Gamma Communications plc (GAMA) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Gamma's Capital Markets Day. Really pleased you could join us this afternoon. It's a real pity that we couldn't do this face-to-face, but we're doing the second best thing. We're doing it live, and we're doing it virtually. Before I go into the housekeeping for today and go through the agenda, I just wanted to explain that the focus of today will be on 3 key things. Firstly, it's about updating you on the market opportunity for Gamma and how we're executing against that market opportunity. Secondly, it's about explaining our product portfolio and how this fits with the overall market opportunity that we see. And then thirdly, it's about demonstrating 3 of our core UCaaS products that address multiple product and multiple channel opportunities across the business market. So 3 key reasons for getting together today. If I just flip over to the agenda, I'm going to start with a short introduction, which is about how we're going to run today, but also to give an update on our business and how we're doing and to reflect a bit on the time over the last 2 or 3 years and where things stand today. I'm then going to hand over to Andy Morris, who's going to provide a reminder of our strategy, the market opportunity and also how we're executing against that, particularly around the acquisitions that we've made. Andy is then going to hand over to Chris Wade and Chris is really going to sort of describe our portfolio, our business segments and how we're addressing the marketplace. And this is going to really be the rump of the agenda, and he's also going to facilitate our product demos, and we're going to be demonstrating 3 products today. SmartAgent, CircleLoop and also Horizon Contact, which we recently launched into the U.K. market. I'm then going to do a bit of a wrap up, and then I'm going to hand over to Andrew Belshaw, who I think you all know, and Andrew is going to facilitate a Q&A session. And we should have about 20 minutes at the end for Q&A. So in terms of housekeeping, so we've got about 2 hours. If you lose connection to the stream that you're on just now, just refresh a browser, and there's also a technical help section that you can look at on the platform. But hopefully, I mean, what can go wrong? Hopefully, it's all going to run well. Then were going to run the product demonstrations and they're going to be rerecorded, yes -- prerecorded should I say, so you're going to be able to see them on our website at some point in the future as well as the presentation that we're going to show on the website. We just probably need a bit of time to sort of slice that in the right manner, and then we will publish that on our website, so you'll be able to get access to that. The Q&A we're going to do at the end of the presentation, as I said, it's going to be about 20 minutes. And you're going to be able to ask questions live in the Q&A session. And there'll be a very neat handover then to a Microsoft Teams platform, and you'll see a link at the end of the formal presentations that you just need to click on, and that will seamlessly enable you to join that Q&A session. But I'll provide a remainder at the back end of the presentation today, just so you know what to do. In terms of objectives for today, so it's about updating everybody on our 2023 strategy and how we're executing against our strategic priorities. It's about updating everyone on our market focus, how those markets are growing and the impact that the pandemic has had on the marketplace. And thirdly, it's about explaining our product strategy in a bit more detail. And as I say, we've got some great product demos to show you later on in the session. And then fourthly, it's also about how our portfolio fits with the market opportunity across all business segments. And that's a bit of a theme today, how we are addressing multiple opportunities, whether it be on the business market side, the segment side or on the product side and what we've frankly done over the last 2 or 3 years to put us in the best possible position to be a winner in the marketplace moving forward. And all of that should hopefully enable us to put our acquisitions into perspective. So in particular, those product acquisitions that we made with Telsis, that we made with Mission Labs recently, but also Exactive around Microsoft Teams to put those acquisitions into perspective in terms of how we're addressing those broad multiple market product and specific channel and market segment opportunities. And finally, for me, it's also about explaining in particular to our shareholders how and where we're going to make money, how we're making money today and where we're going to make money in the future and to provide you with the confidence that we are addressing that appropriately moving forward. And at Gamma, I've said this many times before, we're very agile with the short-term stuff in terms of delivering against our commitments. But we think long term, so a lot of what we are doing and what we've been doing over the last 2 or 3 years, it's about building strong foundations that are going to enable us to be successful in the market, not just over the next 2 or 3 years, but over the next 5, 10, 15 years. I just wanted to share our senior team with you because our business really has changed substantially over the last 3 years. And to support that change, our senior teams really strengthened during that period. And we've been bringing new skills, and we've been bringing new experience into the company. And we've done that both organically, but we've also done it through acquisition. So we've added much welcome talent to the senior team across the business and particularly in Europe and through those product acquisitions that we've made to enable us to sort of accelerate our strategic plans. Notwithstanding the new talent and the new skills and capabilities that we brought into the company, you will see some familiar faces on this slide who have been around Gamma for quite a long time, and they have really been at the center of designing and implementing our growth strategy. And it's not just over the last 3 years since I've been here. It's frankly been over the last 10, 15 years. So a really good mix of talent. On the left-hand side, you can -- with Andrew at the top, you can see, I suppose, the leaders around our corporate functions in the company. And then with Chris, Phil and John, what you're seeing is how the senior leadership around how we design, build, manage and operate those products and services that we take to market. And then on the right, some familiar faces there in Daryl and David in terms of the leadership around our core indirect and direct channels to market. And then through the acquisitions that we made geographically in Europe, Achim, Gerben and Xavi covering the German, Spanish and Dutch markets. So very happy with the team that we have in place. And I suppose it is this team that's been delivering the results and executing against our strategy. So I mentioned earlier, it's been a bit of a transformation that we've been going through. And just as a reference point for how our business has changed during those last 3 years, just some key points to note on this slide. I mean, firstly, the shift and focus around UCaaS and UCaaS sorry, in terms of developing and providing our own products. Secondly, a real focus on both the U.K. and the European cloud communications market. The opportunity within that market is significant, and Andy is going to pick up in that in a bit more detail later. Thirdly, it's around executing our plans, both organically and through acquisitions and the whole geographical expansion and the acceleration of our product strategy. And I was sort of thinking about this earlier this morning. I mean, during the last sort of 2, 3 years, we've actually made 8 acquisitions. And some of them have been quite small, but we are executing against our plans, executing against our commitments, and we're integrating those acquisitions into a very positive culture and true Gamma style. So overall, executing well. And I have to say that in the short term, particularly around our financial results, we continue to execute against our short-term commitments. So a big shift when I think about 2.5 years ago when we held our last Capital Markets Day and what the business looked like and the profile of the business, it's quite different today and presents a really positive and strong platform for the future. In terms of the trends that we're seeing in the market, and Andy will pick up on this in a bit more detail. And this was a slide, I think I shared at the year-end, we've spent a good bit of time assessing the impact of the pandemic on the cloud comms market, communications market and those structural changes that have led to an acceleration in the adoption of cloud and cloud services. And I've highlighted some of the key trends in this slide. And I suppose not going through them in detail because they're generally all positive. The trend really reinforced Gamma's strategy across all business segments and geographies, and we're really quite comfortable and positive. Yes, of course, there's some short-term challenges and headwinds. But fundamentally, when we look at the trends and the changes as part of our long-term growth market opportunity, we're feeling really positive about the situation. As I say, Andy will talk about that in a bit more detail. And then just before I hand over to Andy, this was something that I spent a lot of time on when I first joined 3 years ago in terms of the core foundations within Gamma and why we win as a company in the markets that we focus on. And really, what to say is that our focus since then has really been on reinforcing those foundations, both organically and through the acquisitions that we've made, both to build that capability and competency in the business and also to enable that growth. And our investments during the last 3 years have really supported those foundations. So we've invested in our network capability, expanding our product portfolio to address those multiple opportunities that I talked about earlier and also strengthening the digital platforms that we have in place and the investment that we've made there to support both our indirect channel partners and also our direct customers, a big investment in digital across the company, not just in terms of the foundations that support our partners and our business, but also in terms of creating new channels to market to realize opportunity within the business segment. And while we've been doing all of this, we've also been reinforcing our culture and our approach to doing business. And I think that is typified by our people who have a very strong set of personal and business ethics. And frankly, the businesses that we've acquired during the last 2, 3 years, one of the big rationales for Gamma and the team was wanting to work with people and acquire businesses that had a very similar personal and business culture and ethical way of doing business. So foundations continue to be strong. We're going to continue to invest in these, but it sort of augurs well for delivering against our future commitments. Now with that, I'm now going to hand over to Andy, and Andy is going to go into a bit more detail in terms of a remainder around our 2023 growth strategy. He's going to discuss how we see the market opportunity evolving and he's going to look to reinforce the importance of the acquisitions that we've made in terms of how we've been going about executing our strategy. So with that, I'll hand over to Andy. Thank you.

