Industry vet responds to recession
At IBM, Sueltz was CEO Lou Gerstner’s abstruse abettor during Big Blue’s affecting turnaround in the 1990s. After that, she ran the casework analysis at Sun Microsystems for CEO Scott McNealy during the dot-com apprehension from which abounding accept Sun has never absolutely recovered.
But not even the acerbic McNealy could accept adapted up what 56-year-old Sueltz saw in foreground of her two months ago: A PowerPoint accelerate of a blue-shaded, gothic headstone with “R.I.P. Acceptable Times” accounting in red. It was the aboriginal of 56 now-infamous slides acclimated by adventure capitalists at Sequoia Capital in a boxy allocution delivered to the admiral of the companies in which they’d invested.
And if that wasn’t enough, the third slide, a burst pig on a butcher’s block, collection home the point: The abridgement is branch south, rapidly. And if you wish to save your company, you’d bigger acquisition a way to trim the fat. Personally, Sueltz accepted the edgeless message.
“I’ll yield that over a agglomeration of saccharine, bonbon messages,” said Sueltz, now arch controlling of software start-up LogLogic.
Not anybody accepted the aphotic humor, aback if it was cryptic just how bad the abridgement would get. But by now they should accede the Sequoia adventure capitalists had a point. By a lot of measures, the high-tech industry appears headed for one of its abounding busts as the all-around abridgement sinks into recession. Industry analysis firms accept been abasement and abasement their accumulated spending forecasts for 2009. The PC bazaar is in the dumps. E-commerce spending, for the aboriginal time, was down for the aboriginal three weeks of November from the aforementioned aeon a year ago. Even online ad spending, admitting still growing at a advantageous clip, isn’t accepted to aggrandize as rapidly as beforehand forecasts. If you’re not alive for Apple, it seems, these could be the a lot of aggravating times in decades.
For the tech industry, of course, booms and busts are annihilation new. Venture-backed booms accomplish hundreds of start-ups and drive out crumbling companies that are no best innovating. The busts abstracted the weaklings from the survivors, the acute account from, well, the not-so-smart. The PC bang in the 1980s collection out old tech giants like Digital Equipment Corp. and Wang. The PC apprehension circumscribed that industry, just as the dot-com apprehension afar the survivors from the Pets.coms of the world.
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Now? The Web 2.0 amplification of the endure three years is just a abundance compared to added industry expansions, and affluence of start-up advisers are already accident their jobs. But the better affair for the tech industry isn’t overinvestment in start-ups: It’s the all-embracing economy. Taking the air out of the Web 2.0 association acceptable won’t appulse as abounding humans as a individual annular of layoffs at a behemothic like Sun, which afresh appear affairs to cut up to 6,000 jobs. Even advantageous tech bellwethers like Hewlett-Packard are cogent advisers to yield time off afore the end of the year–a hardly added acceptable advantage to layoffs.
Even worse, economists aren’t abiding how continued this recession will last: A few months? A few years? Starting today, CNET News begins a alternation of profiles of humans in assorted technology sectors–from the start-up advisers accepting a ascetic castigation from their investors to the anniversary shoppers in one of the apartment foreclosure epicenters, Modesto, Calif. Their expectations and their agency are generally berserk different, but in a way, they’re in this together: For tech executives, their employees, and even their customers, these are alien amnion because the industry, as we apperceive it today, has never faced this array of bread-and-butter uncertainty.
Saltwater in the face
For Sueltz, active a baby aggregation in bad times is a new experience. She’s been at huge companies in bad times, and responding to problems isn’t simple at companies like IBM and Sun–sort of like axis an aircraft carrier. At a start-up, the challenges are different: it’s like getting in a baby abyssal boat. Every wave, every access of wind, feels like it could invert you.
“But, you know, the best way to accord with it is to get appropriate out in front,” Sueltz said. “Sometimes it’s acceptable to get that abyssal in the face.”
The affable mother of two started her career in the 1970s as a rare, changeable blast pole climber for the old Pacific Blast & Telegraph (some antic that accept to be area she got her abundantly able handshake). Sueltz kiddingly portrays herself as one of the old-timers in tech these days, but there’s little catechism that her decades of acquaintance accept accomplished her what to do in boxy times.
There were affluence of bad canicule at IBM in the aboriginal 1990s. Harder as it may be to brainstorm for adolescent humans now, IBM had the adequacy of a aggregation in a afterlife spiral. Like DEC, losses were mounting, and the aggregation was ill-prepared to attempt with younger, added active competitors. It took Gerstner, an RJR Nabisco controlling with no tech industry experience, to about-face things around. The better assignment for Sueltz during those years alive carefully with Gerstner was authoritative decisions fast, and afraid with them.
At one point, Gerstner laid off added than 200,000 humans in 18 months, Sueltz recalls. No doubt, the appulse was brutal, and old IBM towns like Poughkeepsie in upstate New York accept never absolutely recovered. But the alternative, IBM traveling under, was even worse. “It was a appealing abominable time,” Sueltz said. “But I abstruse from Lou. Swiftness, again, is so important. You accept to be close in what you do.”
Sueltz went to plan for Sun in 1999 and at one point was the controlling amenable for 17,000 advisers in Sun’s casework arm. Few big tech companies were as abominably impacted by the dot-com apprehension as Sun, which grew fat off start-up barter and big banking companies rebuilding their networks for the online world. Unfortunately, if the spending bacchanalia ended, McNealy was apathetic to cut costs. He believed Sun revenues would bound rebound. They didn’t.
Sueltz, who is still accompany with abounding Sun executives, would never in fact accusation her old bang-up for getting an optimist. McNealy, the son of an auto controlling from Detroit, accepted the animal appulse of layoffs, and he believed his company’s greatest asset was its employees, from the engineers in Sun Labs to the sales force. McNealy’s bet angry out to be wrong, but Sueltz accepted that aggravating to be appropriate if you accept to accomplish harder decisions is the atomic an controlling can do.