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Analyst warnings that IT organisations will not be immune from the credit squeeze have rang true for the first time since the global markets were hit in August. Although a universal slump in business for technology companies is yet to emerge, two of the finance industry’s key IT providers have declared a marked fall in sales. This week Detica, a UK provider of software and IT consulting, reported a “sharp decline” in demand from its financial services clients, particularly investment banks. The City-facing specialist said the slump in orders from financial organisations warrants a redeployment of its staff into its division serving public sector clients. “We expect that full year revenues from this unit [Financial Services] will be somewhat lower than the equivalent figure last year,” the firm added in a statement. The declaration comes just weeks after Cisco Systems reported a “pretty dramatic year-over-year decreases in orders” from financial organisations. In a reported conference call, chief executive John Chambers hinted the biggest drop off in sales for Cisco, which dominates sales of routers and switches, was from banks. But unlike Detica, Cisco said recent financial turmoil had spread way beyond the financial services sector, to hurt other large US-based businesses. “In financial services, especially the large financial institutions, we did see pretty dramatic year-over-year decreases in orders, and the same was true in areas such as automotive. “Retail was, candidly, a mix in terms of the approach, so we saw some very mixed results from the retail segment,” Chambers said. "Those are probably the three industry categories that were most affected.” More positively for the company, analysts at Prudential have pointed out that the US enterprise market is only a reported 12-13 per cent of Cisco’s total sales. The giant’s U.S. enterprise business, including the public sector and federal, saw year-over-year order growth in the mid-single digits, compared to Europe at about 20%. “Cisco will always be affected by major economic changes,” the company said. “We expect and continue to expect US enterprise growth to be very lumpy, both by US areas and industries moving forward.” The company added that sales of its technology in emerging markets would also be “lumpy” going forward, despite growth during the first quarter of about 30 per cent. Nov 22, 2007 Email this article Printer friendly page Previous Page
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