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This is a time I’d almost rather be an Analyst

October 23, 2008

Don’t get me wrong, I very much enjoy my career in analyst relations, it’s just that the uncertainty of the times makes for endless opportunities to prognosticate.

Economic Downturn Cycles

This is the low hanging fruit.  Depending on the product set a company has or where it is on the technology lifecyle chart, it could be doomed, about to bust, ok for now, suffer in the second wave of non-buying or could surf into the annals of profitability.

Companies are clamping down on expenses buying and new technology investment.  The easist things to cut go first like travel.  So count the travel companies as first victims, except that they rely on technology so the companies they buy from get a deduction or a delayed deduction in the upcoming buying cycles.  I wouldn’t doom them as we are going to travel, but suffer would be appropriate.

Older technologies fall in two categories.  A lot of financial institutions have tons of legacy infrastructure that has to be maintained.  There is a trade off in the cost to maintain vs. the savings gained by using newer technology.  This is an easy decision on the lower security issues, but where privacy and security reign, don’t count on rip and replace.  The other category is replace any easy system that saves money or has broken, cut out the rest.

My datacenter experience has been that no matter what you are promised, the cost recovery is rarely there for the first years of a new technology implementation.  There is too much training, running dual systems for integrity, and of course the unknown.

The second slowdown wave is where contracts need to be renewed or lack of spending holds off sales.  These companies could be parts suppliers or those who have customers who aren’t buying.  That will be tough to tell as the first wave of immediate non buying will blend into this wave.  Earnings statements should give us an indication of this wave.

Finally, there are companies who have technology that makes sense (SaaS could be an example) where they will be in the right place at the right time and iff (iff is if and only if for you JCL and OCL types) you can show value, save money or help a company make money.  Everyone is watching their tails and hedging their bets so this is the sweet spot.

I thought of one last class, those companies who can manage to hang on long enough for the economy to turn around, but how many IBM’s, Microsoft’s, Google and Apples are there?  This is a good question for Yahoo to answer.

Analyst or Meteorologist

Everyone cracks the joke that being a Weathernan person is a great job as you can be paid even if you are wrong half the time (jokes here range from William Ayers to global warming).

This is where a good analyst earns their mettle.  How to forecast what is reality for which industry.  Eventually, except for examples like unstopping drains, there is IT involved so it gets back to our industry.

Predicting is next to impossible, advising and reporting are key elements of the analyst value to us right now.

WHY

There is a bigger chance to be wrong then right here, so why would I like to be an analyst on this one?  The challenge of finding out the answer is intruiging.  It is the thrill of the hunt, not the kill.   The endless amount of machinations of companies succeeding, treading water or drowning will happen at a rapid rate.

We’ll get to see who and what groups are what they say they are, the pundits.  No pressure right?

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