The Orange Rag is the breaking news blog for the LegalTechnology Insider newsletter and the Legaltechnology.com website and the American Legal Technology Insider newsletter
The AIM-listed Tikit Group plc has just published its interim results for the six months to 30th June. We've attached a PDF of the full results for readers to chew over and we publish the highlights and our comments below...
2010
2009
Increase %
Revenues
£13.22m
£13.06m
1
Profit before tax, amortisation of acquired
intangibles and share-based charges
£1.65m
£1.16m
43
Profit before tax
£1.38m
£0.93m
49
Earnings per share before amortisation of acquired
intangibles and share based charges
8.4p
5.8p
45
Basic earnings per share
7.0p
4.6p
52
Dividend per share
2.0p
1.9p
5
Cash generation from operations
£2.27m
£1.75m
30
Net cash at period end
£2.09m
£0.73m
187
Sector analysis
Unaudited
Unaudited
Audited
six months to
six months to
full year to
30 June
30 June
31 December
2010
2009
2009
£’000
£’000
£’000
Managed Services
6,967
6,588
13,737
Software
3,035
2,848
4,983
Consultancy
2,464
2,926
5,439
Hardware
758
701
1,037
Total
13,224
13,063
25,196
In his chairman's statement, Mike McGoun says "I am pleased to report that the Group’s performance during the six months to 30 June 2010 has been in line with expectations, ahead of the prior year and has remained cash generative. During the tough economic environment of the past two years, we have taken the opportunity to analyse our business strengths and to cut back or eliminate non-strategic business operations. We have invested our resources to achieve better service levels and efficiencies in our core operations and also continued our investment in the development of software and outsourcing services that will drive the future profitability of the Group. Tikit has emerged from this period in a stronger position. "Revenues increased slightly, and as anticipated, the saving and efficiency measures we implemented over the course of last year helped to increase overall profitability. During the period we have added significantly to our client base, continued to focus on winning and retaining recurring, managed service and support revenues and this, combined with higher margin business derived from Tikit-owned software sales, will drive the Group’s future growth.
"Total software sales increased by 7% to £3.04 million (H1 2009: £2.85 million) and, importantly within this, sales of our own software increased by 26% over the corresponding period in 2009. Total software sales account for 23% of our total revenues.
"Consultancy revenues for the first half of this year were £2.46 million (H1 2009: £2.93 million), a reduction of 16% on the corresponding period, but broadly in line with the run rate achieved in the second half of 2009. The reduction was due in part to the cutbacks made in non-core consulting activities. "An important new element of our growth strategy is the development of the Tikit Legal Office (“TLO”) which we are planning to launch in the last quarter of 2010. This is an outsourced package solution aimed at providing small and medium sized law firms with a complete solution for their practice, including accounting, document management, CRM and time recording. By using TLO, law firms will benefit not only from a reduced capital cost, but also enhanced mobility and reliability. Tikit owns most of the core software that makes up the TLO which will be a subscription based hosted solution. TLO is an important development for Tikit as we predict many law firms, under pressure to increase efficiencies and profit margins, will look to outsource much of their IT function. Tikit is uniquely placed to benefit from this development given its place at the heart of the professional services IT industry."
Comment: We'll gloss over the two elephants in the room, namely the longer-term prospects for the special relationships with Autonomy over the iManage DMS business and LexisNexis Interaction CRM business. We've heard from people in both groups that Tikit is no longer the chosen one (as it was in the pre-acquisition days of Interface Software and Interwoven) but just one of a growing number of vertical market partners. Instead, let's look at the bigger picture.
One of Tikit's problems has always been defining what it actually does for a living. In the early days it was a wheeling-dealing outfit in white-socks that did a bit of this and did a bit of that. Then it moved into software reselling & implementation partnerships in a big way – and for a time was the main channel for many innovative new US products coming into the UK (Carpe Diem and Interaction being two of the best known examples). Then it was going to be big in knowledge management and consultancy and give the likes of Baker Robbins and Deloittes a run for their money.
And now, with its consultancy business stalled, it appears to be morphing into a software and managed services business – with its TFB and NIS operating arms bringing home more and more of the bacon. And, also significantly moving away from its traditional top 100 market into the mid and smaller firms sector. A move that looks likely to accelerate if the Tikit Legal Office/TLO launch goes as well as hoped. Interesting times.
In what he hopes will not be a triumph of wishful thinking over technology experience, later this week Orange Rag editor Charles Christian will be delivering a keynote presentation at Chilli IQ's 5th Annual Lawtech Summit & Awards in Queensland, Australia.
