Regulation Regulation Regulation

I have been saying for a while that the IT outcome of the Sub-Prime mortgage issue in the US would be an increase in the regulation of that sector in the US and UK following Northern Rock.
Given what has happened in the last few weeks and particularly the last 24 hours, the regulation will be from one end of the Financial Services sector to the other, and will likely impact across industries. This is perhaps going to be a rare bright spot for the IT industry, it is clear that whilst there will always be regulatory requirements, the relative optimism will have to be tempered. Opportunities will occur, but they will be harder to find. Smarter not bigger will be the way to succeed.
In terms of IT companies there will be significant brands that disappear as a result of merger and acquisition, and in some cases bankruptcy. This will also change the way in which the industry will move forward. Cash will be king in terms of determining who survives, clearly some relatively strange bedfellows may emerge.

23. September 2008 18:53 by Phil | Comments (0) | Permalink

Will a transformation of Innovation to the emerging markets be an outcome of the financial crisis

Clearly the US government had to intervene in the US and global banking system, it was only going one way otherwise, and that was not up. However as credit availability shrinks and the consolidation in the banking sector increases, along with challenges for the private equity and investment markets. I fear that we will have a potential for a lack of innovation as new ideas are harder to fund. IT will not be immune to this of course, so there is a chance that innovation will become more difficult, or be placed in the hands of the largest firms such as HP, IBM and Microsoft who are able to capture capital more readily. Whilst this is at least some innovation, e-Bay, Google and Symantec did not spawn from IBM et al, rather from small funded ventures.
One may also argue that there is a lot of capital in the emerging economies such as the Middle East, China and India, this may lead to the innovation not so much dwindling, but accelerating the shift from the US to China et al. This is of itself a fundamental shift as the emerging markets have in almost every type of IT investment been guided by US based firms. If this shift or transfer occurs it is going to be one of the most seismic shifts IT has experienced.

22. September 2008 16:59 by Phil | Comments (0) | Permalink

On a light haearted note - How times have changed in the Finance and Banking industry

What did the Investment Banker say to the arts graduate?
You want fries with that.
How do you get the Equities Trader off your front porch?
Pay him for your Pizza.

20. September 2008 22:04 by Phil | Comments (0) | Permalink

Another Australian Channel Player hits the wall

Bluesky Industries went in to administration today. This is not the first, and will be followed as it is on an almost weekly basis. It is getting so tough to be a channel player anywhere are margins are squeezed, credit becomes tougher, and vendors tighten the screws.,bluesky-industries-calls-in-administrators.aspx

16. September 2008 23:07 by Phil | Comments (0) | Permalink

NCS buys SCS - Reposting

This had to be reposted
Singtel's IT Services subsidiary NCS has indicated that it will buy it's Temasek stable mate SCS, putting  value on SCS of about S$250M. NCS has never really fulfilled its potential outside of the Singapore government and the governments various investments. SCS to was heavily reliant upon the Singapore government for revenue. Basically it will have a limited impact outside of Singapore, and perhaps even the Singapore government. SingTel has had the same mixed to poor track record of managing IT Services companies as its peer Telstra, as well as AT&T and others. As many would know as an analyst I do not rate telcos being IT Services providers, and I see no reason here to change this opinion.
BT who bought the largest South East Asian IT services firm in Frontline earlier this year appears to be the only really credible provider of IT Services in the region.
Bottom line, this will not have much of an impact outside of the Singapore government and will not provide SingTel with any super capabilities in terms of building a services capability.

16. September 2008 18:05 by Phil | Comments (0) | Permalink


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