Hello, Mr Chips(et): Capita grabs bigger slice of UK IT education market

Rivals squeezed as buy of NMS bolsters outsourcing giant

School of Rock

Capita gobbled up a larger piece of the UK's £800m education IT spending market in 2013, with sales up 9 per cent to £234m.

According to analyst firm TechMarketView, the top 10 suppliers dominated the education IT market with combined revenues of £741m.

Capita’s sales were bolstered by the acquisition of Northgate Managed Services, a provider of cloud-based, infrastructure solutions to public, private and third sector businesses, said Capita, one of the UK's largest outsourcing and professional services companies.

In contrast, RM Education's revenues headed in the opposite direction, down 9 per cent to £151m. This was in part due to the company seeking to reduce revenues from the low margin hardware business, said TechMarketView.

RM, which specialises in providing IT products and services to UK educational organizations and establishments, has been gradually finding its feet since posting losses of £1.4m three years ago. In its first-half yearly results for 2014, the profits rose 49 per cent to £7.3m, on revenue down 24 per cent £92.1m

However, RM is expected to come under increasing pressure from Capita for the year ahead.

According to the British Educational Suppliers Association (a trade association working on behalf of members to support UK-based companies that supply goods and services to the education sector) technology spending in schools is currently at record levels.

However, G-Cloud sales remain particularly poor in the sector, with just £1.3m of sales in the first nine months of 2014, according to the research.

The education IT market is still big money for vendors securing a place on traditional frameworks.

Last year, the government opened a £500m framework for educational ICT infrastructure services, while last month a four-year £300m "ICT Services for Education" was opened to 20 suppliers. ®

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