Poll: Economic Outlook Dodgy

The tepid U.S. economy isn't suitable for IPO, says a recent poll of 147 NDCF readers (see Economic Outlook).

Just 1 percent of respondents rated the American economic climate as "buoyant," while 31 percent voted it "reasonable." A full 48 percent judged it "not too hot," and 20 percent checked the "Don't ask -- I'm hiding under my desk" response.

Despite this uncertainty, some 61 percent of respondents foresee at least moderate growth for their companies during the second half of 2005.

Oil prices were the biggest single factor cited by data center managers for the state of the economy, although the weak dollar, the war in Iraq, and consumer spending were all mentioned. These factors all figured prominently in an NDCF poll conducted earlier this year (see Poll: IT Managers Bemoan Weak Dollar and Pork City Payouts).

Perhaps things are not as bad as they could be. A number of vendors that suffered a tough first quarter of 2005, such as Foundry Networks Inc. (Nasdaq: FDRY) and IBM Corp. (NYSE: IBM), bounced back with their second-quarter results (see IBM Reports Q1 Results, IBM Reports Q2, and Foundry Faces Tough Times).Still, there remain signs of distress in the tech sector. Foundry and F5 Networks Inc. (Nasdaq: FFIV), for instance, are both smarting from reallocations by federal prospects (see Foundry Flies on 10-Gig and F5 Shares Get Hammered).

All this discourages dreams of technology IPOs. Only 4 percent of those taking part in the survey felt that the time is ripe for going public. Forty-six percent of respondents balked at the very notion of going public at this time, although 50 percent said that it could be a possibility.

Certainly, technology IPOs are few and far between at the moment. Blade server startup Egenera Inc. has been forced to postpone its offering because of market conditions (see Egenera Waits on IPO and Egenera Seeks IPO). Even the most eagerly anticipated tech sector IPO of recent years was not without its hiccups (see Google IPO in Doubt and Tech Cash Slashed? Learn From Google).

Nonetheless, there are some other hearty souls pursuing IPOs at this time, including security specialist Fortinet Inc. (see Fortinet Fires Up for IPO and IPOs Happen: Carl Russo Speaks).

This month NDCF is trolling for your views on the state of the mainframe market. Check out the new poll here: Big Iron: Still Hip?.James Rogers, Site Editor, Next-Gen Data Center Forum

The economy is still not too hot, particularly if you are planning to go public– that was the message from a recent poll of NDCF readers (see Economic Outlook).

Only one percent of respondents rated the economic climate as ‘bouyant’ and almost three quarters felt that conditions are shaky, to say the least. Despite this uncertainty, some 61 percent of respondents foresee at least moderate growth for their companies during the second half of 2005.

Oil prices were the biggest single factor cited by data center managers for the state of the economy, although the weak dollar, the war in Iraq and consumer spending were all mentioned. These factors all figured prominently in an NDCF poll conducted earlier this year, particularly fluctuations in U.S currency (see Poll: IT Managers Bemoan Weak Dollar and Pork City Payouts).

But maybe things are not as bad as they could be. A number of vendors that suffered a tough first quarter of 2005, such as Foundry Networks Inc. (Nasdaq: FDRY) and IBM Corp. (NYSE: IBM), bounced back with their Q2 results (see IBM Reports Q1 Results, IBM Reports Q2 and Foundry Faces Tough Times). However, the federal government continues to be something of a sore point for Foundry and F5 Networks Inc. (Nasdaq: FFIV) (see Foundry Flies on 10-Gig and F5 Shares Get Hammered).But is the economic climate good enough to support an IPO? The jury is out on this one. Almost half of respondents balked at the very notion of going public at this time, although 50 percent said that it could be a possibility. Only four percent of those taking part in the survey felt that the time is ripe for an IPO.

Certainly, technology IPOs are few and far between at the moment. Blade server startup Egenera Inc., one of a handful of tech IPOs of recent years, has been forced to postpone its offering because of market conditions (see Egenera Waits on IPO and Egenera Seeks IPO). Even the most eagerly anticipated tech sector IPO of recent years was not without its hiccups (see Google IPO in Doubt and Tech Cash Slashed? Learn From Google).

Nonetheless, there are some other hardy souls pursuing IPOs at this time, such as security specialist Fortinet Inc. (see Fortinet Fires Up for IPO and IPOs Happen: Carl Russo Speaks).

— James Rogers, Site Editor, Next-Gen Data Center Forum