Sunday Business Post - Done Deal Page - Sep 21 2008
Read it on the SBP website by clicking here.
US retailer group MyWebGrocer has acquired the US business of Irish company Buy4Now in a deal valued at $15 million (€10 million).
Under the terms of the agreement, Buy4Now founder Ali Murdoch will head up the new operation, Buy4Now USA, under MyWebGrocer ownership.
Murdoch will retain his existing 10 per cent shareholding in the Irish company, with sales director and co-founder Michael Veale succeeding him as chief executive.
The €10 million acquisition figure includes an estimated €6.5 million outlay by MyWebGrocer and approximately €3.5 million in restructuring costs.
Veale, along with fellow directors Kevin Murphy, Dan Murphy and Allen Corcoran, hold a 53 per cent shareholding in the Irish company. Veale said the deal would benefit all concerned.
‘‘Ali Murdoch has been living and working in the US for some years and it is very exciting for the new management team here,’’ Veale said.
‘‘While we owned a small percentage of something that was bigger, we now have a larger percentage of a pretty valuable company going forward. The original investors - Superquinn, Grafton and Eircom - have also retained an interest.”
Veale said MyWebGrocer had instigated the deal, approaching Buy4Now late last year. ‘‘We were a major competitor of theirs in the US, and we were winning a lot of the large accounts, so they approached us to see if we were willing to sell the US business,” he said.
Buy4Now entered the US market in 2004, securing e-grocery agreements with retailers including A&P Group, Roche Brothers, New Seasons Market and Lunds & Byerlys. Established in 2000, the company has 80 staff and an annual turnover of €8 million.
An online portal for retail brands, it features more than 20 Irish retailers, including Superquinn, Atlantic Homecare and Arnotts, and 2.5 million products on its website.
Veale said the company’s original e-retail model had evolved over the years to include software development.
‘‘We now see ourselves primarily as a software and services company for retailers,” he said. ‘‘We can design and develop a website, host it and maintain it for you, and also provide call centre support facilities.
‘‘If you buy any phone from our biggest client - 3 mobile - whether through a partner store, their own store, online, or telesales, at some stage you are using Buy4now software.”
Veale said the company planned to focus its future expansion efforts on overseas markets closer to home, including Britain and other European countries.
‘‘While we have been very successful in the US, we have been looking at lesser-developed e-grocery markets in Europe,” he said. ‘‘We see opportunities there for driving the company forward. Europe and Britain are pretty untapped markets for us.”
Monday 22 September 2008
Buy4Now purchased for €10 million
Tuesday 9 September 2008
Blade servers can slash your costs
Sunday Business Post - Computers in Business Magazine - Sep 7 2008
Read it on the SBP website by clicking here.
There are a number of IT options available for companies who want to cut their energy bills and help the environment, writes Dermot Corrigan.
If environmental concerns regarding energy efficiency had not yet grabbed the attention of Ireland's IT managers and small business owners, then August's 17.5 per cent ESB increase has ensured the subject is now front and centre of everyone's mind.
One of the biggest contributors to most organisations' energy bills is their server farm. Whether a company is running one server or a hundred, companies need to ensure that their technology is as energy efficient as possible, said Bill O'Brien, business group lead, server at Microsoft Ireland.
“Companies have to look at their ongoing energy costs,” said O'Brien. “We see many customers actively pursuing a green IT agenda. Practically this is about reducing the number of machines and power consumption from each machine in their infrastructure.”
Kevin Swan, advanced systems group manager, Del l Ireland, said that vendors had introduced newer more energy-efficient server products in recent years, to meet customer demand for cheaper to run servers.
“Depending on server configuration, customers may pay up to €150more on the sticker price for an energy efficient server over a regular server, however, these servers consume up to 25 per cent less energy than previous generations,” said Swan. “This can result in a three-fold increase in performance per watt over previous generations.”
A server's energy efficiency is now more important to cost-conscious purchasers than its sticker price. Bryan Hickson, IBM system-x and bladecentre manager, said that many businesses were unaware that the cost of powering a server can be four times the purchase price.
“The upfront cost of purchasing a server only represents about 25 per cent of the entire cost over its lifetime,” said Hickson. “For anyone involved in a data centre 55 per cent of the cost is power alone in the current environment. The ‘performance per watt' metric that you see being touted around a lot is becoming really important. For anybody who signs the cheques, that is the important factor.”
All the major vendors have also introduced management tools, which al low administrators control the power being used by their servers, with a view to keeping energy costs as low as possible.
“As the price of energy has risen in the last few years, management has become much more critical,” said Hickson.
