This past week we read the news of impending layoffs at Cisco, a strong financial report from Dell and a cautious outlook from HP.  A mixed bag for sure.  Looking back at the past few years of revenue reporting from the technology companies in The Global 5000, we find a pattern of ups and downs in this sector.

There are 307 technology based companies the The Global 5000 with HP, IBM, Nokia, Microsoft, Fujitsu and Dell leading the way. Overall in technology, the combined revenues grew 14.5% in 2007, then fell to 5% in 2008, suffered a decline of 7.3% in 2009 and then rebounded to 15% last year. As the economy slowed and fell  — so did they. Last year was a great comeback but it is sounding like that growth rate may not be sustainable.

Below the top level, we have further sliced the data looking at Software, Semiconductors, Internet, IT/Data Services and Equipment. Software, Services and Internet offerings were the strongest during the period and – while slumping during the recession – they did not see the declines.

Semiconductors might be the real bellwether here.  There are 93 Semiconductor companies in The Global 5000. and their revenue change over the past few years, looks like this:

  • 2007 = 10%
  • 2008 = neg 5%
  • 2009 = neg 17%
  • 2010 = 29%

The orders and sales here experienced the downturn before most industry groups and it was a long period — 2 years. It also went deeper than most with the 17% drop and rebounded sharply last year. It may be an exaggerated indicator but an accurate pattern worth paying attention to.