And now for the good news, brought to you by Deloitte & Touche.
The consulting firm Tuesday released the sunny results of a survey it conducted through its list of upwardly-mobile technology companies, otherwise known as the Fast 500. While a good portion of the year so far has been
spent chronicling the economic downturn and its impact on the IT industry, Deloitte has rounded up its collection of keeners for some much-needed morale boosting.
The results are certainly optimistic. Despite massive layoffs, the fall of super-CEOs like John Roth and Jean Monty, the IPO turmoil and the steadily declining revenues, Deloitte’s respondents want to turn our frowns upside down! Sixty-two per cent of CEOs polled said they were “”very”” or “”extremely”” confident that the technology sector will maintain the growth levels they have experienced for the past five years. “”Our CEOs view the technology slowdown as a healthy shakeout of companies that don’t belong in the marketplace,”” Deloitte says in the report.
This is probably a healthy attitude for firms which are still trying to prove themselves, but their opinions are in stark contrast to those of established industry players like Michael Dell and Carly Fiorina, both of whom have warned that the boom days are more or less over. Some of the Fast 500 firms have experienced growth rates of 824 per cent or more year over year, but that’s because some of them essentially have nowhere to go but up.
Besides having easy access to a sample group, Deloitte no doubt picked the Fast 500 for its research because it wants to position its winners as the high-tech sector’s next-generation leaders. After all, the thinking goes, if they’ve managed this kind of growth in just a five-year period, these companies must have something to teach us, right? Like Profit Magazine, however, which announces its Profit 100 list this week, the Fast 500 is mostly a useful public relations exercise for fledgling firms to get some recognition among their peers. It is also a prescient symbol of an industry that loves to reward its successes but tries to forget its failures, then wonders why it makes the same mistakes.
This is the wrong attitude because the failures often provide us with the most useful tutorials on how the industry works. How interesting it would be, for example, to poll executives from the many now-defunct competitive local exchange carriers (CLECs) on how the remaining players in the telecom market will fare. By struggling with excess capacity and an implosion of its dot-com client base, the CLEC market tells us a lot about what can go wrong.
Similarly, it probably makes more sense to look to the IBMs, the HPs and the Bells of the world to make a proper assessment of the future’s potential. These companies have endured recessions before. Though they may lack some of the entrepreneurial spirit of the Fast 500, many of them are staffed by people who have rolled with the punches often enough that they can maintain a spirit of innovation while offering a realistic outlook on the impact of economic conditions.
Call them the Slow 500, perhaps, but these older firms have shown they can maneuver through mergers, new product lines or exiting unprofitable segments. The Deloitte winners are to be congratulated on their achievements to date, but there has been enough upheaval to question whether some of them have the capital necessary to last half as long as some of the more traditional heavyweights. We all know speed alone isn’t enough to win the race. Sometimes, staying in competition for more than five years is a victory in itself.