RIMM and Cloud Thoughts on a Friday
Starting with RIMM this morning I am not sure what more I can write. As I wrote before the company is in a negative product cycle. The good news is they actually have value in their consumer brand awareness, but there is no value in email anymore. Email is a feature and it is not a killer app, it is a common feature set of smartphones. To be competitive RIMM will have to innovate and catch-up in the product cycle marathon. I am not sure that it can. For the analysts and investors who think the stock is cheap, I would say that tech stocks work on growth and margins. When these two metrics turn negative the stock is a short. In the span of 49 days RIMM twice revised their forward guidance to the downside. If the company cannot predicate their earnings power I do not know how we can debate if it is cheap or not.
I have been writing a lot about new drivers in the network (here, here, here and here) and how various dislocations are going to affect the network and procurement of infrastructure. I am giving props to Phil Harvey and this interview with Randy Bias of Cloudscaling. The broader article is here. My comment about this interview is: spot on. Well done. If I was running money in the tech sector I would think very carefully about what this man is saying. I think it is going to be impactful on infrastructure providers as well as service providers and if you extrapolate his thinking, it might just explain a few things.
* It is all about the network stupid, because it is all about compute. *
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