Uncertainty In UK computer software industry

A study of the UK's leading computer software companies has shown that few are fully in control of their overall business strategy.

A study of the UK's leading computer software companies has shown that few are fully in control of their overall business strategy.

The survey - by business analysts Plimsoll - indicates a remarkable inconsistency in the companies' commercial and financial behaviour.

Very few of the computer software firms planning to come out on top in 2007 in terms of profit and sales will actually achieve their goals.

David Pattison, senior analyst on the project, says: "In today's highly competitive computer software market you cannot sit still for a minute".

"If you have seen sales increase this year and good profits, there is a fair chance that next year you will not be able to maintain it".

"Likewise, if you did not increase sales this year you are going to have to set a priority of trying to grab some growth in the next trading period".

The survey comes a year on from a previous Plimsoll study of the computer software market.

The company, based in Stockton-on-Tees, is one of the leading business performance analysts in the UK, France and Japan.

More than 16,000 customers worldwide rely on its highly detailed and up-to-date reports to allow them to make swift, well-informed evaluations of a wide range of commercial sectors.

The company takes its name from the Plimsoll line, the safe loading line mechanism developed in the 19th century to ensure that ships stayed afloat.

Last year, Plimsoll carried out a survey grading each company based on how successful they were performing on two fronts:.

1 In the market based on their sales and commercial success.

2 Their overall financial strength, taking into account profitability levels and the level of debt carried by these companies.

This year, Plimsoll has revisited and updated the analysis to see how the companies have coped with another year of competitive trading.

The findings show that more than half of the 1500 companies analysed have changed strategy in the last 12 months- and not all by choice.

Winners - Of the 493 winners last year, 227 have retained their winning status.

353 are new to the Winners category, having switched strategy since last year.

Losers - Of the losers last year, 125 have found themselves in this less than prestigious category for a 2nd year.

More worryingly for the industry, they have been joined by 120 other new 'losing' companies.

Chasers - Of the 218 companies awarded this status last year, 87 continue with their pioneering strategy.

They have been joined by another 155 companies, bringing the total number of chasers in the industry to 242.

Sleepers - Last year Plimsoll ranked 504 companies as sleepers.

247 of these continue to preserve financial strength at the expense of sales growth, and they have been joined this year by 186 other companies who have switched strategy.

Said David Pattison: "What this analysis is clearly saying is that, in a very competitive market, of the companies planning to be a winner by the end of 2007, few will actually achieve their goal".

The Plimsoll Portfolio Analysis- Computer Software is aimed at anyone who has a commercial interest in doing business with a computer software company.

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