Dark-horse chipmaker tops list of 2010’s biggest IT growers

Guess which major IT company enjoyed the most growth over the past year, in terms of market value. Apple? No. IBM? Nuh uh. HP? Quite the contrary. Odds are you haven’t heard of the tech firm that grew most in 2010 — though the five biggest losers in the category are household names.

According to analyst Robin Bloor of the Bloor Group, ARM Holdings — maker of the mobile chips that powers most of today’s smartphones, as well as the iPad — saw the most market-cap growth in 2010 among IT companies with total issued stock value of $5 billion or more. ARM’s market cap increased by just over 130 percent, Bloor reports.

The soaring adoption of mobile computing helped fuel that growth, according to Bloor — note the emergence of dozens of iPad-like devices in 2010. ARM has managed to muscle its way to the front of the pack among chipmakers for mobile devices while Intel and AMD have floundered. Further, ARM has piqued the interest of nonsmartphone vendors with eyes on PCs, routers, and servers.

Close behind ARM (Bloor calls it a dead heat) is Salesforce.com, whose market cap expanded by just over 127 percent. That level of growth might come as a surprise, Bloor noted; when is the last time the company made big headlines? Salesforce.com’s success is attributable not only to its overall strong CRM portfolio, but also to the rising acceptance of cloud computing.

Third on the list (its presence in the top five is likely the least surprising) is VMware, whose market cap shot up by just under 114 percent. The company has had fierce competition from Microsoft — which, Bloor noted, has practically given away Hyper-V for free — and Citrix, which dangles that tantalizing open source alternative Xen VM. Still, the company persisted in rolling out a strong portfolio of products to sate enterprises’ hunger for server virtualization, helping to bolster profits by 46 percent in the third quarter, year over year.

Rounding out the list of the top five were data-integration Informatica — another player in the white-hot cloud space — and Red Hat. The latter’s success could be attributed to the increased demand for Linux as a less expensive option to Windows in the server world, along with the fact that, according to Bloor, the company is leveraging its JBoss and delivering “virtualization (with the open source Xen and KVM), data storage technology (Infinispan) and a proposed cloud standard (Deltacloud).”

As for the biggest market-cap losers among IT companies in 2010, according to Bloor, there was a three-way tie at the top of the list: Adobe, Cisco, and HP all saw their market cap decline by 18.03 percent. Adobe certainly suffered from the infamous and crippling shot that Steve Jobs fired at Flash earlier in the year. Further, the company has faced its share of bad press for security vulnerabilities in its product lines.

Cisco’s market-cap decline isn’t indicative of health issues for the networking giant, Bloor wrote; the company continues to see high revenues and healthy margins. But Bloor warns, “However, the shine is no longer on the shoe. Cisco was once a juggernaut, but in the past 5 years its revenue growth has been sluggish, averaging about 8 percent. There doesn’t appear to be anything particularly wrong with the company. Perhaps investors have simply lost interest.”

HP’s decline, on the other hand, is a sign of serious concerns that have turned off investors. First, the company has been rocked by scandals involving not one but two CEOs in recent memory, Carly Fiorina and Mark Hurd. Moreover, HP has demonstrated an inability to reap reward from companies it acquires. For example, HP dropped $1.2 billion for Palm but has to yet roll out a smartphone or tablet in the heated mobile race.

Microsoft saw the fourth most significant market-cap decline, according to Bloor, at 8.2 percent. Although the Redmond-based company has seen success with Windows 7, it has struggled on key fronts against competitors such as VMware, Apple, and Google, and it’s “fighting for its life in the mobile market,” Bloor wrote. “The mobile market will gradually eat most of the PC market and as it does, Windows revenues and MS Office revenues will start to decline. That would cripple Microsoft.”

Rounding out the list of market-cap losers is AMD, which hasn’t been able to make headway against chip goliath Intel or the aforementioned dark-horse chipmaker ARM.

This article, “Dark-horse chipmaker tops list of 2010’s biggest IT growers,” was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog.