Off the boil
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The pace of the IT industry is cooling slightly even as frenzied merger activity continues to artificially boost top-line growth rates at many major vendors.
The pace of the IT industry is cooling slightly even as frenzied merger activity continues to artificially boost top-line growth rates at many major vendors.
The Infoconomy Global Index, monitoring growth rates of the world's 200 largest IT companies, dropped to 11.5% in December, down from 12.2% in November. The subset of European companies in the index have helped sustain better growth rates. Its growth leapt almost 2% to hit 3.6% in December. However, if the effect of acquisitions is eliminated, then the region's revenue rise comes in closer to 1%.
That M&A impact was less of a factor at a global level. Growth at document software vendor Adobe hit 20% in its latest quarter, while revenues at IT services company Accenture were up 14% over the same period. But the real stars were in mobile devices. Research in Motion, home of the BlackBerry, reported a 138% quarter-on-quarter revenues surge, and rival PalmOne saw a 39% jump.
The story was very different in some other segments. Networking equipment maker 3Com continued its slide with a 17% decline in sales, and electronic design software vendor Synopsys saw revenues shrink by 27%. Meanwhile, business applications software companies GEAC and Lawson both showed declines of 5% and 2% respectively.
Outside of this volatility, several industry giants were on par. Oracle reported a 10% growth in revenues and Hewlett-Packard chalked up 8%.
That points to a pattern of consistency. While the industry's growth rate may have gone off the boil, it is still likely to continue at 11% to 13% for at least the first few months of 2005.
The Infoconomy Index measures the overall growth rate of the IT industry by tracking the financial results of the world's 200 largest, publicly listed IT companies.
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