Agentless Backup is Not a Myth

There were some spectacular falls on the London market on Friday, which was reacting to overnight falls on Wall Street. The FTSE was off three per cent, but the technology sector suffered badly. The UK IT sector as a whole was down 14 per cent on the day. The main reason seems to be the weakness of banks and the fact that they are the biggest customers for custom software. Gold pulled past $300 again. In the case of Misys, bank-related business is more than 50 per cent, for Sema and Logica it is around 25 per cent. Misys' fall of 26 per cent was encouraged because Merrill Lynch downgraded Misys, the biggest company in the sector. It does seem that the reaction was extreme, since around 30 per cent of Misys' income is from software licence fees and it is all but impossible for the banks to exist without Misys software. Sema's 23 per cent fall was equally ridiculous since it derives much of its income from multi-year outsourcing contracts which cannot be cancelled without penalties -- assuming Sema performs, of course. Announcing contracts did not help either FI or Logica. FI, a programming operation with an Indian subsidiary, was down 18 per cent despite its £20 million London Electricity contract, while Logica did not profit from the announcement of a £15 million contract with Shell UK Exploration, but perhaps it was a reaction to the previous day's news that it was acquiring the US-based Carnegie Group for $35 million. London Bridge Software was down 15 per cent, CMG fell ten per cent, and Sage was down nine per cent. ® See also US markets on 2 October Click for more stories

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