Tech's Challenge: Keeping Up With the Rust Belt
AT THE RISK OF BEING a spoilsport, I have to ask: Is the technology-fueled productivity boom of the past eight years coming to an end?
It's not something a lot of folks want to talk about, especially tech investors, but it is a notion that some analysts and stockpickers have started to float. Judging by the slew of cranky mail I received last week after giving credence to Goldman Sach's pessimistic forecast for corporate tech spending, it seems clear that most tech fans still choose to see the glass half-full.
For one thing, a number of you think that the chief information officers polled by Goldman are playing down their real intentions to spend, which is probably true to a degree. More than one reader also accused the CIOs of having a vested interest in keeping expectations low to provide extra leverage against their vendors, which may also be true.
So, even if you want to quibble with Goldman's projected increase of only .04% in tech spending for 2004 (down from 2.3% just two months ago), I think one of the most important things here, in the short term, is the directional change in the survey. For several months, sentiment and forecasts were creeping upward ever so slowly, but the sudden negative shift in direction of the poll is not a good omen for tech stocks in the wake of heightened expectations for a recovery.
That said, whether real tech spending growth ends up being zero or 2% isn't the point. The fact is, anywhere in that neighborhood is a sign that tech spending is barely keeping pace with the growth of domestic gross product, which is about 2.8%. So why pay a big premium for tech?
Not only does tech appear to be growing roughly at the same rate as or slower than GDP, the major tech bellwethers are growing substantially slower than their Rust Belt brethren.
Oracle and IBM recently reported quarterly year-over-year sales increases of about 7%, and Intel's sales are expected to be up 8% for the quarter ended Sept. 4 (One fund manager argues that Oracle's real revenue gains without currency help from Europe were closer to 3%). Plus, growth is decelerating. On the other hand, tractor-maker Caterpillar reported a second quarter sales surge of 27%. Illinois Tool Works saw recent quarterly revenues rise 17%, and General Electric reported an 11% sales increase.
The point? Other industries might be recapturing a bigger share of corporate spending, explaining why tech isn't getting the juice it expects. For several years now, tech has been grabbing a historically disproportionate share of capital spending. "Information processing equipment and software now accounts for 58% of total real business outlays on capital equipment -- a stunning surge from a 35% share in 1995," notes Morgan Stanley Chief Economist Stephen Roach.
Most of America has entered the Information Age, which means the much-celebrated efficiencies gained from information technology spending could be nearing their limit, Roach states in a recent report. If true, future tech growth could be driven less by conversion to new platforms and more by product upgrades and replacement cycles, he says. His argument has little to do with potential paybacks -- or lack thereof -- from the next new things; it is just a matter of technology saturation, Roach adds.
Roach isn't concerned that the productivity gains will disappear, but he is worried that the miraculous pace of transition to the information age can't be sustained.
"I fully realize it is considered blasphemy to challenge the productivity underpinnings of this brave new era," Roach writes. But "maybe, just maybe, the American productivity story is finally coming out of the clouds and nearing the end of what has been a glorious eight-year upsurge."
IBM as White Knight?
If the information economy is losing any steam, it sure wasn't evident in San Francisco last week. There were three growth-oriented stock conferences within a few blocks of each other up Nob Hill. Plus, PeopleSoft was holding a big shindig for loyal customers at the convention center.
Thousands of money managers and analysts packed the Ritz-Carlton for the annual fall confab hosted by Banc of America Securities, formerly San Francisco-based Montgomery Securities. Two nascent Bay Area growth boutiques, ThinkEquity Partners and Merriman Curhan Ford, piggy-backed BofA's center-ring event to hold conferences of their own. Organizers of all three events indicated that attendance exceeded expectations. Spirits were higher than in recent years, too. The presentation salons were bustling, and the hallways were buzzing like the Kool-Aid years.
At PeopleSoft's pow-wow, chief executive Craig Conway unveiled a big middleware partnership with Big Blue, prompting some to suggest that IBM could rescue Conway from Oracle's hostile advances. But Piper Jaffray software analyst Tad Piper was quick to dismiss notions that IBM would "step in as a White Knight." The bigger issue, in Piper's mind, was how PeopleSoft customers were "ignoring the elephant [Oracle] in the corner." Some sales folks did admit, however, that Oracle's takeover bid definitely becomes an issue when they are trying to close deals, Piper says.
As for the IBM alliance, Big Blue has agreed to ship its WebSphere application-server software with PeopleSoft's stack. The initial reaction was that the move would hurt BEA Systems, whose core product is the app server and whose partner is PeopleSoft. But the products aren't expected to ship together for a matter of years. The louder grousing came from systems integrators like Accenture and EDS, which fear that once IBM gets in the door, its consultants will steal their business.
Leaving Its Heart
Another nugget making its way around the streets of San Francisco was word that this was the last year that Banc of America Securities would hold its fall party in the city by the bay. A BofA spokesman confirmed that the firm's contract with the Ritz is up after this year, but he said no decision has been made about the future of the conference. In many ways, it would make sense to move it east: since acquiring Montgomery several years ago, BofA Securities has been a New York-centric operation focused on numerous big-cap companies beyond tech and bio-tech.
ThinkEquity Chief Operating Officer Seth Gersch told Barron's that his outfit has already booked the San Francisco Ritz for the third week of September next year. Of course, that doesn't preclude BofA from holding its conference somewhere else in San Francisco or during a different week. But it does appear that the writing is on the wall, which is too bad because the "Montgomery Conference" was the first of its kind: an Indian Summer ritual that put Silicon Valley on Wall Street's map.
