The future looks bright for most of the tech industry

The future looks bright for a lot of the technology sector as a number of key players released positive financial results this week. However, one industry, the virtualization market, appears to be slowing down.

Results published by data integration software vendor Informatica, show a fourth quarter profit of $20.6m, or $0.21 per diluted share, calculated in accordance with US generally accepted accounting principles (GAAP). This is a 40 per cent increase on the same period the previous year.

EMC’s fourth quarter gave a profit of $525m, or $0.24 per diluted share. This is 33 per cent higher than the GAAP earnings a year ago during the same period.

Also positive were the results published by UK outsourcing provider Atos Origin, which signed £400m worth of UK contracts in the fourth quarter, with a 19 per cent growth in the financial sector and a 13 per cent growth in health. Business service management vendor Managed Objects published increased revenue of 20 per cent, but the privately held firm would not disclose its net profit.

However difficulties might lay ahead for firms in the virtualization software market, such as EMC's storage vendor VMware. At the time of writing, the firm's share value was marked at 56.42 per cent, which is a significant contrast to VMware’s 52 week high at 125.25 per cent.

But EMC spokesman Dave Farmer said “The market misunderstands how strong the company is,” adding, “name another billion dollar company that can grow at that rate.” The firm, which EMC has an 86 per cent share in, published fourth quarter results showing a GAAP operating income of $78 million, or $0.19 diluted share.

The positive results have been the outcome of strategies targeting new markets, said many of the firms. Atos Origin is trying to establish better balance across its key markets, while Informatica pointed to its “three pronged growth strategy.” EMC said its agenda has been concentrated on integrating many of its different units

The three pronged growth strategy Informatica is concentrated on is “expansion across all major geographic regions, growth of our addressable market beyond traditional data warehousing, and advancement of our leadership through continuous innovation,” said Sohaib Abbasi, Informatica chairman and chief executive.

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