Thank you, Andrew, and good afternoon, everyone, and welcome to this virtual event. I hope you're enjoying the format. And hopefully, next time, we can do this in person. As Andrew said, I just wanted to spend a little bit of time, just as a reminder, if you like, at the last Capital Markets Day and the information we provided then on our 2023 strategy, which at the time we evolved during 2018, our 5-year growth strategy, which we turned to Gamma's 2023 program. And -- you may recall at that time, we had this slide up which we talked about the waves of adoption of cloud telephony. And I do apologize for using a slide during a pandemic that's got waves on it, and I don't think we were predicting the pandemic at the time. But the slide really was to articulate the fact that Gamma had enjoyed, if you like, the initial adoption of SIP technologies as a replacement of ISDN. And then we were, at the time, seeing that the next change would be to move from on-premise PBX to cloud PBX, cloud voice functionality. And we were predicting, if you like, that the next wave of adoption would come from unified communications. And I think within that, the size of these waves was quite important. We made reference to the fact that actually for us, there's more value, if you like, within each of these product areas and the relationship that we can have with our customers. Because of the pandemic and what we've seen through the pandemic is an acceleration of that, an acceleration, if you like, of adoption of these technologies. That's been brought about by the COVID measures that have been put in place and the fact that we've all had to go and work at home. And that's provided an extreme event, if you like, and the need for us to adapt those technologies very quickly. That has changed user and buyer behavior. And it means that we now need to think about from a strategic point of view, what that will mean as we go forward. And also, it has accelerated the convergence of the IT world and the communications world, again, much more rapidly than we might have thought back in 2019. Again, you may recall this slide in 2019 that we set out the 4 key focus areas for our strategy. The first of those was to take the strong position that we had in IP telephony and cloud telephony and really leverage that position in the UCaaS market as it evolved and as it emerged that we wanted to make sure we built on the really strong kind of fixed and mobile telecom strengths that we've had as a business historically to really differentiate our offering from the pure over-the-top players. We said that we wanted to expand into Europe, recognizing that European markets hadn't adopted cloud technologies in the same way that we've seen in the U.K. at that time and that there was significant opportunity as we saw UCaaS being a new and fresh impetus and a driver for those countries to adopt cloud telephony and cloud services. And the final area of focus was really around ensuring that we stayed relevant. Our products stayed relevant by really investing in our digital capabilities and not resting on our laurels. We talked at the time about our definition of UCaaS and unified communications, and that really be divided by this pyramid, this stack with the straightforward sort of voice interconnect voice telephony at the bottom, then with hosted PBX, call management, the next layer up, then into collaboration, conferencing and business applications within an office suite environment, within an integrated IT environment. And really, this enabled us, as UCaaS would emerge, some really interesting and exciting adjacent market opportunities. And as an example, we talked at the time and obviously very relevant as we've seen in the last year or so with Microsoft and Microsoft Teams. And then the relationship between Microsoft Teams and Communications to provide that full UCaaS stack still requires integration into the telephony environment and the data networking environment. And so we have seen Microsoft, if you like, coming down that stack towards that communications environment. They are now really starting to indicate fairly publicly that this is about as far as I go, they will partner with people for the bottom 2 tiers here. But also, it's enabling us to move up that stack from the hosted PBX into our own collaboration tools. And this is just one example. And it's worth really emphasizing the fact that Microsoft Teams is one headline grabber alongside Zoom and others. But there are lots more business applications in that layer that we would see as we go forward and as we get post pandemic will need to be integrated into communications. We talked last time really around that UCaaS stack, and we talked about the differentiation of core network and the core network, if you like, enabling us to provide an end-to-end solution so that we could provide that from initial commercial proposition right the way through to deployment and support. We were accountable for the whole solution and the importance of that of differentiating against the pure over-the-top proposition. And since that last Capital Markets Day, we've also pulled out particular emphasis on contact center as a Service. We talked previously about UCaaS and an emphasis on collaboration, a sort of internal and external collaborative conversations between teams of people. But also now we're placing a particular emphasis on customer contact externally and how businesses need to handle that contact in all its forms. And Chris will talk about -- a lot more about that later. So that really leaves us in a position today where we're operating in these 3 key markets from a UCaaS perspective, Communications as a Service -- sorry, Contact Center as a Service and connectivity. And to give you an indicator, in terms of -- there's plenty of analysis around in terms of the size of these markets and expected growth. We see that UCaaS and CCaaS are both growth markets for slightly different reasons. UCaaS, we're seeing that adoption and movement to cloud and adoption of integration into applications, figures on there, 20% CAGR. But also, we're seeing some industry changes there around the closure of PSTN and migration, if you like, and the need to migrate PSTN lines to an IP solution. On the customer contact side, although the overall market may be fairly static, actually, we're seeing growth towards cloud and movement from on-prem solution to cloud solutions. But also, we're seeing the advent of informal contact centers. So where businesses need a simpler solution at a simpler price point to be able to enable their wider organization to handle customer and external contact. And again, Chris will talk you through how we're meeting that need in his section in a little while. On connectivity, again, from a fixed data perspective, fairly static in terms of growth expectation, but significant changes within the market from low-end Ethernet to higher end and higher capacity broadband as those technologies have now become available, but also the consumption of very high-speed Ethernet services. And on mobile, we talked last time on mobile about the need for us to adapt our operating model to change our operating model on mobile from what was a sort of heavy MVNO to a much lighter MVNO. We have just recently launched on that light MVNO platform. And that gives us access to 5G services, which will drive new opportunity for us, but also data-only SIMs. We're expecting further growth in that area. Looking at Europe, lots of numbers in and around Europe, lots of predictions from different people. I guess the point here is we're anticipating significant growth, and we're expecting that growth to be more certain because of the adoption now of UCaaS services, but also from a cloud contact point of view, the move and the more of acceptance of cloud, if you like, will help drive the growth of the cloud contact center market. And just an indicator there in terms of in the markets we serve, the difference between those forecasts before the pandemic and now after the pandemic. So we are seeing in Germany, for example, that forecast has been increased by 27% by a number of the analysts. But I'll talk in a moment about how we can start to see how that market may shift and change in the next year or so. So one of the things that we are very conscious of is that we've been -- we had a market sizing. We assessed the market, and we assessed our relative position in the market pre-pandemic in quite a structured way that had been followed for quite a number of years in terms of those waves of adoption from PSTN to ISDN to SIP and then to on-prem PBX to cloud PBX and then the advent of UCaaS. We've seen through the pandemic an extreme situation. Everybody has had to work remotely. We've had mass adoption of online technology in both our professional and our personal lives. And there's been the acceptance of video finally after all these years of promise for people to use video as a media stream. But that's been the extreme situation. And what we're expecting is that post pandemic, clearly, we will see a shift back, if you like, to some kind of hybrid environment. And again, we'd anticipate that user and buyers' behaviors will change again. But what we do know is that some of the things that we've secured, if you like, as an industry through the pandemic will sustain. So we're looking really closely about how that convergence between business applications and communications infrastructure will be sustained. As I said, the fact that applications like Teams, for example, has had a lot of headlines during the pandemic because people that have been used to -- so used to being in an office and sitting in meeting rooms and now suddenly needing a solution to solve that problem. How that will manifest itself in terms of the move to the desktop has been the place in the desktop applications. So in terms of integration into accountancy software, into CRMs or communication services over that long term. And also the role that video will play. As I said, there's been now an acceptance of video as a media, but actually, how will we start to use video in smarter ways as that hybrid model emerges. And a number of these factors, if you like, are the ones that we're starting to really try and review and understand as we develop our 2026 strategy and start to think ahead in terms of now we're part the way through the delivery of 2023, the 2023 program, how we will go beyond that. Just really a couple of slides on execution and where we are against that 2023 program and particularly on this slide around M&A. So firstly, from a European perspective and our European ambitions, we've made a number of acquisitions. We've made a further acquisition in the Netherlands with gnTel. We've -- and also with Nimsys. We've gained entry into the German market with HFO and entry into the Spanish market with VozTelecom. And from a capability point of view, we've made 3 acquisitions here quite significant to us. Obviously, Exactive brought us a real strength in Microsoft skills and particularly voice enablement of Microsoft. The acquisition of Telsis gave to us a team and a capability in software and applications around contact center space, which we have now launched as Horizon Contact. And finally, the most recent acquisition with Mission Labs, that's given us a digital platform to market for the sort of lower end of SME, which Chris will talk about in a little while. But it's also given us entry into some of the emerging -- well, again, quite established markets around Amazon Connect as a sort of technology ecosystem at the higher end of the market with more advanced contact center applications. So we've really kind of delivered, if you like, against those areas of focus, both in terms of building capability ourselves but also through acquisition. And then finally, we talked at the last Capital Markets Day about the potential pressures that there would be on our traditional channels to market. And what we've done through these acquisitions and also through the building of our capabilities in this area is really broaden our channel strategy. So we now really cover all of the bases, if you like. And as we come out of the pandemic and as we start to see adoption of some of the services we've been talking about more on mass and for the long term and how those channels really evolve and change, we're really well positioned to cover the market as it takes shape. And I think with this slide, I will hand over to Chris, who's going to take this slide and sort of decompose it and take you down a number of these areas in much more detail. Over to you, Chris.

