News and Analysis to 21st April 2005
That don’t impress me much
The sentiment expressed by country singer Shania Twain is
echoed by Forbes in respect of IT companies, which dropped Microsoft from 31st
to 47th in its list of most revered companies. IBM (which surprised
Wall Street by failing to hit its most recent quarterly targets) dropped a
place to 17th.
The chips are up
The market looks good from Intel’s vantage point. First
quarter figures are up 25% quarter-on-quarter. The chip making giant is bullish
about the market, pledging to increase its capital spending in 2005. Similarly
ARM impressed with first quarter earnings rising 37%. The UK chip designer is
sticking to its forecast of 20% revenue growth in 2005.
SCO becomes Unix standards body
Well SCO thinks so. Sun Microsystems plans to release its
Unix offering Solaris as an open source product. In the process it has sought
permission from SCO to do this. SCO, as you may recall, has a business model
that in essence involves suing anybody that distributes or uses Linux. It
claims that Linux infringes the IPR associated with its own flavour of Unix.
SCO’s influence in the Unix marketplace is somewhat disproportionate to its
actual market share. Fortunately for Sun, SCO has given its blessing to Solaris.
Smaller Windows in Brazil
In a bid to reduce piracy, Microsoft has made its desktop
operating system more affordable in developing economies. Brazil is the latest
country to ‘benefit’ from this. However for less you get less and thus some
functionality has been removed/constrained. By way of comparison, the Windows
Starter Edition still works out much more expensive than a Linux based PC.
Infosys on road to nirvana
Indian IT services player Infosys is accelerating along the
path of commercial enlightenment by announcing a 55% income increase for its
latest financial year. Despite this Infosys expects a slowdown in 2005,
predicting only 30%(!) growth. This could be interpreted as a general forecast
for the US market, where much of Infosys’s business is conducted.
Not a big deal
The average contract size in the IT and Business Process
Outsourcing market is shrinking according to Computerwire and outsourcing
adviser Everest Corp. First quarter deal size dropped 18% quarter-on-quarter
(to $68.9m). The average deal size has now fallen for three consecutive
quarters. This is probably not an indicator of a declining market. More likely
it reflects the movement towards portfolio outsourcing, where rather than
giving everything to one supplier, the business is distributed amongst best of
breed specialists.