“People can no longer afford to take for granted what their server is doing at any given time. They want to understand exactly what its utilisation is, and make sure they are getting the best value for money out of it.”
James Henry, sales specialist with HP, said management tools al lowed IT staff to see exactly how much they were paying to power their servers at any moment.
“You can see how much power the company is using right now,” he said. “You can input your power costs and see exactly how much you are paying in real time. More importantly it can allow you to plan workloads and set power caps. It looks at how busy the CPU is and are there jobs coming in the queue. Does it really need to run at 3.5 GHz or can it run at 2 GHz, and therefore use a lot less power? Basically if the server is not busy, it can run at the lowest power state. This reduces the power consumption dramatically over the life cycle of the server.”
The green agenda is also persuading companies to look at the energy consumption of their servers, with Henry saying that the IT sector was very aware of its responsibility to reduce the amount of power being used.
“In the US they are talking a lot about government regulation, and it is coming into the EU as well,” said Henry.
“IT emissions are equivalent to airline companies' emissions. The key focus for us, and for the industry as a whole, is control ling power utilisation within servers, and managing this power more efficiently. I spend a lot of time working with companies who are interested in going green while saving money.”
Virtualisation
O'Brien said virtualisation technology, which al lows companies to use one server to do two or more tasks simultaneously, was now widespread in Irish business.
“Our customers are consolidating servers, turning off older machines and replacing them with newer more powerful machines,” he said.
“In many cases they are replacing ten older servers with one newer, multi-processor machine running virtualised instances of those ten much more efficiently.”
Hickson said the use of virtualisation and similar products helped companies improve the energy efficiency of their servers.
“VMware virtualisation software, and Citrix's new Xen product, al lows you to make your systems a lot more efficient,” he said.
“Most applications do not use anything like the total power that is available in a server. Some software is only using an average of 712 per cent of the available processor power. So, while the system seems to be working hard, there is a lot of the resource left over doing nothing. VMware recognises all that spare resource, and al locates it on the fly to other requests. Instead of one process in a queue waiting until the first one completes, VMware al lows multiple threads to be worked simultaneously.”
Hickson said that the combination of virtualisation and rising energy costs meant that companies were deciding to throw out their older gasguzzling servers.
“Most people now look at the possibility of replacing all their kit,” he said.
“The ability to have multiple systems consolidated onto one server means you can clear up a large amount of their estate. You see people reducing this by up to 70 per cent in some cases. The new server probably uses two thirds or less power than the one it is replacing, and if you are reducing by something like 70 per cent, then the break-even point comes very early.”
Shared resources
Henry said that the days of each piece of server hardware being dedicated to just one individual application or purpose were now numbered.
“The trend is towards utility computing and pooled and shared resources,” he said. “Hence servers and their associated technology will evolve to meet that trend; it is just one massive pool of shared resource, that is highly available, efficient and enables you to share those resources across lots of users. I think a lot of people are going to start taking up on that and outsourcing rather than hosting their IT in-house.”
Swan said many companies were using high-speed internet connections to access applications and information stored offsite.
“Some of the change we see is where the servers are located, with many customers consolidating shared applications such as e-mail into data centre facilities delivering software as a service from one central site rather than the application being managed separately in multiple sites or countries,” he said.
Paul Lynch, sales and marketing director at Hosting 365, said that utility computing, where customers received their server requirement from a supplier rather than purchasing the hardware themselves, was a major development in the way IT was thought about.
“It is down to the evolution of technology, and it has come around in a circle,” said Lynch.
“We started off with a mainframe environment, and then the likes of Intel put processing capacity into individual chips and you were able to have individual servers. The next step is into high availability cloud infrastructure, delivered using multiple very high-end servers.”
The idea of taking your server requirement as a metered utility made particular sense to organisations whose computing needs tended to fluctuate depending on demand, Lynch said.
“Take the example of Olympics.com or the website of any major international sporting event,” he said.
“It ticks along for three and a half years, with no one really looking at it. Then for one month every four years it goes insane. For you to manage that type of infrastructure you have to invest in new hardware every four years, because the servers will be archaic by the time the next Olympics comes around.”
“With hosted infrastructure you can build to the level you are at today, with the knowledge that you can grow that within literally minutes, to where you need to be for a particular event,” said Lynch.
“If today you are using a server with 1GB of RAM, and tomorrow you need a server with 8GB of RAM for six hours, then we will just charge you for those six hours when you need it.”
Lynch said customers relying on servers for business critical operations were particularly interested in utility computing, as it was less likely to suffer systems failures or downtime.
“We see a huge requirement from customers for higher availability,” he said.
