Results season: Don't mention the war

Three IT heavyweights shuffled out in front of the class late last week, looked sheepishly at their shoes and admitted that their homework wasn't up to scratch. In a manner of speaking.

In the last couple of days, PeopleSoft, Siebel and Sybase have all said that their soon-to-be-released financial results aren't going to be as good as expected.

And somewhat inevitably, the Iraq war bore the brunt of the blame.

Siebel chief executive Tom Siebel said: "As the quarter progressed, global economic and geopolitical conditions seemed to become even more challenging. By mid-February, it felt in some ways like the September 2001 quarter."

But Mr Siebel was also asked whether he expected business to improve after the war. He replied it was hard to say. So is the war simply providing a good excuse for bad performance?

PeopleSoft doesn't think so. Craig Conway, the company's president and CEO, said: "Obviously the environment for capital spending worsened in the first quarter with added concerns about the war and its impact on the already weakened economy. The result was delays in corporate purchasing worldwide."

Sybase CEO John Chen didn’t make such an explicit reference to the war, but it doesn't take a genius to work out what he meant when he said: "We saw numerous transactions deferred to future quarters, as customers put IT purchases on hold with the increasing economic uncertainty."

Strange, then, that at least one high-tech company actually came out and said things were better than expected last week: step forward RIM, maker of the Blackberry device, and accept your gold star...

All experienced watchers of this industry - and indeed any industry - will hardly be surprised at this. Companies will always try to deflect criticism whenever possible, and when there's (probably) a global recession on and (definitely) a war, it's easy to namecheck such factors, and perhaps with some justification. RIM's market is very different from the other three companies mentioned after all.

But market researcher IDC really hit the nail on the head last week. Its worldwide IT markets group director said: "The outlook for the next six months continues to be extremely volatile, and a double-dip IT recession can't be ruled out in a worst-case scenario. But the fundamental drivers remain solid."

For volatile, read: 'We simply don’t know what's going to happen in the short-term.' And that's the most honest view of the current climate, and one which Tom Siebel was forced grudgingly to admit to holding.

This week sees Juniper Networks and Sorrento Networks report their latest financial results, while Yahoo! will report some earnings news. Keep your eyes peeled for the usual excuses/reasons for any bad news, and remember: no one really knows how big an impact the war/recession is having on specific companies or IT spend in general these days, so sit tight and wait until 2004. Then we'll know who was using the war/recession as a scapegoat when in fact they were struggling for reasons much closer to home.