Monday, January 12, 2009

Tech Industry Update....

Technology has been the primary driver of growth and innovation in the US over the past 30 years. While I don't see that changing, the headwinds that face the tech industry right now are severe.

If you are tech company with a corporate customer base you are hearing the same refrain over and over - "Our budgets are getting slashed and if we renew we're looking for a better price." If you are tech company that sells to consumers, well, perhaps you can get the new iphone down to a price point where Family Dollar and Dollar General will start stocking it.

The latest ripples coming out tech land are the layoffs. I'll just note that while the scope of the layoffs are limited at this point, the companies affected are the best of breed companies. If these companies are starting the layoff cycle expect things to get worse before they get better.

Over the weekend we heard more rumors about layoffs coming from IBM, Microsoft and Oracle.
This is above and beyond the layoffs at Dell, Lenovo and Seagate announced in the last week. For a running tab of layoff announcements check out this chart at cnet.

This is a cycle that feeds upon itself, it will be interesting to track tech help wanted ads again to look for an inflection point (when companies start hiring again - you'll see an uptick in online help wanted advertising first).

Totally off-topic - Facebook/Twitter and our Celebrity Society

This is more of a rhetorical question, but can someone explain to me the need for Facebook/Twitter, etc? I'm stunned by the amount of money being invested by venture capitalists and the amount of time being dedicated to develop tools and marketing techniques around Facebook, Twitter and the rest of the social networking world.

I've done the Facebook thing and frankly, it's seems like a pretty mindless exercise designed to fill two needs for Gen y:

1) This is an exceedingly simplistic generalization, but most young people are looking for more ways to waste time. Now, people have done this since the first temp discovered solitaire on his PC, but the constant need to waste time is now having meaningful impact on our long-term success as a nation. I'll note that this is not convined to Gen Y - Gen Xers spend too much time emailing, IMing and CCing in an effort to look busy.

2) There seems to be a need to share every move they make with the world because clearly they are an undiscovered American Dancing Idol in waiting. Gen Y is the most celebrity- obsessed generation we've witnessed, and while their audition tape for Real World 38 1/2 might have been rejected for the 17th time, they can post their musings on the healing powers of wheat bread vs. white for all of 1,752 of their "friends" to see.

For those unfamiliar with Twitter - it's a dumbed down version of Facebook where you can quickly broadcast to the world earth shattering news like --- "Just finished working out and heading back to the office" (translation - "I coming back from Krispy Kreme, do you need anyting?") or "Eating w/Jane at Nobu" (translation - "Ramen noodles, again!").

If these are the two greatest technological leaps forward in the US over the past 5 years, we are in big, big trouble.


TWITTER Update: "Just updated my blog. Heading to add pics to Facebook". :)

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