Pulsant puts £24m into cloud service

A TECHNOLOGY company that emerged from Scottish internet service provider Ednet is gearing up to take on “cloud computing” pioneers Amor, Iomart and Onyx after a £24 million cash injection from a private equity firm.

Edinburgh-based Pulsant aims to grow its turn-over from £30m to £50m by 2015 as it targets the growing number of mid-tier firms that are moving into cloud computing.

Rather than storing software and data on desktop machines, cloud computing allows users to access their programs and files from anywhere in the world using an internet connection.

Pulsant was formed following the takeover of Edinburgh-based Lumison – which had changed its name from Ednet in 2004 – by BridgePoint Development Capital in September 2010.

Ednet founder Aydin Kurt-Elli, who launched his company in 1995 while he was still a medical student at Edinburgh University, has stayed with the new business as chief operating officer and owns a stake in the enlarged firm.

In 2011, Lumison bought Maidenhead-based Blue-Square Data and DediPower, in Reading, each for about £20m.

The combined business was rebranded as Pulsant and is now ramping up its growth plans with further financial backing from BridgePoint, which also owns fashion chain Fat Face, Leeds Bradford Airport and sandwich retailer Pret A Manger.

Pulsant’s chief technology officer Matt Lovell told Scotland on Sunday: “We’re committed to growing the business around our data centre at Newbridge and we plan to move our Dock Place head office to near Ocean Terminal in the coming months.

“About 39 of our 130 staff are based in Scotland and I would see us growing the total to about 180 by 2015, with around 25 of those jobs in Scotland.”

Lovell said the larger business would allow Pulsant to win clients, particularly in the financial services sector, that Lumison would have been unable to secure in the past.

“You get IT companies being built up to the level where they’re turning over £10m a year, but then they have to spend £2m or £2.5m kitting out a data centre, and that can be difficult,” he said.

Lovell said about £6m would be invested in the business over the next year, mostly on equipment for its eight data centres, which include a base at Newbridge on the outskirts of Edinburgh.

He expects a similar amount will be invested each year as the number of customers increases and the company approaches its turnover target.

Cloud computing and website hosting are competitive markets in Scotland, with players such as Amor Group, Onyx and Angus MacSween’s Iomart all vying for business.

Aim-quoted Iomart posted a doubling in pre-tax profits to £2.4m in the six months to 30 September. Inchinnan-based Amor Group has also continued its expansion after winning a string of deals.

And Teesside-based Onyx, which broke into Scotland in 2008 by taking over Edinburgh’s Dundas IT and Campbell Lee in Glasgow, revealed in January that it has its sights set on further takeovers north of the Border after ISIS Equity Partners backed a £27m management buyout in October. Onyx has a £15m war chest.