Software developers have suffered a rise in insolvencies of more than a quarter year on year, according to recent figures.
The number of companies in software development for the business or domestic markets that filed one or more insolvency notices in the third quarter of 2015 was up by 27.1% compared with the same period in 2014, rising from 48 to 61.
However, the latest figures from the Exaro Insolvency Index show that the level of insolvencies across information and communication companies over the same period fell slightly, from 528 to 521 – a decrease of 1.3%.
The overall figure represents a decrease of 5.6% on the second quarter of 2015, down from 552 companies.
“Competition is fierce. Many IT businesses are having to defend themselves from being undercut by rivals,” said Andrew Corbett, membership services director of the UK IT Association.
IT consultancies continue to endure rising insolvency levels, although it has decelerated marginally since the previous set of figures.
The latest figures show a year-on-year rise of 12.9% in insolvencies among IT consultancies, going from 194 in the third quarter of 2014 to 219 in the same period in 2015.
Of course looking at these figures in isolation does not mean that software developers are IT consultancies industry is in decline. Many firms are very successful and the sector itself is growing. This can be seen in the huge number of companies that are moving to “silicon roundabout” in London. However, it is inevitable that some miss out and fail to compete in the fast paced environment.
Categories: Creditors Voluntary Liquidation CVL