TWST: Lets start with a historical background of the company and your involvement in it.

Mr. Banwell: Aspective was born at the peak of the Internet boom in December 1999 to address what at that time was considered to be a significant market opportunity for software to be delivered as a service to customers; Aspective was what became known as an application service provider or ASP. The company was formed by our CEO Javaid Aziz, a business leader looking to do something big and brave in the market, with funding obtained from a venture capital company called Kennet Capital and appropriate assets acquired from a consultancy house called Ives & Co.The plan was to prove the business concept and then to aggressively enter the ASP space, leveraging the platform of customer relationship management (CRM) software, alongside a website portal philosophy and a mobile delivery capability a recipe which tapped into all the hot spots of the developing market. However, the market is very fickle and in 2000 when the ASP market didnt take off, and more specifically, the IT market declined, everyone, not just Aspective, had to reinvent themselves. We moved away from the ASP model and instead, focused our attentions on the substantial consulting capability that we already had. Basically, we went back to the more traditional deliverables of system integration and implementation, which are more cash generative business models. We concentrated on developing a blue-chip customer base, large accounts and trying to drive ourselves into profit in a manner that would enable us to survive.At the same time we developed a couple of additional strengths to the company: building a pharmaceutical focus within customer relationship management, and a much stronger mobile proposition within our field service management line of business. Those developments were based on two acquisitions. The first was Oxygen Solutions Limited, a software company which specialized in pharmaceutical CRM. The second was DataRoam a mobile field service management offering based on the iMedeon (later ViryaNet) product platform. In short, we changed both the business model and strengthened our offerings to the market. As a result, we managed to survive the boom and bust of the last three years and are now operating on a profitable and stable basis. In that time we have built partnerships with Siebel Systems, IBM, Sun Microsystems, Cable & Wireless, BroadVision, Actuate and ViryaNet. Weve also implemented projects for over 100 customers including Bayer, Legal & General, Philips Components, The Law Society, T-Mobile, and Zurich Financial Services to name a few. Today Aspective is well regarded in the industry as a genuine alternative to the larger professional services consultancies, and we specialize in customer-driven solutions for sales, marketing and service. We offer a huge range of services from consultancy and implementation through to complete one-stop-shop solutions that we develop, support, manage and maintain either at the customers site or remotely from a state-of-the-art Internet data center. Looking forward, were investing in a couple of new areas that we hope will drive growth in the next year. One of those is, of course, Microsoft. Microsoft recently entered the CRM market and is aggressively seeking traction in the small-to-medium market space. Another plus is the fact that the ASP model is enjoying a revival. So I would like to say for the record, that what we identified back in 1999 as the hot area of the market, four years later, actually is! Today, numerous companies are entering the market with an ASP offering including IBM, Siebel On-Demand and Salesforce.com. The enterprise/licensing model has, well, not fallen by the wayside but is surely being pushed to one side. People are beginning to access software on a rental basis. We are now priming ourselves for a second chance to take advantage of this particular market space, with the benefit of a much more significant track record of implementations and a great batch of blue-chip customers in the bag.

TWST: Can you talk about the competitive landscape? Whats the competition like?

Mr. Banwell: It depends where you play. Its rare that well go up into, what I call, Tier One, significant enterprise-level accounts, for example Lloyds Bank. We do play in what I call the Tier 1.5, which is just below that in terms of enterprise size and is characterized by companies like Orange, T-Mobile and Legal & General big corporations, but not quite the size of those at the top of the FTSE 100. We play from there, right the way down to the small business. When we start talking about increasing our offerings in the Microsoft CRM space, then we are talking about 25-man companies who want some sort of CRM offering. So the market space is quite large in terms of what we address. In terms of who we compete against; more often than not at the high end of the market and in field service management we come across IBM, Accenture, Deloittes - all of the big guys. The advantage we have, and the reason why we beat them, is flexibility. We are a private company, and as a result only have to account to a very small number of investors with whom we are in direct contact - not to 30,000 shareholders. As you can imagine, that cuts down quite substantially on decision-making time. Talk to any of the names above and see how long it takes for them to make a significant pricing decision. The difference is of a significant order of magnitude and it gives us a great advantage against those types of companies. Then there is the mid-market space where there are a lot of players although less than there used to be. We tend to meet similar sized consulting houses to ourselves, for example, Princeton Consulting in the smaller deals, and Axon on the CRM side.However, 80% of the time, we are fighting against some of the big five and IBM. Most recently we have gone up against SAP and EDS on a particular bid, so we do tend to punch above our weight for a small company.

TWST: What are the skills and strengths of your management team?

Mr. Banwell: Interesting you should mention that, because that actually leads us onto it. The reason we do punch above our weight is because the team here is experienced with a big company background. The CEO, Javaid Aziz, has had a distinguished career and is well known in the European IT industry. He has almost 30 years of experience including serving as General Manager and CEO of IBM UK and Senior Vice President and General Manager, Silicon Graphics Europe. A lot of us have come from companies like Oracle, Silicon Graphics, KPMG, Global Crossing and Cable & Wireless, and the list goes on. We are all very familiar with how big companies work and therefore a) we know their Achilles heels, and b) the people we are up against used to be our peers or juniors. So, while we respect them, they dont intimidate us. When you go head to head, you are only ever as good or bad as your last sale. Aspectives credibility builds every time we get shortlisted because we can rely on the quality of the people we field to deliver the propositions we sell.

TWST: What are the comments or questions youre hearing most from your investors? Are they pleased with your results?

Mr. Banwell: When they first invested the idea was that they were investing in an application service provider who was going to take on the market and yield, in a few years, significant returns. But the market changed quite significantly, under their feet. We managed to change horses in mid-stream and capitalize on the strengths that we did have, which was very much, at the time, a survival strategy. So our investors are pleasantly surprised we are still around and more and more delighted that on top of surviving we have been able to deliver an EBITDA and cash positive business and acquired some great blue-chip customers. All we get from our investors now is encouragement.

TWST: What problems might be in store for your sector or your company?

Mr. Banwell: There is a lot of mergers and acquisitions activity out there centering on three big players: Oracle, Microsoft and IBM. I would say the danger for us is that, if they put their mind to it, these guys can really take the market by storm. They can blow the pricing and leave people who cant realise their economies of scale floundering on the sidelines.Yet, big players do bring credibility to the market and the offerings involved, which is to our advantage. One of the great things about being small is being able to beat the bigger competition and grow a business from what they might consider to be a relatively small number of deals. IBM has never won 100% of the deals theyve gone for. I am an ex-IBMer so I can vouch for that. We just need to win a few of these tenders to make us very, very happy.Will we win? To answer that Ill go back to something Ive already stressed: we are lucky to have the track record and talent of a big company, but be small and flexible enough to appeal to customers. After a couple of truly appalling years across the board for the IT industry, there is finally a feeling that we are on the way back. In some ways, Aspective has been fortunate to survive, but weve also made our own luck in taking some difficult decisions before we were forced to and thats definitely helped us develop and mature as a company. Were still an unusual combination of big company ideas, small company execution, but weve been around long enough now to feel comfortable in our own skin and I rather think this could be our year!

TWST: Thank You (MD)

Mike Banwell
Finance Director
Aspective Limited
One London Road
Staines
Middlesex
TW18 4EX
Tel: +44 (0)1784 410420
Fax: +44 (0)1784 410444
http://www.aspective.com

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