Information Age Index: A return to growth?
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For the first time in a year, the rate of revenue decline among the IT industry's key suppliers slowed in October 2009
After 12 months of consistent decline, the Information Age Index, which tracks the revenue growth rates among key suppliers in the IT industry, moved in a positive direction in October 2009. The index moved up by 0.2 percentage points to -9.7% during the month.
The European Index, which tracks the European subset of those key suppliers, fell by 0.6 percentage points to -4.2% during October. This marks the 15th consecutive month of decline in the European Index, although the rate has been slower than the Global Index’s recent fall.
The month saw financial performances from some of the largest suppliers in the industry, including IBM and Microsoft, that would have been disastrous under normal circumstances. However, many of these companies saw a slight reduction in the pace of revenue decline compared to previous quarters, thereby easing the downward pressure on the Index.
For example, networking equipment giant Cisco’s 13% revenue decline in the first quarter of its new financial year, down to $9.0 billion, would have been the shame of any other financial year. But preceded as it was by 18% and 16% quarterly declines, Cisco’s performance was seen as a positive sign for the industry, and made a contribution to the Index’s upward motion.
There were some notably strong performances reported during the month. Two Indian IT services providers – Cognizant and HCL Technologies – reported double-digit growth, as did security vendors McAfee and CheckPoint.
On the European stage, the Index was not helped by French-owned telecommunications equipment provide Alcatel-Lucent, whose third-quarter revenues fell 22% year-on-year to $5.5 billion, or by German application maker SAP’s 9% revenue drop to $3.6 billion.
However, the month’s biggest revenue growth by percentage came from a European company, UK-based search technology vendor Autonomy, whose revenues rose 51% year-on-year to $191 million, thanks in part to its acquisition of content management vendor Interwoven.
