It's becoming increasingly hard for me to reconcile the news I read, see, and hear about the economic downturn and its affects on the technology center with what I hear from companies that work in the technology field.
Just yesterday, for instance, the Wall Street Journal reported that Cisco Systems posted a 27% drop in quarterly profit and that its revenue fell 7.5%. CEO John Chambers expressed a gloomy view for the current period in an analyst call, according to the paper. Of course, these numbers are not quite as bad as what my 401(K) did last quarter. But then Cisco basically owns the Internet, and I...don't.
I also read about reported layoffs at Microsoft and IBM. Chambers pointedly did not rule out further layoffs at Cisco.
But HP representative Gerard Nolan painted a different picture yesterday. He suggested that most vertical sectors, excepting banking, seemed able to support their IT projects, especially data center projects. Peter Marin said something similar to me just a day earlier, explaining that obtaining capital had become an issue for some companies but that he could count at least 20 companies exploring space agreements with T5, a developer of shells for high-performance data centers. Most other developers, builders, owners, and vendors agree.
I'd like to hear your thoughts about the dissonance between what I hear all around me, and what I hear in interviews and conversations.
In past blog entries, I've described the data center industry as a bulwark in tough times. I've also worried that weakness in other sectors will harm customers so painfully that data center orders will drop significantly. I'd like to find a definitive answer to this dilemma.
Today the nation's elected leaders are trying to create a national economic stimulus bill. As a concerned citizen, I have been watch closely. I don't claim to understand all the facets of the bill, but I am taking it as a positive sign that Congress doesn't seem to worried about the IT sector, at least according to how TARP funds and stimulus money has been directed. Should I be?
I am also reassured that money for smart grid development seems to be one of the least controversial parts of the bill. This infrastructure improvement has been long overdue and should increase technology spending in the short term plus improve the competitiveness of our economy by reducing energy use and improving our ability to meet our energy demands. Should we all get behind this investment.
More controversial are plans to increase broadband penetration throughout the nation. I see the phone companies making technical arguments against this investment. Are they on to something or just protecting their turf.
Please post a comment below.