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

Jon Reed Profile picture for user jreed June 27, 2022
This week - tech stock crash, or correction? And how should companies adapt? As data privacy suddenly takes center stage, we continue to grapple with the future of digital work - and the surge in AI adoption. Plus: whiffs lighten the mood.


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:

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

Waiter suggesting a bottle of wine to a customer

My top seven

Overworked businessman


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.

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