So it’s all change at the IT services group LogicaCMG. Martin Read, chief executive and leader of the company for the past 14 years has decided to step down, though he remains in post until a successor is found.

There are a couple of interesting observations one can make from this turn of events. Read himself attributed his decision to go to a single project overrun that cost the firm about £10m, plus generally depressed trading. The formal line from the company pointed to unsettling speculation in the market following its recent announcement that half-year revenues would be lower than last year. When the profit warning was made last week, nine per cent of the share price value vanished immediately. Both could be right, but there is always a bit of short-term market uncertainty when a listed company announces a profit warning.

Some commentators are suggesting that LogicaCMG can’t handle the competition from the Indian IT companies all ramping up their service offering in Europe. The Financial Times even went so far as to name Wipro, TCS, and Infosys as the key rivals making life hard for LogicaCMG these days. LogicaCMG is engaged in its own programme of hiring in India, creating its own blend of offshore as well as onshore local expertise, so the firm has already embraced the concept of a global delivery model for IT services.

But there must surely be more to it than just this though. So LogicaCMG has announced a downturn in profits and a hit on a particular project. That sounds pretty much like life as normal in IT services. Most of the time projects work out well, but now and again there are overruns and the service provider has to take it on the chin. LogicaCMG is still a name and brand that has exceptional value in the IT services marketplace. If the Indian players are really troubling the company then it can’t be down to reputation or branding as the bright yellow logo of LogicaCMG in the Hampstead Road is generally trusted a lot more than the offshore operators, no matter that they are ramping up UK operations.

I don’t have any inside knowledge, so I can only speculate as to what is going on, but it wouldn’t be a surprise if some of those companies being named as international competition (Indian or not) are running a sliderule over some European IT service groups, as a way of consolidating their entry into Europe and leveraging off an established brand. With the LogicaCMG share price taking a tumble and the management situation uncertain, it would not be a surprise if the next chapter in the story were a bid for the group from an erstwhile rival.