I spent Thursday of last week at an event put on by A&R Edelman talking about the importance of trust, where they discussed their findings on a survey of around 4,000 companies. They concluded that that trust is directly tied to the market recovery and that tech companies were the most trusted.
In addition, in Barcelona, what may be the birth of the next technology platform was announced. Finally, with a lot of folks facing layoffs, it occurred to me that many of you may want to consider buying your first PC as a hedge against this unfortunate outcome.
We’ll talk about all of this and close with the product of the week, the most affordable Dell XPS gaming PC ever brought to market.
Trust, Technology and Market Recovery
To say the world stock markets are in the toilet would be like saying the Poseidon — the ship that flipped over in the movies of the same name — hit an impressively large wave. Valuations are dropping to historic lows, and the market clearly did not like the Obama stimulus package. But what if there were a way to bring the market back up significantly to help drive an economic recovery, as opposed to what is more likely, respond to it?
A&R Edelman, using its latest annual survey, the 2009 Trust Barometer, as well as historical data, showcased a strong correlation between trust in companies and how much they were valued, either individually or as a group. The charts supported this supposition strongly and questions on causality (the chicken and the egg thing) were adequately explained away using known consumer behavior. In other words, we’ve known for some time that the more common order of things is trust first, buying behavior second.
The premise was extended to argue that if companies worked on their trust issues, they would not only improve the sale of their products but of their securities, with the result being increased sales prosperity and higher valuations. This should create a reverse death spiral, where increased trust leads to more sales and more sales lead to improved financial performance, followed by more trust until the repeating cycle drives a recovery.
Of the segments they surveyed, the technology industry was the only one were the major brands like HP and Apple were trusted above the average. Overall, the tech industry had a substantially higher trust score than any other segment. The implication was that tech is well positioned to lead out of the depression and that the recovery could be started earlier if the major vendors focused on improving customer, investor and stockholder trust.
As a side note, Edelman’s CEO made a comment at the end that would have me shorting the company’s stock. He said he had made the decision to put the existence of bonuses at risk to preserve jobs, but if you study motivation or compensation theory, in a competitive market, this decision is potentially a company killer.
Barcelona and the Next Big Thing
The tech market goes through regular cycles as it matures and changes. Whether it was electricity, telephony or computers, the cycle has remained intact. Most recently, it was the stability of mainframes that gave way to the complexity of PCs, followed by the stability of Windows, and now apparently being followed by the complexity of smartphones.
In Barcelona last week, the Mobile World Congress met, and we may have witnessed the beginning of the birth for what may be the next big thing. This is because, right now, we are in the complexity stage. If this cycle — which first put GE, then AT&T, then IBM, and then Microsoft into the lead positions — repeats, then we will have a new king vendor, and it probably won’t be one of the firms that came before.
Contending for this next century-defining platform are Apple, Google (Android), Microsoft (Windows Mobile), LiMo, NEC (Symbian), RIM (Blackberry, and Palm (WebOS). In the last cycle, we went from a host-leading technology (mainframe) to a client led technology (Windows), and the next cycle is emerging to be a blend. That blend crosses the device and the host (cloud) to create something that eventually will be vastly more amazing than any phone, and each of these firms are in the hunt.
If you look at all of the previous winners, while they (with the exception of the latest) did dominate with hardware, they actually got to dominance by owning the related standards and allowing others to use the most critical ones so the market didn’t move around them. In short, by giving up absolute power, they gained their dominance and owned the leading solutions.
Much like the automobile defined the last century, I believe what is being born in the smartphone segment will eventually grow to become our personal mobile companion, much more than the device we struggle with today, and that what makes this possible will be based more on what is in the cloud than on the device itself. The two companies most likely to pull this off, largely because of breadth, reach (particularly in the cloud), and willingness to license are Google and Microsoft.
Given history, particularly recent history, the next winner is unlikely to be the same as the last, but we likely won’t know for sure until around 2015. This date is based on the timeline for the critical broadband network that has to be fast enough, ubiquitous enough, and cheap enough to make this all work.
That makes it anyone’s game, and even a global carrier like AT&T or computer company like HP could come in from the side and control this critical class. Whoever it is, they will contend for being “the” company of the century, much like Ford, GM, and eventually Toyota did for the last one.
A New PC as a Layoff Hedge
With layoffs starting to top 800,000 a month, I’ve started getting inquiries from a lot of folks who have been laid off asking for help. There are even folks building models you can use to help determine how much risk you are under.
To the 10 tips for preparing for a layoff, add buying your own PC if you don’t already own one. Thus the reason these folks are suddenly calling me.
There are a lot of you who have as your only PC the one your company gave you and, evidently, that PC now has all of your personal stuff on it. In some cases, when layoffs come suddenly and while at work, the computers are confiscated and wiped before anyone can get their personal information off them. In other cases, where the employee is remote, they are electronically and remotely wiped before the employee can get their information off, and in all cases there is a sudden need to replace that PC to recreate the lost information and help search for a new job.
Realize that before this recession bottoms, somewhere between one in 10 and one in five people will be unemployed and you’ll recognize that the risk of losing your critical information (which could include wedding and baby pictures on these company PCs) goes up unacceptably.
At the very least, you should buy a drive like an Iomega or Click Free backup drive and back your stuff up so that if the PC is confiscated you don’t lose your personal information and contacts. Ideally, you should move to work off your own PC, separate your work and personal files so that there is no risk to your personal stuff. Use a product like BeInSync to keep your work and personal PCs linked and you can even continue to use your business computer. But, if you wait until the last minute, you may find yourself not only out of a job but without one of the most critical tools you need to find a new one, your PC and your contacts.
Product of the Week: Dell Dragon XPS 625
This market is all about affordability and bargains. Traditionally, when you talk gaming systems, you are talking prices that start near US$2,000 and go up astronomically from there, and Dell’s flagship XPS desktop gaming systems are no exception. Well, working with the new AMD Dragon processor and high performance ATI graphics components, Dell built an XPS 625 that is — gasp — affordable with an entry price of under $1,000. I’ve been playing with one for a couple of days and, for the money, it is a sweet box.
Because this is a market looking for good values, because I like to game, and because the new XPS Dragon system provides both, it is my product of the week.
Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.