It was 20 years ago today
No, I don’t mean the opening line of a Beatles song; I’m referring to the 20th anniversary of the first Holway Report. It’s an annual analysis of the UK software and computer services (SCS) market published by industry analyst Richard Holway. In marking that anniversary, Holway drew our attention to the following:
- In 1988, the top ten players had 24% of the £2.5b market. Today’s top ten have 50% of a £31.4 billion market.
- That’s a CAGR of 14% pa, but the current decade has seen only single digit annual growth (sometimes negative).
- Between 1986 and 1987, line charges (what we used to call data communications charges) grew by 29% to £340m – somewhat less than the £544m that DP departments (what we used to call IT departments) spent on paper!
- In 1988, listed SCS companies’ average P/E was 16.8 – similar to today, and way down on the frenzied levels of the various tech bubbles.
- Of the 50 quoted UK SCS companies in 1988, most have disappeared. Logica is the only ‘biggie’ remaining.
I expect you’d see a similar story in most countries. Oh yes, and for disappointed Beatles fans, here’s a link to that song.
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