Close
  • Latest News
  • Cybersecurity
  • Big Data and Analytics
  • Cloud
  • Mobile
  • Networking
  • Storage
  • Applications
  • IT Management
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Menu
Search
  • Latest News
  • Cybersecurity
  • Big Data and Analytics
  • Cloud
  • Mobile
  • Networking
  • Storage
  • Applications
  • IT Management
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Applications
    • Applications

    Its Time for Tech Firms to Bet on Growth

    By
    Scot Petersen
    -
    October 4, 2004
    Share
    Facebook
    Twitter
    Linkedin

      Theres a joke going around that our lives have become so boring that weve taken up watching people play cards on TV. In fact, one of TVs latest phenomenons, all-star and celebrity poker, has joined reality TV as our latest diversion.

      Not so amusing is that observing the IT industry has become something like watching poker, except that the stakes are much higher and the players arent as good. Weve seen too many tech companies betting large on mediocre hands, especially lately. You can see it in the markets as tech firms struggle to keep their stock price above water. The IT industry seems like its sleepwalking its way through the fall.

      A lot has been promised in the way of a tech recovery, but its clear corporate America is not buying—or spending, either. Industry leaders have been offering too few innovations and too many marginal upgrades—at not-so-marginal prices. Meanwhile, a lot of vitality is being sapped from the industry as a whole by offshoring.

      Its time for industry leaders to put their cards on the table. At Hewlett-Packard, for instance, that means coming clean on the state of HP “PCM”—thats Post Compaq Merger. To recap, in May HP CEO Carly Fiorina announced that HP was so confident about growth that the company raised its second-half outlook. Only three months later, Fiorina lowered the outlook in reporting lower-than-expected third-quarter earnings. Whoops.

      It also came to light that poor execution in HPs Enterprise Storage Group, due to a faulty SAP migration, cost the company about $400 million in revenue. Earlier this month, speaking before a Bank of America securities conference, Fiorina said the problems are now fixed. But the pressure is on the company to deliver in an enterprise computing market that is not investing heavily in large systems. The recent, renewed rumblings that HP should spin off its lucrative printer and digital imaging business as a separate company isnt such a bad idea. Given a choice, HP shareholders might agree.

      At Microsoft, the implications of the “Longhorn” delays announced this summer are still sinking in. WinFS, the crown jewel of the new platform, is out; “Avalon” may be next. Despite the cuts, users still will have to wait till 2006 before the upgrade, which is looking more and more like it will be more like XP SP2, part 2. The opportunity has never been better for competitors, yet few challengers are prepared to strike. Linux and open-source options may be ready to step in, but as we reported last week, some customers feel Linux is just not ready, and theyre switching back to Windows.

      Over at Sun, although the brain trust is sincerely trying to get the message down, its still muddled. Sun is alternately a Solaris/SPARC company, an x86 and commodity hardware company, a Linux company, an open-source company, and a Java company. Customers are wishing that the real Sun would please stand up.

      Intel, another industry pillar, has also been suffering this year, as a result of too much emphasis on computer chips and not enough on mobile chips and devices. HP delivered a blow last week when it announced it is discontinuing its Itanium-based workstations, the latest problem with the 10-year-old chip initiative. Meanwhile, Advanced Micro Devices is gaining traction as the low-cost processor maker of choice.

      Who else? I could go on, but its clear theres a pattern here. Tech users have responded to the changing environment since the end of the dot-com boom by cutting costs, establishing ROI benchmarks and shifting costs to outsourcers. Tech manufacturers, however, have not. They are still running the same basic business models theyve always run, scratching for any small or near-term growth they can get but missing, or not communicating to customers, the long-term solution.

      The bet-the-company scenario has been played many times before by these and other technology leaders. But they might have to try it again unless they are satisfied with slow, single-digit growth. They may have to take some risks—real risks. If they do, that may actually be fun to watch.

      News Editor Scot Petersen can be reached at [email protected].

      To read more Scot Petersen, subscribe to eWEEK magazine.

      Check out eWEEK.coms Enterprise Applications Center at http://enterpriseapps.eweek.com for the latest news, reviews and analysis about productivity and business solutions.

      Be sure to add our eWEEK.com enterprise applications news feed to your RSS newsreader or My Yahoo page

      Avatar
      Scot Petersen
      Scot Petersen is a technology analyst at Ziff Brothers Investments, a private investment firm. Prior to joining Ziff Brothers, Scot was the editorial director, Business Applications & Architecture, at TechTarget. Before that, he was the director, Editorial Operations, at Ziff Davis Enterprise, While at Ziff Davis Media, he was a writer and editor at eWEEK. No investment advice is offered in his blog. All duties are disclaimed. Scot works for a private investment firm, which may at any time invest in companies whose products are discussed in this blog, and no disclosure of securities transactions will be made.

      MOST POPULAR ARTICLES

      Android

      Samsung Galaxy XCover Pro: Durability for Tough...

      Chris Preimesberger - December 5, 2020 0
      Have you ever dropped your phone, winced and felt the pain as it hit the sidewalk? Either the screen splintered like a windshield being...
      Read more
      Cloud

      Why Data Security Will Face Even Harsher...

      Chris Preimesberger - December 1, 2020 0
      Who would know more about details of the hacking process than an actual former career hacker? And who wants to understand all they can...
      Read more
      Cybersecurity

      How Veritas Is Shining a Light Into...

      eWEEK EDITORS - September 25, 2020 0
      Protecting data has always been one of the most important tasks in all of IT, yet as more companies become data companies at the...
      Read more
      Big Data and Analytics

      How NVIDIA A100 Station Brings Data Center...

      Zeus Kerravala - November 18, 2020 0
      There’s little debate that graphics processor unit manufacturer NVIDIA is the de facto standard when it comes to providing silicon to power machine learning...
      Read more
      Apple

      Why iPhone 12 Pro Makes Sense for...

      Wayne Rash - November 26, 2020 0
      If you’ve been watching the Apple commercials for the past three weeks, you already know what the company thinks will happen if you buy...
      Read more
      eWeek


      Contact Us | About | Sitemap

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Property of TechnologyAdvice.
      Terms of Service | Privacy Notice | Advertise | California - Do Not Sell My Information

      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×