(By Richard Holway 3.00pm 29th May 09) Dell announced a quite staggering 23% decline in quaterly revenues to end Apr 09. Indeed revenues from large corporates fell 31%. This decline was greater than expected as Dell moved to protect its bottom line at the expense of sales.The FT on Friday 29th May 09 ran an article Microsoft and Dell counter rivals' optimism in which both companies cautioned against statements made by others like HP, Intel, Cisco etc that the tech downturn had 'bottomed out'. Also, last week Leo Apotheker, CEO of SAP said that he saw "no significant improvement in the bleak outlook for 2009". SAP saw software licences sink by an even more massive 33% in Q1. As the FT on 30th May 09 said SAP is only staying buoyant thanks to growth in maintenance revenues - which rose 18% in Q1.
We too would suggest caution. Readers know that our prediction is that recovery will only become apparent in H2 2010.
Having said that all tech companies will not behave the same way as in "a rising tide lifts all ships". I believe that SAP, Microsoft and Dell will be amongst the worst affected and, currently, do not have the business models or products required to take full advantage of the upturn. Downturns accelerate change - in this case to cloud and netbooks/smartphones respectively. SAP, Microsoft and Dell could still pull rabbits from the bag - but don't bet the house on it.
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