Tuesday, 11 August 2009

CSC UK still growing - just

(By Anthony Miller – Tuesday 11th August 2009 8:45am). I held over commenting on CSC’s quarterly results last week because, as usual, US management appears to believe that worldwide unity has broken out and there are therefore no such things as country borders. Why do they seem to believe we live in a single global IT services market? Which is my way of complaining that CSC still gives no regional breakouts in their results, which I find astonishing – no other major player (nor most minor players) are quite this opaque.

Rant over.

However, I caught up yesterday with CSC’s European head, Guy Hains, who helped add some colour and movement on the local scene. I gather than CSC’s European operations pretty much followed the trend across its global business, with revenues declining 6% (constant currency). CSC UK, which represents some 45% of European revenues, grew “a smidgen”, though it sounded like France did better and Germany worse. Last year we estimated CSC’s UK revenues at £1.2b (+10% yoy), ranking them 9th in the UK SITS market. When we met ex-UK CEO, Nick Wilson (now heading HP UK – see Nick Wilson departs CSC) at the end of last year, we got the feeling that CSC’s UK growth would slow, though was still expected to be a few points above the market. If achieved, this would still put growth in positive territory.

Hains was typically circumspect on the NHS NPfIT, but it sounded like the programme was moving ahead despite the current political grandstanding; “We’ve got a delivery plan to meet ... and the hospitals are eager to get (the new systems)”. CSC has implemented 900 GP systems to date and installed systems in 35 major hospitals. He firmly believes that even if the government (pick a colour) decides to devolve ‘control’ further down the value chain – even to we citizens – the core systems CSC is installing will still be needed.

But the UK low growth does seem to suggest CSC is losing share given the creditable results from the major European players such as Logica, Atos Origin and Capgemini (see Logica Update). No doubt Hains will be asking CSC UK VP and COO Kevin Brown to pedal faster!

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