VAR500 This Week: Sapient Revenue Rises, Qwest Offers Hosting, And More

More earnings came out this week, and the results are a mixed bag. Outsourcing and managed services firms gained, despite some setbacks. Still, demand is bubbling up -- and over -- for some.

Sapient (2009 VAR500 rank: 114) reported fourth quarter revenue of $183.5 million compared to $164.7 million in the fourth quarter of 2008, an increase of 11 percent. Compared with the prior quarter, service revenue was up $17.9 million, or 11 percent, from $165.5 million in the third quarter of 2009. Looking forward, Sapient forecast first-quarter revenue in the range of $177 million to $181 million, which is greater than the $175.1 million many analysts expect.





"We finished the year strongly and are very proud of our accomplishments given the difficult economic conditions last year," said Sapient President and Chief Executive Officer Alan J. Herrick in a statement. "As we look to 2010, we believe we are well positioned to grow our business and improve our operating performance as we help our clients succeed."

Cognizant (2009 VAR500 rank: 48) will give a presentation at Goldman Sachs' 2010 Technology and Internet Conference. Gordon Coburn, the solution provider's CFO and COO, will host Cognizant's presentation. The conference can be attended via a link on the company's Website, or by directly going to http://investors.cognizant.com/.

French solution provider Atos Origin (2009 VAR500 rank: 18) saw 2009 revenue fall 3.7 percent to $6.93 million from 2008. Profits rose 8.5 percent to $264.8 million and net income rose 40 percent to $44 million, due largely to a strong performance at its U.K. operations.



In the U.K., revenue grew 7.4 per cent due to the performance of managed services, while France remained steady and Germany and Benelux saw revenue fall. Consulting and systems integration saw sales dip a bit.



"We have developed distinctive offerings and launched many new projects with the support of our Scientific Committee, and we have set up an organization to address the technological challenges in the IT sector," said Thierry Breton, Atos Origin chief executive, in a statement. "The implementation of High Tech Transactional Services as a new Global Service Line to roll out the offerings of Atos Worldline into our major geographies is well underway and is one of our major achievements in 2009."

In response to growing demand for cloud-based services, Qwest Communications (VAR500 2007 rank: 19) has opened its 17th data center nationwide. The center is the third in the Washington, D.C., area. The 129,000 square foot "CyberCenter" currently supports one federal government customer, and is equipped with redundant state-of-the-art network and hosting capabilities.



"Our managed CyberCenters offer customers a compelling alternative to taking on the considerable risk and expense of building, maintaining and staffing their own facilities," said Chris Ancell, executive vice president of Qwest Business Markets Group, in a statement.

Pricing pressures and the sharp demand for its IT services conspired to cramp Capgemini's (2009 VAR500 rank: 7) performance during the fourth quarter of 2009. Capgemini's revenue fell 8.4 percent to $11.31 billion U.S. compared with the fourth quarter of 2008, and revenue declined by 3.9 percent year-over-year. All of the solution provider's businesses, with the exception of outsourcing, declined amid the economic downturn.



The company has said it is positioning itself to return to growth in the second half of 2010, in a market indicating some signs of stabilization. "The Group has shown quite respectable resilience," said CEO Paul Hermelin in a video on the company's Web site. "We just launched a lead program to reinvent our delivery. There are big productivity gains that are within reach. Thanks to offshore we can be more productive and even onshore by reinvesting in innovation we gain very significant savings." The company is also considering acquisitions in the U.S. and in emerging markets.