The fortunes of top technology vendors have ebbed and flowed through much of the modern computer era. But every once in a while past does not equal prologue, and there is a growing chorus of voices saying the industry could see some major shake-ups as the decade unfolds.
Without doubt, technology markets of all stripes are undergoing unprecedented change as virtualization, the cloud, data mobility and other forces sever the once-staid relationships between users, data, applications and infrastructure. The question is, can the leaders of the past successfully manage the transition into a still largely unknown future?
For example, it’s no secret that the declining fortunes of the once all-mighty desktop computer are wreaking havoc with the fortunes of HP and Dell. In the view of Goldman Sachs, HP’s turnaround strategy is mired in uncertainty and most Wall Street investors are overly optimistic that the company’s fundamentals couldn’t get any worse. In a rare move, the firm is advising clients to dump their HP stock. Meanwhile, Dell is caught up in its own reorganization drama, so the likelihood of its even having a turnaround strategy in the near future is slim.
And if that isn’t unsettling enough, questions are being asked as to whether Microsoft will have a strong role to play as the IT transition unfolds. Gartner, for one, expects Android devices to outshine Windows PCs and phones by 2017. And while Redmond is making moves into mobile phone and tablet markets, there is every possibility that it could, horror of horrors, be on an equal sales footing with Apple by mid-decade – something the company has not had to contend with since the early 1980s.
And speaking of Apple, it seems that the bloom is already off the rose already now that the mobile market is growing more diverse. While Wall Street is still confident that Apple will hold a strong position going forward, that is a dramatic drop from even last fall when Apple products were considered the darlings of the new data generation. Indeed, the company has lost almost a third of its value since last September, a sign that many analysts believe the company’s streak of innovation ended with the loss of Steve Jobs and that the transition from “growth” to “value” has begun.
About the only top provider that seems to be holding its own in the eyes of the moneyed classes these days is IBM, but even here there is still a broad undercurrent of uncertainty. JP Morgan recently reaffirmed its Neutral rating on Big Blue, while other analysts like TheStreet and Sanford C. Bernstein are steady at Buy or Market Perform. IBM has the advantage of not being saddled with a PC business anymore and has kept up steady progress in upcoming technologies like the cloud and data mobility, although recent quarters have seen some revenue slippage.
Absolute certainty in business is a rare commodity, and quite frankly, financial markets have been skittish in just about everything since the housing bubble sucker-punched the economy in 2007. But it is also true that the only constant is change, and times of rapid change make it very difficult for large, staid organizations to maintain long-serving business models.
It’s still too early to make any solid predictions, but there is every possibility that the IT landscape in 2020 could be very different from what it is today.
