The CBR 250

CBR 250: Size Matters

As the IT industry begins to enjoy sustained quarterly growth Matthew Aslett assesses the trends indicated by CBR's ranking of the industries top 250 vendors.

The big are getting bigger and the small are getting smaller, according to the CBR 250, CBR's ranking of the 250 biggest public revenue generators in the IT industry.

Based on the latest annual financial results, the CBR 250 ranks vendors according to revenue and indicates that the industry as a whole grew average revenue by 7.9% in the last financial year.

That was achieved thanks to average revenue of $3.13bn in the latest financial year, compared to $2.90bn the previous year. While most vendors have managed to get themselves back into the black in more recent quarters, the CBR 250 also shows an average net loss of $2.7m in the most recent financial year, although that was at least an improvement on an average net loss of $94.4m the previous year.

The figures are skewed slightly due to the CBR 250 covering the latest published annual results, some of which were published in late 2003, but a lower rate of growth compared to more recent quarterly results indicates that many companies will be showing higher rates of growth when they publish their next fiscal results.

This is likely to be especially true of the largest vendors, who are expected to keep getting bigger, according to the CBR 250. The 50 biggest vendors, responsible for $671.74bn in revenue, or 85.8% of the CBR 250 total of $782.76bn, are outpacing the market, with 8.3% average revenue growth in the latest financial year.

The next 50 biggest, ranked between 51 and 100, are hanging in there. Responsible for just 8.1% of the total revenue, they recorded average revenue growth of 7.2% in the year. While these vendors are growing just behind the industry average, the rest of the CBR 250 appear to be falling away.

Vendors ranked between 101 and 150 are responsible for 3.5% of total revenue and showed average revenue growth of just 3.4% in the year, while those ranked between 151 and 200 fared slightly better. Responsible for just 1.6% of total revenue they saw average growth of 3.9% last year.

While much is made of the ability for smaller companies to enjoy rapid growth, those at the bottom of the CBR 250 actually shrunk on average. Responsible for 0.8% of total revenue, vendors ranked between 201 and 250 saw average revenue shrink by 0.3% in the year.

The fact that some of the smaller vendors recorded the highest growth rates indicates just how badly the majority of these smaller vendors are doing. For example, Dot Hill Systems, ranked 195 on the CBR 250, showed revenue growth up 299% to $187.5m in its full year 2003 thanks to an OEM deal for Sun's StorEdge low-end disk arrays, making it the fastest growing vendor in the whole of CBR 250.

One again, IBM topped the list of the largest revenue generators, with revenue up 9.8% to $89.1bn and net income of $7.6bn, up from $3.6bn the previous year.

Key to Table

RA - RANK
CO - COMPANY
MA - MAIN
ACT YE - YEAR END
RE - REVENUE ($M)
%C - % CHANGE
NI - NET INCOME
PI - PREVIOUS NET INC ($M)

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