Investment Strategy
Pinnacle Telecom Group plc focuses on the business market across the UK. Driven by leveraging organic opportunities as well as through targeted acquisitions, we provide a wide range of converged managed solutions including Managed Support Services, Unified Communications and Collaboration, Communications and Mobility, Software as a Service (SaaS) and Infrastructure services.
Pinnacle has prospered through organic growth, targeted acquisitions and disposals. We underwent a fundamental restructuring during 2007 – a process that took two years to show concrete results – and which included the disposals of Eclectic and inGroup and a focus of the business back toward recurring revenue streams and away from non-recurring revenue projects (84% of revenues were recurring under contract in 2011 up from 33% in 2008).
Having completed the first phase of acquisitions, the Group is poised and ready for the next steps of its growth strategy. The Group now consists of specialised technology companies that deliver exciting leading edge products and services. The acquisitions have been carefully selected to align with Pinnacle's strategic plans to assemble a highly profitable, converged managed services offering that can be distributed in volume.
The Group aims to build a £50m business by leveraging organic opportunities as well as through targeted acquisitions. We create solutions that join together a company’s three core networks (IT network, telephony network and mobile network). Our strategy of cross-selling the five elements of our converged managed services offering, which is now delivering positive results.
Our strategy is predicated on cross-selling the five elements of our converged managed services offering (as detailed below). The objective is to cross-sell all of the group’s services into our existing customer base, which strengthens our customer's reliance on the company, increases our profit per customer and dramatically decreases the likelihood of our customer’s switching to a competitor.
Converged managed services offering
1) Managed Support Services
2) Unified Communications and Collaboration
3) Communications and Mobility
4) Software as a Service (SaaS)
5) Infrastructure services
1) Managed Support Services
Managed Support Services focuses on IT support and consists of five revenue streams, 1) installation and deployment, 2) desktop support, 3) server support, 4) network support and 5) break/fix
We realised that in order to roll out our converged managed services strategy; we needed to increase our IT capability across the group. To this end, we successfully acquired MacLellan IT in August 2011 and followed that with the acquisition of Online Computer Developments in October 2011, these two acquisitions have been integrated into our previous IT business of Explore IT Ltd.
With these recent acquisitions, we have set about increasing our overall IT revenues from the group’s customers, and in line with our objectives to move our revenues from being almost exclusively generated from traditional telephony, into revenues generated from a converged managed service offering, 2011 certainly signals a shift in the allocation of business resources to this objective. At 30 September 2011, we have seen a quantum shift in the cost of group resources dedicated to our IT offerings, increasing from £639,855 in 2010 to £1,542,881 in September 2011 and further demonstrates our commitment in this regard. We hope that in 2012, revenues from Managed Support Services will be much closer to the combined revenues from Mobile and Telecoms.
2) Unified communications & collaboration
Unified communications and collaboration consists of six revenue streams, 1) hosted voice (VoIP), 2) conferencing services,
3) call centre applications, 4) inbound call services, 5) mobility solutions, 6) call recording solutions.
In order to deploy our unified communications offering, we acquired Solwise Telephony and Sipswitch in January 2010.
Through successful delivery of our unified communications and collaboration solutions, we earn trust from our customers, which in turn leads to new opportunities for us to supply additional services or bid for new contracts. It is through this cycle that we earn our status as a Trusted Advisor to our customers. We have seen the results of this approach by building solutions for some high profile and prestigious events, including voice and data solutions for the UK General Election and Papal Visit in 2010 and of course the Royal Wedding in 2011.
3) Connectivity and mobility
Pinnacle’s heritage is in connectivity and mobility, which consists of seven revenue streams. 1) Broadband services, 2) MPLS,
3) Ethernet, 4) SIP Trunks, 5) Voice minutes, 6) fixed line rental, 7) mobile services.
Whilst on the face of it there seems little to measure between competing offerings in a crowded market, in the area of connectivity and mobility, we challenge the bigger players through our value proposition and have increased revenues whilst maintaining margins. For us to deliver solutions in this way, we need exceptional people and robust vendor relationships. We also need a deep understanding and control of the underlying technologies that come together to make the connectivity solution. Our preference is to own the solution from end-to-end, but where we do have to partner, we make sure that we select only the best vendors, those who can support us to deliver a seamless service to the customer.
4) Software as a Service (Saas)
SaaS is the new world of cloud computing, it allows us to leverage our data centre assets and deliver recurring revenue, which is derived from monthly subscriptions by customers having access to software applications that are hosted in the cloud and residing in our data centres. There are eight revenue streams to our Saas offering; 1) Security, 2) Digital content; 3) Vertical markets, 4) CRM, 5) Business process, 6) Supply chain, 7) Business intelligence, 8) Business productivity suites.
Buoyed by lower start-up and maintenance costs compared to on-premises application deployments, as well as the ability to distribute and share applications and documents through the cloud, businesses appetite for SaaS applications is increasing and will become a large percentage of the group’s turnover over time, particularly in the hosted desktop and CRM space.
5) Infrastructure Services
Infrastructure services are another opportunity for us to leverage our data centre assets. Consisting of the following four revenue streams; 1) Colocation and hosting, 2) Platforms as a service (PaaS), 3) Infrastructure as a Service (IaaS), 4, Data security – data backup, disaster recovery, business continuity.
A good example of leveraging our data centre assets is the acquisition of an IP CCTV business we made in July 2011. The UK CCTV market was an area that we felt we needed to break into because we see it as essentially an ISP business, this allows us to host the required IP CCTV hardware in our data centres at no extra cost to the company.
Most businesses demand round the clock CCTV surveillance from external monitoring companies and it was these monitoring companies that we sought to target as we entered this new service area. However, the key differentiator for us was service resilience. By offering a reliable IP connection with failsafe technology to 2G and 3G as a backup, we have developed a unique and innovative solution, combining IP and 2G/3G data into a single solution with seamless automatic failover. We now deliver a completely outsourced remote security and surveillance service, sending threat alerts back to the control centre. With this offering, we now supply Sotheby’s, Unipart and Hilton Hotels to name but a few and look to develop these services further during the coming months and years.
Our strategy of cross-selling our customers the five elements of our converged managed services, differentiates us from our competitors who in the main only sell products. We sell solutions, a mutually agreed-upon answer to a customers’ problem with measurable, often transformational improvements.
Growth plans will be achieved by nurturing existing sales networks whilst creating and building a new superbly trained, professionally managed and motivated national salesforce, capable of delivering new technology-based solutions to the Group's existing and growing client base.
The activities of the Group are undertaken by the Pinnacle Group of companies, which includes
- - Pinnacle Telecom Plc
- - Accent Telecom UK Ltd
- - Solwise Telephony Ltd
- - Sipswitch Ltd
- - Sports Club Telecom Ltd
- - Explore IT Ltd
- - Pinnacle Mobile Ltd
- - Glen Communications Ltd
- - Colloquium Ltd
- - MacLellan It Ltd
- - RMS Managed IT Security Ltd
- - Online Computer Developments Ltd