Skyscape – would you invest £4 million? Thousands haven't.

There are other cloud computing suppliers than Skyscape.

Some of them comparatively well-established.

What is Whitehall doing?

How did the Cabinet Office and the Government Procurement Service

manage to give G-Cloud accreditation to Skyscape?
And how did the MOD, HMRC and GDS
decide that Skyscape is a safe home for our data?

Skyscape's first accounts appeared on the Companies House website today.

Is Mr Jeremy Robin Sanders still in ultimate control of the company?

Yes.

Except that it's become a bit indirect. He set up a company called Virtual Infrastructure Group Ltd (VIG) in June 2012. Then in October 2012 he transferred all his Skyscape shares into VIG. So VIG controls Skyscape. But Mr Sanders controls VIG.

How is Skyscape financed?

Not by equity, that's for sure. VIG has £180 £1,180 of ordinary shares and Skyscape has £1,000.

Mr Sanders lent some money to Skyscape and the balance outstanding at 31 March 2012 was £93,333. But that's not a lot to fund an operation meant to be able to support the Government Digital Service (GDS), HMRC and MOD contracts let to Skyscape. So what other money is there available?

Answer, in November 2012 – well after getting the GDS and HMRC contracts – a loan note financing exercise was launched. £12 million-worth on offer, of which £8 million-worth had been subscribed for by 7 February 2013, the date on which the Skyscape accounts were signed by Mr Sanders and the auditors, Grant Thornton.

Who are these subscribers/investors? We don't know.

What we do know is that, as set out in the Particulars of a mortgage or charge filed with Companies House on 14 November 2012, if Skyscape goes into receivership or administration or ..., then the noteholders get all the assets, which may include GDS's data (our data), HMRC's data (our data) and the MOD's data (our data).

And who's managing the loan notes? That's the other thing we know. Jeffrey Paul Thomas (15 active companies to his name and 45 inactive ones).

Who?

You remember Jeffrey. He's the man who once held some shares in Skyscape but transferred them to Jeremy. He's the man at ARK Continuity, the data centre specialist, with the Rt Hon The Baroness Manningham-Buller on board, funded by Real Estate Venture Capital Partners LLP (RevCap).

The business review in the Skyscape accounts makes it clear that Skyscape was set up explicitly as a speculative venture designed to exploit changes in UK government IT procurement, particularly G-Cloud, the move to cloud computing.

How's it going?

By 31 March 2012 Skyscape had sales of £44,416 which cost them £327,320 and they'd spent £956,965 on administration. There's no detailed P&L in the accounts, but there is a balance sheet showing negative net assets of £1,240,833.

A bit precarious. Just what you'd expect from a speculative venture. It might come right. You never know. Bit worrying that they couldn't get all the notes away, prospective investors not overly impressed.

Still, there's Whitehall in the background. They could make Skyscape a success. As long as Skyscape is well enough managed actually to cope with a lot of contracts.

And there's Cisco and VMware and EMC and QinetiQ in the background, the Skyscape Cloud Alliance. Skyscape is their Trojan horse. They'll extend their credit terms for a while yet but their patience won't be infinite.

G-Cloud, on which Skyscape largely depends – that's one of the Principal Risks And Uncertainties listed in the accounts – released some sales data last week. It's very early days yet. But between April and December 2012 G-Cloud sold just under £6 million of services. Emergn Ltd got 24% of those sales, BJSS 14% and Ninian 9%. 50 suppliers on the list, everyone else is an also-ran so far, including Skyscape with 2%.

Patience. Tested.

And remember. At some stage, G-Cloud may admit the big boys, Amazon and Google.

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(NB DMossEsq is absolutely not licensed to give investment advice.)