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Industry nosedive halts

The rate of revenue growth among IT vendors has reached a plateau after a few months of steady decline. This is happy news for the industry: the rapid deceleration in revenue growth was beginning to resemble a serious downturn.

The Information Age Index, which tracks the growth of the world’s 200 largest IT companies, rose 0.2 percentage points in August to 10.3%.

The European industry – which last month saw even steeper decline than the global index – also levelled off in August. The European Index, which tracks revenue growth among 80 companies based in Europe, rose by just 0.1 points to 6.8%.

Buoyancy in the global index was the result of financial results from such industry stalwarts as Microsoft and IBM. The former grew its fourth quarter revenues by 18%, to $15.8 billion. Big Blue expanded its second quarter takings by 13% up to $26.8 billion – putting it on track to become the second technology company to break the $100 billion-a-year barrier after HP.

Other good turns came from chipmaker Intel, where second quarter revenues rose by 9% to $9.5 billion, and EMC, which pushed revenues up 18% to $3.7 billion in its second quarter.

Keeping the Index in check were companies with less enviable performances, including systems integrator Unisys, where second quarter revenues slid by 3%, and storage vendor Quantum, where revenues were down 10%.

On the European stage UK business process outsourcer Capita saw half-year revenues grow by 20% while German application maker SAP saw its second quarter takings grow 18%. These results were counter-balanced by Alcatel-Lucent, whose revenues fell by 5% (see Financial Report).

Nonetheless, the index looks to have stabilised around 10%.

The Information Age Index measures the overall growth rate of the IT industry by tracking the financial results of the world’s most important publicly listed IT companies.