Why did Accenture and HP services revenues drop the most last year

Yesterday I blogged about the Gartner figures on the IT services market last year.

Accenture and HP both recorded double digit falls in revenue compared to 2008. The two giants stood out amongst their peers, but why?

I have since spoken to a couple of people about this and here is an example of what I have been told.

One contact told me that HP and Accenture had the biggest losses for completely different reasons.

On Accenture:

“Accenture has built its business up with very large deals and their have been fewer during the recession.”

“Consultancy services like Accenture’s are very expensive and people think twice about it when time are bad.

“It has also been unsuccessful changing contracts it signed before the downturn.”

On HP:

“HP has had difficulties cause by the acquisition of EDS.

“There is ongoing uncertainty about HP/EDS and HP has caused the sales machine that was EDS to slow down because of redundancies.”

What do you think?

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I also think one of the reasons is the shift from single sourcing to multisourcing. Lots of companies have had bad experiences with laying all their eggs in the same basket. Problem in single sourcing is also that the same provider is judge and jury at the same time (think of SLA reporting on its own performance in different IT areas). Therefore more and more companies are choosing (and I agree with that approach) a best-of-breed strategy for sourcing. Singlesourcing is also not ITIL compliant since you cannot be the best in all areas therefore your service cannot be competitive in all areas and this is however what ITIL prescribes.

All this said, HP and Accenture are historically relying and just these type of very big single sourcing deals. In terms of crisis companies prefer quick wins not outsourcing the whole lot (which is declining anyway). Anybody agree on this ?

Thanks anonymous

Yes there has been an increase in multisourcing. This would logically reduce the revenues of the big players. I think there is a combination of things at play.

Karl Flinders