This week CIOZone is publishing a series of articles and features centered on our annual ranking of the CIOZone 100 - information technology's biggest and best companies.
The CIOZone 100 represents an ambitious undertaking and is painstakingly assembled by veteran technology journalist Robert Hertzberg. This is the second year Hertzberg has undertaken the project and I asked him what were some of the biggest surprises in this year's ranking compared to the last year's.
For starters, Hertzberg says revenue and profit numbers for the top 100 didn't turn out nearly as bad as he thought they might look given the state of the economy. In fact, overall revenues for the top 100 grew 9.4% in 2008 to $702 billion, compared to $642 billion in 2007.
That doesn't mean the industry is skipping the recession - it's just an indication that things were going very well indeed before the economy fell off the cliff.
"I really expected to find a worse set of results," says Hertzberg, "but the really bad stuff didn't kick in until the fall and there was probably enough in the pipelines that it didn't hit as hard as expected.
"But it is really hitting hard now," he adds.
Secondly, companies at the top of the list benefited from blockbuster acquisitions. Hewlett-Packard, for example, grew its revenues by 14% in 2008 thanks in large part to its acquisition of Electronic Data Systems. Oracle, which came in at No. 9 on the list, reported a 17% increase in sales with help from its acquisition of BEA, and SAP, No. 13 in the ranking, reported a 13% boost in sales after buying Business Objects.
What the top half of the list won't tell you, however, is which companies felt the greatest pain in 2008. And a look deeper into the numbers shows a handful of companies were hurting indeed.
Borland Software, which specializes in lifecycle management and test automation software, suffered a 36% drop in revenue, the biggest decliner in the CIOZone 100. Cadence Design Systems, which provides software used to design semiconductors, saw its revenues fall by a similar amount (35.5%), while iGate Corp., a global outsourcing company, was hit by a 29% drop in revenues. That fall in business may have played a role in iGate's decision in March to drop out of the bidding for troubled Indian outsourcer Satyam.
As interesting as the compilation of the 2009 CIOZone 100 proved to be, Hertzberg says he is looking even more forward to compiling next year's numbers. Already Oracle is bound to make a big leap up the rankings with its acquisition of Sun Microsystems, and it is widely expected more mergers and acquisitions are in the wings as the strong look to prey on the weak.
"The technology industry has some really strong fundamentals," he says. "There are basically a group of very healthy companies - whose share prices are now depressed - so it's a good time to go bargain hunting.
"The conditions are certainly in place for some interesting M&A activity."
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