Beancounters at GlobalData have added up some numbers and reached the conclusion that half of the top 20 IT service providers saw a year-on-year revenue decline in 2020, while nine saw a drop in net earnings.
The firms recorded a 14.6 percent year-on-year decline in cumulative net earnings, the analyst says, with 40 percent of the companies reporting a double-digit decline in net earnings.
GlobalData blames the pandemic, causing “cost optimisation” measures to be implemented, with customers pushing back previously planned projects.
GlobalData principal analyst Gary Barton said that many IT companies have experienced customers delaying IT transformation projects as enterprises struggle to understand what their businesses will look like in terms of new working practices after the pandemic.
“There is an opportunity for IT companies to engage with enterprises and help them build the business models of the future – the IT companies who seize this opportunity will be well placed to grow revenues.”
Hewlett Packard Enterprise (HPE) and NCR reported a decline of over five per cent in revenue and their net profit decreased more than 110 percent, GlobalData says.
It was not across the board. Fiserv, NetEase, Capgemini and Intuit all reported double-digit revenue growth in 2020, with Barton offering an optimistic prediction.
“Finally, there are signs that smaller businesses are becoming more attuned to the benefits of being more digital. Funding schemes such as NextGenerationEU are providing potentially billions of Euros to help enterprises adopt new technologies and this spending will benefit IT providers”, Barton said.
