WT & Mary, too: Well articulated exchanges of opinion. Bravo. And to sum it up; you're both correct. Mary with her "always a need for a faster processor" mantra, and WT with your "lengthening product replacement cycles" chant.
The reality is the business world will always have a need for more speed, be it in the form of routers, servers, employee PC's and laptops, or this new emerging force, the PDA. And this need will be driven not only by new software applications yet to be envisioned (thinking outwards to one such mundane application as possible corporate applications which will run on wireless internet connections to remote employees, service arms, etc.); but also in the never-ending tweaking/upgrading/etc. all corporate IT departments routinely experience (and for which there will always be work). So more speed and new machines will always be a driving force.
BUT....and this is a big one from my point of view, in terms of determining demand cycles....well...I think that 'ol acronym, Y2K, has blown smoke up many market analysts spreadsheets, heh! That is....as Y2K approached almost everyone in the world was freaking and trying any number of ways to head off disaster. Typically this meant wholesale upgrades of software, equipment, etc.. Demand, as a consequence, did a moon shot.
Unfortunately, it's entirely probable the market mistook this demand for a indication of "routine" demand, rather than what it was; a one time event. So despite the "need for speed," going forward equipment replacements/upgrades/etc. must be balanced against corporate "bean counting" methodologies, which are the ultimate arbiter of replacement demand. And these methodologies are now unconstrained by Y2K fears. Therefore, to use the process of the "logical middle" between your twin arguments, my WAG is for a lengthening of the replacement cycle, too, with most of the corporate world not looking to do any wholesale replacement of what now amounts to brand new "stuff" for at least 3-4 years (and I use my own corporation as a reference point in this regard). Bottom line? Anticipate continued softening of demand. (Hell, the entire PC-styled supply chain has made that comment abundantly obvious hasn't it?)
And going forward, although I think a fair percentage of the tech world has been thrown out the window like that proverbial baby with the bath water still, forward looking analysts will need to take into consideration the demand curve leading up to Y2K. It was an anomalous period. All data associated with it will needed to be discounted accordingly when they conduct their soothsaying sessions. ;-)
All imho, of course.
John~ |
