Feature – Ian Stokell’s Guide To Networking Gibberish

MINNEAPOLIS, MINNESOTA, U.S.A., 1997 JUL 18 (NB) — By Ian Stokell. In this week’s column, Microsoft’s [NASDAQ:MSFT] marketing muscle, overseas revenue potential, and corporate downsizing.

In a public verification of what many people have known all along, Microsoft’s powerful marketing “big stick” was given some recognition by an executive with competitor Novell this week in the Newsbytes story “Microsoft Best At Marketing, says Novell VP.”

Said Art Ehrlich, Novell Asia Pacific vice president, “The non- technical user is best swayed by marketing hype and Microsoft has the best marketing machine. We will continue losing business in that segment until Novell gets its marketing machine together.”

Well, Novell and everyone else! Just look at the coverage of Windows products in computer magazines, and I don’t mean ads. But Novell, if you’re talking the non-technical user as a target market then don’t you think you should also be talking graphical user interface?

One of my pet subjects, as anyone that reads this column knows, was highlighted in a couple of stories this week — the revenue potential in Latin America and Asia for networking and computing companies generally.

In “Netscape Strengthens Presence In India,” Netscape said it plans to have a direct presence in India through a software development center, which will be operational by 1998, and will be the center for its regional operations. Intranets also featured in the plans, with the company intending to collaborate with the government and information technology companies in setting up pilot applications for intranets.

And in another story highlighting foreign market potential, “$5Bil Latin American Systems Integration Market – Study,” Killen & Associates said the Latin American market will reach $5 billion for system integration and outsourced services by the year 2000. While much of that will involve year 2000 problem-solving, the Internet and intranets will also play a role.

I’ve said repeatedly that networking companies need to get in early with a physical presence in those regions in order to establish themselves in the marketplace.

Killen Senior Vice President Bob Goodwin appeared to back that notion up, saying: “You do need a local sales or service organization, or at least an agent who can rep you effectively. The point we’re making is that if you have a presence there, we think it’s a good opportunity.”

Elsewhere, too many companies offer knee-jerk reactions to disappointing quarterly results in order to satisfy either shareholders, who have no real commitment to the company other than a financial one, or Wall Street. Either way, the unfortunate consequence is often that executives choose to take the cosmetic approach to business problems in order to achieve immediate, or relatively immediate payback, instead of creating a workable long-term business plan. And that approach often involves layoffs.

In a story this week, entitled: “Downsizing Doesn’t Work, Says Aussie Academic,” a six-year study of Australian companies reportedly found that downsizing “only works for some companies and in many cases leads to the ultimate disappearance of the companies concerned.”

Concentrating on companies with more than 100 people, the study argued that companies which downsize once are likely to be drawn into a “contraction cycle,” making “several rounds of retrenchments.” Interestingly, the study also said that the “companies downsizing to reduce labor costs often end up with proportionately more of the people who cost more to employ — managers.”

Executives need to stop being bullied by Wall Street or their outside shareholders, and think more about the company’s long-term survival and competitive capability than any short term financial goals. They also need to consider, dare I say it, the well-being of their employees when they take such radical decisions.

You don’t amputate someone’s leg when they have athlete’s foot! Companies need to consider the long-term implications of their actions, not just the next quarter’s financial results. And a loyal workforce will pay dividends in an increasingly fluid technology-related marketplace where flexibility is often needed with regard changing employee job descriptions and duties.

Don’t just lay an employee off, retrain them into sales or support, for example. A company that offers good products with a high level of free technical and customer support will gain long-term loyal customers. Many products may have become commodities, but selling hem with such value-added services attached can often mean the difference between success and failure in the marketplace.

Note: Ian Stokell is Newsbytes’ managing editor and resident networking expert. If you have a question or comment, feel free to drop him an e-mail at Ian_Stokell@newsbytes.com . Non-techie questions welcome.

(19970718/Reported By Newsbytes News Network: http://www.newsbytes.com/NWGIBB/PHOTO)

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