Enterprise hits and misses - debating tech crash versus market correction, as data privacy suddenly takes center stage

Lead story - Taking stock - crash or correction for the tech sector?

The overriding story in the tech sector? The macro-economic headwinds - including the changing spend in enterprise software.

After breaking down how we got here, Cath explains how uncertainty is manifesting. Example: ROI pressure on tech startups. She quotes Raj Shah of digital consultancy Publicis Sapient:

Companies that may have had five to seven year horizons have seen their runways shrink to a year or less. This resulting pressure has meant cost cuts, hiring freezes, and the shutdown of companies, which in turn has led to some panic selling of tech stocks across the spectrum. Consider this a culling of those companies with weak plans for returns or profitability.

How do we account for the domino effect of these contractions? As Cath points out, the tech bellweathers are likely to be safer harbors:

While the situation may likewise be hitting the value of established, ‘safe harbor’ companies, such as Microsoft, Google and Apple, Shah believes their income and balance sheets remain strong. As a result, although they could continue to be hit by short-term supply chain issues, which hamper product development and sales, they “will weather the storm and likely emerge stronger”, he suggests.

More than a correction? Cath quotes Dr. Richard Smith:

You could already call it a ‘crash’, especially if you want to talk about cryptocurrencies, and I don’t think the worst of it is over yet. What’s guiding my expectations is that this contraction is about halfway done and I’d expect a similar experience over the next 12 to 18 months - I don’t think we’ll really see a bull market until late 2023. So if you’re a tech company, you have to be planning for a different market for the next 18 months to ensure you can survive.

I am not a crystal baller, but I don't agree we always come back stronger after a recessionary period. I do, however, welcome increased accountability of the half-baked "gig economy" startup ideas for hyper-convenience that tried to save the pesky question of profitability for a rainy day (check Uber and Lyft Are Out of Ideas, Jacking Up Prices in Desperation for Profit - and these are two of the better gig economy ideas).

Where I see economic hope: I believe we are midst a tech-inspired transformation across industries that is nowhere near complete. No, I'm not talking about the freaking metaverse - though even that parade of prognosticating foolishness has some redeeming and important concepts (digital twins or augmented reality, for example, could be included).

I'd point to the unprecedented development of COVID vaccines in record timespans, or the overall impact of AI on medicine - and that's just one sector. In other words, I think those tech fundamentals are strong. Whether we can avoid tripping and falling into the divisive quagmire of politics, culture, global conflicts, and social data surveillance would be my top impediment to that underlying optimism - not inflation or interest rates.

Diginomica picks - my top stories on diginomica this week

Vendor analysis, diginomica style. Here's my three top choices from our vendor coverage:

• Adobe reports record Q2 revenue - CEO confident on future, despite macroeconomic uncertainties - Count Adobe as a reassuring voice amidst the economic headwinds (though Wall Street dinged Adobe for weakened outlook). Derek quotes Adobe's CEO, who believes that even if the "quarter to quarter rhythm" gets disrupted, Adobe's fundamentals remain strong: "When you talk about a recession, when you look at the three things that Adobe does, which is focus on content, focus on automation, focus on customer engagement, I just don't look at any of those and feel like the secular trend for that will change."
• ServiceNow and Qualtrics progress partnership with new tool that puts experience and operational data side-by-side - Derek on a partnership with a vendor that ServiceNow CEO Bill McDermott knows well.
• The SAP CX review - what we learned at Sapphire Orlando, and what lies ahead - SAP talked a lot more about CX in Orlando that remote audiences realized. Here's my on-the-ground review.
• Neptune Software adds AI-augmented no-code tooling to its SAP-friendly development platform - Speaking of on-the-ground, Phil filed his Neptune Software learnings from Oslo.
• "This is our responsibility as an industry!" - Salesforce CMO Sarah Franklin on why the tech sector needs to step up on equality and inclusion - A timely post from Stuart, given what's happened since. Also check Alex Lee's Salesforce use case: Making the passenger e-commerce experience fly at Heathrow.

A few more vendor picks, without the quotables:

Jon's grab bag - Chris Middleton breaks out AstraZeneca’s rules for implementing responsible, ethical AI (one of the few case studies on ethical-AI-in-practice I've seen). Finally, Neil took on the misconceptions of so-called "edge analytics" in Edge analytics hype versus reality - a discerning look at the pros and cons.

Best of the enterprise web

My top seven

• Bitcoin Sellers Lose Historic $7.3 Billion in 3 Days of Pain - To what extent these crypto-crashes are part of the overall economic "correction" will be an important issue going forward.
• Tech firms under pressure to safeguard user data as abortion prosecutions loom - Yes, data privacy was already a hot issue. Ratchet that up.
• Is remote work effective: We finally have the data - I could do without the "we finally have the data" self-congratulations, but this is a revealing piece by McKinsey nonetheless. The results aren't easily summarized, but we can see a persistent gap between the flexibility digital workers want and what they employers offer (flexible work options has now become a top three criteria for job moves).
• IT Executive Insights on Cloud Vendor Relationship Strategies - In one of my fave UpperEdge posts, Adam Mansfield shares customer views on the under-nourished topic of cloud vendor management: "Vendors often expand where they manage to build.  They build relationships with every C-level executive at the company and they’re selling not just to me, but to them as well.  When you’re going to non-technology folks who are not worried about data migration and integration, you may end up in a situation where the solution seems much easier than it actually is across the organization."
• Artificial intelligence projects grew tenfold over past year, survey says - Joe McKendrick delves into the project data on AI adoption: ""IT teams are scrambling to keep up." This isn't a hype problem anymore - this is an adoption-at-scale problem, including all the ethical/bias issues in play.
• An In-Depth Guide to Enterprise Data Privacy - A comprehensive and useful resource from CIO Insight.
• On the Dangers of Cryptocurrencies and the Uselessness of Blockchain - Bruce Schneier gets the tell-us-how-you-really-feel award, but the real strength of this post is taking on the rebuttals, and linking out to a range of positions.

Whiffs

Raise your hand if you're shocked that an NFT conference got fooled by a Snoop Dogg impersonator: Doop Snogg: how a fake Snoop Dogg fooled an NFT conference | Cryptocurrencies (via Clive Boulton). In other tomfoolery, I was chagrined to learn that the mysterious "jetpack man" creating a ruckus near the LA Airport could be a drone with a mannequin...

This, however, cheered me up:

So did this:

Cheering me up this week may be a little tougher, but as usual, let's give it a go. If you find an #ensw piece that qualifies for hits and misses - in a good or bad way - let me know in the comments as Clive (almost) always does. Most Enterprise hits and misses articles are selected from my curated @jonerpnewsfeed.