This page contains a Flash digital edition of a book.
INDUSTRY FINANCIAL REPORT


Accenture’s growth reveals global IT strategy plans, as software infrastructure vendors talk up the cloud


ACCENTURE is the largest remaining IT consulting business that is not attached to a technology vendor. While it nevertheless has its own outsourcing services to sell, that means the company’s financial performance provides a relatively independent view of the major IT undertakings that enterprise organisations are planning for the coming years.


The recovery took longer to materialise for Accenture than it did for most IT companies, thanks in part to the elongated sales cycle of IT outsourcing contracts, but its return to growth continued in earnest during the latest financial quarter.


During the three months ending 28 February 2011, the company took revenues of $6.1 billion, up 17% for the same period of the previous year. Bookings for the quarter reached $7 billion, Accenture’s highest since the closing quarter of 2008. Significantly, bookings for the consulting division were the second highest in the company’s ten-year history.


According to the company’s chief financial officer, Pamela Craig, fresh demand for management consulting is being driven by customers’ need to “to take out costs, to drive more top-line growth or to change to meet new compliance requirements”. Meanwhile, Accenture’s technology consulting business saw “significant activity in application modernisation”. “We are helping our clients to rationalise the operations of their infrastructures through virtualisation,” Craig said in a conference call with investment analysts, “and large companies are also engaging us to help them with their cloud computing initiatives.”


Also at their highest for ten quarters were bookings for consultancy on integration. “The primary driver is enterprise resource planning,” said Craig, “as clients are streamlining their operations and reducing their costs due to globalisation, [mergers and acquisitions] and regulation.”


Outsourcing bookings were “solid”, said Craig. “Business process outsourcing bookings were up significantly, especially [for] finance and accounting and… health and insurance.” Accenture’s resources division, which serves businesses from the chemicals, energy and utilities industries, was its fastest growing, with sales rising 21% to $2.3 billion. Craig explained that this was down to “ERP programmes, global operating model design and rollout, supply chain optimisation and Smart Grid projects” at those companies.


The financial services division followed, with 18% growth to $2.6 billion, driven by the sector’s


46 INFORMATIONAGE APRIL2011


need to meet changing compliance requirements, Craig explained.


The company’s recently appointed CEO, Pierre Nanterme, added that continued globalisation was driving “more consolidation and fuelling demand for our M&A services, as well as demand for global operating model transformation.” Accenture’s discovery that businesses are once again investing in their enterprise applications was also borne out by ORACLE’s latest set of financial figures. Overall, the company’s revenue grew by 37% to $8.8 billion in the three months ending 28 February 2011. Oracle’s acquisition of Sun Microsystems last year still has a lingering effect on that headline growth figure. However, the software division, Oracle’s core business before the acquisition, grew 19% to $6.0 billion during the quarter, so its growth is by no means illusory. The software growth included a 29% increase in new software licence sales to $2.2 billion. Perhaps surprisingly, Oracle saw sales of its applications in Europe increase 47% year-on-year in its latest financial quarter. Mark Hurd, the company’s co- president, described that level of growth as “simply huge”. By comparison, Oracle’s arch rival in the applications market, SAP, grew European software revenues 25% in its latest quarter.


CLOUD INFRASTRUCTURE


Oracle CEO Larry Ellison took the company’s financial report as an opportunity to talk up its cloud computing credentials.


“In Q3 we signed several large hardware and software deals with some of the biggest names in cloud computing,” he said in a statement. “For example, Salesforce.com’s new multi-year contract enables them to continue building virtually all of their cloud services on top of the Oracle database and Oracle middleware.”


Ellison’s choice of example is not arbitrary. At Oracle’s user conference last year, Salesforce.com CEO Mark Benioff publicly criticised the company’s cloud strategy. “Clouds are not in a box,” he said, referring to Oracle’s Exadata and Exalogic database and hardware systems. “Beware of the false cloud,” Benioff added. Open source enterprise software vendor RED


HAT also paid tribute to the cloud in its most recent financial results announcement. “We believe the strong demand we experienced was largely driven by customers who are modernising their data centres and preparing their infrastructure for cloud computing,” said CEO Jim Whitehurst. But if that gives the impression that enterprise customers are using Red Hat’s virtualisation platform, RHEV, to build so-called ‘private clouds’, Whitehurst later clarified that RHEV was mainly being used by public cloud providers. “We’re not trying to get at VMware’s installed base,” he explained to investment analysts.


www.information-age.com


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52