Information Age Index March 2009

The IT industry is fast approaching the zero growth line. The Information Age Index, which plots the overall growth rate of the industry by tracking the revenue change at the top 200 IT companies, fell sharply again in February, as technology companies started to turn in recession-damaged results.

The industry’s pace slumped to 2.3%, down from the 5.6% recorded in January – putting it at a fraction of the 11% enjoyed throughout most of 2008.

The European Index, which tracks a subset of 75 companies with headquarters in Europe, also fell in February, sliding more slowly from 4.6% to 4.0%.

The biggest drag on the global growth rate came from three of the industry’s giants of servers and PCs. For their latest quarters, revenue was down 16% at Dell and by 20% at Lenovo, while Hewlett-Packard could only muster growth of 1%.

There were plenty of other negative influences elsewhere. In IT services, Computer Sciences Corporation reported a 5% downturn in its fourth quarter and Perot’s revenues were off 7%. And in networking equipment, Nortel revealed a 15% downturn in revenues.

But the news was by no means all bad. There were strong numbers from on-demand applications vendor, where revenues grew 34%, and from security company McAfee which turned in a 19% rise in revenues. Indian outsourcers also showed positive report cards – at least when measured under local accounting rules. TCS saw a 18% revenue rise, compared with growth of 38% at Mindtree and 36% at Infosys.

Meanwhile, the European Index, while heading the same direction, was buoyed by strong quarterly results at several players. Applications infrastructure company Software AG of Germany reported a 14% rise in revenues, while UK-headquartered chip designer, ARM, saw revenues surge 47%. Also from the UK, IT and BPO services company Capita, reported a 16% hike in second-half revenues.

Nevertheless, the overall trend for the industry is irreversible: coming months are going to show the growth Index turn negative.

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.

David Cliff

David Cliff is managing director of Houghton le Spring-based Gedanken, a company specialising in coaching-based support and personal development. Cliff is an experienced trainer, manager and therapist,...

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