Reasons to be Optimistic Heading into a Summer Weekend

Here are a few of the corporate earnings headlines we were treated to over morning coffee, earlier today and yesterday.  

"Microsoft Profit Rebounds by 48%"

"Second Quarter Income Higher at Amazon"

"Optimistic 3M Lifts Guidance For Year"

"Wireless Revenue Drives AT&T Growth"

"Honeywell Outperforms Again"

"AutoNation Profits up 36%"

"CA Exceed Expectation"

"Ford Higher After Strong Q2 Earnings"

"Verizon Posts Wireless Customer Growth"

"UPS Raises Profit Outlook"

"U.S. Manufacturers Continue Streak of Profit Beats"

"Caterpillar Posts Strong Profit and Raises Outlook"
 

These results are reasons to be optimistic about the recovery.

And this too:  "...spending on technology products and services is set to continue growing around the world."

According to a report this week from Forrester Research, spending on IT goods and services in the U.S., Canada, Latin America, Asia-Pacific, Easter Europe, the Middle East and Africa will increase this year anywhere from 9.9% (in the U.S.) up to 16.2% (Canada). 

It's true that IT spending in the western and central regions of Europe are forecasted by Forrester to drop by a modest 0.7%.  But the increase in spending throughout the rest of the world is significant enough to offset Western and Central Europe.

A reason for the IT growth spurt?  According to the IDG News Service which viewed the report, "the U.S., and to a lesser extent, other nations, are entering an innovation cycle marked by the adoption of new technologies."

News like this makes for a great summer weekend.

Cluelessness Volume III

I can't swing a dead cat without finding an example of bad communication. This time it is France that takes this week's prize. On July 14, Bastille Day, the French government launched france.fr which was to be a global and multi-lingual portal for all things French -- tourism, investment etc. The problem was that the same day that the site went up it then came back down and has not come back to life since. Visitors to the site receive the following message, "France.fr, a complete and complex site, is temporarily unavailable. We are in the final phase of our audit to find out the causes of the technical failures which led to us closing the site, and are close to finding a solution. We would like to thank all the web users who helped us spot the bugs. We aim to have the site fully operational again in the second half of August, and can confirm that a version with a participatory dimension will be released in November. Thank you for your patience." At least the SIG, France's government information service, bit the bullet and re-set expectations with a new availability date. What I don't understand is how they got themselves into this mess in the first place. I mean this is cyberspace not outer space and creating a website -- even a complex one -- is not like sending astronauts to Mars. This has been an embarrassment for the French government. Maybe it is because the web is inherently a bottom up environment and not top down. The most visited websites -- Google, Facebook, eBay -- were bottom up / entrepreneurial ventures. Maybe this is why Microsoft has struggled with Bing and Live. At this point the damage has been done and my advice to the SIG would be to ensure that when the site launches it works flawlessly -- even it it means delaying the launch past the late August date. The last thing the SIG needs is to make the headlines again with a buggy site.

It Depends On Who You Ask

“It depends on who you ask.” That was the response I received from the head of Corporate Communications of a global semiconductor company during our annual planning session when I asked the question “what are the company’s three primary business objectives for the coming year.” Now I understand that in a large organization that different business units or divisions will have their own specific targets and objectives for the year, but I wasn’t talking with a business unit or divisional communications person, I was in the midst of annual planning with the head of Corporate Communications on behalf of the entire company. If we were going to build an effective plan that reached all of the company’s various audiences in an engaging and meaningful dialogue, we needed a solid foundation built upon clearly articulated business objectives. This wasn’t the first time I’d encountered a Corporate Communications leader who couldn’t succinctly identify the organization’s business objectives. In fact, I’d have to say that more times than not, this was something very few people in companies could clearly state. I’ve seen it happen at big global companies, smaller venture-funded companies, hardware companies, software companies and just about every company in between. And you know what? For decades, it didn’t really matter all that much if the communications people couldn’t repeat the company’s business objectives in two or three sentences. That’s because for decades, having only a general understanding of the direction the company was headed was enough to do effective marketing and communications. For years, if a marcom manager knew that the company was expanding into France and Germany, they took out ads in the top trade publications in those markets touting the company’s newest widget and put out a few press releases that had been translated into the local language. The ads ran, the press releases were issued, some articles were written in key industry magazines and the communications team celebrated their success. But we all know that in today’s digital and online environment this methodology is as outdated and ineffective as group-faxing. A company’s customers today don’t want to hear about what the company thinks about its own product or service, rather they want to know that the company understands their business challenges, has helped other companies solve similar problems and is willing to work in partnership with them to make their business thrive. To accomplish this effectively, a company must align its internal goals and objectives with the needs and wants of its customers, and then enter a long-term relationship where information is shared in both directions so each can achieve success. Sharing and receiving information with customers in an efficient and effective manner is at the heart of content-centered communications. And the starting point for this effort is the clear articulation of the company’s business objectives and alignment of those objectives across the entire organization. Which takes us back to my meeting with the head of Corp. Comm. at the semiconductor company. After much discussion, it was decided that if we were going to develop a truly effective annual plan, one that was impactful, sustainable, and measurable we needed consensus among all of the company’s leadership upon no more than 3-5 succinct corporate business objectives. Our agency took the lead on scheduling meetings with the various EVPs, divisional and business unit leaders and key internal communications people. We led sessions where we extracted business information from the various company leaders and then reconstituted it into a handful of easily articulated business objectives. Gaining consensus wasn’t an easy or quick process, but when we had accomplished it, it gave us the solid foundation upon which to build a powerful content-centered communications program. Clear articulation of a company’s business objectives isn’t a communications panacea, but it is the first step to in entering an ongoing and meaningful conversation with your customers.

Can you recite your company's business objectives, or will it depend on who you ask?

Cloud Computing is Sitting in the Catbird Seat

Cloud Computing is sitting in the technology catbird seat.  

Earlier this week, two leading technology companies betting their businesses on the promise of cloud computing -- EMC, Inc. and VMware -- reported strong second quarter earnings.

For EMC, this was its third consecutive quarter of record revenue growth.  The company's operating cash flow is at an all-time high.

And server virtualization leader, VMware, exceeded analysts expectations with strong second quarter profit and sales results as well.

Google, who along with VMware constitutes half of the so-called Four Horsemen of Cloud Computing, also announced last week that it too grew second quarter and revenue profits -- although profits fell short of the street's expectations.

On the company's earnings call, EMC execs said that sales of its solutions for building virtualized, private and public clouds will grow this year by about 25 per cent.

VMware's second quarter results and rest-of-year guidance were strong enough to earn a price target increase from the analysts at J.P. Morgan -- from $60 to $70.

And if these cloud developments don't excite, then how about this? Cloud computing is helping organizations climb out of the global economic mess!

How?

Well, according to a new study conducted by international research firm Vanson Bourne, a majority of IT business and decision makers say cloud computing is helping their companies do more with less.

A number of the 600 survey respondents believe that the benefits of cloud computing will result in a 15 percent decrease in their IT budget while others said IT savings could approach 40 percent.

Bryan Doerr, CTO at Savvis, Inc. -- which commissioned the study -- says that two key issues are driving organizations to cloud computing: flexibility and a pay-as-you-go model.

Cloud computing isn't the perfect computing model -- yet.

Security issues remain a concern, for example. But among fewer and fewer organizations as security issues are addressed and resolved.

Not matter how you slice it, Cloud Computing is enjoying the view from its coveted perch.