His session is on Future-Tech – analysing possible future technologies and the role that IT, including disruptive technologies, will play in the legal workplace of the future. That's the good news and the session starts at 9:15 Queensland time on Friday 10th September. The bad news is the session will take place via a videoconference link, kicking off just after midnight UK time, and will involve a Skype session running across a satellite broadband link. Now he's off to tighten up the twine linking his cocoa tin to the BT phone network. No, sorry, that is the BT infrastructure in Norfolk.
by Dan-Joe Barry, vice president of marketing, Napatech
The internet is still growing and, as it does, we are starting to make the transition from Intrusion Detection Systems (IDS) to Intrusion Prevention Systems (IPS) – driven in part by the fact that IPS technology can scale to meet users’ needs in the future. Against this backdrop, I'd like to look at the distinctive features of IPS and how the performance of these systems can be increased to keep up with the relentless development on the bandwidth front.
Whilst many IT security professionals regard IPS to be a natural extension of IDS technology, the real answer is that IPS is actually another type of access control mechanism, rather than purely a sister IT security platform to IDS. It may surprise you to know that the term IPS is actually a lot younger than IDS, and is a colloquial term first used by Andrew Plato, a technical consultant with a major IT security vendor that, way back in the late 1990s, developed the industry’s first IDS platform.
In its purest form, an IPS makes a number of access control decisions based on the content of the application, rather than taking a traditional firewall approach of monitoring IP addresses, ports and other connective links. Back in 1998, Andrew Plato opined that a good IPS should feature a sophisticated analytical engine, but one that generates as few false positives as possible. Provided this is the case, he said at the time, then a good IPS has a number of advantages over IDS, since it can sit in line with an IP traffic flow and analyse the data stream in real time.
In addition, most modern IPS solutions also have the ability to analyse Layer 7 protocols such as FTP, HTTP and SMTP, and make decisions on whether to allow – or quarantine – the IP packets as required, even if the data is encrypted. But are today's IPS platforms up to the task of scanning IP traffic at the high speeds needed in a modern IT environment?
The problem facing IT professionals is that, with the Internet growing at between 40 and 60% a year (source: Atlas Internet Observatory) – and against the backdrop of a mobile data explosion – it’s important that IPS technology can keep up with this data bandwidth growth and not become the bottleneck in the network.
It’s also becoming clear that, on a typical network of today, users are placing a very load on each port of a multi-10G port system and, whilst there are IPS products available that are capable of supporting a multiple 10 Gbps port topology, providing continuous 10 Gbps throughput on these ports is a something of a challenge. The most worrying part of this development is how IPS platforms can be scaled to meet the needs of 40G and 100G IPS technologies, which are set be introduced to the IT/networking mix in the next few years.
Until a few years ago, it could be argued that IPS platforms were up to the task, especially since most IPS platforms adopted a core five-stage real-time analysis process that steps through a number of stages as various IT threats are encountered when monitoring an organisation's data streams that flow both in and out of the IT resource.
• The first stage is to bandwidth throttle any suspicious IP traffic to give the organisation's IT security software a chance to analyse the data stream – let's take the example of an email message stream – and deal with suspect messages and/or attachments in real time.
• If the data is found to be suspect, but does not conform to known infection signatures, then the second stage is for the message's header to be analysed and, if an infection etc, is found, the data can be quarantined.
• The third stage in the analysis process involves performing user management and address validation, typically by applying a number of automated checks to verify whether the message comes from a source previously known to be dangerous.
• The fourth stage involves applying an anti-malware and anti-hacking analysis engine for anything suspicious that has passed the first three analysis stages but does not pass muster.
• The fifth stage, typically involves using the analysis engine to weed out anything that still looks suspicious for later, manual, analysis by the IT security staff concerned.
However, the increasing sophistication of malware, together with the recursive and obfuscated coding approach taken by an increasingly criminal hacking fraternity – and, of course, the higher network speeds seen on today’s networking systems – means that IPS systems are under pressure to keep up, both in terms of handling the amount of data, but also in having the raw horsepower to run more sophisticated algorithms.
So how serious is the threat of an intrusion? A recent online poll carried out by Napatech found that a quarter of respondent firms have suffered a network intrusion. The interactive poll amongst more than 300 attendees at one of our online events, found that 25% of respondents had experienced an intrusion incident, with 44 % of these incidents occurring within the last 12 months.
The important thing to realise here is that network intrusion events are not just an irritation – as they were back in the early days of IT networking – but they can be commercially damaging. This is because, unlike the 'altruistic' 1980s – when the hackers of yore tended to be fellow engineers who also had access to the dial-up modems, expertise and other IT resources that were required to gain access to other businesses’ online assets – the majority of attacks today are carried out by highly sophisticated criminal organisations attempting to steal data or hijack computing resources for their own illegal use.
