NCTech

Summary of SBL Preseen DEC 2023

By Sir Hasan Dossani (+971555245672)

Colour coding:
GREEN: Strength

RED: Weakness

YELLOW: Important Information

 COMPANY INFORMATION
Company Background
- Well-known cloud service company operating in developed country of Farland

- Established 10 years ago by 3 software engineers who currently hold the positions of CEO, Commercial
director, and Operations director

- Targets a wide client base of small to medium sized companies (SMEs) throughout Farland

- NCTech provides comprehensive data storage facilities, servers and the required networking resources
necessary to provide IaaS service model.

- NCTech has never offered the PaaS or SaaS service models.

Ownership Structure
- Listed on Farland stock exchange 5 years ago

- Each founding member has 10% shares (30%)

- Rest of the shares are held by institutional investors (70%)

- No single shareholder holds more than 10% equity

- Current board membership has not changed in the last 5 years

- NCTech shares have performed better than other technology companies since the last five years

- In the last financial year there has been an unforeseen and significant fall in gross profit, which has affected
the share price and unsettled some shareholders

Vision
The NCTech corporate vision is to be one of the leading cloud service providers in Farland
Mission / Strategic Objectives
Customer Brand Operational Financial position Stakeholders
satisfaction efficiency

Differentiating Developing and Constantly achieving Maintaining a Developing

ourselves by maintaining a strong operational profitable business sustainable
exceeding the NCTech brand excellence. model to attract relationships with all
expectations of our further investment key business
clients stakeholders.

Core Values
- ENERGY: Grasp opportunities (INNOVATION)

- EXCELLENCE: Strive to do things better than anyone else in our industry (QUALITY)

- EXCITEMENT: Foster challenge, trust, and respect to and from colleagues through teamwork (HR)

- ETHICS: Promote and show integrity and openness in all areas of business (ETHICAL VALUES)

Board Structure
- Total 12 directors:

o 6 executive directors (including CEO)

o 6 NEDs (including chairman)

Board Committees:
Audit committee: comprising three non-executive directors all of whom have a strong background in finance.

Nominations committee: which is run by the non-executive chair and comprises all non‑executive directors.

Remuneration committee: comprising three non-executive directors with the human resources director providing
the members with professional guidance.

Risk committee: comprising two non-executive directors and the commercial director and operations director.

Risk Register
- NCTech maintains a register of principal risks.

- Risk manager who reports to both the operations director and to the chair of the risk committee

Key Risks
Competition Staffing Technology Data security Regulatory changes

New entrants Loss of key staff Lack of internet Unauthorized access New regulations on
cloud industry by
Tech obsolescence Unethical behavior Service availability Hacking Farland Authorities
24/7
Price reduction System slow down
Virus

Strengths
- A good reputation with the core client base

- Strong relationship with clients

- The provision of secure and reliable services, competitively priced

- A capable and competent workforce

Weakness
- The IaaS service model offered to clients has never changed, so restricts growth potential.

- Several large, overseas cloud service companies have recently entered the Farland market.

- High staff turnover of key members of staff.

- Worsening financial performance over the last financial year.

- High dependency on internet service providers, to enable clients to access the IaaS system.
Financial performance
Operational performance
 COUNTRY / INDUSTRY INFORMATION
Cloud Industry in Farland
- Competitive pricing has made cloud services a financially viable option for clients

- Industry growing very rapidly and is anticipated to double in size over the next five years

Cloud Service Models

With SaaS, the cloud service provider effectively handles all components of the service, so the client does not need
its own specialist IT hardware and software. As SaaS is a premium service, it is the most expensive.

Cloud Service Delivery

- Public cloud: All clients share the same infrastructure (sharing model)

- Private cloud: separate (i.e. private) infrastructure for the client. More suitable for large businesses who
have considerable data and complex computing requirements (premium pricing)

- Hybrid cloud: combination of public and private. Important computations are on private cloud and general
computation on public cloud

Benefits of cloud to clients

Quick installation, scalable, better security, can be accessed from anywhere, cost savings (IT staff, IT hardware,
premises)
Industry challenges
- Intensifying competition

- Challenging to satisfy client demands

- More global competition is emerging

- Internet providers needs to keep upto date with the pace of growth / demand

- Constant risk of hacking, data loss

- Increasing regulatory requirements

- Possible shortage of skilled staff due to high demand

Innovation
The following areas of technological development have been identified as being vital to the future success of all
cloud service businesses which provide the SaaS service model within the Farland cloud service industry.

- Business Intelligence BI: provides meaningful information to clients to support in decision making

- Quantum computing: performs complex data processing more efficiently than a normal computer. This can
be a unique selling point

- Artificial Intelligence AI: Performs tasks like humans and will lead to lower operating costs for business

- Machine learning ML: more sophisticated form of AI. Could become a game changer for cloud service
providers many clients who would not otherwise be able to afford such complex technology

Operational KPIs
- Service availability: The amount of time the service is actually available as a proportion of the total amount
of time that the service is scheduled to be available to the client (target 100%)

- Capability utilization: cloud service capacity allocated to users VS total available capacity

- Service reliability: number and duration of reported service failures in a given period

- Security breaches: number of security breaches identified in a given period

Financial KPIs
- Average revenue per client: average revenue generated per client

- Operating profit margin

- ROCE

- Security breaches: the financial impact of security breaches in a given period (compensation, loss of
revenue, etc.)

---End of Preseen Summary---