Sunday, 13 May 2012

How’s business?

Since 2008, the world seems to have lurched its way from one financial crisis to the next. In the UK they’re talking about double dip recession. In Spain, things look difficult. And in Greece, things look impossible! So how are the big mainframe companies weathering the storm? Are we looking at an extinction-level event? Are the big players (the metaphorically dominant dinosaurs) going to be replaced by smaller companies (the metaphorical mammals)?

For people who like this kind of thing, there are meant to have been five mass extinctions in the Earth’s history. There’s the Cretaceous–Paleogene extinction event (about 65.5 million years ago) when about 75% of species became extinct, seeing the end of the dinosaurs, and mammals and birds becoming the dominant land vertebrates.

There’s also the Triassic–Jurassic extinction event (205 million years ago). The Permian–Triassic extinction event (251 million years ago), which is referred to as the ‘Great Dying’. The Late Devonian extinction was about 375–360 million years ago. And the Ordovician–Silurian extinction event was 450–440 million years ago.

BMC Software’s fiscal fourth-quarter earnings fell 42%. On the dowside there was an increase in operating expenses, while on the up side they saw slightly improved revenue. It seems that cloud services bookings totalled $100 million for the year – 10% ahead of analysts’ projections. The company closed its acquisition of Numara Software, which added to revenue in the fourth quarter, and gave BMC additional IT management tools and distribution to mid-sized companies. BMC also has 25% more sales people than it had a year ago. Looking at the bottom line: for the quarter ended 31 March, BMC Software reported a profit of $70.7 million, or 43 cents a share, down from $122.5 million, or 67 cents a share, a year earlier.

CA Technologies’ fourth-quarter earnings increased from last year, helped mainly by lower income tax payments. Revenues for the quarter rose 5 percent from last year, but were mostly offset by increased product development and general expenses. Its fourth-quarter net income was $211 million or $0.45 per share, compared to $188 million or $0.37 per share last year. Its net income jumped by 12%.

IBM recently reported flat revenues as its hardware business struggled in the first quarter of 2012. Revenues increased by just 0.3 percent to $24.7billion from the same period last year, although profits increased by 7.1 per cent to $3bn. IBM’s figures for each of its major divisions were generally positive, especially its cloud services, which saw revenue double, however its hardware business suffered a 6.7 percent decline in revenue to $3.7billion. IBM has raised its 2012 full-year earnings per share forecast to at least $15.00.

I couldn’t find any figures for Progress|DataDirect.

So, it seems financially to be a bit mixed rather than anywhere near an extinction for the big beasts of the mainframe software world. There may be a number of small mammals running around their feet, but these metaphorical dinosaurs are far from fighting for their very existence. It’s always worth remembering that dinosaurs were the dominant terrestrial vertebrate for around 135 million years. Mainframes have only been with us since the 1960s They’ve still got quite a long way to go!

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