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IT service providers searching for stronger recovery

John Madden | Feb. 23, 2010
Judging by the most recent round of earnings reports (the latest being from HP), IT services providers appear fairly confident about future growth this year following a disastrous 2009.

Meanwhile, Accentures first-quarter earnings, released in December 2009, showed a total 11% revenue decline year-on-year. The player believes it has made the organizational and portfolio changes necessary to capitalize on customers plans for IT investments this year. This includes focusing on what it describes as hot areas such as risk management (in its management consulting division), sustainability, digital marketing and analytics (along with, of course, continuing to optimize its cost structure).

Financial results are only one set of criteria that we look at when evaluating the success of an IT services providers current strategy and future prospects. Providers spent 2009 cutting costs and, more importantly, focusing on specific solutions, geographies and vertical industries that hold the most promise for growth. Its clear that many providers appear eager to declare that the worst is behind us and that enterprise customers are investing in IT on a broad scale again. But its also clear, judging by recent financial performance, that were not there yet.

John Madden is Research Director, Ovum Summit.


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