Good afternoon, everyone. It's great to be here. It's a pleasure to add my welcome to that of Andy and Andrew's. Obviously, a face you may not have seen before around Gamma. I've got the relatively new joiner here. So it's my great pleasure to talk through how we're taking the strategy that Andy and Andrew talked through there. And as Andy just described, decomposing that and making sure that we have the right products, the right channels and the right propositions, therefore, ready to take to market to win wherever we compete. So I'll start with the slide that Andy just finished on and say that having great products, having the products that are listed there on the right-hand side is obviously a good thing. Good product is fundamentally a good thing, but it's not enough to win in the market if you just have a good product. You've got to be able to deliver that to the market in a way that satisfies the needs of the user and the customer. The delivery of that is often much wider than just that sales process as well. It extends into the in-life support. It comes right back forward to when people are just trying to search and discover what products and what solutions they need. And it's wrapping all those things together and bringing these 3 elements together of the business segmentation, the channels to market and the products that we deliver through them, which is what makes Gamma successful. And I say makes Gamma successful. It's a historical strength that Gamma has had. I think Andrew alluded to how we've built the capability in the business to get to where we are today. And I think you'll see, and I hope to demonstrate through the rest of my session here, how it remains a positive differentiator for Gamma even as the market changes and accelerates, and we have new entrants in the market, COVID forever influences user demand, and we change the fundamental landscape of communication. The things which Gamma have historically been good at will continue to serve us in good stead going forward. We will need to add new capability over the top of that, and I hope to introduce some of those concepts here as well. But we're starting from a position of strength and able to build on that strength and go forward from here. So hopefully, through the rest of this session, what I'll do is describe the shape of the business market, the segments that act within it and then give you some insight into how we take business -- take ourselves to market in each of those segments. So what are the segments? Yes, we serve business customers. I think that's a relatively obvious statement. And the 3 segments that we think about within that, again, relatively intuitive, the very small micro businesses, the small and medium-sized enterprises and then the enterprise scale and public sector customers at the very top of that pyramid. And what's interesting, I think, of this though is how that breaks down, how the demographics and the firmographics that you see there, how people's willingness to adopt technology drives their take-up of Gamma services and communication services more generally. I think an interesting point in it is the number of employees that are employed in each of these segments, broadly the same. So 9 million people in the very smallest businesses, 10 million people in large enterprises. The reason that I think that is interesting is it's people that drive communication need. So if you've got markets that are broadly similar in terms of that need, you're going to have similar size opportunities that are open to you as you go through it. That said, obviously, what they need and what solutions they're looking for in those spaces can be materially different. I'll highlight that as we go through. Their willingness to pay, their acceptance of new technology and the demands that they place around the capability, obviously, very different. And again, we'll demonstrate that going forward. At a very headline level, though, micro businesses are emerging. They're waking up to the benefit really of what cloud communications can do from them. They're waking up to that because their customers are demanding more and different things of them. And they're demanding quite complicated things of these small businesses. So these micro businesses are now looking to us, to Gamma, to our partners, to the ecosystem to solve those complex communication needs in a simple and cost-effective way for them. And that means that we've got to adapt our approach to serving them, providing product, providing applications over the top of that to enable those needs. Because of that, cloud adoption is relatively low in that space. So again, an opportunity for Gamma. And that's because they are generally reluctant to take on new technology until it's been proven. In the mid-market, the SME space, what you've got there is Gamma's heritage. This is where Gamma has built its strength, very, very strong channel to market there. It's where our products have been designed for historically. And what we're facing into there is, again, that complexity theme. What customers are asking for in that space is changing, and therefore, what we provide to them in that space must also change and adapt. They have a different starting point though when it comes to cloud, because they're relatively flexible and relatively agile and they're always looking for that way to make their business different and better, we see that cloud adoption is much more advanced there. And that's mirrored in how Gamma is presented in that market. It's a strong market for us, and our channel exists and is experienced in delivering that type of capability to those customers. And again, that's a strength we can build on. At the very top of the market then with the enterprise customers, they have the most complex needs. I think it probably goes without saying, and we'll illustrate why later. But they have not been the most accelerated adopters of cloud technology because they've solved those problems before using existing infrastructure, existing services. And what they're trying to do now is understand how they transition from those existing applications and services towards a new way of working that allows them to embrace what's happening in the world around us with people being distributed and working in a much more remote way. So they're looking for the solutions that allow us -- allow them to replace existing solutions and let them add capability efficiency over the top of that. Again, cloud penetration as a result, relatively lower, but Gamma, moderately strong in that space given the experience we've got with our direct business, servicing large retailers, other large businesses and public sector entities as well. So when we talk about problems that we solve, and Andy and Andrew used phrases like UCaaS and CCaaS and CPaaS connectivity quite a lot. I see customers and businesses tend not to think that way. What they think about is problems that they have in their business, needs that they need to deliver and solutions that they want to embed in that business. And we group those typically or we do now into the 5 elements that are listed on the right side of this slide. So connectivity, available to be online, to be connected, to be available and accessible to the wider market. Voice communication, self-evident, I think, what that is, but some of the complexity around it, again, we'll draw into a little bit later. And then there's an emerging need for conversations inside the business as we've seen through COVID, collaborating with your peers, with your colleagues, with the rest of your business. External conversations in the market for that is now going beyond voice into multiple different communication mechanisms and being able to integrate those together, stitch the information together and turn it into insightful information that's actionable for the business becomes key. And that points to the last piece as well of bringing the communication infrastructure, the communication applications and services together in a way which supports the running of the business, doesn't disrupt it, and it's not an add-on to the side. It's integrated into the overall flow. So how do we go about doing that? So thinking about the portfolio, where Gamma builds from, where our history has been. We started as a connectivity and voice provider predominantly, and that's where we've been strong. We've got a great strength there in the fixed position. Andrew referred to broadband and Ethernet. We've talked about cloud telephony, that Wave 1 and Wave 2 space, as Andy described it. And as Andy described as well, we've added mobile capability recently over the top of that with the access to 5G, high bandwidth, high availability, very low latency connectivity there that's starting to change the way that businesses communicate. So that is the history of Gamma. That's the heritage that we have. It's the very strong position we have serving those markets that we've just described. What we're seeing now is a change in the way that the communication landscape is evolving, and we're seeing a change in the demand and certainly the appetite for more communication mechanisms between the end customer and the business customer that we serve. And that might be the introduction of web chat or e-mail or SMS, WhatsApp, social media as a communication mechanism where people are making inquiries, asking about status of an order, want to place business with you. A business needs to be able to respond to that need and be able to be present where all those consumers want to communicate. That's changing the nature of that external conversation. It's changing the nature of the product that we bring to market and serve that market with. That has a twin almost in the internal conversation side of things that has to happen within the business. So that's where you're working with your peers, you're working with your colleagues inside the business and making sure you're still progressing that. You're sharing information, you're sharing files, you're exchanging instant messages, all those kind of pieces of communication that we are now predominantly people working in corporate entities, very familiar with, but that's starting to cross over into the entire business world as people are adapting to remote working. The center of that then is stitching those things together and making sure that they are integrated together, that the information that's available and flowing in all of those conversations can be surfaced, can be connected to different applications or services as is needed and can really drive through and deliver value for the business, make it more efficient, make it deliver greater returns through those conversations and make sure that the information is never lost. So that if you've got a customer is complaining, you can point back to the resolution you've already given them. If they're asking you about an order and want to place more business, you've got a really quick way of being able to respond to that request and drive the top line of the business. The final piece, which is evolving, I think, around this is the application of pure technology. So where machine learning, artificial intelligence and really the emergence of -- not the emergence, the real convergence of IT and communications, as Andy described, bringing APIs, the concept of being interoperable and integrating together and wrapping around those communication services to drive efficiency, automation, integration so that people can exist within one ecosystem inside a business and be able to talk out to multiple different people, be able to stay in that environment, not disrupt their daily flow, but be able to be really connected, really, really well engaged with all the stakeholders that are in that business or outside that business and able to really drive, therefore, the performance of that business forward. Now I showed segments earlier. Those needs, as I showed in that triangular diagram, obviously manifest in different ways when you get into the segments. I think it's fairly self-evident intuitive, but it's worth just sort of dwelling on some of those points, I think, before we drive into what that means for each of the segments. So an enterprise customer or a public sector entity, very large organization, probably departmentally driven, very complex needs. Well, probably in all of those pieces, he will need to be able to stay connected very reliably, robustly high availability. They have a lot of people who want to talk to them from outside their business. They will need to facilitate intra and interdepartmental conversations. And they'll want all that to be integrated very closely to the other applications and services they have around it. At the other end of the spectrum, in a micro business, by virtue of having fewer employees, their need for internal collaboration is probably less, but they do need to be absolutely available to their customers. They mustn't disappear offline. They mustn't disappear otherwise, that's a customer loss for them, a direct impact on their business. So you can see there, the grading of the criticality of those issues as it comes to manifesting those needs into those segments. And whilst I say that's intuitive, I think it's really important that you understand how we embed that in our decision-making process to drive both our organic product development and our consideration of acquisition targets to supplement the portfolio as it stands today because you solve those needs in different ways for different segments. The final piece of the puzzle, as I sort of referenced at the start of this section, is really to talk about the way you reach customers. And that is different again by segment. So our direct customers in the enterprise space and in the public sector very much expect a high-touch model. They expect to see people. They expect to be able to interact directly with the vendor. They expect to have a very complex, often a lengthy sales cycle to discuss their specific needs and how we will solve them. That requires a very intense direct sales force. Again, micro market, the other extreme of the spectrum. Often, in some cases, will require some confidence building, some handholding to go through a process if they're new to the space or they're taking what for them is a really significant step in terms of capability and commerciality for them. So they'll work with an indirect partner potentially to identify what the best solution is for them and to help implement that. But increasingly, and I think we all know this from our own lives, there's a segment of the market which is driven digitally. They're digital first, they're digitally native, and they want to be able to take this on themselves. So when it comes to the conversation around the acquisition of Mission Labs, for example, and Andy referenced the growth of our digital capability, that's to help support our expansion of coverage in that market. And then you have the SMEs in the middle who are very, very strongly served by the Gamma channel that we have today and have served very, very effectively by those channel partners that we have. But there's also a need to ensure that we're operating in other parts of the market as well to supplement that and to ensure that we're in places that our customers are going to as we evolve our capability there. Final slide for me on the introductory section is to go back to the way that Andy and Andrew described the market, UCaaS, CCaaS and connectivity. And to just give you a sense of how the product portfolio, so the logos on here, map against those segments. And again, we'll demonstrate these in each of the segments. So there's not too much in sort of insight in this. But it helps you understand how we've grown from that connectivity and core voice application to become really strong in the UCaaS space, where we've added acquisitions in, and we've grown our product capability separately. And also, we've acquired businesses and melded that with our organic capability to satisfy that Contact Center as a Service need and to be really present in that market. So as each of these parts of the market grow, as Andy demonstrated, Gamma has a part of its portfolio, which is well situated to address those needs, irrespective of the segment of the market that we're targeting. So that's enough of an intro, I think, highlighting how product, channel and go-to-market segment really come together to make sure we're successful and highlight at a high level how Gamma operates and addresses these markets. What I'm going to do now is dive into each of those segments, so micro, SME and enterprise, give you a sense of the specific needs that are operating in that market, how our product portfolio addresses them, how we win and to show you the products in action. So show you how we satisfy those needs for those customers and give you a sense of why they find Gamma to be a good partner to satisfy those needs for them. I'm going to start at the bottom. I'm going to start with the micro segment. I'm going to start with those because they've got the simplest needs and everything kind of layers on from there. So if you think about the micro segment, it's an interesting segment, as I said at the start, in its own right because of the scale. There's 9 million people employed in these nearly 6 million businesses in the market, but they've got a relatively -- they're relatively behind the curve, I would say, in terms of adopting cloud communication technology because they haven't felt the impetus to do that. But they're being driven to it now by their customers, and they are about to be driven to it by, as Andy referenced, the PSTN switch off in 2025, which will fundamentally change how they access services and how they drive their communication capability over the top of it. There's also a general trend in technology, and I think in communications too, for improvements and increases in functional capability. And we're certainly seeing micro companies wanting that and wanting to be driven that way now, and they're pushing that back into us as a vendor in that space, too. And as I referenced in terms of channel, they are increasingly asking for, I want to be able to self-serve or at least part self-serve through this. And so you've got a different dynamic emerging there of being able to serve Gamma and Gamma products in a complementary way to our direct and indirect channels through a web presence or through a digital-oriented business. So what needs are we satisfying here? You'll see we've graded out many of the chevrons that are in this triangular diagram because if you think about what a micro business needs to do, it doesn't have a lot of employees. So there's not a great deal of need for internal communication. It probably doesn't have the most complex application ecosystem around it. So integration is also not the main challenge. What they're absolutely doing though is to be connected, to be visible, to be available and to be able to have a conversation with their external stakeholders. So that right-hand side of the chevron. So connectivity is key, be it digital, be it fixed or mobile, we need to be able to provide a capability to them to let them appear. Voice communication still drives way more than 50% of all conversations in the market, we think probably around 65%. But that means that if you aren't enabling other types of conversations, you're effectively closing their shop for 2 days of the week, and that's really not acceptable to a micro business. It's too much money lost. So we're also evolving what those external conversations need to deliver to them to allow them to act on that as well. So we're continuing to grow and evolve our capability in the micro segment along those lines and make sure that we're addressing those needs as they arise. What I'm going to do here, and actually, that's -- is for today, but it's also in preparation for that PSTN switch off as the fundamental connectivity and access model changes and people are driven into the market to consider what their future solution looks like. What we're going to do here, and I should have said upfront, all the demos that we'll see here are actual and live products. We've prerecorded them to make sure there's a minimal chance of a technical snafu. So we're going to show you here how a customer goes about exploring Circle Loop, buying it, provisioning it, setting themselves up and then running it, including some of its more complex use cases. So you can see the types of capability that are there over and above just the pure voice conversation. And with that, we cut across the video to show CircleLoop. [Presentation]

