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IT service buyers cautious but no panic

Economic uncertainty has led to less demand for IT services but panic has not set in as Western IT services firms report modest growth.

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Economic uncertainty has dampened IT services sales with businesses spending cautiously, but panic has not set in as Western IT services firms report modest growth.

Atos, T-Systems and HP Services have all reported modest growth in sales in their latest financial results.

Atos, which completed the integration of its Siemens IT Solutions and Services acquisition last year, reported a 0.3% increase in sales for the full year 2011. Sales were worth about €6.8bn. The French company saw drops in revenues in all sectors apart from manufacturing, retail and services, where sales were worth €2.13bn in 2011, 7.5% higher than the year before. The financial services and public sector verticals saw sales fall 1.8% and 1.2% respectively.

Meanwhile Deutsche Telecom-owned service provider T-Systems reported a 2.1% increase in sales in 2011 compared to 2010. All service areas grew apart from desktop services, which dropped 6%. T-Systems lost a huge desktop services contract with Centrica early last year.

HP announced services sales worth $8.6bn in its first quarter, which was 1% higher than the same quarter in 2011. The IT giant, which acquired EDS in 2008, said technology services and IT Outsourcing sales both increased by 2% while application and business services sales remained  flat.

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