Science: After 25 years, Logica still makes sense: Steve Homer examines the outlook for one of Britain's flagship computing firms whose activities stretch from the London Underground into space

British computer companies come and go, but mostly go. This month, one of Britain's few successful computer firms celebrates its 25th birthday. With 3,500 staff, offices in 15 countries and a pounds 217m annual turnover, Logica is a major force in computing consultancy, offering expertise in everything from space and infrastructure projects to defence and finance systems.

The company was founded by Philip Hughes and Len Taylor in 1969. They wanted a company name that would 'travel well'. Even at the outset, Logica had international aspirations.

The company wanted to help others with their computing needs, looking at the hardware and software available, making recommendations and writing new programs.

Logica's breakthrough came when PRC needed a company to design and construct the European end of a huge hotel reservation system being built in the US. It was a difficult, high-profile job that provided a useful springboard for the fledgling company.

In 1971, the company won its first defence work, developing a system for war games. Two years later, in the face of stiff competition, it won the contract to develop Swift, an international electronic bank currency exchange system.

Logica's first overseas base was opened in the Netherlands in 1973. Within a year the company was working on a project to control the Dutch gas system, based on work done for the UK national gas grid, and the exploitation of its UK experience was one of the key factors in its growth.

In 1974, Logica developed a system for the BBC to process and display election results. The following year the company developed an automated typing system for Unilever which later became VTS, a pioneering office automation product which was one of the first software set-ups in the world to show the sort of networked word processing that is commonplace today.

In 1983, with a turnover of pounds 42m, Logica was floated on the London stock exchange. It continued to attract impressive contracts. In 1984, it was employed to complete the largest computer contract in Europe, the pounds 1bn BT Customer Service System. In 1986, it was awarded a pounds 500,000 contract for work on the European Space Agency's Columbus orbiting laboratory and a further contract to supply the telemetry and control software for the Giotto spacecraft, which was sent to rendezvous with Halley's Comet.

In 1987, it was responsible for the introduction of London Underground's automated ticketing system. The following year, it unveiled the new Ernie, the machine that chooses the Premium Bond winners every week.

But in the late Eighties and early Nineties the remarkable growth of the company began to slow. In 1985, Logica had a turnover of pounds 62m; by 1987 it had grown to pounds 109m; in 1989 it had risen to pounds 180m. But two years later it had only grown to pounds 198m and last year it was just pounds 217m.

For Martin Read, brought in seven months ago to shake up the firm, the problem was to turn a big small company into a small big one. 'This company is technically very strong, with a great client list and clients that have been with us for many years,' he says. 'They like and trust us. But the profits have not been where they should be.'

The City expected Dr Read to shake up the company, but he is taking a gentler approach, concentrating on maximising the profitability of the existing operations rather than fundamentally changing its business focus. For example, the company recently landed a major water industry contract in Australia mainly on the strength of its UK operations - Anglia Water is a long-standing client. Repeatability could be an important trend.

'When Logica started out, the computer department in an organisation was like a mystic god, and no one could get any computing done without going through these monolithic organisations,' he says. 'This was largely because that was the way the technology drove it. In some ways Logica was fortunate because it was part of the god-like syndrome at the start. There were few people around with the skills, so in many ways a company like Logica that had these skills and insisted on quality had a good chance to establish itself.'

Now, with a personal computer on almost every manager's desk, people want a quick solution to their problems for the right price. This means building on work done before and relying on pre-written software developed either by Logica or standard commercial packages.

Dr Read is keen to develop the company's business overseas. 'I want to make sure we have a better international balance. The UK is important for us, but we ought to use our international offices more. I think Logica will be a better balanced company if it does that.'

Logica is evolving quickly. Dr Read says he wants to convey his enthusiasm for the company and the diversity of its work. Major projects include software for the Huygens satellite, the latest command and control system for a collaborative European military project, an interactive television interface with a US telecommunications company and designing for the interface for the Civil Aviation Authority's new en-route centre.

The test for Logica is to make use of its diversity. Many companies emerging from the recession are focused on their core businesses. In Logica's case that is knowing how to apply computing to business - no matter what the business happens to be.

Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Graduate Web Developer

£26000 - £33000 per annum: Recruitment Genius: A Web Developer is required to ...

Ashdown Group: PeopleSoft Developer - London - £45k

£45000 per annum: Ashdown Group: PeopleSoft Application Support & Development ...

Ashdown Group: PHP Developer - Buckinghamshire - £29,000

£25000 - £29000 per annum: Ashdown Group: Junior PHP Developer - Milton Keynes...

Recruitment Genius: Online Sales & Marketing Assistant

£22000 - £25000 per annum: Recruitment Genius: This UK based B2C and B2B multi...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003