The Turnaround

Data should be used to help make better decisions, but it shouldn't be the only thing used to make those calls.

I've seen more failures than successes on the part of executives who relied heavily on research and for a very simple reason: Data, no matter how good, is always behind the action. Numbers that fall into the hands of someone looking to make a decision without having a fundamental and deep understanding of the market those numbers are measuring are very dangerous.

I've seen a lot of folks jump from one industry to another and begin applying principles of their former home to the new one without first trying to distinguish the nuances that are in place.

Then there are people inside of organizations who only speak to other people inside of that same organization and then use those conversations to make decisions about how to deal with customers, when they, in fact, rarely speak to a client themselves.

Here at CMP, and particularly in the channel space, we spend a lot of time and money collecting and looking at data.

I regularly receive the results of CRN's poll of solution providers detailing their best-selling hardware and software over the previous 30 days. This, of course, as I mentioned earlier, is data that tells us what has already happened.

That monthly poll, launched more than a decade ago, provided the first confirmation of just how large and important the white-box market was to the channel. We used that data in the early 1990s to wake manufacturers up to the fact that the largest PC brand in the world is the white box, or custom system.

But our data isn't just historical. We also ask forward-

looking questions of solution providers like you in an attempt to gauge what is likely to occur in the next three months.

The data from the past few months has begun to show a steady belief on your part that spending by small, midsize and large businesses will rise in coming months.

One key question we ask is for solution providers to characterize anticipated sales growth over the next three months versus the previous three. For better than two years, the answer to that question has largely shown that the vast majority of solution providers believed it would grow by less than 5 percent in the three general customer segments.

Now the data tells us that an increasing number of solution providers foresee significant sales growth potential in small and midsize firms and positive momentum in larger companies.

Some 37 percent of you, according to the September results, expect 6 percent to 10 percent sales growth in networking hardware; the same number anticipate growth of better than 10 percent in service and support.

Just last week, the government reported that GDP grew 7.2 percent in the third quarter, the best quarterly jump since 1984, a decade before the Internet bubble began. Even more encouraging was the fact that the government said business spending increased by 11 percent in the quarter, indicating that finally it isn't only the consumer who is leading us out of the doldrums.

We are probably a quarter or two away from significant job growth, but my own anecdotal evidence gathered from talking to a myriad of companies each week indicates that more jobs are available and every month this will increase.

Companies that have resisted raises and are overworking current employees will be forced to adjust or risk losing their most valued asset. This, in turn, will mean more money in more peoples' pockets, resulting in increased spending and necessitating more investment by businesses,and that's good for you.

Economics is a wonderful thing when it's positive.