“A couple of hours downtime for your websites, or for the critical applications that your business runs on, is just not acceptable any more. If you can share your data out among multiple data centres, it is no longer located in the one vulnerable centre. If you lose power in one centre, it is not a disaster, your applications should remain up and running, and your data will still be there.
“If your e -mail server goes down in a traditional setting, the problem could be one of 20 things and you could be down for one or two days. If it is hosted, you can be back up and running in a couple of minutes.”
Lynch said utility computing offered huge flexibility to customers, with the ability to buy your computing power where energy is cheapest.
“Clients should be able to choose which they want to use and for how long,” said Lynch. “If they want to use an Irish provider at night-time to take advantage of lower power costs they can do that. Then at six o'clock in the morning they can move their requirement to a provider in the US, or anywhere else. It is really about freedom.”
Servers still needed
Henry said that fewer servers were being sold in Ireland this year than in 2007. However, he blamed economic conditions rather than any dramatic shift in the technology.
“The whole server market in Ireland dropped 18 per cent in Q1 of 2008,” he said. “Personally, I think that is more down to general market conditions, although virtualisation is having an impact as well. We are still selling more servers today than we were selling three years ago and servers will continue to be the lifeblood of a company's IT solutions.”
Blade-servers are the fastest growing products in the Irish server market, Henry said.
“Blade servers would be the biggest new technology in the server arena over the last couple of years,” said Henry.
“Our blade servers were launched in 2006, and adoption of them has grown massively in the Irish market.”
Henry said blade servers were smaller and more efficient than the traditional rack-type technology.
“They are a lot smaller, but there is no compromise in terms of performance or scalability,” he said.
“They offer the same amount of performance, disks, CPUs, etc, etc as rack servers.
“They are just a lot more efficient in the way that they do things. A blade server does not come with a keyboard, screen or mouse, they are all managed remotely from a central console. This helps customers get up and running a lot quicker and they also provide a lot more advanced management features and functionality.”
Hickson said vendors were continually introducing servers with more and more processing power into the market.
“The main thing that has catapulted it is multi-core technology, where multiple processors are combined into one,” he said. “That is where you get the terminology dual core and quad core. You have several processor cores that fit into one socket.
“Five years ago, we were in a single core environment, with one or two processor units. Now we have up to systems with four sockets holding four processors each. It will keep growing exponentially.”
Smaller companies could now buy servers capable of handling applications that were previously only available to larger organisations, Hickson said.
“Because of the advent of multi-processor core technology, smaller organisations now have the ability to work and use large enterprise applications at lower costs,” he said.
“A typical small user might have been deterred from buying large database applications because they are charged and licensed by processor cores, so something like SQL Server, you might have originally required eight processor cores, which would have been quite expensive. Now you can run those types of software on much lower-end servers.”
O'Brien said that scalability was a key concern of Irish SMEs when purchasing new server solutions. “Scalability is important and interestingly that is why virtualisation is so in vogue,” he said.
“You can add resources quickly and easily and it's not necessarily about adding a new box but simply a matter of provisioning a new virtual instance on your existing hardware. This gives you great flexibility.”
Henry said bigger organisations now tended to purchase bigger servers.
“The trend is towards buying bigger servers, with higher levels of availability, because you want to know that if I am taking 20 to 50 small virtualised servers on one big server, I want to be getting a server with reliability that I can trust,” he said. “We have seen an interest in sales in our higher-end systems, which compensates for a drop in sales in units.”
Hickson said that resilience - the ability of a server to maintain service level despite power or system problems - was a key concern of smaller companies, especially those using servers for business critical processes.
“The explosion of both e-mail and web trade means that a large amount of business that was done over the telephone or face to face is not any more,” he said.
“If any organisation were to lose either its web or e-mail servers, it is losing money, and a lot of it. It is imperative that organisations look for the most resilient server infrastructure.”
Swan said today's servers tended to last longer than their predecessors.
“Historically customers upgraded server hardware every three years,” he said.
“Today customers are using their servers for longer and longer, typically between three to five years. Hardware reliability and performance continue to improve, and with technologies like virtualisation and data tiering, older servers can play their part at the core of an IT infrastructure.”
Hickson said the introduction of Virtual Desktop Infrastructure (VDI) would lead to a surge in demand for server technology.
“We are heading towards Virtual Desktop Infrastructure, which is reverting back to the dumb terminal stage,” he said.
“Instead of everyone having a PC on their desk, they have a box that connects to a back end server.
Your whole desktop and Windows environment is stored on a virtual machine in a back office somewhere. All you have on your desk is a monitor, keyboard and a small processing unit that allows traffic to go from the server to your desk. There will be just one system at the back end, instead of a PC on every desk.”
