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A Revenue Rocket perspective by CEO Mike Harvath.
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Welcome to the inaugural issue of the Revenue Rocket newsletter we're calling Mach 2. You know Mach 1 as the speed of sound. Named after Austrian physicist Ernst Mach, it's the ratio of a body's speed relative to the speed of sound.
Mach 2 seemed appropriate because it fits nicely with Revenue Rocket for one, but more importantly it's indicative of the speed with which we all must move to keep pace with the market. Metaphorically, if the industry is moving at Mach 1, then those who want to keep one step ahead have to be traveling at
Mach 2.
For some perspective, just think about the speed in which the IT industry has reached $3 Trillion, which is what Gartner claims is the size of the industry. In GDP terms, the IT industry would rank third among the world’s economies, only behind the United States and Japan and slightly ahead of Germany. More astonishing than its absolute size is the speed at which innovation continues to fuel the industry. In most cases big equates to lumbering, lethargic, stodgy, yet it’s a constant source of amazement that an industry this size can move as fast, be as adaptable and be as innovative as we are. Just consider some of the technologies looking to have a breakout year, VOIP, unified communications, and SaaS, as well as those that continue to thrive, social networking, mobile and you quickly understand what was an idea yesterday is a technology today and a fabric of life tomorrow.
When I think of our industry's velocity I'm reminded of the African proverb Thomas Friedman refers to in his book, The World is Flat. He uses this to illustrate the pace at which we all must move in his notion of a "flattened world":
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Every morning in Africa, a gazelle wakes up.
It knows it must run faster than the fastest lion or it will be killed.
Every morning a lion wakes up.
It knows it must outrun the slowest gazelle or it will starve to death.
It doesn’t matter whether you are a lion or a gazelle.
When the sun comes up, you better start running. |
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It's also why many of you have heard us speak of managing through the Innovation Cycle. It's that 4.5-year window made up of 3 distinct periods, each about 18 months long, which we know as growth, stagnation and inevitably, regrettably. . . decline. To prosper in this industry you have to keep yourself in a perpetual state of growth. Linger too long and in the blink of an eye you'll find yourself a hapless gazelle in the clutches of a voracious lion.
To help get you off and running in the new year, click HERE for an article I wrote for the January issue of Redmond Channel Partner magazine. It was one of a series of briefs under the cover story, "A Partner To-Do List: 2008 Marching Orders." It's a lessons-learned piece covering five strategic steps for growth in a market that this year looks to have its own challenges.
If you have any thoughts, ideas or suggestions about what you would like to see in upcoming Mach 2 e-newsleters, please let us know by sending Mike an email or by calling us at 952-886-7085.
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| Page 2 |
Our Take on it all. |
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| Page 2 |
New Partners: Dave Stahlman and Hugh Voigt |
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| Page 3 |
A conversation with Greg Frankenfield of Magenic |
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| Page 4 |
Take Five Strategic Steps, article by Mike Harvath |
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Industry Watch
If it's January, it must be the time for prognostication. We gathered up a variety of crystal balls and assembled a list of how industry pundits see 2008 unfolding. In no particular order, here's a sprinkling of some of the conventional wisdom:
A leaner cupboard.
Both Gartner and IDC see 2008 global IT spending falling from an estimated "6.9% in 2007 to 5.5%-6.0% or lower". The U.S. market could be more anemic, falling from 6.0% to 3%-4%. Forrester is looking for U.S. growth to be 4.8%. A cloudy, shaky U.S. economic forecast is the culprit with the "R" word now being spoken by more people more often.
Following the money.
There are pockets of opportunity, and IDC points to both emerging markets (growth rate of 16%) and the small-to-midsize market (growth rate of 8%-10%). IDC includes among the former what they call "BRIC+9," which are Brazil, Russia, India, China plus Mexico, Poland, Turkey, Argentina, Columbia, Saudi Arabia, Thailand, U.A.E. and Vietnam. You can tell when things slow down as large companies target the small-to-midsize markets, which, they relegate to the back burner in more flush times.
It's a virtual world after all.
Will this be the year that SaaS explodes? The punditry says yes. Research conducted by Saugatuck Technology reveals that, "Similar to other leading industry and Wall Street analysts, Saugatuck believes worldwide SaaS revenues will exceed $20 billion by 2012 (up from $6.5 billion in 2007), which translates into a 35 % compound average growth over this time period."
More active M&A.
So says a survey conducted by the technical consultancy The 451 Group, "Technology M&A is set to hit its fourth straight record year in 2007." It goes on to say, "People in the software industry should expect more mergers in 2008, as more than 85% of corporate development professionals at companies that acquired other companies within the year said they ‘expect to maintain or increase current-year levels of M&A." Companies with an aggressive M&A plan are looking for new customers, new markets, next generation technologies, new business models, to bolster their existing business, or to match rivals.
Will security finally get some love?
What's the next big headline that shouts, "What about security?" The latest newsmakers were the 46MM stolen credit card transactions from T.J. Maxx, the "Datagate" debacle in the UK, in which the personal information of 25 million Britons was lost, and according to the Privacy Rights Clearinghouse, the loss of 215 million records on U.S. residents. Will this be the year that security is taken more seriously by corporate America? Apparently not. Despite the fact that 85% of companies reported a data beach in 2007, Gartner predicts: "security spending will drop out of the first 10 spending priorities for CIOs since the prolific Internet worms of 2003."
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