Archive for May, 2009

Smart Business for Challenging Times: Ten things we can do

Friday, May 1st, 2009

By Dean Whittaker

Challenging, unprecedented, and rapidly changing are all terms we have heard to describe our current economic environment. We are all hearing the stories of companies whose sales have dropped by 30-40% within a few months. Banks are canceling their financial commitments, leaving customers without the needed capital to finance their inventory or balance their cash flow. How do we survive and even prosper in times like these? Here are ten ideas to consider in response to this situation:

  1. Adapt quickly to the changing environment :conserve cash, work with suppliers, customers, and co-workers to develop a plan of action.
  2. Communicate :with customers, suppliers, vendors and your bank. Keep them informed so they can plan accordingly.
  3. Collaborate :share what we have and know. We are all in this together. By sharing surplus office space, under-utilized equipment, surplus staff time, knowledge and skills, we all will benefit.
  4. Create :innovation is one of the benefits that comes from our current situation. Look for new ways to do things, reduce costs, improve efficiencies, and add more value.
  5. Trust :have confidence in yourself and others that we will work through the situation. Decide to offer the trust you seek.
  6. Give :focus on giving, being of service to others, sharing your skills and expertise.
  7. Support :provide support to those in need. All of us know of someone who is seeking employment. Help them network. Look for opportunities for them to engage their skills.
  8. Share :look for ways to share what you have. We live in a world of abundance.
  9. Participate :in an open-source project.
  10. Love each other :give what you want to get.

While these are simple concepts, they represent a positive way to take charge of the situation. We can weather this storm. Reach out and give of yourself.

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The World is Small (& You Can Be Big)

Friday, May 1st, 2009

By Todd Smithee

Nearly everyone has read, or at least heard of, The World is Flat by Thomas L. Friedman. The basic premise of the book is that due to technology, much work can be done anywhere in the world. Legal research is now done in India; technical support is sourced out of the Philippines and Romania; and just about everything under the sun is now manufactured in China.

These are scary times, but also times of great opportunity. Just because someone can come play in your sandbox does not mean that you cannot move into theirs. Instead of looking at the downside of a flat world, try looking at things this way: The World is Small & You Are Big. If you have been in business for any length of time you have valuable skills that have a market. If people are willing to pay for your service in, say, Florida or the southeastern US, there are surely people willing to buy your services throughout the US and Canada. Most likely, you can sell services to countries around the globe.

Conrin has benefited greatly through this thinking. We have implemented Salesforce.com CRM and B2B lead-generation programs for companies in our home state of Michigan, across the US, and for multinational corporations. Oh yeah, I forgot to tell you that our offices are located in the rural community of Lowell, MI. I also forgot to add that for many of these implementations we never visited the clients”™ offices.

How to get “Big”

Five simple things that one needs to do to get “Big”:

  1. Decide which of your products and services can be sold and delivered regardless of the physical location of the client. Most likely, all of your services will not be sellable everywhere. All you need is one, though.
  2. Invest in your website. You need to look big to “be big.” Enough said.
  3. Market aggressively. Invest in pay-per-click advertising and search engine optimization (SEO) for highly targeted marketing. Pick some test areas and target them.
  4. Learn to use technology. There will be times when you will have to travel to meet a potential client. That said, you can extensively qualify your clients via conference calls and web meetings. This will allow you to be selective when investing time and resources in physical travel.
  5. Look for Rain Brokers. A rain broker is someone who is in a position to refer multiple prospects to you. Conrin has been brought into many profitable projects by partners with contacts in many parts of the world and country. These people provide you with tremendous sales leverage and should be nurtured carefully over time. As business becomes more global in nature, you never know who your neighbor might know.

The bottom line is this. You can fret over what is happening in the global economy or you can learn the game and use it to your advantage. It is time we start getting aggressive again and make some good things happen.

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Surviving the Watt-Com Boom

Friday, May 1st, 2009

By Jim Bruckbauer

It seems as though we are in the middle of a strange time in the renewable energy industries. Some are referring to it as the Watt-Com Boom. Similar to the Dot-Com boom, there has been a large amount of investment into many companies in a particular sector. Although, this time the investment went into renewable energy, and again, we are seeing the astronomical growth in investment come to a screeching halt due to lack of financing for the actual renewable energy projects. Many companies who were predicting growth in 2007-2008 are now experiencing a time of downscaling, much like other industries.

Survival of the fittest will once again come into play as the government makes the $150 billion dollar investment in renewable energy a reality. As residents, as well as companies, take advantage of the large federal incentives to invest in renewable power, the demand for the products will once again increase. Like the dot-com boom, unfortunately some companies will not survive long enough to benefit from the stimulus dollars. The companies that do, however, will see large investment leading to large expansions.

A few companies that should be on the radar and that are likely to remain active during this time are highlighted below.

First Solar, Inc. : This Tempe, Arizona company has been on our “watch” list for some time. They have been able to produce electricity at the lowest cost-per-watt in the solar industry, by using cadmium telluride in its solar panels instead of silicon. We’re likely so see a large amount of activity from this company as it takes over much of the market share in the solar industry.

Ormat Technologies : Ormat is based in Reno, Nevada, and has capability of turning hot water and steam from the earth into electricity. It uses its own technology to sell power from the plants that it builds and owns. It still expects to sign about 120 large contracts this year, putting this on our “watch” list for 2009.

Itron, Inc. : Look for Itron to continually grow as a company through the stimulus activities. Itron is headquartered in Liberty Lake, Washington and creates data collection products for resource use. It creates meters and software products that assist utilities to monitor how gas, water, and electricity are being used. This company has partnered with Google to record and display what products in your home are using energy and how much they are using. With this technology, expect continual growth in the next few years.

