2002 worst year for IT services, but future looking brighter

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News: 2002 worst year for IT services, but future looking brighter

  1. Gartner has released a report that labels 2002 the "most difficult year" on record for the worldwide information technology services industry. However, IBM CEO said today that the tech market is stabilizing and that the computer industry will continue to be a growth industry; also, BEA today said that it's Q2 revenues will grow as much as 5% over Q1.

    5% quarter on quarter revenue increase is a pretty radical expectation for BEA to set with the market and must be based on a pretty careful analysis of economic growth. Combined with IBM's statements, this could mean good things for our industry...

    Read:
    Report: 2002 Worst-Ever Year for IT Services.
    IBM CEO: Reiterates That Tech Market Is Stabilizing.
    BEA sees 2nd-qtr revenues flat to up 5 percent.
  2. Earnings isn't the same thing as revenue. They're saying that their revenue is going to go up by 5%, which is quite interesting.

    Earnings might go up for a variety of reasons including changes in CGS, SG&A, other cost/revenue related stuff. The phrase "earnings" generally refers to income (sometimes before, sometimes after Tax and/or Depreciation and/or Amortization).

    Jason McKerr
  3. <eom>
  4. P.S. Sorry to split hairs on the finance thing, but the difference between what the article said and what Floyd said are significantly different.

    BEA might raise income/earnings by 5% through cost cutting. That's internal.
    But increasing revenue's by 5% is a whole different game; that's a market statement. They're saying they can grow revenue through either growth in the market (important) or through taking market share from someone else (also quite important).

    Jason McKerr
  5. You're right, it's revenues[ Go to top ]

    Jason, you're right, it's actually revenue, not earnings. I updated my summary to reflect this.

    Floyd
  6. Earnings count, not revenue[ Go to top ]

    But increasing revenue's by 5% is a whole different game; that's a market

    > statement. They're saying they can grow revenue through either growth in the
    > market (important) or through taking market share from someone else (also
    > quite important).

    Your right, raising revenue might be a market statement - it can as well be a statement about prices haven risen or changes in maintenance contract renewals.
    Generally, I prefer to know about earnings of companies, because I believe that a market is only stable and on an ongoing upward slope, if the earnings of most of the major corps are rising (or at least are not negative).

    Remember the dot.com and investment banking hypes: Revenue OK and rising sharply (for some time at least)....
  7. Finite Revnue in Finite system[ Go to top ]

    but remember rigth now we are talking aobut a finite system where revenues are concerned or infinite and the only way to judge that is to compare other market leaders revenue against BEAs announcement..

    Did everyone increase or not?

    ie was this actual market growth or just Market revnue shuffle from one market leader to another?
  8. I definitely agree - we are seeing a significant improvement over 2002.


    Cheers,
    Don Morgan
    www.developeradvantage.com
  9. It's definetly positive news that revenue grows. BUT, no one said that it will have an impact of IT employment picture.
    Fact remains: it's much cheaper to do thinks in India. In fact IBM and many others are investing big $ in India.
  10. How smart !!![ Go to top ]

    And after the rain comes the sun ....

    How much have they been paid for such an evidence ???
  11. Looks like IT services in the Asia Pacific region (esp India) grew at 16% in 2002 ! http://www.zdnetindia.com/news/stories/70876.html

    Its only expected to grow at 13% this year... a slowdown !?!?

    winston veerender
  12. It is same all over the world. Look at Merrill Lynch report from an Indian news paper at
    http://timesofindia.indiatimes.com/cms.dll/xml/uncomp/articleshow?msid=43397440

    This is growing in a fast scale all over the world.

    Regarding BEA's 5% increase in revenue. I am sure that is from internal lay-off process started by the end of 2001. As long as there is not much employees to pay salary every month from company revenue, it is reasonable to have a 5% increase in paper revenue.
  13. TQ,

    You can't have revenue increases from lay-offs. That might be a cost-cutting measure that impacts earnings/income. But companies can't increase dollar-sales through cost-cutting measures.

    Salaries have no impact on revenue (company or paper, although I don't really know what you're implying is different about the two).

    Jason McKerr
    Northwest Alliance for Computational Science and Engineering
  14. T Q's at it again ...[ Go to top ]

    Dude, your posting only confirms that BEA did an excellent job laying you offas a result of your total incompetence. It is obvious you don't understand Finance 101, how can revenues increase if any company has layoffs? That would impact the bottom line, ie: earnings but not revenues!!!

    Get a life and go back to paying your "girlfriends" by the hour.
  15. T Q's at it again ... I don't!!![ Go to top ]

    I don't understand much!!!, down the road all it matter is how much you got and how much you spend. Any way I am not going to believe on people who made others as greatest fools in all centuries through Finance calculation in Enron, MCI etc etc. Whenever somebody talk in financial word ( some thing they use for fooling others!!) I don't respond much, that is the reason I didn't reply to one response to my post. Anyway BEA have an attitude to ask for bills of one even dollar to show up in revenue even though they used to charge 300- 450 USD/ hour in consulting business.
  16. Layoff to increase revenue[ Go to top ]

    For what it's worth a lot of companies could actually *increase* revenue by laying off their totally incompetent sales staff and replace them by better people. Nothing is as bad for sales as an bad sales person .....
  17. This is reminding me of the great parody that SatirWire did a while back:

    AT&T TO CUT WORKFORCE 120 PERCENT
    http://www.satirewire.com/news/att.shtml

    "....The reduction decision, announced Wednesday, came after a year-long internal review of cost-cutting procedures, said AT&T Chairman C. Michael Armstrong. The initial report concluded the company would save $1.2 billion by eliminating 20 percent of its 108,000 employees.
     
    From there, said Armstrong, "it didn't take a genius to figure out that if we cut 40 percent of our workforce, we'd save $2.4 billion, and if we cut 100 percent of our workforce, we'd save $6 billion. But then we thought, why stop there? Let's cut another 20 percent and save $7 billion."