Well, I hope you found that interesting and useful and a really good example of the way that we're solving those needs for those customers who want to serve themselves digitally with a way to solve their communication problems. I think what you can see there, though, is that's one part of the market. That's for those people who are digital first. It's for those people who are comfortable and confident of taking it on themselves with an admin user who's able to set these capabilities up and to really move that around on the behalf of the business. And many people won't have that. So we're also bringing that product to market or a sister of that product to market through our existing channels as well to ensure that we're covering both parts of that micro business ecosystem equally with highly capable products. Andy referenced about the convergence of IT and communications as well. And we're starting to see that a little bit in this space, but it's a topic we'll come back to probably a little bit more in the SME space where it's more relevant. What I hope you saw in Circle Loop as well was highly simple or highly -- very clear product pricing and proposition delivery. And that's something which Gamma has historically has had a strength. And as I say, we're trying to bring as many of those strength possible forward with us into the future. So very simple, very clear pricing structures, but with the flexibility and optionality to add capability or not take capability as the business requires to satisfy its needs. And what you'll see with Circle Loop as well as its integration capability, starting to bring to life some of those business process integration, which whilst the need is light in many micro businesses does exist in some segments of the market or some verticals of the market and is really critical to making sure that they can be really successful. I think one thing which is key and perhaps didn't brought to life in the video because it's very difficult to demonstrate is our commitment to service excellence there in that space. Gamma has prided itself on the service delivery that we do, the network availability, the support that we provide both to our channel partners and to our end users. And really, the support we provide to our end users as well, potentially as they move from one provider to another one port their number. We are really committed to making sure that, that remains a strength and a differentiator for us going forward. So I think the black bar at the bottom sort of summarizes that very clearly. We've been driven to be innovative by our customers. We're following where the market is going from a communication need, and we're trying to predict where it will go in the future so we can be ahead of it. But we're not leaving behind our historical strengths of channel and the support differentiation and the ability to provide support services that differentiates us going forward. Of course, any attractive market like that attracts competition. This is no different. And the existing providers in the market obviously bringing their own evolutions of product and capability to market and are seeking to understand how they can make theirselves competitive in this space, too. It's a little bit difficult for new entrants to get into this space because of the regulations around telecom. So it's relatively protected from new entrants like that. And I think when you look at forward to 2025 with the PSTN switch off that we've referenced, what you'll see is a bit of a shakeup in that dynamic. It will create an opportunity for everybody in that connectivity and in the application space together. And it will create an opportunity and an imperative, in fact, for businesses to move from existing infrastructure to something new. And that will allow them to unlock new and different and advanced capability. And Gamma's convergence of fixed connectivity and mobile connectivity and our concentration on applications and services and our development of those really stands, I think, in outstanding stead to address that opportunity as we go forward because we have established there that product channel and segment fit that we talked about right at the start here. And we're wrapping it still in that Gamma capability to make sure we're delivering an outstanding service to our customers and to the partners who are active in that space. So where do we go beyond that? I think there are 2 elements always to future direction. There's channel and there's the product capability itself. So in a channel perspective, we're making sure we're expanding our coverage for those digital first -- for those digital-first businesses, making sure we're in all the places where they're looking when it comes to searching for communication capability, making sure it's as quick and easy and seamless as possible for them to get up and running and drive their business from there. We're also exploring, obviously, the existing indirect channels and also what other channels we might choose to explore with that human touch involved in that mechanism and that way of aggregating some of those capabilities forward. The other interesting example, and Andy referenced our European acquisitions is this capability is transferable across Europe. And so we're exploring how to bring this type of capability, this product into those markets to be satisfying those emerging cloud communication needs in Spain and Germany and the Netherlands as well. On the capability of the product, obviously, the European aspect is part of that. We're exploring what does it mean? What does an external conversation mean? How do we need to evolve the capability of the product in line and in line with where the market is going from that conversation perspective. So if it's WhatsApp today, what is it tomorrow? If it's phone today, is it video tomorrow? Making sure that the product is capable of accepting all those communication mechanisms as the end user really wants them to happen. We're making sure it's integral and interoperable where appropriate with that wider range of services inside businesses. And we're trying to bring to market then propositions and bundles, which really marry the strength of our connectivity and our application business together, drive value add both for ourselves and for our partners and for our customers and making sure that we're also bringing mobile into that mix as well as we move to an increasingly hybrid and remote working paradigm and as 5G comes to the fore, which will have speeds equivalent, if not greater, than some fixed, certainly consumer-grade broadband services there. And again, that's where you've got the benefit of Gamma's relatively diversified portfolio from a connectivity and application perspective, giving us greater chance and more chances and more opportunities to be present as these markets grow and continue to evolve. So wrapping up, I think, for micro business, I hope what you can see is we understand the market that we're aiming at the segment. We understand the needs that are happening there. We understand the channels which are necessary and important for those businesses going forward, and we understand where they're evolving too. And we've taken the opportunity through the 2023 strategy to identify where we can address that opportunity organically, where we need to bring some capability into the business from an acquisition perspective. And we're starting now on that journey to bring those pieces together and make sure we're activated in time for that real significant opportunity that emerges in 2025. There'll be an opportunity for Q&A at the end, obviously, the session, as we said. So what I'm going to do now is move straight on to the SME segment and go through a similar format, try and educate a little bit on the dynamics of the market, our needs, demonstration and then some of the description of how we win. So the SME space, the next slice up in the market, as we described there, again, employing almost 8 million people in 300,000 or so businesses. So a significant opportunity and a significant need for communication and conversation in those businesses. As I said in the intro, they're actually moderately advanced in terms of their adoption of cloud technology because they are -- they identify the need and because they're agile and flexible, and they're always keen to improve their business and drive efficiency and drive return. They are willing to make the investment in many cases to take that next step to a different technology platform to ensure that they're benefiting from that. And those who've been forward-thinking enough to do that have been protected and insulated to a degree against the disruption that COVID has brought into it. What is happening in that space is that move is obviously accelerating now, and that's driving further adoption in this space. The conversation capabilities we described continues to be more complex. And actually, because they're larger businesses, they're having more conversations, which means they're exposed to more end users, which means that the mechanisms at play there get more and more diverse. And so we have a more complex ecosystem of conversations to connect into. They also have more employees, obviously. So their need for internal conversations and internal collaboration capability is also stepping up. And again, that confluence then of external and internal conversation creates a significant opportunity that Gamma can bring its portfolio to bear on in that space. And that's what this chart illustrates. You'll see the internal conversation has gone from a gray to a purple here because you're starting to think about how do we address that need inside the business, too. That's not to say that all SMEs are equal. You can think of 2 ends of the spectrum here, a small accounting firm or a services firm and a manufacturing company. They will have -- they both sit inside this segment, but they have different needs. A professional services firm will have a number of staff, probably all of their staff, communicating outside the business with their customers, with clients, with prospects, with suppliers on an everyday basis. And they'll also be needing to collaborate and work together on the action that comes out of those conversations. So they have a really strong need for external conversation capability at scale and also for internal conversation capability at scale. They will be driven often by voice, picking up the phone to the accountant or to professional service firm, the advertising agency, but they will be bringing other mechanisms over the top of that. At the other end of the spectrum, the manufacturing company, they probably have or they might have a majority of employees or a significant number of employees employed in that manufacturing facility on the shop floor, working the machines, making the things that they make. They will obviously have a very limited need to communicate either externally or internally. So they are driving a very different dynamic there. They still have that need for external conversations and that still have that need to be able to communicate a peer professional, peer available. But their need for internal collaboration will be different again. So you've got a sub-segmentation happening. What they both have in common is that need to stay connected and available. And again, a Gamma differentiator is that network grade capability that we provide to connect our customers to the wider world. So you're bringing that together and you're able to then address all those needs in those different industry verticals that exist within the same segment and have similar needs as we describe them here. What you can see on the right of that diagram, obviously, is the specific bullet points that talk about some of the capability that we deliver, video conferencing, web chat communication, call recording, PCI payments, 5G. They're all very important pieces of individual capability that we deliver to a customer, but it's much more important in how we put together -- put them together, serve them through a channel and make them consumable by that end user. And again, back to Gamma's unique strength of service wrap, that's something we're bringing forward as we go through this transition. Again, more products listed at the bottom of this page as well, simply because this is where we have our greatest strength. It's where Gamma Horizon, our core flagship voice platform, exists. It's where it grew up, it's where it matured, and it's where we're now building on that voice communication bar in the middle to extend that conversation capability above it. I'm going to follow a similar format that we did in the micro space now and show a demo. Now connectivity, I've said it's critically important. It's quite difficult to demo. Usually, it's just a box in the corner with some lights that are flashing. If it works, they're flashing, if it's not, they're off, not a very interesting demo. What is interesting is that external communication. And what we're going to show here is a demo of something called Horizon Contact which brings together the Horizon Voice platform and the acquisition of Telsis and creates a packaged capability to address multiple different conversation types out in the market and allow the business to really respond and act and react to the information that comes in through those communication mechanisms to make a difference for their business. So over to the video. [Presentation]

