Well, I am back in the saddle for 2009. Usually, I look forward to embracing a new year—and all the new initiatives financed by all of those reloaded annual budgets. However, I cannot recollect a new year in my career when I had more anxiety regarding the resilience of the technology services industry. Will 2009 be a total disaster regarding technology services revenues or will this sector continue relatively unscathed as it did in the first three quarters of 2008? To help answer that question, my eyes will be firmly fixed on two datasets: The Service 50 and The TPS Tracker.
The Service50 Q4 Snapshot
Later this month, Bo DiMuccio and I will be hosting our quarterly webcast on the Service 50. As a reminder, we analyze the financial performance of fifty of the largest providers of technology services in the world. In that webcast, we report on the trends in services revenues, margins, and profits. Keep in mind that the Q3 snapshot showed strong performance for companies providing technology solutions. For example, take a look at the revenues, margins and profits of companies that were in both the Q3 2007 snapshot and the Q3 2008 snapshot:
As can be seen, 2008 was a growth year for these companies through Q3. However, the Q4 snapshot will be incredibly telling. If the companies in the Service 50 held revenues and profits at least flat compared to 2007, I believe this a positive indicator the technology services sector is continuing to weather the economic downturn relatively well compared to other industry sectors. However, if the Q4 snapshot shows a dramatic downturn in service revenues and margins, this could be the springboard into a very rough 2009.
The TPS Tracker
The second dataset will focus on is the TPS tracker (The Technology Professional Services Industry Tracker). For reminder of what this dataset is all about, read this previous entry: Tracking the Industry
When we took this snapshot in Q3, participating companies were confident Q4 2008 would not be disaster for their PS service lines. We collected data on three regions: North America, EMEA (Europe), and Asia. We asked companies how key PS business metrics actually came in for Q3 2008 and how they predicted those metrics would come in for Q4 2008. Here is how the North America snapshot came in:
As can be seen, participants had a weaker Q3 but PS revenues and profits did not fall off the cliff. More importantly, companies felt Q4 would see a slight increase in both PS bookings and revenues. Did this really happen? Was Q4 at least flat for TPS organizations? I, like you, am anxious to find out. To get this answer this month, you are welcome to participate in this TPS tracker survey. We do not collect actual numbers but have participating companies provide trend data. The data is collected via an online survey and relatively painless to complete. For more information, contact me directly at email@example.com.
I can’t wait until this month is over—the anticipation and related anxiety is killing me.