Sunday 17 August 2008
Investment pays off for Dublin Port
Sunday Business Post - Done Deal Page - 17 Aug 2008
Operating profits at Dublin Port Company rose by 7 per cent last year to total €28.5 million.
The company’s trading results for 2007, released last week, also showed a 6 per cent increase in turnover at €70.5 million. Goods passing through the port for the period totalled 30.9 million tonnes, up 6 per cent on the previous year.
Michael Sheary, company secretary and chief financial officer of Dublin Port Company, said the results marked the company’s 15th consecutive year of growth.
‘‘Over five years, we have invested a lot in new technologies, improving the way we do things and our systems and work practices,” Sheary said.
‘That has all borne fruit.” Dublin Port Company is a private l imited company wholly owned by the Irish state. Established in 1997, it employs 193 staff and handles over two thirds of container trade to and from Ireland, including 50 per cent of all Ireland’s imports and exports.
Additional financial figures released for the first six months of this year show a 3.8 per cent jump in turnover and a 0.3 per cent growth in passenger figures. However, total throughput at the port to the end of June was down 0.9 per cent.
‘‘The volumes coming through Dublin Port in the first half of 2008 are holding up very strongly amid all the doom and gloom,’’ Sheary said.
Cost-cutting initiatives have seen the port cut its wage bill significantly to total €13 million last year, a drop of 1.1 per cent over 2006 - and 33 per cent compared to 2001.
‘‘We have introduced an extensive change management programme over the last five years,” he said. ‘‘We looked at how we do things, the technology we use, and improving how we deliver our services to our customer. That has led to the reduction in payroll costs.”
Boosting last year’s profits was the €109 million sale of the former Irish Glass Bottle site in Ringsend.
‘‘About €30 million of the proceeds was paid over to our pension fund, €30 million paid off our borrowings, and the balance was used to finance our ongoing capital programme,” Sheary said.
The company invested €42 million in several projects, including a new service station, and upgrades to existing terminals, berths and road infrastructure as well as new pilot and tug boats. It has earmarked another €30 million to invest in further upgrade work this year.
Although container throughput accounts for 80 per cent of the company’s turnover, Sheary said passenger traffic was another important source of income.
‘‘We carried 1.4 million ferry passengers last year after a very successful ferry marketing campaign,” he said. ‘‘This year, we expect to have 80 cruise line visits, bringing 60,000 high spend customers into Dublin.”
Wednesday 13 August 2008
PAC sells plastic card division to US firm
Sunday Business Post - Done Deal Page - 10 Aug 2008
Prime Active Capital (PAC) has agreed a €13.9 million deal to sell its plastic card division to US company CPI Card Group.
The agreement will see the transfer of PAC subsidiaries, Plastic Card Company and PCC Services, to CPI ownership.
Together, both operations comprise the plastic cards design, production and distribution division of PAC’s Digimedia business.
CPI has agreed to take on existing debts for both operations, resulting in a net sale price of €11.3 million after advisers’ costs, taxes and transaction fees.
PAC chief executive Peter Lynch said the deal was the logical next step in the development of the company’s card production business.
‘‘In order for PCC to grow it would need to move factory, invest in new machinery, get new products and go after new customers such as Visa or Amex,” said Lynch. ‘‘In order to qualify to provide that kind of product you really have to have superb security and facilities and we would have to start again.”
The disposal of its plastic cards units will allow PAC to focus on other areas of its business, Lynch said.
‘‘We decided to sell out in order to change out the business into other areas where we thought we could get value and growth,” he said. ‘‘Once we decided to sell, it was a question of finding the best buyer.”
The sale is subject to shareholder approval, with a confirmation vote scheduled for PAC’s agm on August 28.
PAC’s three directors - executive chairman Peter Lynch, John Doris and Anne Keogh - are all in favour of the deal.
‘‘It is selling at eight times profit before tax, which is ten or eleven times profit after tax,” Lynch said. ‘‘That has to be regarded as a pretty good price.”
PAC’s other businesses include book, journal and on-demand digital printing unit PAC Digimedia and telecommunications division PAC Telemedia, which owns a majority stake in US-based mobile phone retail chain Cellular Centre LLC. PAC also holds a 21.5 per cent share in Media Square, a marketing services group based in Britain.
PAC developed out of printing group Oakhill, led by Ray McLoughlin. Lynch took over as chief executive of PAC in April of last year. The company subsequently relaunched as a buy-out investment vehicle.
‘‘We have experience of investment, and we have experience of running businesses through a private equity situation,” said Lynch.
‘‘We are a hybrid between a management company and a private equity situation. We raised approximately €15 million last year and we have invested most of that in Media Square and Cellular Centre.”
