Surveys indicate upturn in IT industry

29 July 2003 Two separate surveys suggest that growth is returning to the IT industry, with the server market enjoying double-digit growth in the second quarter, according to analysts Gartner, and venture capital investment in the US increasing for the first time in three years.

A total of 1.28 million servers were shipped worldwide in the second quarter, up 18% compared to the same period a year earlier.

The analyst group added that the increase in sales was led from the low-end, with one to four microprocessor systems proving most popular. Hewlett-Packard retained its market leadership, with 376,100 units sold, with Dell and IBM closing the gap with sales of 261,600 and 199,900 systems respectively, each increasing sales by about one third, twice the rate of HP.

Last week, Gartner released figures that indicated an upturn a 10% upturn in PC sales. This rise may have been driven in part by Microsoft’s recent decision to discontinue support for Windows 98, pushing many companies to upgrade four and five year old PCs.

At the same time, venture capital investing also increased in the same quarter — the first rise since the dot-com bubble burst.

According to a survey by accountants PricewaterhouseCoopers and Thomson Venture Economics, total venture capital investment in the US increased to $4.3 billion, compared to $4 billion in the first quarter. More encouragingly, investment in early-stage start-ups leapt 43% to $956 million.

However, Mark Heesen, president of the National Venture Capital Association warned that it was unlikely to portend a dramatic turnaround in venture capital investment.

But he added that there was a build-up of funds waiting to be invested and that after the 2001 terrorist attacks on New York, the Iraq war and the bottoming out of share prices on the Nasdaq stock exchange, venture capital firms had few excuses left for holding back.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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