So I hope that gave you a sense of the type of contact center capability and core management flow that can exist now within Horizon Contact serving our small and medium-sized businesses. I think what's really interesting to make sure we bring that to the fore though and explain is how that can be applied, not in a contact center environment, but in all SMEs or a majority of SMEs. And Andy, I think, referenced informal contact centers. So if you think of a travel agent or a car dealership, all of those have multiple people sat inside their facility or at home in the moment but they have the ability to communicate with their customers. And if you can provide that richness of service that I think you saw just described there in that demo, where you recognize that someone has spoken to you in the past and you're able to treat them slightly differently. You're able to say, "Hello, Rachel, it was great to speak to you last week about booking your holiday in Bahamas. Is it all still going to plan? Is there anything I can do about that for you now?" You're able to -- the customer, the business in this context, is able to differentiate itself and provide that standout service in a consumable way through the use of Horizon Contact, a Gamma service. So how do we get this product out into the market? As I say, it very much uses our existing channels. If you think back to the pyramid we showed where we have the indirect channel being a very, very strong strength for Gamma in this space, we can really drive that. And the reason that, that channel is so interesting in this space is the intimacy that they can drive with the customers. So a vendor like Gamma who's large, can employ a massive sales force. No one in the business is really going to be able to have that conversation, that in-depth conversation with the end customer and understand exactly what it is they're trying to do and understand how our solutions can solve that in a way that someone who's literally around the corner from them in many cases, can do as well. So our existing channel partners who understand Gamma and understand our portfolio, but also really understand the communities that they serve is the best of both worlds. They're able to really use their knowledge of us and our services. They're able to understand -- use the knowledge of the businesses that they serve, put those 2 together and really drive that and create something which is quite unique and quite differentiating and special for the customers who are using this in space. It's also worth pointing out and reiterating, we talked about IT channels and communication channels coming together, starting to emerge in this space a little bit because of the way that people are buying and because that they have often, and we'll touch on this in a second, an IT strategy, which incorporates a lot of Microsoft capability. That drives a need for them, and it drives a way for them to solve a problem sometimes in a way which is a little bit different to how it's been in the past and that we'll touch on. Similar themes though on how we win to what I described in the micro market. We remain committed to being easy to do business with, having simple, clear, flexible propositions that we can deliver to our channel partners and allow them to take to our customers to satisfy those needs in a really strong and meaningful way. And we're really keen to make sure that we continue to evolve the capability of the products so that the features evolve and often the price increases as we add more capability, but that ratio between the price that someone pays and the value that they deliver out of applying that solution continues to be a really positive thing for the business and the channel partner in that space. So again, we're drawing together our historical strength in the channel, our commitment to providing service and being a really good and service-oriented business and evolving the capability of our product to serve these end-to-end needs. As with anything, we've talked a little bit about Microsoft entering the market. So competition. Increasingly, this market is seeing new entrants coming. We see Microsoft coming in. You've seen other large-scale tech businesses enter the market, particularly towards the top end of it, where you've got larger businesses with larger budgets. Microsoft Teams, particularly in that internal communication space, has changed the dynamics as well. It's not the only player in the market, Google and Zoom, certainly Zoom have more users than Teams. But Microsoft, given that people have this IT -- Microsoft-driven IT strategy has a unique position in the market, I think, going forward. What is interesting, though, and Andy referenced this as well about Microsoft tolerance for getting into some of those lower network layers of capability. Microsoft has said they're not interested in that. So there's a strong combination that can be driven between carriers and providers like Gamma and Microsoft is an IT company that enables both of us to take a part in that market and enables a company like Gamma, particularly to stitch together those third-party products, including Microsoft Teams with our own capability, serve them through a channel which has served us well, understands how to deliver these things to market and really drive something which is positively different for our customers in the market. And it's worth noting explicitly, I think, at that point that Microsoft Teams does not connect to telephony network. So if you think back to the triangle we've got with internal conversations, external conversations and a voice platform, that voice platform is still required if a Teams user wants to talk to someone on the telephone. And that's where Gamma strength really comes to the fore, providing that interoperability and that connection through our Exactive acquisition, for example, the work we're doing with our direct routing capability to mean that a user who works in Teams collaborates a lot over Teams with their colleagues inside a business, they can stay in that environment and still punch a telephone number in and call out to whoever it is that they need to be, who isn't willing or able to make a Teams call at that time as well. Thinking about where we go in future, again, channels and capabilities and a very similar story to what we described in the micro space, continuing to drive and develop and grow the channel to capitalize on this transition to cloud-based infrastructure and capability and continuing to grow the capability of the product to satisfy more conversation needs, make it more interoperable, make it more seamlessly integrating with the way that the business operates already. Being more amenable to supporting hybrid working and connecting through to our various connectivity capabilities, be they fixed or mobile again, to make sure that everybody can access these on an equal footing, not have people who are in an office be advantaged over people who are working from home over different broadband. I think where we are starting to see some different, and we sort of alluded to some of that in Horizon Contact, and you'll see some more of it in the enterprise demo is how do we apply automation, intelligence and machine learning to help make some of these processes even more efficient to mean that some conversations aren't making their way into the contact center or into agents in the first place. And instead, they're being managed because they're low value or they're very easy and transactionally oriented to fix outside that conversation flow and making -- delivering a great experience, but doing it in a much more cost-effective way. And that's where that packaging customer experience improvement capability really comes to the fore as well. So in summary, for SME, I think it plays on our historical strength. We have some unique heritage in this space in our channel and our product, and we continue to draw those forward with us, make sure that our service wrap is evolving in line with the need of customers as the product is as well. And we're continuing to pursue and understand how do the evolution of market needs give us some capability or give us the opportunity to create new capability to satisfy even more needs in the market and drive greater return from there. The final section for me is to talk about enterprise and public sector. You're familiar with the format now. I won't dwell on that. So the enterprise, obviously, the very largest businesses in the market, in the economy today. playing in the U.K., something like 11 million people across about 8,000 businesses. It's worth noting at that point, these are all U.K. stats that we've used here. The broad shape is roughly the same in all European markets. So there is an opportunity to sort of extrapolate from this into opportunity in other countries as well. As I said about enterprise customers that we serve in this market are very, very focused on the efficiency of their operation, but delivering a great customer experience while they do that and making sure that they remain as productive and efficient as possible inside their organization. So they are often the needs that they come to us asking for us to solve those problems for them. That said, they're often quite different from each other, quite bespoke, either in terms of the way that they want something to happen, an IT policy that constrains something or perhaps an infrastructure that they're embedding these solutions into that we have to be very aware of as well. And again, that's where Gamma service wrap can help with this because we can take that into account when we talk about what the complete solution that we provide will be. These companies are also obviously looking for something which will serve them over time. So we're increasingly being asked for things which will have a much longer lifespan in the past and making sure that we're delivering that capability in a way which is extensible and can grow with that business as its needs or its scale changes as well. So what are those needs? Everything, unsurprisingly, I think. The enterprises and the public sector entities are taking steps to progress their capability in all these spaces. What often happens though in these spaces is a specific need or a specific department with multiple needs will come to Gamma or come to market and ask for a solution to their set of problems, particularly. And that means that you need a different sales approach. It's not just enough to have a product-driven approach here. So we are very much in tune with understanding what does success mean for each specific customer and making sure that we deliver our capability to it, to address those specific needs that they call out, be that in terms of how people are allowed to collaborate or the types of conversations that people are going to have outside the business or the way that the business wants the connectivity to operate and whether there's different mechanisms at play there to ensure that there's redundancy and resilience in that delivery as well. What we're going to show here is a demo of contact center capability again, but on another level. So we showed you Horizon Contact, which delivers that capability to small- and medium-sized enterprises. What we're going to show here is something which on the face of it solves similar needs, but they're in a much greater degree of depth and there are a much greater degree of automation and machine intelligence around it because it's driven into a larger organization who has more bespoke needs, more specific needs and frankly, is willing to pay more for that solution as well. What's also interesting to note here, and we'll come back to this when we talk about market dynamics is this solution is driven off the Amazon Connect platform. So again, if an enterprise has an AWS-oriented IT strategy and they're looking at how do I harmonize my entire technology stack across onto one cloud platform. They're looking at Amazon Connect potentially to supplement that. And through the acquisition of Mission Labs, we've been able to take quite a strong stance in that market now and deliver the capability we're about to describe here in a product called Smart Agent. So over to the video for Smart Agent. [Presentation]

