Monday's massive 300-plus-point drop in the Dow Jones and 100-plus-point drop in the Nasdaq stock exchanges may reflect the bearish sentiments of investors, but the bears have yet to hit the channel or its customers.
Solution providers said customers so far are viewing Monday's near-record shares sell-off of shares, particularly shares of technology companies, as more of a correction in the market, and less a cause to cut back on spending.
The Wall Street Journal's MarketWatch site called the Dow Jones drop of 326 points, or 2.1 percent, the worst drop since June 20, while the 107-point drop in the Nasdaq was the worst one-day drop since June 1, 2012.
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IT vendor shares nearly all fell Monday, including all the tech shares on the Dow 30, which includes AT&T, Cisco, Intel, IBM, Microsoft and Verizon.
Of 35 tech companies whose share prices are closely watched by CRN, only one, Apple, saw its Monday share prices rise. Apple's shares rose 0.19 percent to $501.53.
For the rest, storage vendors bracketed the drops in share prices, which ranged from 0.94 percent for NetApp to 6.24 percent for CommVault.
The stock market is insane, said Tim Neary, owner and president of Strategic Storage Solutions, an Allen, Texas-based solution provider.
However, the fall comes after a long-term stretch in which share prices rose strongly, Neary said.
"Customers have been putting off infrastructure upgrades since 2010," he said. "This is not the worst news customers have heard. With all the confusion of the last few years, they're finally seeing some clarity."
The recent drops in share prices for tech stocks could be good news for investors, said Gordon McKemie, owner of Ohio Valley Storage Consultants, an Anchorage, Ky.-based solution provider.
McKemie cited Apple's and Intel's price-to-earnings ratio of about 12 times as examples of tech stocks that might be considered possible bargains. "It looks like a contrarian time," he said. "A good time to buy tech stocks."
Customers, on the other hand, look less at how the stock market is doing and more at the kind of products and features their technology suppliers offer, McKemie said.
"I try to help customers look at the financial health of companies," McKemie said. "But they look at the features, not at the long-term viability of companies. Everything in the hardware world is getting beaten down with the focus on the cloud. SaaS, that's where the magic is, where people want to put their money. Hardware is just going away. It will happen slowly. But for now, there's still a huge multitrillion-dollar hardware market out there."
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