Views on the Industry

Initial

This is the first post in an analysis of the industries of interest. First off will be the Computer industry, or as Cnet calls it the Enterprise Hardware/Software industry. From there I may try and post about industries closer to home. To me, it seems that business is still running a little timid right now, and that the many new opportunities presented from the impact of global markets being opened in both directions, that the new opps. outweigh the potential losses (jobs, standards, security, privacy, wages, volume, specialty, etc.., etc..). In early 1990's terminology, the fear of the "giant sucking sound" is just a tactic for those who like things the way they are. "Some men dream of what is and asky why, I dream of what never was and ask Why Not." The impact of India for high-touch, and China for high-volume is notable, and is a potential business opportunity for many, but the threat to U.S. economy is way overblown. And business has only themselves to blame for the harsh rhetoric coming out of the workers, for they have fostered a climate of fear of the unknown. My look at this is that the endless (literally) possibilities for investment are being defeated by the equally endless chances that risk will lead to failure. That is business. You have to spend money to make money. You have to invest to profit. And you have to have the courage to face the possibility of failure, and compute your risk quotient and attack. Some in the computer industry view this as a M&A activity (read the software industry), but it is also about investing in new projects, and spending on R&D. Look at Biosciences. It costs ~ $1.4B to bring a drug to market. It's not the Pharmaceutical companies that are bearing all this cost, it is the Biotechs who have CFOs that have never played with $1B before. Do they shrink in the face of risk of failure, no they diversify, and share costs among the industry. Of all the industries going right now, Biosciences has the best model of inter-cooperation of assets, where a home run/blockbuster does not go to one company, but then again the failure does not all go to one company either. As a wise, old business man once said to me, it is better to have 10% of something than 100% of nothing. Remember that as you build your businesses, choose your partners scrupulously, and go on the attack. Whether you are a regional bank, a manufacturer, or a start-up, there is only one way to do business, and that is to grow. Out.

posted by douglas dooley @ 9:27 AM