Skip to main content

Large-cap tech entering a period of out-performance? Here's why

Read an interesting article at ComputerWorld today that got me thinking. The title: "IT centralization is back in fashion."

It is useful to think about what this means for IT organizations and the vendors that support them.

Why centralize?

With technology assets centralized in one place, it's easier to take advantage of opportunities for efficiency and streamlining such as virtualization, storage de-duplication, cloud computing and outsourcing, all of which promise to lower costs.

Centralization also makes it easier to create an effective disaster recovery strategy, minimize labor redundancies (ie, reduce expensive IT staff), get volume discounts on technology purchases, and lower maintenance and training costs through standardization.

Is the trend real?

There's some statistical evidence of a tilt toward IT centralization. In Computerworld's recent Forecast survey, 37% of 312 respondents said it's likely that their IT units will become more centralized in the next 12 months. And in a 2009 IBM survey of 2,500 CIO worldwide, 76% of respondents said they anticipated having a strongly centralized infrastructure in five years.

IBM itself last year completed a shift to centralized IT management, reducing the number of data centers it operates from 155 to five and trimming its portfolio of applications from 15,000 to 4,500.

Which vendors will qualify?

The move to centralization will see CIOs looking to vendors who can offer several of the following major benefits:
  • Products should efficiently scale up to handle greater numbers of user and transactions.
  • Vendors must offer greater out-of-the box integration of wide-ranging functionality
  • Vendors should also offer IT services either for system implementation or longer-term outsourcing
  • Vendors who can offer quantity discounts or concessions on corporate-wide site-license pricing will have an advantage
The largest IT vendors are the companies that most easily meet all the requirements listed above. This means companies like Cisco Systems, IBM, Oracle, Hewlett-Packard, EMC, VMWare, SAP, Computer Associates, Teradata, Microsoft, Dell, NetApp, Juniper Networks, Fiserv, BMC Software and Compuware.

The folks at IBM think we have a 5-year cycle during which the centralization trend will maintain its popularity before the pendulum begins to swing in the opposite direction. During that time, large-cap tech stocks can be expected to out-perform.

Comments

Anonymous said…
so which company you like best?..csco,msft,ibm??

Popular posts from this blog

Running TradeRadar on Windows 7 and Windows 8

Development of the original TradeRadar Stock Inspector software was begun back in the days before Windows 7 and Windows 8 were available.

As these newer versions of Windows have become more popular, we have heard from some users that they are having problems installing and running TradeRadar on their newer PCs.

The good news is that TradeRadar will work just fine on Windows 7 and Windows 8. All you have to do is adjust the Windows Compatibility Settings to ensure TradeRadar runs as intended.

It is recommended that you can apply Compatibility Settings when running the initial installation; however, it is also possible to apply Compatibility Settings after the program has been installed.

Prior to installation
After downloading the install program, go to the folder where you have stored the TradeRadarStkInsp_7_Setup.exe or TradeRadarStkInsp_7_PRO_Setup.exe executable. Right-click on the executable file and select Properties. Click the Compatibility tab. Adjust the Compatibility mode to …

Durable Goods report for Sept just so-so but Computer segment is on fire

The Durable Goods advanced report for September 2011 was released on Wednesday.

I like to dig into the Durable Goods report because it can be useful for seeing how tech in aggregate is performing and how the sector may perform in the future. I always focus on two particular measures: shipments and new orders. Let's see how it played out last month.

Shipments -- 

I generally give less importance to Shipments since this is a backward looking measure reflecting orders that have been confirmed, manufactured and shipped. It's similar to earnings reports -- it's good to know but the data is in the past and we're more interested in the future. The following chart shows how September shipments looked for the overall tech sector:


Results for the overall tech sector were a bit weak but take a look at the next chart which tracks the Computers and related products segment:


Results here were actually quite good and, to make things even better, the previous month was revised upward.

N…

Alert HQ has moved!

End of an era!

This site was started way back in 2006/2007 to showcase my blog posts and the Alert HQ buy signals and sell signals. Alert HQ grew to include other kinds of stock alerts including Swing Signals, Trend Busters, Trend Leaders, Cash Flow Kings and more.

In the meantime, I built a sister site, TradingStockAlerts.com and I started using some of the same Alert HQ content over there. As a result, I am discontinuing the Alert HQ data here at Trade-Radar.com

The good news, however, is that all the Alert HQ signals and stock screens are still completely free. In addition, the pages have been enhanced so that you can hover over a stock symbol and a small chart will pop up so you can get a quick look at the stock's recent price action. If you click on a symbol it will take you to a page with plenty of financial and technical analysis information (still free!) as well as a larger chart that you can play with in terms of adding or deleting indicators, moving averages, etc.

Click …