| | The IT services market
has been recovering -
but the leading
providers have been
recording mixed results,
according to analysis
from Pierre Audoin
Consultants (PAC), the
market research firm.
According to PAC this
year, eleven providers
are likely to exceed
€2bn of revenue (not
taking into account
possible captive
revenue) on the European
IT services market. They
include: five American
firms – IBM, HP, EDS,
Accenture and CSC; five
European – Capgemini,
Atos Origin, T-Systems,
SBS and LogicaCMG; and
one Japanese provider –
Fujitsu Services.
Considering growth
rates, the clear leader
is LogicaCMG, which
managed to expand by 39%
in the first half of
2006, mainly thanks to
the takeover of Unilog.
Organic growth of 5% was
satisfactory –
particularly in the year
of the merger.
Second comes
Capgemini with an
impressive 10% growth in
the first nine months,
and even 13% growth in | |
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| | and BPO. It’s remarkable
that the problems with
Sainsbury and the NHS
have not had a more
negative effect on the
business trend in the
outsourcing area in
particular.
Fourth comes a
company that only a
short while ago was
considered to be in deep
water by many market
observers: EDS posted 9%
growth worldwide and 10%
in Europe during the
first nine months,
despite the GM contracts
being re-awarded. EDS
has returned to its old
shape; its offering and
delivery are up-to-date
and well aligned.
IBM follows at fifth,
generating a modest 3%
growth in the first nine
months. Growth was
driven by the SO (IT
outsourcing) and BTO
(BPO) areas, with
figures up by 6% and 5%,
respectively. Here IBM –
like EDS – has managed a
turnaround and is also
benefiting from the
redesign of its offering
and delivery. With an
increase of only 1%,
though, the consulting
business (GBS) did not
live up to expectations. | |
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| |
T-Systems ranks
sixth, posting growth of
almost 3% in its IT
activities. While the
large-account business
(ES) declined by 1%, the
SMB business (BS)
expanded by an
impressive 58%. Captive
business shrank by 5%;
external IT revenues
rose by 9% – solely
thanks to the takeover
of gedas.
HP comes seventh,
with figures up by only
1% in the past financial
year (ending 31
October). While
performance in the
outsourcing business
(MS) was satisfactory
with growth of 6%, the
CI area (project
services) grew only
modestly by 2%. HP
suffered in particular
from a slight decline
(2%) in TS activities
(hardware maintenance
and support services),
which still account for
more than 60% of global
services revenues.
CSC ranks eighth
after the first six
months of the current
fiscal year (starting on
1 April). Especially in
Europe, its revenue
plunged by a | |
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| | considerable 7%. CSC is
followed by Atos Origin,
whose revenue fell by
1%, or grew slightly by
2% “pro forma”, i.e.
considering
divestitures. Both
companies show a large
share of outsourcing
and, what is more, have
so far followed a strong
big-deal approach –
similar to EDS in the
1990s.
Last is SBS with a
revenue decline of 4% in
the past financial year
(ending 30 September).
While captive revenues
increased by 6% during
this period, external
revenues fell by 7%.
This decline, though,
PAC attributes to the
sale of the PRS
activities (hardware
maintenance and support
services) to Fujitsu
Siemens. When excluding
this disposal, SBS grew
by 8%, its external
business even by 10%,
pushed by activities
abroad (mainly in the
UK, the US and Austria).
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| | Europe. Outsourcing
activities generated the
strongest growth, with
14%. The company
recorded a considerable
increase in project
services, amounting to
10% in the Professional
Services unit and 11%
for Technology Services.
Compared to this, the 5%
growth in Consulting
Services is rather
modest, although this
rate is in line with the
market average.
With 7% growth
worldwide for the past
financial year (ending
31 August), Accenture
ranks third. However,
EMEA revenues fell by 1%
due to problems in the
UK, where revenues fell
by 18%. While consulting
increased by a moderate
3%, outsourcing grew by
13%, especially in
application management | |
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