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EDITORIAL: Where's the good news?

EDITORIAL: Where's the good news?

Confusion, uncertainty and doubt. It's not really the best way to start a year is it?

Welcome back to work and the harsh reality of 2001. Apparently "e-anything" is dead or dying and good ol' "dot-com" is very 2000. Meanwhile, the "new economy" is starting to look like the old one and so are "startups".

Working in the channel, or the IT industry at large, must be something like an episode of Seinfeld. One minute George is working for the New York Yankees, the next minute he's sacked (again) and back at the restaurant having coffee with Jerry, Kramer and Elaine.

So why all the doom and gloom so early in the New Year? I think there are three big issues contributing to this general uncertainty.

Firstly, the general feeling I've canvassed from my contacts in the channel is that both distributors and resellers face further bloodletting this year. The key word here is consolidation. Sub-distribution, in particular, is looking very shaky - but I guess you'd expect big distributors to say that.

The second issue, of course, are the feelings generated by the spate of sackings that took place pre-Christmas and the rising tally of dot-com burnouts. It's become trendy in investor circles to be anti-IT stocks. And many not-com companies are feeling tarnished by the same brush.

However, some pretty ordinary quarterly results seeping out from the vendor community are not helping matters much either - hello Apple, Intel, 3Com, Microsoft and HP.

This leads me to the third issue. Is the PC a dead duck? Both Inform and IDC have recently released figures indicating a general slowdown in PC sales, particularly post-GST. In fact, Inform reports PC sales slumped 24 per cent between June and July after a pre-GST spike of 18 per cent. Since then, sales have continued to slide, with November figures showing a 30 per cent decline since January.

Some claim the PC is doomed, while others argue it will consolidate as the hub connecting various portable devices. Both may be true, but that's not where the confusion lies for the channel.

PC sales have long been the litmus test for the overall health of the industry, and it's this very status that's finally being challenged. PC margins, as we keep reporting ad nauseam, are too low for anyone but large integrators and service providers that can tie in other services.

As a result, I just don't believe we can rely on PC sales to judge channel health any more. So the next question is: what will become the next litmus test?

Enterprise software, storage and security certainly appear promising this year. But I don't think you can settle on any single type of technology simply because they all change too fast.

So where is the good news about profitable business in 2001? Well, I'd like you to tell me.

I for one have not given up hope on the viability of the Internet in the long term. It remains the single most influential business trend today and is the only thing I can think of that has the rare ability to unify diverse technologies. What's your opinion?


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