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Jeff Vance, president of Sandstorm Media, a marketing services firm focused on emerging technology trends, has an article in CIO Update entitled 5 Hot Trends for 2009. This article is the next in his series of predictions as evidence by his article last year entitled 5 Hot Trends for 2008. He begins with an honest critique of his 2008 predictions. I admit I was too eager to find out what was anticipated for this year and so I skipped right to the 2009 predictions. After reading the latest predictions, I confess that my first thoughts were, “Well how good did you do last year?” and so it was easy to find out. Depending on your patience, either order is fine. I’ll give you a brief synopsis of his 2009 predictions and leave it up to you to decide if you agree and need to check his score from last year. For 2009 Vance sees the following unfolding:

1.       Major Mergers and Acquisitions: Vance expects some big names to come in and buy at bargain prices.  One place to look is in the wireless market-space.

2.       Disappointing sales in the mobile market space:  The recession will cause consumers to delay purchases of new handsets with all those nonessential features. One business model to watch is pay-as-you-go.

3.       Virtualization is a winner in 2009: And the reason is obvious, cost. Seems like the recession plays a big part in most predictions for this year. Quicker ROI and less upfront cost will be the tipping point for most technology winners. Vance sees virtualization marching past the servers and moving to desktops and quite possibly the mobile desktop sector as well.

4.       Businesses crack down on social networking: Lack of worker productivity and data leakage are the two main reasons.

5.       IT Spending saves the economy: Admittedly this may be too brash of a boast, but look for major IT expenditures to support a fundamentally changed economy due to the global recession. Regulatory agencies will look to data mining in an effort to detect fraud and forestall market collapses.

So what do you think? If you are interested on how well Vance’s 2008 predictions turned out, read the article, (HINT: he wasn’t too far off).

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Canadian Telecom Colossus Nortel Files for Bankruptcy

Sean Michael Kerner, a senior editor for InternetNews.com and a proud Canadian (so says his Bio), has written a commentary on the financial woes and bankruptcy protection filing of the giant telecom equipment maker.  On January 14^th Nortel filed for protection and reorganization in the US under Chapter 11.  As Kerner points out, the $2.4 billion Nortel has for continuing operations is a mere shadow of the $366 billion value it once held on the Toronto Stock Exchange.

From Kerner’s article it seems that the anticipated demise of Nortel is a convergence of two distinct events.  One of the culprits was the bursting of the telecom bubble as a consequence of the larger dot.com bubble bursting in the later part of the 20^th Century and into 2001. The second reason was a huge accounting irregularity that forced Nortel to restate its financial statements for 2000, 2001, 2002 and the first and second quarters of 2003; for more on this see Kerner’s 2004 article Nortel Fires CEO Over Accounting.  The lack of a quick response only compounded matters.  I might add a third reason; the current global recession did not help the situation at all.

Kerner does not believe that Nortel can emerge from a reorganization and sees a break-up and a selloff of its most attractive business units to either Cisco, Juniper, Avaya, HP, or perhaps Nortel’s partner Microsoft.  The New York Times reports that this opinion is back-up by Mark Sue, an analyst with a unit of the Royal Bank of Canada, who stated “I don’t think it’s going to exist”.

The New York Times gave a brief synopsis of Nortel’s accomplishments:

“During the 1990s, Nortel designed and built much of the fiber optic equipment that now carries most of the Internet’s data.  Along with the company now known as Alcatel Lucent, it computerized the operation of telephone networks during the 1980s.  Nortel pioneered the development of equipment and software that brought the world wireless phone networks.”

Kerner concludes his commentary on a somber and poignant note:

“The true lesson in all of this though is simple. It is execution as well as prudent financial management that is the key to the success of a technology business. It's a lesson that Nortel is learning the hard way.”

For more on this story see also CNET News, Nortel Files for Bankruptcy.