These Napatech online poll results were confirmed by a PricewaterhouseCooper-sponsored survey, details of which were announced at the recent Infosecurity Europe show in London. That survey showed that 83∞ of smaller organisations had experienced a security incident in the last year, compared with 45% two years earlier. The PwC/Infosecurity survey also revealed that 90% of all organisations had increased their expenditure on IT security technology, whilst smaller businesses are now spending 10% of their IT budget on security issues, compared to 7% two years ago.
The report attributes the rise partly on the increasing use of cloud computing and social networks within enterprises. Delving into the study reveals that 15% of large companies noted IPS systems are under pressure to keep up, both in terms of handling the amount of data, but also in having the raw horsepower to run more sophisticated algorithms that their IT resources had been accessed by an unauthorised outsider in the last 12 months, and 25 %t had suffered a denial-of-service attack – double the number logged in the last survey carried out two years earlier.
The report also found that the rate of adoption of newer technologies has accelerated over the last two years, with most respondents now using wireless networking, remote access and VoIP technologies. In addition, the number of organisations allowing staff to have remote access to their systems has also increased with around 90% of large companies now offering this facility. These figures confirm that our Napatech online poll is on track and that the number of intrusion incidents is definitely on the rise. This, in turn, is also forcing most organisations to increase the proportion of their IT budget they spend on security technologies.
Businesses are not just increasing their IT security budgets, however, they are also raising their game when it comes to security strategies. Given this scenario, the key challenge now is scaling these systems to keep up with the increasing bandwidth generated by richer content in emails and on web sites, more video and teleconferencing and the transition to cloud computing already taking place.
The important thing to realise is that all these innovative services provide a new and high-speed avenue of attack for hackers. And because of this, network security systems need to react in real-time to contain the problem. To keep up with these high-speed, real-time demands, the traditional approach of network security appliance vendors has been to invest in the development of customized, proprietary hardware.
However, a new approach is emerging where off-the-shelf standard PC server hardware is being used negating the need for hardware development. The Napatech poll revealed that the majority of network security appliances being used are still based on proprietary hardware, but for every 3 proprietary systems, there are now 2 systems based on standard PC server hardware.
In the past, PC servers have not been powerful enough to meet the demands of security applications like IPS, but the latest generation of PC servers provide significant processing power and a strong roadmap of increased performance to come.
Our researchers have discovered it has now become more economical to build network security appliances based on standard PC server hardware using, for example, Napatech’s own intelligent real-time network analysis adapters to ensure high levels of performance.
But, one of the most compelling reasons for considering this approach is the ability to scale performance. At various key IT events throughout this year, Napatech has demonstrated a full-throughput 10Gbps IPS system based on eight instances of a standard SNORT application running in parallel. This technique takes advantage of the multiple CPU cores available in modern PC servers. Napatech can support up to 32 CPU cores, so as the number of cores increases and the power of each core ramps up, the ability to scale performance increases.
Indeed, it’s worth noting that CPU chipmakers such as Intel and AMD are increasing the performance of their chips by as much as 50% on an annualised basis. Can the vendors of proprietary network security appliances keep up with this kind of performance roadmap? Does it even make sense to try? If you ask us here at Napatech, we will tell you that the time has come to reconsider.
* A recording of the online Napatech webinar referenced in this article can be found online at http://bit.ly/9CmM6M (registration required). www.napatech.com
Chapman Tripp, one of the leading law firms in New Zealand with over 225 lawyers, has selected Aderant Expert as its new practice management platform.
"We conducted an extensive evaluation process to identify the best platform for the next ten years," said the firm's chief executive Alastair Carruthers. "There were a number of compelling factors in our decision to invest in Aderant Expert, including the analytic capability of Aderant’s ClearView and the new matter planning tools.”
By way of a little diversification, today we have a software sales story – although this time the developers are putting the entire application and IP rights up for sale, as they are seeking to divest themselves of what has now become a non-core product.
The software application – called the FileNote Management System* – was originally developed for the legal sector in 2005/6 but never actively marketed, as the company's other business stream – banking systems – was going through a period of rapid expansion. (The company has also recently relocated from Dallas, Texas to Melbourne, Australia.) As a result, although this is a fully functioning application, there is no installed user base and no support revenue streams.
Although the application will operate in a stand-alone mode, the developers envision it being used in conjunction with practice management, case management, document management and/or CRM systems and are looking to engage with prospective buyers who are already established in these markets. Because the product is protected by non-disclosure agreements, we are unable to go into any further details at this stage – save to say this is an application that could be used enterprise-wide by all fee earners in a firm – and are currently looking for expressions of interest. We** will also be directly contacting some of the usual suspects to invite them to look at the software.
* This product has no connection with the Tikit Group's FileNote application, which was developed independently at a later date.
** Legal Technology Insider is acting as a broker in this transaction – negotiations will be conducted by an Ashurst partner who is also a relative of the software company's founder.
