Martin Hingley's Blog

I’ve just completed my assessment of Q3 2009 and wanted to share some of my findings. These are based on my Revenue Tracker, which is available to purchase either as part of my subscription service, or as a stand-alone workbook. I am also preparing a full report on the market, which I’ll give more details of later.

Q3 2009 ITC Revenues Show An Improving Market

• The worldwide ITC market declined by 6.3% worldwide to $1.56 trillion – a significant improvement on the double-digit decline of the previous two quarters
• Profits for ITC vendors grow for the first time since Q1 2008, reaching $191 billion in total
• Employment remained at 20 million, with new hires in emerging countries off-setting cost-cutting lay-offs in emerged ones
• On a current $US basis the Americas declined 6.0%, Asia Pacific by 2.8% and EMEA by 9.4%
• When recalculated on a local currency basis the rate in the Americas was -6.0%, Asia Pacific -15.5% and EMEA -4.6%
• Although the decline in EMEA was very close to Q2 there is no sign yet of the ‘double dip’ I predicted earlier
• IT Services (especially in Asia Pacific) is doing best of the 4 categories, declining by only 0.5%
• Hardware declined by just 4.5% in the quarter
• Software and Telecom Services are now the worst performing categories (replacing hardware), declining by 9.2% and 9.0% respectively in the quarter

Full-Year 2009 And Forecast To 2013 – The Recovery Continues

• Overall the world ITC market will decline by 10% in 2009, following the 9% growth of 2008
• I expect the ‘saxophone-shaped’ recovery to continue, with the first positive quarterly growth overall returning in Q3 2010
• The market will show 0% growth in 2010, until a period of moderate single digit annual growth returns
• It will take until 2012 before the total market value exceeds the height of 2008
• Asia Pacific has seen the biggest fall in spending during the downturn, but is expected to show the strongest growth in coming years
• EMEA and the Americas show similar growth patterns until 2011 when the Americas are expected to show stronger growth
• Software will take longer than other categories to recover, but will take the strongest growth position in later years

How Vendors Should Plan For The Recovery

Many vendors have reacted to the downturn by cost cutting, restructuring and/or acquiring new companies. Now we’re approaching a period of relative stability it’s a time to consolidate new operations and prepare for new business. When considering changes in your market share you should make sure you take into account the differences between organic and non-organic revenue growth. In terms of marketing themes I expect a move away from the ‘customer intimacy’ messages of the last year and the strong competitive attack campaigns. You should expect the theme of Cloud Computing to grow significantly over the next year. You should also expect a renewed interest in Corporate and Social Responsibility in light of the Copenhagen Summit in a couple of weeks, especially if there is a significant new commitment to reducing carbon emissions. You should also think about ‘Digital Explosion’ as a theme to develop – especially if you’re in the server, networking or storage area.

What are you planning? Do you see the improvement in the market? Let me know by commenting on this post.

Filed under: Market Share And Forecast Tagged: | Americas, Asia Pacific, EMEA, hardware, IT Service, Recovery, software, Telecom Service