Adversity goes to Mr Beaumont.

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So who deserves the credit for the £109 million G4S has agreed to replay the Ministry of Justice? Bear in mind the original offer from the firm was £24 million, so someone, or a number of people, deserve some praise here on behalf of the taxpayer. Some reports have suggested that this was the Cabinet Office working their commercial magic, and there is no doubt their generic tough line on suppliers has persuaded suppliers to open their purse strings more than might previously have been the case.

But it is hard to believe that the MoJ’s CFO and / or Permanent Secretary, not to mention the Commercial Director, would not have played a leading role in this, it being so important to the department’s credibility and finances.  But surely the Cabinet Office wouldn’t just be seeking to claim the credit unless they really were leading on this, would they?  Perhaps an FOI question is in order to establish the real heroes...  But anyway,  it’s a substantial sum for the taxpayer to recover from a private sector firm in any  case, so well done to everyone involved.

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A new artist for me anyway, Heterotic is the brainchild of Mike Paradinas, who was a leading techno music artist back in the 90s but “the last few years have seen him mostly shun recording to focus on his day job as boss of Planet Mu; firmly establishing it as one of electronica's most consistent and forward thinking labels” as Drowned in Sound says. Anyway, I’m about to check out the new album, Weird Drift, but if this track, Rain, is anything to go by, it sounds rather lovely with a chilled-out sort of vibe (as the young folk say...) .

Voices (6)

  1. Jonathan Holden:

    Hi Peter

    It has been interesting watching the response to the Telegraph piece this week, where clearly Ronald has been regarded as mad, bad and dangerous for daring to share his vision! Well it’s that vision that persuaded me to travel halfway round the world in January to join cloudBuy and it’s also that vision, clearly articulated within the company, that is driving our global strategy and product development.

    The cloudBuy technology is unique, it was obvious to me from my first encounter with the company when I was working for Visa Europe. Put simply, cloudBuy is the only marketplace in the world that can create a basket of goods from multiple suppliers, settle the entire basket with a single card payment and flow the funds to each individual suppliers merchant account, regardless of bank or payment service provider.

    This is only possible because our technology is eCommerce based and was built from the ground up to support B2B trading for merchants, which means that payment is an intrinsic part of what we do not an add on.
    When you start from a place of enabling the payment, it means that you have to build a system that gets everything correct and that’s what we do for our merchants through their websites and their interactions with our private buying portals.

    B2B eCommerce has finally come of age and we are at it’s vanguard, this area of our business grew by 73% last year and with the enlarged team in place we are going for it globally. We have a vision, it’s a big one and we are not going to keep it a secret!

    You will be seeing a lot more of us in the press this year as we continue to deliver on our strategy, indeed we launched a new SpendAnalytics Discovery service this week which any of your readers is welcome to try. This benchmarking solution for private sector, Large Corporate organisations will allow them to quickly check the spending on a wide range of products to see if they have been overcharged by suppliers during the last 12 months, or if they have been afforded the best prices. If there is a business case for cost recovery will work with them to realise these savings and offer solutions to future proof their procurement.

    We are no longer just about process savings and work closely with our customers to reduce consumption and more broadly to increase profits before EBITDA. (earnings before interest, taxation, depreciation and amortization).They might find that they enjoy working with an innovative organisation that’s determined to grow by delivering great service.

    We would welcome you at our HQ in Aldermaston to see the cloudAnalytics solutions first hand and we can prove to you that our plans are not a pipe dream.

    We are no longer a UK centric, public sector focused business. cloudBuy has active clients in Australia, Hong Kong, Singapore and India, with pipeline business in many others countries world-wide.

    I admire people that have aspirations to work outside of their comfort zone, have global aspirations and are willing to invest in the future. Since joining the company I have met with several city investors, alongside Ronald that are comfortable with our global development plans.

    1. Bill Atthetill:

      Yes, but, is your turnover £3m (the figure stated on investor sites) or £50m (the figure Ronald stated in his article)? There a big difference. The idea that Cloudbuy could beat Google, Amazon and Microsoft is simply daft.

      1. Jonathan Holden cloudBuy CEO EMEA:

        Thanks Bill, I joined cloudBuy from Visa which has a system turnover in the trillions, Amazons turnover was $ 74.45 billion in 2013. Googles revenues were $ 59.82 billion in 2013. CloudBuy has now analysed $ 500 billion in spend through our cloudAnalytics and there are significant benefits to both buyers and suppliers from this spend going through the cloudBuy system. The Visa Commercial Consumption Expenditure report shows that B2B spend is over $ 100 trillion, so there is a big market to play for, and I think cloudBuy is a serious player.

        Re the Telegraph article company turnover is currently £ 3m and the article said “is set to turn over £ 50m” which is the medium term target first announced last year, and not the volume flowing through the system which is significantly more.

  2. Peter Smith:

    Spend Matters readers have such immaculate taste! Ned Sauvignon (did you run a sourcing event for the wine Nick)? And … what the *** is that, LincolnMusicFan?! You must have had good drugs 21 years ago is all I can say. I guess you just had to be there. Actually, I warmed to it as the track went on, An early influence on Django Django do you think?

  3. LincolnMusicFan:

    Mike Paradinas, really? In classic indie snobbery style, I prefer his older stuff: https://www.youtube.com/watch?v=gwQfuXmpB8g – can’t believe it is 21 years ago since I bought this. Suddenly feel rather old!

  4. Nick @ Market Dojo:

    Ahhh, Ned, very nearly the wine of choice for my wedding last year. Opted for Crux in the end, another good Kiwi sauv. blanc. Perhaps a suitable Easter wine too, chortle chortle!

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