Former SpiriTel CEO Alastair Mills is back in the unified comms game with the formal launch this week of his new venture, the Six Degrees Group.
Mills insists Six Degrees is not just another SpiriTel, the successful unified comms ‘buy and build’ venture that Mills took from a start-up in 2006 to a company valued at over £30m with 4,000 corporate customers by 2010, selling it to rival Daisy last November for £37m.
However, it is hard not to make inevitable comparisons between SpiriTel and Six Degrees. For starters, the new company – named after the theory that everyone on the planet is linked by just six degrees of contact – is backed by a whopping £60m of funding, largely from Penta Capital, which also backed SpiriTel. Penta Capital’s loyalty to Mills signals its confidence that he will be able to deliver another success story.
Moreover, like SpiriTel, Six Degrees is made up of a number of acquisitions, with more to follow. So far Six Degrees has been stitched together from the acquisition of data centre UK Solutions, MPLS provider NetworkFlow and voice services company Protel. Now Mills is busy putting together a deal to buy at least one mobile company to complete the business, which he says should be in place before the end of the year.
Another similarity to SpiriTel is Six Degrees’ commitment to significant organic growth, something not all buy and build companies have managed to achieve. It is one thing to bolt together acquisitions to create a unified comms monster. It is another to be able to breathe organic growth into it. Mills did just that at SpiriTel, delivering organic growth figures of 15%, which significantly outstripped his rivals’ efforts.
Now Mills is targeting even more ambitious growth targets for Six Degrees, which he says is already delivering 27% organic growth rates.
Like SpiriTel, Six Degrees is also targeting the 90,000 companies in the UK mid-market that employ between 50 and 1,000 staff, although it also has some large corporates on board, including a number of City investment banks and corporate lawyers. Existing customers include well-known brands like ICAP, Linklaters and GAB Robins.
With so many similarities, what makes Six Degrees a different proposition to SpiriTel? Mills says one major difference is its focus on bringing cloud services to mid-market businesses.
‘We want to be the best mid-market provider of managed data services. We are all about connecting people and places to the cloud, which is why we chose the name Six Degrees to reflect the fact we live in an always-on, interconnected world. Connectivity is what we do, bringing people and information together – it is in our DNA,’ he says.
‘The ties that bind us now are not physical but technical: those who fail to leverage the immediacy and dynamism that this connectedness brings will be left behind,’ he warns.
As part of this drive into cloud services, Six degrees has added a new purpose-built data centre to its existing suite of data centres to drive growth in the sector.
Mills says: ‘Public cloud services like iCloud and Amazon Web Services have captured the imagination of consumers but these are not enterprise-grade products. Our private cloud is built for business and we see the benefits as being transformational – that’s why we’ve seen nearly 800% growth in 12 months in our cloud solutions, and why we’ve made a big investment in more data centre space to help us grow.’
The company has also developed a cloud-based voice business continuity and disaster recovery solution – Livenumber. Mills says it has seen significant uptake from legal and financial services companies in particular.
The Group has also developed in-house expertise in managing web-based services, user profiles and secure workflows to support capabilities like Bring Your Own Device (BYOD).
Mills has added a number of former SpiriTel colleagues to his new team at Six Degrees, which employs around 100 people across four sites in London, Birmingham and Gatwick. Now he is on the hunt for more ‘high performing’ staff, with plans to grow staff numbers by 20% per annum despite the economic climate, which he sees as more of a challenge than a threat.
Mills says: ‘In January, I sat down with a clean sheet of paper to think about where I should next look to build a business. Cloud-centric convergence is the most exciting growth area in the market so we made that our focus. Nine months later, we’ve raised £60m in funding, one of the largest fundraises in the sector, and we’ve got nearly 100 people. We’re growing at over 20% year on year, and we’re solving real business challenges.
‘That’s great for our investors and our staff but it’s also great for the country. We’re growing as a company and we’re doing it in technology areas that will spur growth for UK plc. It’s innovation and ideas that will drag Britain out of its slump and that’s what we aim to deliver.’
Mobile acquisitions on the way
Six Degrees is about to make two mobile acquisitions, but the process has taken longer than Mills had originally planned. He tells Mobile: ‘All the acquisitions that we have made to date have a strong heritage, a good base, they are all profitable and they are all growing.
‘Mobile is the next piece in the jigsaw and I would be surprised if we have not achieved that by the end of the year.’
Mills says there were two reasons for the delay in closing the deals. ‘There were a couple of deals we were not able to do,’ he says, adding, ‘but the main reason is that we are being very selective. Our acquisitions have to have growth and profits. We have to make the right acquisition. It has to fit our model and strategy. We want the right skill set in the mid-market to allow us organic growth. Not everyone has the right skill set, particularly in mobile and fixed.’
Mills acknowledges that Six Degrees’ organic growth rate of 27% is a stretch for any mobile company. He says: ‘We understand that and we know we might have to scale down that target temporarily in mobile and then scale up again.’
He adds: ‘What we like are one-trick ponies that do that brilliantly, and we have over 1,200 companies they can sell into so we may be able to turn their 10% growth into 25% via new business.’