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Marching Orders 2017: Prepare for a Correction

What should you do to make the most of technology business opportunities in 2017? For this "Marching Orders" series, we put that question to a number of channel luminaries, including top Microsoft channel executives, consultants, Microsoft partners and other regular RCP contributors. This entry comes from Reed Warren, vice president of Revenue Rocket Consulting Group.

Harry Truman was fond of saying how much he yearned for a one-handed economist. He grew weary of economists offering one prognostication, then a minute later saying, "On the other hand," and proffering yet a completely different scenario.

We're going to offer a one-handed prognostication for 2017/2018 -- the market could very well see a pullback in demand, thereby setting off a technology correction.

It seems the timing is about right. We are not looking at a correction the likes of 2000/2001, or of 2007/2008. It appears to us that the market going forward will be characterized more by a sustained period of incrementalism, rather than some new significant, unforeseen innovation that reshapes the market.

The IT services firms that will prevail over the next 12 to 24 months will be the top-quartile performers possessed of an arsenal of cash, low debt and a fortified balance sheet.

In addition to a healthy balance sheet, these top-performing companies will be those that have successfully transitioned to a process orientation, and with significant IP initiatives. They have focused their business on the intersection of a technology and an industry. Having such will put the company in a better position to win over new customers relative to those less endowed, and to also be in a more advantageous position to make attractive acquisitions.

History has proven time and time again that successful companies look at recessions or pullbacks as the best time to invest in their business, such that they come out the back end in a better position than they were at the outset.

For 2017, think profit.

Posted on December 29, 2016