Editor's Note: Using A Downturn To Prepare For An Upturn - InformationWeek

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8/2/2002
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Editor's Note: Using A Downturn To Prepare For An Upturn

John Chambers, the president and CEO of Cisco Systems, tells a story many people will relate to about his experience as a father. In their early years, his two kids thought Dad was one smart guy. In their teens, that changed and, as Chambers put it during a recent conversation, in their eyes "I lost my intelligence." Now in their 20s, Chambers' children can once again see his wisdom. Or, as he says with a slight Southern accent, "We're back smart again."

Could this be a parable for the leaders of the technology industry? CEOs of IT companies were widely viewed as visionaries during the business boom of the '90s, as companies used PCs, servers, Web sites, and a wide range of new applications to drive ahead. In the abrupt slowdown that followed, tech execs lost some of their cachet. And now?

We'll leave that for you to answer, but this week's cover story (p. 34) provides the latest thinking about where things are headed from some of the top CEOs in the industry: Steve Ballmer (Microsoft), John Chambers (Cisco Systems), Craig Conway (PeopleSoft), Michael Dell (Dell Computer), Larry Ellison (Oracle), and Henning Kagermann (SAP). In a recent series of interviews, they took time to share unique observations about what they've learned and how they see things changing.

Collectively, their outlook is positive, both for their companies and for their business customers. If these guys are right, hardware costs will continue to decline, software licenses will be more flexible, productivity increases will continue, technology will better support business processes, and the overall value proposition offered by technology suppliers will improve.

Let's assume they're even partly correct. Now, juxtapose those prognostications with the economic realities that still damper IT spending at many companies. What do you get? Our story by senior editor Tony Kontzer (p. 22) explores that question in detail. We found that underneath the surface of flat and low-growth IT budgets, there's a lot of activity. Forward-looking business-technology managers are finding ways to move ahead with projects that, rather than being defensive in nature, are intended to position their companies for growth and opportunity when the business climate improves.

How much of what these CEOs have to say rings true? Is the concept of using a downturn to prepare for an upturn wishful thinking? Let me know how these stories relate to your own experience at the E-mail address below.

John Foley
Editor/Print
[email protected]

Stephanie Stahl will be back next week


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