With recent product introductions by Dell and H-P in the laptop/hybrid form factors, maybe MSFT's intention was to force the OEM's to innovate more in response to Surface and Macbooks. Maybe.
The stock has done exceptionally well, and the Enterprises businesses seem to be gaining a lot of traction. After the recent quarterly results, brokerage houses have meaningfully trimmed EPS estimates for fiscal years ended 6/15-6/17.
CiscoBesides managing the fortress balance sheet, their questions about margin compression in their core business product lines while managing their transformation into cloud, data center, and security products are largely unanswered. The stock looks somewhat less expensive than their peers, but with the financial and operational murkiness, one wonders where this company is going over the next one-two years.
A New Selling Paradigm
- Tech sales people have generally always made a great living, whether they sold hardware of software. Marginal product improvements and enhancements, new models, and industry gurus crying wolf about security or energy efficiency were all enough to generally carry the day over a cycle.
- IT executives were generally left alone by senior management, unless a VP were brought into the CEO's office to fix a printer or reboot a system. Despite the governance gurus and folks Accenture and McKinsey protesting, CIOs weren't real players in the C-suite. I would bet most investors couldn't name the CIO of their portfolio companies.
- Business segment leaders cried directly to the CIOs about what they needed, and because they were the profit centers, they got it. As long as the big budget came in where it needed to, nobody cared.
- Sales were organized by geography, by product line, by type of account (national, global, key strategic etc) with lots of cross-over "sales teams" which never worked for the insiders or for the customers.
- Going forward, things have to change.
- Issues like data security, especially in the case of global financial firms, e.g. JP Morgan Chase , now land right in the board room and the CEO's office. It has to be a new kind of CIO, probably supported by other key executives like a Chief Data Security Officer, who is in the CEO's office answering questions and having accountability for lots more than a budget.
- This new CIO will have to have a new relationship with the heads of business units, actually trying to understand their businesses, as opposed to just IT. This CIO will have to respond quickly, without time for multi year major system makeovers or delayed data center openings.
- IT, whether hardware, software, or services, probably won't be bought blindly from one vendor, just because of a history with a key sales person. The CIO and her staff won't have time for sexy sales presentations.
- The corporate sales staff too will have to understand their business unit customers and how they actually work, much better than in the past.
- In a sense, a new sales force will have to be more like Accenture-style consultants, but with specific product, software and application knowledge across a variety of offerings.
- This means a new kind of sales team, but a real team with accountability for more than hitting a quota or making the President's Club by individuals.