AlixPartners forecasts year of IT mergers and acquisitions

Consultancy says pace of change is faster than ever before

The growing gap in the IT industry between companies that fail and companies that perform well is likely to lead to a year of mergers and acquisitions, according to US consulting firm AlixPartners.

The company's latest research found that the IT industry is full of "winners or losers", and that 44 per cent of companies are at risk of near-term financial distress.

This sizeable gap in performance has already led to Google's bid acquire to Motorola Mobility, AT&T's offer to buy T-Mobile USA, and HP's potential divesting of its PC business.

Michael Weyrich, AlixPartners managing director, explained that this divide is occurring because the pace of technological change is "faster than ever before".

"For example, market shares are rapidly moving away from traditional players like HTC and Nokia. Look at how quickly Apple and Android picked up pace in the mobile market," he told V3.

"The speed of change is now critical to businesses. Before, when a company was suffering, there was a time lag before it failed. Now that time lag has shortened so the loser is flushed out faster than it would have been."

AlixPartners also published details of how the IT industry has performed since the global recession in 2009.

The IT industry went into a modest decline of just three per cent in 2009, followed by a jump of eight per cent in 2010. The first quarter of this year saw IT revenue pick up by 10 per cent.

The semiconductor sector, which suffered the worst revenue loss at 15 per cent in 2009, topped the overall industry's rebound, posting 29 per cent revenue growth in 2010.

However, Weyrich warned that it is the high-tech industry's sub-sectors like semiconductors that are most at risk from the double-dip recession financial analysts say is about to hit global markets.

"When sectors go up and down in revenue a lot, they are more at risk," he said.