Information Age: News, analysis & insight for IT & business leaders

• Michael Dell returned to take over as CEO of the computer maker he founded, Dell, replacing his protégé Kevin Rollins. Under Dell’s leadership the company had raced into market-leading positions in the PC and server market. But falling sales and declining margins under Rollins tutelage forced a change in leadership.
• The UK government proposed to relax data protection rules, to make sharing information between government departments easier. Privacy campaigners were furious over the perceived erosion of civil liberties and highlighted the government’s poor track record on implementing large IT projects.
• Some carbon offsetting schemes, intended to reduce business’s environmental impact, were dismissed as ineffective. Research from the Department for Environment, Food and Rural Affairs concluded some tree-planting schemes did more harm than good. Vendors such as Dell and Rackspace have launched tree-planting initiatives to mitigate the effects of their products’ energy consumption.
• The fallout from the two-year delay to its next generation operating system became apparent at software maker Microsoft. In its most recent quarter, ended 31 December 2006, the company’s profits fell by 28%. It blamed the delayed release of Vista, on which it has been working since 2001.
• The European Commission was presented with a list of complaints from rivals to telecoms heavyweight BT. The companies are unhappy at the pace at which they are being granted access to local networks. The UK Competition Telecommunications Association, whose members include Global Crossing, Thus and Colt Telecom, took the complaint to European regulators because it believes the UK watchdog, Ofcom, lacks the clout needed to force BT to change.
• Security vendor Symantec agreed to buy software management company Altiris for $830 million. The anti-virus giant will use Altiris’s products, which allow users to manage software deployed on desktops, servers and mobile devices, to improve client-based security.
• The government unveiled plans to use iris scanning to authenticate immigrants under its newly published UK Borders Bill, despite already having concluded that the technology is not ready for large-scale implementation. In December 2006, the government shelved plans to use iris scanning in its proposed National Identity Card, after extensive trials proved that the technology was unreliable.
• Technology giant Sun Microsystems signed a landmark partnership deal with long-time rival Intel. Sun will exclusively use Intel’s x86 chips in its PC and server range for the next three years. During the 1990s, Sun’s Sparc processors were seen as a fierce rival to Intel’s processors. It had also been scathing about the billions of dollars Intel had sunk into developing the 64-bit Itanium processor, alongside Hewlett-Packard.

Infoconomy Index: Industry growth synchs around 10% 

The IT industry – both globally and at a Europe level – converged around the 10% line during the opening weeks of 2007.

The Infoconomy Global Index, which tracks the revenue performance of the world’s 200 largest technology companies, rose to 9.4% during January, up from 9.2% recorded in December.

The subset of around 50 European-headquartered companies in the index fell into line with that global picture as growth among the group eased slightly to 10.2%, from 10.4% in December.

The Global Index’s climb was influenced largely by solid growth among mid-tier suppliers. Most of the US behemoths reporting quarterly numbers in January turned in below par results. On the more positive side, IBM, Sun Microsystems and SAP all showed a respectable pace of 7%, and revenue growth at Microsoft and at security systems vendor Verisign was only a point behind that.

Less upbeat was a 5% fall in quarterly revenues at Intel and a 4% drop at rival chipmaker AMD.

An exception to the sub-10% growth rate at the industry’s majors was a 17% rise in revenues at information storage and assurance company EMC. Sales there were up 17%, helped by runaway demand for its virtualisation software and revenue added through recent acquisitions.

But an even stronger lift to the index came from outside either the US or Europe: India’s IT services companies Tata Consultancy Services and Wipro accelerated their momentum with revenue growth of 41% and 43%, respectively.

Overall the outlook is still strong, with clear signs that the industry’s growth rate could break through the 10% barrier in coming months.

The Infoconomy 200 Index measures the overall growth rate of the IT industry by tracking the financial results of the world’s most important publicly listed companies. For more details, go to www.information-age.com.