This week, TSIA has been analyzing data from our Q2 2010 snapshot of the TSIA Service 50. This is an index of fifty of the largest providers of technology services. As I pore over the data from the Q2 quarterly earnings, it is clear that the recovery for the tech industry is not just centered in a few strong performers like Xerox or Intel. The recovery is presenting itself across the tech sector in companies both large and medium sized. Also, the Q2 numbers were better than the Q1 numbers—which shows the trending is in right direction!
On Thursday, I will be delivering my one hour dissertation on the Service 50 Q2 data. To join me, register here:
To give you a glimpse of some of the analysis, below is a chart that segments the revenue trends of the companies in the Service 50. As can be seen, compared to the same quarter one year ago, companies are seeing an increase in product revenues.
Historically, for technology companies, the return of product revenue growth is always news for celebration. Specifically, because tech companies operate to one clear truism:
Product Revenue = Profitability
Even services intensive tech companies like IBM, Xerox, and Oracle still operate to this unshakable truth. Yet, there is a disturbing trend that is beginning to present itself in the Service 50 data that questions this high tech truism. To learn more, join me on Thursday.