The market for consulting services from the largest firms seems to have turned a corner. The downturn began to subside in the second half of 2010 and several leading IT firms are now reporting year-over-year growth as well as sequential quarterly revenue increases.
Accenture's consulting business grew by 6 percent (9 percent in local currency) in the most recent quarter to $3.09 billion. Executives at the firm told investors: "Although fiscal 2010 consulting revenues reflect the impact of the economic downturn, overall market demand for our consulting services improved during the second half of
fiscal 2010. Beginning in the third quarter of fiscal 2010 and to a greater degree in the fourth quarter, we experienced quarterly year-over-year consulting revenue growth in local currency."
In the fourth quarter of fiscal 2010, consulting growth in four of Accenture's five operating groups, led by Products and Financial Services, was offset by a decline in Health & Public Services, primarily due to the public service business.
"Clients continue to focus on initiatives designed to deliver near- and medium-term cost savings and performance improvement. Projects with growth and transformational objectives are returning; however, clients remain cautious, seeking flexibility by using a phased approach to contracting work," the executives said.
IBM is experiencing big growth from emerging markets. According to Big Blue's latest quarterly SEC filing, "Total revenue from the growth markets increased 15.7 percent (13 percent adjusted for currency) driven by the BRIC countries (Brazil, Russia, India and China), which increased 28.8 percent (26 percent adjusted for currency)."
In the growth markets, the company has focused its investments on expanding into new countries and new territories and building out the IT infrastructure in these regions in support of economic growth. Systems and Technology had its best revenue growth in six years at 10.4 percent (11 percent adjusted for currency). In addition, business analytics is a key growth area for the company.
In the third quarter, IBM told investors that "business analytics revenue increased 14 percent compared to the prior year, which contributed to strong performance in Global Business Services. Global Business Services revenue growth improved to 5.4 percent (5 percent adjusted for currency)." Overall, IBM's global services business grew to just over $14 billion, up about 2 percent over the same quarter of 2009 and a sequential quarterly improvement compared to the prior three months of 2010.
Meanwhile, growth is also being felt by middle market IT firms. According to its latest quarterly earnings report, CIBER's total revenues increased $9.5 million, or 4 percent, for the three months that ended on Sept. 30, 2010 , compared to the same period of 2009. Executives said: "Excluding the unfavorable currency translation effects and the $3 million of additional revenue from our June 2010 acquisition of Segmenta A/S, our total revenues increased 5 percent for the three months ended Sept. 30, 2010, compared to the same period of 2009."
All divisions, with the exception of Federal, had improved revenues for the third quarter as compared to the same quarter of 2009, but the primary contributing divisions were International and Custom Solutions.
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