Those are just a few publicly traded companies that are likely to continue to grow as demand increases in the next few years. We are focusing on finding private companies that are experiencing similar business activity that may be expanding soon. Give us a call for more information on some of the data that we’ve been collecting on the renewable energy industries.

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SharePoint Training

Friday, May 1st, 2009

By Jami Miedema

Whittaker Associates’ staff loves to learn new things. That is why when we had the opportunity to discover SharePoint, we were eager to see how implementing a powerful program could assist us in our daily tasks. Our training was split into two 4-hour sessions, a week apart from one another, and Sherri Amstutz, President of Accelerated Knowledge (www.acceleratedk.com), was our trainer. The following paragraphs will provide a brief overview of the main topics that we covered during our training.

SharePoint is an application that is used as a collaborative tool to manage projects, documents, and communication among its users. The system can be set up by an administrator who can easily coordinate and oversee members, groups, and tasks. It is a safe way to store information and confidential documents, as all areas of the application can be secured.

Permissions in SharePoint can be regulated at many levels. For instance, one may restrict certain groups of users from accessing areas of the system or making changes to the sites within the system. Permissions may also be given on a site by site basis. One site could require an approval from an administrator before updates were allowed to be made to the site content. The deepest level of security is used to set permissions on individual documents within sites and sub-sites. While this level of security may be necessary to protect private information, it can also cause complexities in maintaining the system and issues with consistency in setting up sites.

SharePoint can improve project management by creating a level of transparency among its users. Users can see who is working on the project, what tasks have been completed, what still needs to be finished, as well as issues that are created while carrying out the tasks. When each project is set up using the same structure, productivity is increased because processes become consistent. As a central location for document storage, SharePoint ensures that each user is working with the same up-to-date document.

Other beneficial features of SharePoint include the ability to set up surveys, contact databases, wikis and blogs, discussion pages, and calendars. All of these tools help encourage communication among the system’s users, therefore, improving processes and workflow.

This powerful tool has many advantages, but an intuitive interface is not one of them. Proper training before implementation of SharePoint would provide the greatest benefit to users. Our company was able to receive a grant from Michigan Works for the training. Find out what funds may be available for workforce training in your area.

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The World of Data Centers

Friday, May 1st, 2009

By Vidhan Rana

As more and more people today watch videos, store their documents and pictures, and get their news online, the need for online storage capabilities has increased tremendously. As we hit the search button on Google’s search engine, Google servers in one of Google’s 36 data centers around the world get busy. Google has 20 data centers alone in the US (including those currently under construction). The company invested $1.9 billion on data centers in 2006, and $2.4 billion in 2007.

Alongside big Internet companies such as Google, data co-location service providers are also making the most out of this favorable trend. Equinix, a company that provides data co-location services for companies that cannot build their own data centers, has increased its revenue from $221 million in 2005 to $705 million in 2008. Since hitting its lowest stock price of $32.72 a share in November 2008 in the last 52 weeks of trading, Equinix (NASDAQ: EQIX) has almost doubled in value to about $72 a share now. The overall market (S&P; 500 index) only increased by around 20% in the same time period.

Using Conway Scorecard Data, a service that tracks new investment and expansion announcements in the United States, we identified 426 data center announcements in the United States between 1993 and 2008. In 2008 alone, there were 57 new project announcements, the highest on record, bringing recorded investments of over $3 billion. The chart below shows the level of projects by year in the United States between 1993 and 2008.

Though the number of data center projects continued to increase despite the financial turmoil, the dollar amount of investments declined in 2008. The chart below shows the dollar amount of data center investments in the United States between 1993 and 2008.

Notice the spike in investment in 2000 and 2001. Data center investment remained fairly low in the years after the “dot com” crash. However, since 2005 investments have increased dramatically. The total recorded investment in the last three consecutive years were $2.7 billion in 2006, $5.1 billion in 2007 and $4.1 billion in 2008.

We measured investment per data center project and saw a marked decline in per-project investment for both new and expansion announcements. The chart below shows the comparison of investment per project for data centers between 1993 and 2009.

Investment per new project has declined from a peak of $115 million per project in 2007 to $32 million per project for the 11 projects we have identified in 2009. Similarly, investment per expansion project has declined from $71 million per project to $28 million per project in 2009.

This change may be attributed to factors such as improvements in technology in the industry, which has led to the decrease in the size of data servers and thus a decrease in the size of data center facilities. The limited availability of financing for large projects, perhaps, also contributed to companies taking on smaller projects.

Texas, Virginia, California, Kentucky, and Ohio have been the top states in the data-center industry in the last 15 years. In 2008 alone, Texas received 14 data center projects. Ohio and Kentucky had nine and seven projects respectively. Kentucky had no projects in 2007, when the industry was fairly active in other parts of the country, but there were seven projects in 2008. Similarly, there was only one project in Ohio in 2007, but activity jumped in 2008 with 9 project announcements.

The map below shows the location of the top thirty data center projects in the United States in terms of investment dollars in 2008.*

As the map above shows, the major data center announcements have centered close to major metro areas. However, there have been projects in rural areas that are within two to three hours driving range of a major city. Whittaker Associates is currently undertaking a study to determine if there is any difference between companies that expand within a metro area or those that stay outside of it.

These top 30 projects had a cumulative investment of $3,041 million out of the $4,102 million recorded in 2008 for the 57 projects that Whittaker Associates identified. According to a recent article in PC World Magazine, forty percent of the companies that operate data centers will run out of data center space in the next 12 months. As the cost of creating additional space for data centers is rising and obtaining financing is becoming more difficult, many companies will go the co-location route. Therefore, demand for co-location provider’s services is expected to skyrocket. This means that 2009 is going to be a busy year for the data center industry, despite the economic slowdown.

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