Close
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • 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
Logo
Logo
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Latest News
    • PC Hardware

    Look for the Payoff in Poor Earnings

    By
    eWEEK EDITORS
    -
    January 22, 2001
    Share
    Facebook
    Twitter
    Linkedin

      Earnings reports last week swooped down like an Alberta Clipper, suggesting the economy is headed for the deep freeze. Refreshingly, IBM, one bright spot and an accurate gauge of future IT spending, brushed aside this nonsense with a 28 percent rise in fourth-quarter earnings from a year ago. More important, IBM, according to Chairman Louis Gerstner, looks forward “to another good year.”

      Gerstner will probably be chided by President Bush for not being pessimistic enough.

      Fear not, there was plenty of misery to go around last week as Apple reported a greater-than-expected loss. Intel lowered its 2001 forecasts, and GE suggested big layoffs are in the wind. The worst news came from smaller techs and Internet pure plays. Vignette, citing uncertainty about IT spending, announced layoffs. So did NBCi and AltaVista. And DSL provider Northpoint Communications filed for bankruptcy.

      Rounding out this bleak picture, California plunged into darkness with rolling blackouts. What more? Oil prices shortly will head up again.

      Its too easy and perhaps unwise to adopt the herd mentality and pull the reins in on IT spending. Given the restrained market, now could very well be a propitious time to launch a project long relegated to the back burner due to skills shortages. The good news is consultants and product vendors alike are hungry for business.

      Analysts chided Intel for hiking capital spending to $7.5 billion this year, 12 percent more than last year and nearly double the figure in 1999. Intel, which has put cost controls in place and plans to shut down a plant in Puerto Rico, is counting on PC sales rebounding in the second half of the year.

      Beyond just admiring Intels boldness (Wall Street sees it as stupidity), there is a big potential payoff. While its competitors hunker down, Intel will be ready for the next upturn. With well north of $13 billion in cash, Intel can afford to take the risk even if it incurs the wrath of Wall Street.

      Ironically, IBM enters the year with unbridled confidence. In good times, Gerstner has been far more cautious if not downright gloomy in his prognostications. Just as the rising chorus of pessimism is hitting a crescendo, IBM is leaving the music hall.

      For its part, Microsoft, which met lowered expectations, cautioned that falling PC sales will make this a tough year. But dont necessarily believe Microsoft—it has a habit of setting lowered expectations and then sailing by them. This was the companys modus operandi for years.

      The company, with upward of $24 billion in cash, is also on tap to spend almost $4 billion in R&D for fiscal 2001, up from $2.6 billion in 1998.

      These three companies are technology bellwethers, able to rekindle a recovery faster than a half-point drop in the prime. But you have to do your part, too, and see beyond the prevailing state of economic sentiment. Gloom, after all, is a state of mind.

      eWEEK EDITORS
      eWeek editors publish top thought leaders and leading experts in emerging technology across a wide variety of Enterprise B2B sectors. Our focus is providing actionable information for today’s technology decision makers.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.

      MOST POPULAR ARTICLES

      Latest News

      Zeus Kerravala on Networking: Multicloud, 5G, and...

      James Maguire - December 16, 2022 0
      I spoke with Zeus Kerravala, industry analyst at ZK Research, about the rapid changes in enterprise networking, as tech advances and digital transformation prompt...
      Read more
      Applications

      Datadog President Amit Agarwal on Trends in...

      James Maguire - November 11, 2022 0
      I spoke with Amit Agarwal, President of Datadog, about infrastructure observability, from current trends to key challenges to the future of this rapidly growing...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Applications

      Kyndryl’s Nicolas Sekkaki on Handling AI and...

      James Maguire - November 9, 2022 0
      I spoke with Nicolas Sekkaki, Group Practice Leader for Applications, Data and AI at Kyndryl, about how companies can boost both their AI and...
      Read more
      Cloud

      IGEL CEO Jed Ayres on Edge and...

      James Maguire - June 14, 2022 0
      I spoke with Jed Ayres, CEO of IGEL, about the endpoint sector, and an open source OS for the cloud; we also spoke about...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2022 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.

      ×