So I hope that gave you a sense of is the next level of capability we're providing to enterprise customers as they look to improve their contact center operation in the aim of delivering a greater customer experience to their customers, but also in helping them drive the efficiency and the capability that they allow their staff to take part in. I think you can see that we're building on that as a platform. We'll see those capabilities continue to emerge, continue to evolve, continue to progress as we go forward. As I say, that's driven off the Amazon platform, which we'll talk about in a second. So delivery to market in the enterprise space is a little different, I think, from the micro and the SME space because, as we've said before, the larger the entity, the more specific needs they have, the greater demand they have for direct interaction with the vendor that they're looking to do business with. That doesn't mean that we do everything ourselves. We very much work with system integrators or very large partners to go into these bids and make sure that we deliver a complete solution, which addresses the needs of the customer and gives us the best chance of winning. Often, and I think it's worth noting it's inherent how we win, that will include incorporating third-party components as well as Gamma components because that's the way that we can ensure that we're focusing on the customer need and we're delivering the true capability that allows us to be successful in the customer, create a long-lasting and positive relationship, and give us the opportunity to land and expand. So satisfy one need, prove that we're a successful and credible provider and then grow the coverage that we have across that need space inside each customer. We continue to look at routes to market as well and make sure that we're evolving that. We're working with the right partners. We're evolving our capability as well to address those needs as they go. I think Amazon, we'll talk about in a second, is a key example of that as well, making sure that we have a great relationship with these providers as they come into the market is going to be really key to us going forward. What's happening on how to win? I think a key point worth noting is through the COVID pandemic, what happened was many people look to implement a tactical solution. And that's where land and expand becomes particularly important. Have we satisfied that tactical need in a really compelling way that gives us then the right to continue to work with that customer to satisfy their strategic need as they look at assessing their communication needs in this new paradigm going forward. So again, to the points on the bottom, we're focused on that total service that we deliver, and we're very flexible in terms of the components and the combinations that we deliver and wrapping it in that managed service wrap to ensure that we can be allow our customers to be as successful as possible. Where is competition going? What's happening in this market around it? I think it's probably self-evident to lots of people here. The application vendors, the global hyperscalers are all bringing their cloud capabilities and extending those platforms with communications capability. What they're not able to do necessarily is compete on the sort of carrier-grade capability that Gamma provides and running our own network. And so our completeness of offer allows us to differentiate versus their providers in many places. What we also have is some of our existing SIP infrastructure and our network capability, for example, supports many of these hyperscalers as they enter into this communication application space. And so even if we don't win the application business, we're often very successful at winning that underpinning communication infrastructure side of things as well. So we have, again, the completeness of the Gamma portfolio gives us many opportunities to be successful in the market as we go through here. I think what we'll see is that continue to evolve. We'll continue to see the evolution of the hyperscalers in the space. And we'll continue to see places where we work with them when we are partners and we work against them when we're competing. We just have to continue to hold that under review and ensure that our flexibility of approach, our service wrap, the capability of our core offering continues to evolve at the pace of -- or faster than the market to ensure that we remain compelling and competitive there. And that's where the future direction comes in, making sure that the capability of the solution moves further faster, making sure it's more easy to consume, making sure it's more efficient for people to consume, making sure it does more things. We're also making sure that we're delivering a much more seamless experience if someone takes more than one Gamma product across the range and making sure that the whole portfolio expands in line with the needs of the market. So thinking about the migration from fixed infrastructure to SD-WAN to WAN capability that's backed up by mobile access, delivering that capability and making sure that it evolves in need with the market is key. You saw the application of bot technology and some of the learning which happens around the edges of this application as well. That's also a space where we can deliver something unique and different as well, and we'll continue to expand what that capability looks like and how we deliver it both to our enterprise customers and predominantly to our enterprise customers, but also further down the market as well. And then how that wraps up altogether to make sure that we're delivering that improvement in customer experience overall. So to summarize from an enterprise perspective, I think there is a specific sales model and sales approach here, which is different from the other parts of the market we described, but which we are well versed in and have a very strong track record in. But it also draws on many of the strengths which Gamma holds to be very core to how we do business. We're easy to do business with. We're very focused on that service delivery, and we're very focused on that overall success for the customer and satisfying that wide range of needs to ensure that we maintain that right in that relationship with customers. That's the end of our deep dive into segments. I hope it's given you a sense of how we view segmentation, how we approach the market, how we bring our channel mix into that, how we bring our product mix into that and give you a sense of where we're evolving the portfolio from our history of connectivity and voice into that much more holistic conversation management or also UCaaS and CCaaS space as well and how we continue to win in the space even in the face of increasing competition. With that, I'm going to hand back to Andrew for the rest of the session.

