The IT industry has begun to show evidence of the impact of widespread budget freezes and cuts among its customers.
The Information Age Index, which tracks the revenue growth of the 200 largest technology companies, fell a single percentage point to 10% in November, with clear pointers to a protracted slide.
The subset of European companies also showed overall revenue decline, with November’s 5.6% rate a drop from 6.3% in the previous month. In both cases, those were the weakest growth rates since mid-2006.
The greatest negative influences on the indexes came from the telecoms sector. Telecoms equipment giants Nortel and Alcatel-Lucent saw their revenues slump by 14% and 7% respectively. Deutsche Telekom’s IT services unit, T-Systems, was another loser, with quarterly revenues slumping 7%.
Other performances undermining the double-digit growth rate came from PC makers Dell and Lenovo where revenues were -3% and 0%, respectively, and from networking equipment company Cisco where revenues were also flat.
However, there were plenty of upbeat numbers to offset those influences. Hewlett-Packard stunned with revenue growth of 19%, while networking systems integrator Dimension Data chalked up a buoyant 17% rise. Also showing rude health was SME ERP software company Sage, where second half revenues jumped 15%.
The real runaway growth, however, lay among e-commerce-centric vendors. Web analytics software company Omniture grew revenues by 108%, while managing a break-even bottom line. And in the related field of marketing software, Alterian, also doubled its top line, but with revenue surge largely coming from its acquisition of content management software specialist Mediasurface.
The current batch of results, however, is based on pre-October market dynamics. And the impact of the crunch will be painfully evident in the company reports released in coming months.
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.