PAC’s group of companies turned over a total of €34.6million in 2007, including €21.4 million from the PAC companies sold to CPI.
Lynch said he expected PAC’s US operations to grow significantly over the next few years. ‘‘The Cellular Centre business has gone from turning over nothing last year to turning over just short of a million dollars a month,” he said. ‘‘It is in a growth phase in a colossal market and we expect it to get up to around $20 million next year.”
Friday 4 July 2008
The future is 'functional foods'
Sunday Business Post - Best Business Food Drink & Agribusiness supplement - June 29 2008
Teagasc has a five-year fund of €30 million to develop new initiatives in the sector, writes Dermot Corrigan
Last month Teagasc, the agriculture food and development authority, launched a detailed report that outlined its strategy for the future. According to Liam Donnelly, director of food research with Teagasc and head of Moorepark Food Research Centre, the report - Towards 2030: Teagasc's Role in Transforming Ireland's Agrifood Sector and the Wider Bioeconomy - showcases Teagasc’s continuing focus on helping Ireland’s small and medium-sized food companies to develop and market new products.
"Teagasc 2030 outlines a special programme of technology support for smaller food companies,” Donnelly said. “The intention is for Teagasc to put personnel in place to link with a broader range of small food companies, so they can get access to our knowledge and technologies. If they have ideas for product development there will be a mechanism for us and Enterprise Ireland to help."
Donnelly said ‘functional foods’, or food products with health and dietary benefits to consumers, were a focus for Teagasc.
"Currently Teagasc is allocating close to €30 million over five years to a new expanded programme of functional food research,” he said. “This will put Teagasc right at the centre of national objectives and ambitions for the development of functional foods, which is an important opportunity for the future given the increasing awareness among consumers of the relationship between diet and health."
Teagasc funds and manages a wide variety of food research activities at its two dedicated food research centres, Moorepark in Fermoy, Co. Cork and Ashtown, Dublin 15.
"Our programme at Moorepark consists of traditional dairy research in mainstream dairy products such as cheese, and in dairy ingredients, while there is a strong meat background at Ashtown," said Donnelly. "The plant and facilities of the food directorate are second to none in the world.”
Donnelly said that a typical Teagasc food research programme was initiated by a proposal from a customer, who approached Teagasc with an idea and funding.
"80 per cent of the time the customer is the state and its various agencies that fund research, the Department of Agriculture being the principal one,” he said. “They fund research that is for public dissemination. Where a private project is required, and it is essential we engage in private projects, as it spearheads the technology transfer strategy, then it is essential that a private company funds that project. Companies in that process can avail of supports from Enterprise Ireland, they can use that money to commission us for our input."
Products developed at Moorepark and Ashtown are currently enjoying commercial success in Ireland and further afield, Donnelly said.
"We have been involved in the development of cheese cultures for use in Irish and continental cheese varieties,” he said. “Dubliner Cheese, which is a Carbery product, was developed here at Moorepark. Currently there is also a pro-biotic cheese being marketed by the Irish Dairy Board in the UK, which was developed here."
Ingredients products aimed at industry customers are also developed at Moorepark.
"We have been involved with the development of whey protein ingredients, notably Alphalac, which is used by Wyeth worldwide in their infant formula," Donnelly said.
Donnelly said Teagasc’s research activities were in line with Ireland Inc’s goal of developing an internationally respected knowledge economy.
"We have worked with multinationals, for instance Wyeth, who have been so important to the development of the Celtic Tiger,” he said. “The continuation of our economic success is dependent on moving to knowledge-based investment as distinct from just manufacturing investment. We fit right into that agenda when it comes to multinational food companies."
Irish companies’ R&D budgets are typically too small to compete with large multinationals, so government support is vital, said Donnelly.
"Ireland is well respected for the technical quality of its food companies, but we would not be in the Premiership when it comes to innovation and R&D,” he said. “Multinationals like Nestle, Unilever and Danone have a vastly greater R & D expenditure. The best justification for the state investing in public research is to bridge that capability gap, because our companies are operating on tight margins and at a lower scale."
Donnelly said that Moorepark’s was not involved in GMO (genetically modified organisms) research, in line with EU and government policy.
"We leave the GMO debate to the policy makers and EU policy is very conservative in that area,” he said.
Developing organic foods was not a primary priority for Moorepark, Donnelly said.
"There will always be a niche market there, but there will always be a debate,” he said. “There is no convincing scientific evidence that organic foods are any healthier than non-organic foods, except in a situation where chemical residue from herbicides or other sources is present. It would be an error to believe that organic milk has any health attributes that normal milk does not have."