Hi, everybody. Welcome back. And thanks to Chris, and thanks to Andy for their contribution through the day. So the good news is that we are more or less on time. And what I wanted to do was just to spend a few minutes sort of wrapping up and then doing a bit of an intro into the Q&A session. So listen, I touched on this earlier that the scope of Gamma today is quite different to where we were 2 or 3 years ago. I think we're executing really well, and we're positioned, I believe, to win in the market. And although we're very focused on our short-term execution, we do take this long-term outlook in terms of the investments that we're making across the business and building those strong foundations that I touched on earlier and reinforcing the foundations that I touched on 3 years ago. We're very focused on addressing both the U.K. and the European marketplace in the Netherlands, Germany and Spain for now. And remember, what we talked about earlier, we're still at the very early stage of cloud adoption across all of those markets, including the U.K., although there is some higher penetration in some of the different segments. And compared to 2, 3 years ago, we've now got a very clear technology and product road map and set of capabilities that we're actually very proud of. And hopefully, some of those demonstrations that you've seen today really bring to life what we're taking to market, specifically across the business market. And on that, we're addressing the complete communications market for all B2B segments, and that is very different to where we were 3 years ago. And I touched on this earlier as well, we're continuing to develop and strengthen our team skills and capabilities, both organically, but also through acquisition as we've looked to bring new skills in to enable us to accelerate the plans that we have primarily across the product and technology platform side of things. So listen, the growth opportunity that Andy talked about and Chris touched on is pretty significant across the market that we are focused on. And yes, there's an opportunity over the next 2 or 3 years, but we're looking at this as a 5-, 10-year opportunity. And if you think back to what we talked about in January 2019, it was about making the right decisions, building those foundations that are going to enable us to deliver the strong financial growth that we've demonstrated, frankly, over the last 6 or 7 years since we listed, but in particular, over the last 3 years. So listen, that's it from me in terms of wrap-up apart from saying that we're planning to have another Capital Markets Day. It's going to be some point in Q4. So we'll just -- we'll agree the date over the next month or so. And in that session, we're going to focus very much on our European businesses and introduce you to what we're doing there in a bit more detail and introduce you to some of the leadership that we have driving those businesses for us. So listen, thanks a lot. In terms of the Q&A, don't rush away, yes, because we're -- we're actually ahead of time. So we're now going to move into the Q&A section. It's going to give you the opportunity to ask questions directly. We're going to use Teams as a platform to do that. So when I stop talking, you're going to be prompted to join a Teams call. So there'll be a sort of button that comes up. Hopefully, you won't be able to miss it. And you just have to press that button and that will seamlessly take you through into the Teams environment. Now for the best viewing experience, you may need to pin the studio view. So look for the studio view, that's going to give you the best viewing experience. And please ensure that your cameras are turned on and you're prepared to raise a virtual hand when you want to ask a question. So you do need to switch your cameras on and you do need to be active in terms of when you want to ask a question. If you've got any problems joining, there will be an audio-only option so that you can dial into. But hopefully, there'll be no problems and that number is going to be displayed on your screen. So Andrew Belshaw is going to facilitate this session. It's going to take about 2 minutes to make this happen, so you should press that button when you see it. And then there'll be about 2 minutes, just a short comfort break, and then we'll see you then. Okay. Thanks a lot. See you then. Bye. [Break]

Well, good afternoon again, and welcome back to Gamma's Capital Markets Day. I'm Andrew Belshaw. I'm Gamma's Chief Financial Officer. I think most of you probably know me. I'm joined in the studio with Andrew and Andy and Chris, and we're now going to move to a session of Q&A. Now the way we're going to do the Q&A is we've actually got a video wall behind me. And what we'd like to do is get people who are on this call up on the video wall. But apparently, you're either all unbelievably modest or wearing a onesie or worse and everyone has their cameras turned off. So in order for this to kind of work, and we'd really love you to play along, it would be brilliant if you could turn your camera on for us. And you're going to have to do that anyway when we get to the Q&A section. Okay. Very good. Thank you. I gather enough people have turned the camera. So thank you very much. So what we're going to need to do as the day goes on is you're going to need to raise your hand virtually. As Andrew said, I think a number of you have done that. So we've got a few questions already queued up. But please do just raise your hand virtually. We'll call you on to the wall, ask your question. It's my job to make sure the guys answer it. I think I may even answer some of them myself, who knows. And yes, we'll sort of see how it goes. Right. So video wall. Who is our first question from? Has anybody got a hand up? Is anybody going to virtually raise their hand for a question? Come on. Don't leave me hang it. Otherwise, we can all go down to the pub or I have to make some questions. Okay. Okay. Stéphane, I think we're calling on.

