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March 13, 1996

FIGURES SHOULD BE TREATED WITH CAUTION, BUT SPAIN’S COMPUTER LEADERS POINT TO EMPHATIC RECOVERY

By CBR Staff Writer

Computerworld Espana recently published its annual ranking order of information technology companies in Spain, in which the top 100 companies in Spain claimed sales of more than 1,000m pesetas, $8,723m, in 1995. The information that the companies provide should be interpreted with a good measure of salt, since figures are often inflated to gain a better position in the ranking list, while the figures themselves include sales both to end users and to distributors, who enjoyed a bumper year in 1995. Nevertheless, the signs are that the sector has indeed recovered from the recession-ridden years of the early 1990s and that a new phase of growth and expansion is being enjoyed. The top 100 companies reported sales up 20% on the previous year, with the domestic market growing 19.2%. After several years of job cuts, staff numbers were up 3%, with a total of 30,603 staff employed in the sector at the end of last year. The turnover per employee ratio rose 13% to $252,623. Once again research and development investment levels are disappointing if compared with those of Spain’s European neighbors; the top 100 firms spent only $41m or an average 0.5% of turnover on research and development in 1995. Gone are the days of IBM’s stranglehold on the sector, when the gap between ‘El Gigante Azul’ and its closest competitor was more than $1,600m in sales. Hewlett-Packard, still unfamiliar with the words crisis and restructuring, is posing a serious threat to IBM’s hegemony, while its highly successful San Cugat, Barcelona factory was responsible for manufacturing two thirds of the entire sector’s exports out of Spain last year. The top 20 companies lined up as follows:

Rank Company Turnover +/- Staff +/- Profit 95 (94) 1 (1) IBM $1,705.6m -3.3% 2,933 -14.4% +$59.3m 2 (2) Hewlett $1,163.9m +47.2% 1,620 +22.3% +$82.0m 3 (3) Informatica $364.8m +28.8% 915 +26.2% +$4.1m 4 (7) Sistemas $287.6m +53.3% 993 +16.5% N/D 5 (12) Nixdorf $275.4m +100.0% 656 -7.2% -$2.5m 6 (10) Compter $235.5m +50.0% 200 +14.3% N/D 7 (5) Fujitsu $235.2m +16.3% 1,053 0.0% N/D 8 (4) DEC $232.8m +8.1% 631 -12.5% +$12.2m 9 (8) Olivetti $208.5m +11.9% 840 -10.5% N/D 10 (9) Indra $172.1m +5.0% 1,706 +0.3% +$8.2m 11 (6) NCR $168.9m -10.4% 757 -14.9% +$13.6m 12 (11) Bull $155.9m +13.1% 647 -0.8% +$8.2m 13 (25) Ing.Micro $138.3m +125.0% 160 +100.0% N/D 14 (13) Sintronic $126.1m +19.1% 115 +3.6% N/D 15 (23) Elc Data $108.4m +73.2% 1,154 +9.9% N/D 16 (15) Dinsa $104.1m +18.1% 387 +1.8% +$1.8m 17 (19) Rank Xerox $95.1m +28.9% 398 +0.0% N/D 18 (17) Compaq $95.0m +20.7% 44 +4.8% N/D 19 (20) Epson $90.2m +25.7% 97 +12.8% N/D 20 (16) CCS $89.1m +1.9% 1,111 -4.5% N/D

N/D – Not disclosed Perhaps a more reliable picture of the computing sector in Spain can be gleaned from the 1995 figures recently announced by SEDISI, the Spanish Association of Information Technology Companies. SEDISI reported a surprisingly buoyant final quarter in which hardware sold very strongly, making the final figures for the year look decidedly rosy. The sector showed overall growth of 10.4% (3% more than last time), with hardware leading the charge, up 14.7% on 1994. Software displayed signs of recovery, growing 10%, while services were up 4.9%. Hardware maintenance services grew 1.9%. SEDISI declared that the market began to pick up from the third quarter and suggested that if similar growth takes place in 1996, the sector will soon be in a position to start generating employment once more. The current mood is one of optimism and growth of 8% to 9% is tentatively predicted for 1996. SEDISI also chided central, autonomous and local public administration, which currently owe the sector some $550.9m, a figure that is up 2.1% in the last six months.

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