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Is the end of the U.S. tech market upon us?

Rob Enderle | May 30, 2016
Tech companies’ almost exclusive focus on quarterly returns to appease investors who will likely take their fast profits and run is troubling and something to consider when choosing a vendor, writes columnist Rob Enderle.

Picking a vendor on stability

This would seem to suggest that part of the section process, which likely already takes into account whether the vendor is likely to be sold, includes a review of their ownership and management skills at executive levels. This would tend to favor non-public companies at scale, public companies run by founders or subject matter experts, and firms that have a long history of stability and heavy customer focus.

On the short list of companies to avoid are those that are bending to the will of “activist investors,” run by executives who don’t have a background in what the firm sells, or are obviously in financial distress.   Notice I didn’t say avoid public companies largely because you really can’t and because there are firms still being run strategically and resisting effectively the influence of their quarterly return focused investors. But, I wonder, how long these CEOs can hold in the face of this increasing pressure.  

The end of the U.S. tech market as we know it?

This massive change to almost exclusively focus on quarterly returns to appease investors who will likely take their fast profits and run is incredibly troubling. Not just from the standpoint of a customer but from the standpoint of the nation, which could lose its leadership in technology along with the firms that fail as a result of these practices. We may be seeing the end of the tech market in the U.S. as we know it, all because of a bunch of very shortsighted but power hungry investors who are willing to trade the viability of an entire market for some quick cash.

Be that as it may, it does suggest that more due diligence into the longevity and stability of the vendors you use is in order. Also, the choices you make are important to assure a good price and that the vendor will be around to service what you bought. 

 

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