科技行业风头渐尽
这么问或许有些扫兴，可我还是忍不住：8年来由科技行业带动的生产力突飞猛进的时代是不是接近尾声了？
这是一个很多人不愿谈及的问题，特别科技类投资者，但某些分析师和股票投资者的确开始有这种感觉。在我表示赞同高盛(Goldman Sach)对企业技术支出的悲观预期后，一系列显示信心波动的来信接踵而至，大部分科技股追捧者似乎仍然感到乐观。
首先，很多人可能认为接受高盛调查的首席信息长(CIO)们淡化了公司的支出意愿。不过从某种程度上来讲，这可能都是事实。其次，很多读者抱怨说CIO们一贯把支出预期定得较低，以便更好地与供应商们讨价还价，这一点也可能是对的。
因此，即便你想对高盛预期的今年科技支出仅增长0.04%的幅度（远远低于两个月前的2.3%）较真儿，有一个重要事实仍然不容否认，那就是近期方向的改变。近几个月来企业的信心和预期一直在缓慢攀升，而这次调查中却突然反转，这显然不是一个好兆头。
换言之，实际的技术支出增长到底是零还是2%并不重要。事实是，只要在这个区间就表明技术支出的增长步伐与国内生产总值(GDP)的增长速度（2.8%左右）大致相仿。那么，为什么还要高价买进科技类股呢？
不仅技术支出勉强跟上GDP增幅或者偏低，几家科技行业巨头的业绩也远远落后于传统经济领域的大企业。
甲骨文(Oracle)和国际商业机器公司(IBM)近期均公布季度销售额较上年同期增长7%左右，英特尔(Intel)截至9月4日当季销售额预计增长8%。（一位基金经理表示，排除汇率因素，甲骨文的实际收入增长可能仅为3%左右)。这些增势头都在放缓。相反，拖拉机制造商卡特彼勒公司(Caterpillar Inc., CAT)第二季度销售额猛增27%。Illinois Tool Works预计最近财政季度收入增长17%，通用电气(General Electric)销售额增长11%。
这说明什么？其他行业争取到的企业支出比例可能正在增加，这也是科技类股未能如愿获得足够比例的原因。多年来科技公司一直在资本支出中占有不成比例的绝对份额。摩根士丹利(Morgan Stanley)首席经济学家斯蒂芬?罗奇(Stephen Roach)说，“信息处理设备和软件制造商目前占有资本设备商业支出总额的58%，远远高于1995年的35%。”
罗奇在最近的报告中称，大多数美国企业已进入信息时代，就是说由信息技术支出引发的高效运营可能已经接近极限。他说，倘若果真如此，未来的技术增长可能主要受产品升级和替代周期推动，而不再源于新平台的设立。当然，他的观点与未来新事务的潜在回报无关；他补充说，这只是技术饱和问题。
罗奇并不担心生产力的增长会就此驻足，但他表示，迈向信息时代的奇迹般的步伐可能难以维系。
罗奇写道，“我完全明白对这个勇敢新时代的生产力支柱提出异议可能会被认为是一种亵读”，但是“或许，只是或许，美国人的生产力传奇的光环正在渐渐散去，八年的光辉时代也许正在接近尾声。”
IBM能否成为白衣骑士？
信息经济或许已成强弩之末，但上周的旧金山却是春意融融。在诺布山脚下的几个街区内，3个有关增长的股票讨论会在这里先后召开。此外，仁科(PeopleSoft)正在这里的会议中心为忠实的客户举行大型聚会。
数千名投资经理和分析师云集Ritz-Carlton，参加美银证券(Banc of America Securities)举办的年度秋季会议。两家名不见经传的旧金山湾区成长性公司也借美银证券的声势召开了自己的分析师会议。3个会议的组织者均表示，出席人数远远超出预期。人气也比以往更加高涨。展示会沙龙现场人头攒动，走廊的热烈景象甚至可以与Kool-Aid年代媲美。
在仁科的盛大会议上，公司首席执行长克雷格?康威(Craig Conway)隆重公布与IBM达成一项大型合作协议，这不禁令投资者猜测，IBM可能将康威从甲骨文对仁科的恶意收购中拯救出来。但Piper Jaffray软件分析师泰德?皮珀(Tad Piper)很快表示不赞成IBM将成为“白衣骑士”的说法。在皮珀看来，主要问题是仁科的客户或许忽略了甲骨文的实力，参与仁科出售的人士已承认，甲骨文收购仁科已成定局，只是他们想何时达成交易的问题。
鉴于已经成为IBM的合作伙伴，IBM同意将其WebSphere应用伺服器软件提供给仁科。对此市场的最初反应是，此举将损害BEA Systems的利益以及BEA Systems与仁科的合作关系。但预计这些产品不会在几年内大量发货。牢骚满腹的主要是Accenture和电子资讯系统(EDS)这类系统整合商，它们担心IBM的介入会抢占他们的市场。
旧金山魅力渐失
有传言称今年是美银证券最后一次在旧金山召开秋季会议，这也令这个海滨城市喧嚣一片。美银证券发言人证实该公司与Ritz酒店的合约将于今年过后到期，但对于将来的会议低点公司尚未作出决定。从很多方面来看该公司很可能倾向东移：自几年前收购Montgomery以来，美银证券已经将业务中心移至纽约，业务重点不再仅仅包括科技和生物技术类股，还开始关注多家大型股公司。
ThinkEquity首席运营长塞思?格施(Seth Gersch)在接受《巴伦周刊》采访时称，ThinkEquity已经向Ritz酒店预定了明年9月前3周的会议场所，但这并不排除美银证券在旧金山其他酒店预定位置，或将会议时间改期。但判断美银证券告别旧金山似乎还是有据可循，这显然不是什么好消息：因为这是同类会议的首创。正是这场秋季的盛会将硅谷牢牢印在了华尔街的地图上。