Yes. Thanks for the organization and everything. Can you just come back on the split of your revenues, if we take again the 3 different splits between UCaaS, CCaaS and connectivity. Are you able just to come back and update us on where you stand today in terms of revenue split between these 3 and possibly the margins evolving there evolving?

Yes, that's probably one straight away for me actually. So revenue split between those items. So yes, so our UCaaS revenue by which we probably mean sort of Horizon is about 1/3 of what we do. About another 1/3 of what we do is SIP and about another 1/3 very crudely because we don't disclose the exact numbers, as you know, is connectivity. So things like mobile and data and also some of the legacy products that we sell. In terms of the margins, again, SIP, we typically -- when we're selling at wholesale, we're typically making about 60 points, 6-0. Hosted PBX, we're probably around sort of 50 to 55 points these days, and contact center is probably a little bit higher than that. The reason I don't pull out contact center is a sort of revenue split is we don't do very much of our revenue as contact center for the time being. As we mentioned, we bought Mission Labs back in March. So we've only owned it for a few months, and we only launched the Telsis product earlier in the year. So we haven't got that much revenue from those items at the moment. But obviously, that will grow over time. And not only does the revenue from the cloud contact center business grow, but also pulls through revenue from other items like sort of hosted PBX. So I hope that answers that for you. All right. We'll go back to the wall. Okay. John Karidis, apparently, you're going to join me for a question. John, you're not on my wall, but carry on. I can hear you.

Yes. I'm really sorry, every time I put the video on, I dropped. So clearly, there's a sort of in-build quality in the system where it sees my face and it drops me. But...

That's a feature, John. Yes, it's been built in, but it was a request from a number of users. But anyway, please do carry on.

Okay, I've got two questions. The first one, just thinking back to Collaborate. So that was introduced back, I think, March '19. And the way I understand it, the take-up of this still remains predominantly -- it's new customers that take up Collaborate rather than existing customers. And I'm trying to understand, given that we had sort of the mother of all crisis in the last year, why is it that it's been -- that it's still difficult to sell Collaborate to existing customers versus new ones? And then completely separately, so of course, you are addressing financial audience today. So it would be really useful if you look sort of 3 years out to tell us what, in your view, success would look like for Horizon Contact, Smart Agent or CircleLoop. And on a best case scenario, it would be nice to figure out things like revenue or GP or volume, pick a metric, but give us an idea of what would satisfy you. And I appreciate that Andrew at the beginning said that this is about the next 5 to 10 years. But I'd quite like to figure out what the picture would be in 3 years from today.

Okay. We'll do our best. Chris, do you want to talk about Collaborate? And then maybe, Andrew, do you want to pick up the point about what the future looks like? Is that the case?

So John, from a Collaborate perspective, I think what you see is actually it is strongly attached to the Horizon base. I think we see a roughly 10-ish percent attachment there. I think if you think then about the segments that we described and then the vertical industries within it and the way that, that's balanced is not everybody will need that capability. So that's one factor. The second is that in many instances, people have adopted that tactical solution. So they're using Zoom for free or they're using Teams that they have available as well for video collaboration and managing that move between two different systems. So I think the really interesting place for us to understand how that plays out going forward is as people move from that tactical solution to something which is a little bit more strategic and lasting. So as the new normal, whatever that looks like, which will inevitably involve a blend of office and remote working comes to life and particularly as the SME community starts to really understand what that looks like. Only then I think we will really see what that looks like in terms of true adoption back into that core telephony platform. Hope that gives a sense of that.

John, it's Andrew here. I mean just to add to that, I mean, to your point, we did see quite a significant spike last -- well it was Q2 of last year when sort of the pandemic kicked in. So we saw quite a significant spike in sales and adoption of Collaborate amongst new users. But I mean, we're pretty happy with the level of adoption in the run rate business, the net new business that we have coming in, on a monthly basis. So I think that is in reasonable shape. Looking more broadly at the new products that we've taken to market, I think it's too early, and I'm sure Andrew would agree for us to be providing specific forecast on this. I mean some of these market areas we're quite early in the adoption phase. And the key thing for us, similar to what we did with Collaborate, the key thing is about making sure that we've got a high-quality product that's feature-rich and ready to be taken to market. And then if you think back to one of our core foundations, it's the digital automation of how we take that to market through our partners to make it really easy to consume. So frankly, I mean, across those, if we look at Horizon Contact as an example, I mean, the level of effort that went into getting that ready to launch and making it really easy to sell and upsell and cross-sell to existing Horizon users, plus making it really easy to consume for new customers was enormous. And all I can say is across those 3 products that we've talked about today, we're very happy with how we've taken them to market, but it takes time because we also have to educate the market, yes. So the level of training and development we do across the whole mix of presales, sales, operations, customer management, the level of training that we do with our partners to enable them to consume it without our direct involvement is pretty significant. So I think we're in good shape. We're making good progress. And frankly, I mean, when we're ready to -- I mean, what we're very happy to do is to share more information about the market and the market size. And -- but it's just a bit too early to share specifics on actual units other than to say, I think we've had a good start and our partners and our sales teams are very, very positive about what we're doing. Chris and I were talking about it earlier with over 700 partners join the launch of Horizon Contact back in I think it was March. So there's real engagement from our partners. So we're happy, but not willing to sort of provide numbers at this point in time.

Yes. Thank you, Andrew. And I'd probably just add to that. I mean it is just very, very early, as Andrew says, in our product evolution. And I think over time, we continue to sort of see not just the interworking of these products, but also the meshing of the various segments. When does the micro business become a SME and when does a SME become an enterprise and therefore, ultimately, what product sets are they going to take from us. And therefore, I think it's less about going forward, there's a revenue line associated with this product or that product. We have that UCaaS suite. And whatever customers want to do and whatever they want to consume, we will -- hopefully, what we've shown today is we will have a product that fits for them. And therefore, there's no reason to assume that revenue and profits won't kind of carry on growing in line with the market as they have done for the last few years. But as Andrew said, it's very, very difficult to be specific. And yes, is that okay, John, for you?

Yes, of course. If I may, just very quickly, does it -- when you launched Collaborate, you saw -- you said it was very easy to provision. It was just a click. Does it not worry you that during this pandemic, people didn't choose to avail themselves of this. And instead chose to go to Zoom or to other sort of solutions. And in a sense, I think what Chris implied was that once things come down, people will be happy having used Zoom or Teams to then say, well, fine, I'll now forget everything I've been doing for the last year, and I'll go to Collaborate instead. Is that what you're telling us?

Chris, do you want to take that one? Yes.

So I think there's a degree of truth in that, John actually, to be quite honest, because I think people are using Zoom because they can. They're used to it from a consumer perspective. They've done the Zoom calls with their family. Is it really going to sustain their business over the next 2, 3 years? And is it going to bring them that integration capability with the core voice platform as an example, where instead of forcing people to remember which platform they're in, which application they're in, they can sit within one sort of set of applications or one application, a single pane of glass, which lets them communicate with whoever they need to communicate to in one place. I think there will be a transition across these pieces. I don't think Zoom and Teams will go away. I think it's be very clear. I think they will continue to persist in certain parts of the market. But certainly, as you drive into the sort of people who are using this on a much more industrial and sustained basis, I think they will consider moving. And I think it's on us to make sure that we're very, very clear on what the combination of capabilities we provide under that Gamma logo really provides and why it's different and better.