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The business environment for 2009 looks bleak.  Financing came to a screeching halt in the late summer of 2008 and capital markets are still reticent on extending credit.  What is an enterprise to do?  As Bryan Stolle, partner with Mohr Davidow, points out in his article How to Survive - and Thrive, the key is first to survive by assessing the environment, creating a plan, and executing.  Once the economic recovery begins, your company must have differentiated itself from the other companies in its market-space.   

Stolle presents a list of 10 tips for the tech CEO of today.  As he states, some are obvious.  I will try to summarize his action plan below, but for the full impact I strongly suggest you read his article:

1.       Question every expenditure:  If it does not fit into the “Must Have” category, then it should be cut.  Does the spend positively affect the bottom line?  Examine R&D with an emphasis on return on investment and its ability to differentiate your products from your competitors.

2.       Everyone is a salesman:  All employees must focus on acquiring new customers and maintaining the current customer base.  All top executives, CEO included, need to be in the field or on the phones.

3.       Mirror your customer’s mantra – cut costs:  Your sales pitch must state how much your solution will “CUT COSTS”.  Your customers won’t be listening to anything else.

4.       Increase your marketing efforts:  The more spent in this area will help your customers to focus their spend prioritizing on your application, the sales process is enhanced, and competitors will be forced to compete or leave the market.

5.       Refocus your distribution strategy:  The search for new channel partners and resellers is a drain on cash.  Funnel your cash into the proven channels and leave the marginal producers for later.

6.       Cut headcount – but do it fairly:  In my career I have seen enough of the “Trim the Fat” executives as it relates to personnel and I know the devastating affects it has on the individual, on his/her family, and on company morale.  Stolle also recognizes the need to maintain and “nurture the esprit de corps - not kill it” and advises to give full consideration to the corporate culture.

7.       A good time to hire:  As a counter-balance to point 6 above, this may be the time to upgrade your team.  Top-performers in other companies may be getting a bit nervous with their current position in light of the current economic climate.  If offered the right package, these top performers would be happy to join your team.

8.       Reexamine the operation and consider a new approach:  Take this opportunity to rethink how the company works.  Perhaps an outside observer can suggest a new approach and re-energize the operation.

9.       We are a global economy: Since the internet and global supply chains and global service providers allow us to sell our products and services anywhere in the world, then take advantage of this fact.  Stolle suggest that you find a market that is healthier than the US and Europe and determine if you can sell at or below our current market costs.  If so, then do so.

10.   Reject the urge to merge:  In the current economy, the chances are both companies will fail.  Two struggling companies seldom create one strong enterprise.

Stolle’s concluding remarks are right on point and I couldn’t say them better.  He concludes by saying:

“Whether all, or just some, of the above apply to you, to make it through these “interesting times”, you must a) be very sober and realistic about valuations if you must raise capital, b) treat every dollar as if it’s your last to avoid having to raise more capital, and c) lead, lead, lead!

Lead with a vision of how your company will be a winner despite the tough times; lead with a plan that will deliver on that vision and is credible and inspires trust and confidence; lead with execution from the front (as in constantly in front of customers and employees), hammering the vision, the plan for success, and the results.”

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Richard Adhikari reports for Internetnews.com on a recent Forrester Research report addressing the strategies of CRM Vendors entitled Social Networks Among Trends in CRM for 2009.  The Forrester report discusses the difficulty in these tough economic times of obtaining funding for new CRM projects.  New customers are harder to come by and so one approach for 2009 will be to create customer loyalty in an effort to avert attrition and thereby at the very least maintain revenue for 2009.  CRM Vendors will direct their efforts on adding value to existing applications.  One way to do this is targeted offerings that will incorporate CRM into existing ERP and SCM systems.  These new solutions will utilize the existing systems to provide enhanced customer facing applications.  Forrester also sees the Salesforce.com model of incorporating Social Networking capabilities into its CRM offerings as yet another approach.

On the flip side of this equation, the enterprises will be looking for specific enhancements in their CRM applications in order to justify future projects.  As discussed in Forrester’s report, Customer Data Management seems to be the biggest area for improvement.  The enterprises will also be exploring SOA and SaaS licensing models as alternative means of obtaining value and keeping costs down.

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