News and Analysis to 27^th January 2005

HP board with Carly?

According to reports in the Wall Street journal, HP’s board are to clip CEO Carly Fiorina’s wings on the basis that the company’s performance over the years has been rocky. Hence senior executives have decided that Ann Livermore, who heads up HP's vast Technology and Services Group, Vyomesh Joshi, who has just been put in charge of a merged PC and printer unit, and Shane Robison, the company's chief technology officer, should be given a bit more autonomy.

Microsoft is not appealing

Microsoft has decided to comply with the European courts in respect of creating a version of its operating system that does not have Media Player embedded. It was always stretching the definition of what an operating system is to even think that a media player or even a browser should be a component of Windows.

Bill Gates tackling viruses

The fact that Microsoft has entered the anti-virus market place and is now bundling the software with Windows is a concern for the existing players. No one however should be dismayed by the fact that Bill Gates has donated $750m to a worldwide infant vaccination programme.

PC World

According to IDC the PC market in EMEA grew 19% with close to 60 million PCs shipped in the region. HP led the market, but strongest growth (40%) was by Acer. Fujitsu Siemens had 60% of notebook sales with Dell second with 11.7%. The figures are enhanced by the weak dollar but suppressed by the miscalculation of demand for processors leading to a shortage of this key component.

VC World

Funding in tech companies increased by $11.3bn during 2004 according to Ernst and Young/Venture One, reversing 3 years of decline. Hopefully a good sign that the tech market has turned the corner.

India’s booming

Two of India’s leading IT services companies recently reported impressive results. Wipro reported a 60% increase in net profit for its third quarter. For the same period Satyam reported a 20% increase in net profit. Only 3.3% of Satyam’s revenues were generated domestically.

EDS insources HR outsourcer

EDS is to buy the human resources outsourcing business of Towers Perrin. This will strengthen its position in the growing Business Processing Outsourcing market. No doubt its first assignment will be to handle the outplacement of 20,000 EDS staff, scheduled to be ‘shown the door’.

IBM – Making history

IBM just clocked up its most successful quarter ever. In its fourth quarter it booked $27.7bn in sales, which had a bottom line impact of $3.04bn. IBM appears to have come to terms with the fact that it cannot dominate every aspect of IT and is now concentrating its attention on the most profitable markets.

IT contracts contracting

According to Computerwire, 2004 saw solid growth in the value and number of IT contracts. However there were fewer mega deals in comparison to 2003. This suggests that many clients are moving away from the ‘eggs in one basket approach’ to suppliers and are choosing specialists for different aspects of their IT department. Big deals aren’t disappearing though. The value of the top 20 contracts rose from $38.3bn in 2003 to $53.6bn in 2004.

CIOs upbeat

According to Gartner, CIOs expect IT budgets to increase 2.5% in 2005. The survey covered 1,300 in 30 countries. The focus now will be on business growth and ‘results’, as opposed to the previous focus on cost control and internal efficiency. Don’t tell the CRM vendors.

Europe – Home of the outsourced

Of $76bn in major outsourcing contracts awarded last year, 49% of these originated from Europe, 44% the US and 7% Asia. The value of Europe’s contracts doubled that of 2002. The figures are courtesy of Technology Partners International.