Growth to follow launch of TSG Tribe product

Newcastle-based Technology Services Group (TSG) is launching its very first software product built from scratch

David Stonehouse, chief executive of TSG
David Stonehouse, chief executive of TSG

A leading IT services company is weeks away from launching to market the first product from its newly-formed research and development team – the firm’s biggest software launch a decade.

Newcastle-headquartered Technology Services Group (TSG) told Journal Business earlier this year how it is investing £1m a year in an 18-strong research and development division, to spearhead a series of new products.

The firm, owned by former Sage director Graham Wylie and run by chief executive David Stonehouse, set up the team with the aim of cementing its expertise in its chosen markets.

And the 450-strong business will launch Tribe at Microsoft HQ in London on June 24 to industry leaders, in a move which sees the firm make a solid bid to tap into larger businesses, specifically the 1000s of membership organisations in existence, while also expanding its traditional SME client base.

Stonehouse said: “We have to distinguish ourselves – move to the mid-market but also have things of value to SMEs. We’ve got to put an emphasis on defining ourselves from a bog standard provider.

“And for us, this represents our first real move into building a product from scratch, and it puts us – assuming things got to plan – in good shape for the world of IT going forward.”

Tribe – which cost between £600,000 and £700,000 to build – is essentially membership software which can be used on or off-premises and in the cloud.

The £37m turnover business will see some revenues come through from the new product in the current financial year, but Stonehouse said the real return on investment will feed through in subsequent financial years.

Stonehouse continued: “We started off by talking to user groups, in other words we have done this the proper way as opposed to making something and thinking ‘that will get us going’.

“We brought in Mat Peck, who leads the R&D team and was fundamental in the building of Sage Pay and Sage One – the logic was if we were going to do this we are doing it seriously, and he has a history of building in a very particular, professional way. The brains in general in that team are phenomenal.

“We’re putting £1m every year into R&D and this is the team’s first product, with others to follow.

“Most of the people in our sphere turnover between £2m and £3m and they can’t afford a research and development spend of that size.”

Stonehouse describes Tribe as a feature-rich product which will be added onto in the future.

He said: “Within membership management software, it’s all about coping with anything from Gift Aid to being able to book venues and events and changing a direct debit. Often if your company has 5,000 members there is no quick and easy way to do these things, which is where Tribe comes in.

“With the launch we are not trying to do everything for everyone – we are going to evolve Tribe and we’ll get feedback from early adopters.

“Eleven have already been sold, to people we have been talking to for a while, and now we’re ready to launch to the market.”

He added: “I don’t think it’s a gamble – we chose membership organisations because we had domain knowledge of membership organisations so we had some good understanding.

“We have recognised that the world is changing, for someone who needs an out-of-the-box solution that’s alright, but for others they need something more than a ‘vanilla offering’.”

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