cloudBuy – update on a procurement solutions enigma

One of the most enigmatic and puzzling firms in our entire procurement solutions world is the business that was known for some years as @UK plc, but changed its name to cloudBuy plc late last year (yes, the weird capitalization is deliberate).

It's some time since we covered them here, but even way back in 2010 we commented on the wide range of activities and capabilities they offered, from company registration services (we registered both Procurement Excellence and Spend Matters UK/Europe through @UK, and a very good service it was), to spend analytics and a range of eProcurement products and services. Our piece in 2010 also featured an interesting new offering around sustainability analysis of an organisation’s supply base.

So we were really due a catch-up with the firm, and when Jason Busch was over recently, we met with Ronald Duncan, the firm’s founder and MD, to pick up on recent progress. Let's start with the name change – it was obviously designed to better reflect the core business in eProcurement, but apparently it doesn't mean they are getting out of the company registration business. “That is a good route in to new business and SMEs – that gives us opportunities to sell them other products” says Duncan.  I’d forgotten they also offer trading websites for businesses on the sell side...

In the spend analytics field, cloudBuy was chosen by Tungsten recently to provide services around the new Tungsten / OB10 e-invoicing offering as we reported here.  cloudBuy has done interesting work in this area, using academic thinking on artificial intelligence and cybernetics to make their spend analysis output more meaningful to users. As they say,

“cloudBuy has used its Savings programme to analyse over $500bn of procurement spending across the corporate and public sectors. Combined with publicly verified industry information worldwide, this has created a very rich database for benchmarking the procurement spend of any organisation. Using a technology-based solution which was developed in association with two of the world’s leading university cybernetics departments, procurement savings can quickly be identified in areas such as contract compliance and price deviation within contract”.

Then there is cloudBuy's work in the National Health Service. Whilst Duncan has a tendency to hyperbole in terms of how much the NHS could save by better analysis and rationalising spend, the firm has made inroads here and has a decent market share in the health analytics area. And the sustainability product we mentioned earlier is still being offered, although has not taken off quite as expected perhaps.

More promising is the investment the firm is making in new senior level staff. Pretty much an entire new top team has been recruited in the last six months or so, including Jonathan Holden, previously Visa’s European Vice President of Commercial Solutions, as CEO for the EMEA region. “Jonathan will help drive the expansion of cloudBuy and will have responsibility for global partnerships including Visa”.

If you talk to Duncan for a while, or indeed peruse the firm's website, the range of interest areas  will inevitably give the impression that this is a major firm, working in some very dynamic areas, and with excellent prospects. Yet their last published results showed revenues of just £1.375m for the half year, although this was up 26% year on year.  The latest trading update suggests growth for full year 2013 will be at least that percentage – but even so, we are still talking about a firm with revenues of around £4M perhaps this year. (They're quoted on the AIM stock market, so of course all the data is readily available).

Not huge really, particularly given this range of activities in which they engage.  Is the time right for cloudBuy to go up a gear and realize their significant potential? We suspect things will become clearer, one way or another, as we move through 2014.

More in part 2 anyway, including around their Visa partnership and some exciting public sector eProcurement / marketplace activities…

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Voices (4)

  1. Ronald Duncan:

    Hi Peter,

    We just announced a £ 600k content management system contract win, to provide an intranet to a major government agency.

    Can you think of any other procurement vendor that has a sufficiently good work flow, forms engine and attractive content management that their technology could win an intranet contract, or power the Invest NI website a 10 year contract with us.

    Sounds like we are Russia an enigma, wrapped in a riddle etc.

    The core is really simple. Correct prices for goods and services in a really easy to use flexible system that can power your intranet or website and supports the full b2b processes from sourcing to payment.

    The NAO report found £ 500 million of saving on 25% of spend. 4x £ 500 is £ 2 billion, and the NAO was looking at consumables which are much more competitively priced than the rest so the actual savings are over £ 2 billion.

    On the SME side of things my Dad ran the Toy Industry buying group Toymaster, and when we have time we will help our 270,000 start ups to buy better. We saved 40% in our internal tests.

    Best regards
    Ronald Duncan

    Look forward to seeing the next article

  2. Lyn Duncan:

    Hi Peter and Jason – lets see if we can crack the enigma code!

    Our approach is actually quite straightforward, it just begins with the supplier rather than the buyer. The supplier eCommerce capability sits at the very heart of what we do; we provide every supplier with a sophisticated B2B web site which allows them to manage their content (goods and services), contracted pricing, buyer accounts, delivery and other charges, stock visibility, time based booking/diary functionality, eInvoicing and most importantly electronic payment.

    As we are in the midst of global roll out we are currently upgrading our entry level supplier eCommerce sites to cover multi currency, multi language and cross border taxation, so that they have the same capabilities as our enterprise customers. Where we have a full automated tax mapping, such as in Europe and the USA, suppliers will receive this as part of our standard offering. Businesses want functional eCommerce solutions to trade with all of their customers over the web, which is why the large suppliers have set up ‘punch out’ capable websites.

    We provide businesses with their own B2B environment, which is optimised for the search engines for public trading and hooks into an ERP with ‘single sign on’ to trade with large buyers. We are completely agnostic as to what type of supplier uses our websites ( well… sex we’re British! ), so we cover everything from large specialist suppliers such as AbD Serotec through to our latest live site Anyone forming a company can go on and trade using one of our web packages which is exactly the route that bridesonhorseback took and they are now in dialogue with one of our pre-integrated banks to add a merchant account to their site to take online payments.

    As we increasingly flex the technology into areas such as social care, after all buying stuff is something that we all do all the time, it’s not just the preserve of organisations with an ERP…..we need a wide range of suppliers who are eCommerce and card enabled. In this area we are seeing everything from domicilliary care providers through to equipment providers and hairdressers coming on to our system to trade with social care departments and end users.

    This means that bigger buyers can hook into an already enabled and active supplier community through a ‘private view’, which is mapped to their pricing and products, by the supplier. All of the catalog maintenance, up to date pricing, agreed delivery charges, variable taxation etc is now the responsibility of the supplier which they manage on their web site. This means that everything is correct in the basket when any buyer (private or public) checks it out and if the buyer is using a card they can complete the transaction and pay securely. Buyers in the cloudBuy environment become publishers of content, not catalog managers; equally our focus on enabling the supplier to get everything correct in the basket and pay makes the process highly efficient and cost effective.

    It has taken a long time for our vision to be validated and it has been an expensive journey, predominantly with public sector organisations in the UK, which has broken more than a few of our original competitors! Our revenues don’t represent the breadth of what we have achieved – 1m registered users and over 4m buyable items, but they do demonstrate that the solution is highly scaleable at low cost, which is what has excited the city and our banking partners.

    In the last 12 months we have taken a major step forward – we have invested in people, rebranded for global roll out and we believe that 2014 will be transformational for the company. Contract wins are increasing, as are contract values, prospects ‘get’ the proposition and we are optimistic that we are well placed for global growth.

  3. Bill Atthetill:

    They are indeed on the AIM. A revenue of £1.3m but a market cap of £54m?! Current share price is circa 49p (was as low as 6p 12 months ago). The traders are certainly having fun with this firm and it could go either way if they pull the plug and send the shares into freefall. It’s a clever little SME but currently built upon the promise..(The comments in the link below are interesting.) However, I wish them well.

  4. Sam Unkim:

    Their data contribution to the NAO’s 2010 Report (Procurement of consumables by NHS) has still left a question mark over their analysis skills, in my eyes.

    “1,751 different cannulas & 652 different types of gloves”
    (Note not even SKUs, but Types)

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