While vacationing in Yosemite last week, I read an interesting article about corporate earnings, specifically for our nation’s retailers. The author made the point that low-end retailers (think TJ Maxx) are seeing their growth decline while high-end providers like Nordstrom are kicking butt. What struck me was the notion that 75% of the population is still in a deep recession while 25% of us are enjoying much better times.
As I proxy this against another 500-point drop in the stock market today, I think of the tremendous rally we are seeing in technology spending, specifically on Cloud Computing. When observing our customers who are spread out across North America, you can see a clear renaissance happening around IT initiatives which had been previously postponed or stalled. And if you’ve been in IT for a while, you know that you can defer spending for a period of time, but those problems never go away. It’s time to address the Gartner estimated $500B “IT Debt” and it appears that corporations of all sizes are finally getting the message.
There also seems to be a willingness to look at new solutions to old problems which is exciting for companies like Zumasys. For example, the concept of renting time on an outsourced data center platform (i.e. Cloud Computing) vs. purchasing servers and storage, is in full swing. CFOs and CEOs no longer want to burden their balance sheets with costly IT investments–Cloud Computing is solving this problem (and others) and is fueling tremendous growth for boutique Cloud providers like Zumasys as well as larger players like Amazon.
What lessons can we learn from this? For me, it’s the fact that strong corporate earnings are driving this investment. There are vibrant, growing companies out there — that 25% of the population — you just need to know where to look. When you find those precious relationships – whether it’s with your clients or your vendors – the message is hold on with both hands and forget about the Dow Jones Industrial Average (for now).
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