Just been reading a rating of the various IT players in terms of revenues size and categories, and its amazing for an industry that prides itself on being dynamic to see how little the vendor statuses have changed from 2005 to 2006. The top 20 players by revenue, ignoring category such as software, hardware or services, saw no new player enter, or any existing player leave. Apple was the only vendor to change position by more than two slots, up from position 18 to position 12, and if you look at the top 7 on the list there was absolutely no change in any of their positions whatsoever!
The devil lies in the detail and not in the headlines. Take Oracle who lifted revenues by 16%, surely a good gain, but not enough for it to change its ranking from 13th in both 2005 and 2006. The one common feature of the top twenty vendors was the number of acquisitions that were made to provide their growth, and since most of them made acquisitions the net result was not to change their relative positions. These ‘super vendors’ look to have sufficient cash flows and appetite for acquisitions to look unassailable by the vendors lower down the listings.
In the lower rankings acquisition still seemed to be the path to success with the fastest growing vendor being Symantec which with its acquisition of Veritas roared up from 37th place to 28th place with revenues up 60%. Perhaps another way to look at what is happening is to take a look at the countries supporting technology vendors, and then some changes do start to appear.
US leads with 33 vendors in the list followed by Canada with 6, then comes the UK tied with India with 3 each, (India being the new up and comer). India has already passed France, Japan and Netherlands with 2 vendors each and then comes Germany and South Africa with 1 each. Study profitability and country and something key comes up; India has all 3 vendors in the top ten for profitability and the other 7 are all in the USA, so if cash generation for acquisitions is a critical success factor for growth it seems the Indians are well positioned.
What do I conclude from all of this? Sadly the simple answer seems to be that the period when technology innovation in products, or services, counted to grow revenues and market position, on this evidence at least, seems to be over. Instead we seem to be in a mature industry where growth depends on financial strength to buy others and consolidate your position.
Hope I am wrong??