Enterprise Buying and the Tech Sector

To reiterate something I said on CNBC last night, I mused bullishly about technology over next eighteen months based on enterprise buying picking up. Said nice things about Cisco, Dell, Juniper, and others.

A point I’m wavering on is whether Microsoft should be lumped into that group. The bullish case is that a rising enterprise buying tide lifts all tech boats, even ones with holes; the bearish case is that Microsoft’s core businesses are slowing, spending is increasing on unprofitable programs, and the company is f(l)ailing in search-related ads.

A reader made the point in a different way to me via email. His take: The Dow’s has outpaced Nasdaq materially over the last twelve months. Assuming the Dow doesn’t backslide, then cheap-o mean reversion would suggest significant Nasdaq (read:tech) outperformance.


  1. Only in the Apple and Google centric view of the technology landscape could there be a boom for cisco, juniper, “others”, and, get this, Dell, without these enterprises also upgrading to office, vista, server 2003 — soon to be longhorn server, and Microsoft Dynamics. Yes one of Microsoft’s most successful and highly profitable platforms is getting a major update in 2008.
    Its an especially curious position because that’s exactly what msft CFO DIDN’T say was happening, only yesterday, on the CC. Microsoft products are being gobbled up by enterprises large and small.
    This was the one quarter when the very vocal Vista bears could have been right, as Vista was always predicted to have a slow ramp in enterprises. But even That didn’t happen. Vista Only builds momentum from here as drivers get updated, vista specific software is developed, and SP1 gets released.
    It is going to be a vista “world” someday very soon. If one really thinks about it, it couldn’t be any other way actually. At least when this becomes entirely obvious (perhaps when Roger acknowledges that msft still has a pulse if only a faint one?), the A/G centric bloggers can then begin to sharpen their “focus” on the next money losing msft business (designed partly to shield their massive net income), and of course pen their clockwork like Microsoft is “dead” posts, widely linked of course.

  2. Re: Dow vs. Nasdaq.
    I believe the Dow is a price weighted index and the Nasdaq is market cap weighted.
    The two really shouldn’t be compared.
    Moreover, one shouldn’t use the Dow as a comparison to ANYTHING, since price weighting renders it fairly meaningless for measuring return or performance…