The cautious outlook of American businesses continued to impact the technology industry in May 2008, with the result that
Take computer manufacturer Dell, for example: a company that has of late struggled to stem a gradual decline in revenues and market share.
In 2007, following the ejection of erstwhile CEO Kevin Rollins, the company announced a five-point plan to restructure its organisation and redefine its business model. Most significantly, it decided that it would sell hardware through third-party vendors, an explicit departure from the direct sales model upon which it built its name.
One year later, the Austin, Texas-headquartered company has at last seen signs of a turnaround. For the first quarter of its current financial year, the company booked revenues of $16 billion – a 9% rise from the same quarter of the previous year. Net profits were also up, growing by 4% to $784 million.
But that success was not driven in its own back yard. Quarterly revenue for the commercial operation in the
Instead, it was the emerging economies that Dell had to thank for its return to form. By getting its stock in stores across
Meanwhile, business activities on its home turf are as turbulent as ever. In May, a
One company even further down the road to global diversification is Hewlett-Packard. In its second financial quarter, the computer industry leader grew revenue by 11% to $28.3 billion. Again, the upswing was largely driven by sales abroad. Revenues at its
A slightly different pattern was evident at HP’s rival in IT services, Computer Sciences Corporation, in its fourth financial quarter. The company, which is best known for its large government IT contracts across the world, reported revenue of $4.48 billion in its fourth quarter – up 11% from the same period in 2007. The cost of long-term restructuring adversely impacted profits, which fell by 28% to reach $187 million for the quarter.
Unlike Dell, for example, CSC’s growth was driven by the
US-based companies tend to treat
Anglo-Dutch IT services provider Logica, for example, saw revenues grow by just 4% in the first quarter of its financial year, from £768 million to £856 million. It was Logica’s division in
A similar story was seen at French IT services company Steria. The company ostensibly grew revenues by 38% to €438.5 million during its first quarter, but much of that was related to its acquisition of
In fact, Steria’s revenues in the
It is tempting to see the success that IT services companies are having in
But this view is contradicted by a sharp revenue drop at T-Systems, the IT services division of the country’s incumbent telco, Deutsche Telekom. The services unit saw revenues fall in its first financial quarter by 10.4% to €2.6 billion, although it also grew operating profits. The revenue decline was driven by a sharp decline in domestic contracts, which themselves dropped by 13%. International revenues actually grew by 3%.
So while European IT services companies appear to be struggling in
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