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By Laton McCartney
Chart: Companies With the Greatest Decline in Revenues
It's the economy, stupid. That, of course, has caused a big dent in the revenues of many IT services and solutions vendors, but with those unfortunates that dropped to the bottom of the CIOZone Top 100 list there were often other factors as well. Here's a breakdown of what went wrong - and why.
Borland Software Corp.
Revenues 2007—$269 million; Revenues 2008—$172 million; -37%
Borland has been in a downward spiral for several years now. In 2008 its sales dropped 36%. In part this was due to the company selling off its CodeGear assets to Embarcadero Technologies, Inc. This resulted in the loss of revenue from the CodeGear business.
Today Borland is betting its future on the Open Application Lifecycle Market. This is a relatively new and evolving arena, and Borland has had to alter its go-to-market strategy and sales and service organization to go after it. One bit of good news: HP has agreed to use Borland's application lifecycle management products internally; the agreement also provides HP the opportunity to resell Borland's portfolio and use the products to deliver application development services to clients around the world.
Revenues 2007—$1.5 billion; Revenues 2008—$962 million; -35.7%
Verisign provides infrastructure services to various networks worldwide. It operates in two segments, Internet Infrastructure and Identity Services, both of which have been hit by the economic downturn. However, the company recently entered into a deal to sell its communications services business to TNS Inc. for $230 million in cash. That may help stabilize the company until the economy rebounds.
Cadence Design System, Inc.
Revenues 2007—$1.6 billion; Revenues 2008 - $1 billion; -35.7%
Cadence generates most of its revenue from licensing its EDA software, selling or leasing hardware technology, providing maintenance for its software and hardware and providing engineering services. Problem is the integrated circuit (IC), electronics systems and semiconductor industries are currently experiencing significant challenges, primarily due to a deteriorating macroeconomic environment, which is characterized by diminished product demand, production overcapacity, high inventory levels and accelerated erosion of average selling prices. As a result of this downturn, some of Cadence's customers faced financial challenges in fiscal 2008 and may continue to face such challenges in fiscal 2009.
Openwave Systems Inc.
Revenues 2007—$241 million; Revenues 2008—$174 million; -27.9%
Openwave provides software solutions for the communication and media industries in the United States, the Asia Pacific, Europe, the Middle East, and Africa. It offers products in the areas of server software. Its total revenues decreased by $67 million, or 27.9%, from $241 million for fiscal 2007, to $174 million for fiscal 2008. The decrease, the company says, relates to a decrease of $13.3 million in license revenues and $25.8 million in services revenues in fiscal 2008 from fiscal 2007. Note, revenues were consistent during the three and six months ended December 31, 2008 compared to the corresponding periods of the prior year.
Chordiant Software Inc.
Revenues 2007—$135 million; Revenues 2008—$107 million; -18%
Chordiant provides products and services designed to improve the customer experience in front-office processes in North America and Europe. The company offers solutions that include software applications, business processes, tools, and services. As an enterprise software vendor, Chordiant generates substantially all of its revenues from insurance, healthcare, telecommunications, financial services and retail markets. These markets have been adversely impacted by the recent worldwide credit market turmoil, the result of which is that customers are hesitant to make large commitments and some customers are merging, Chordiant says.
Next: The Final Group of Revenue Decliners