Enterprise hits and misses – big tech isn’t doing well, but where do we go from here? Plus: metadata matters, and Meta struggles

Main story – Reports of big tech profits are in, so what’s next?

MyPOV: Big tech earnings reports were decidedly mixed this week, but can we see a useful pattern? Get started with Amazon. While Stuart reports AWS is still on the rise as Amazon’s retail arm is hit by the sector slowdown, but it’s another quarter of big losses overall, surging AWS won’t make up for sudden sloppiness/spending of buyers. The hit to retail across the sector is compounded by rising gas/energy prices. Wall Street sees the upside:

It may have been a big loss, but Wall Street sent Amazon’s share price up 12% in after-hours trading. There is clearly a lot of confidence around the organization and its ability to weather the current macro-economic turmoil better than many of its rivals.

It’s a similar story at Google, where ad revenues through Alphabet are down. Stuart broke it down on Google Cloud’s rising revenues, but also its losses as Alphabet sees growth slow. Google blames “macro-economic uncertainty,” and, obviously, it’s cloud business isn’t entrenched enough to earn the kind of investor premium that Amazon (AWS) has received.

However, I prefer Google’s ad revenue prospects to Meta’s, which is tied to algorithmic walled gardens with a major weakness in TikTok. Stuart covers that sh#tshow off Ruling the Metaverse is proving to be a costly burden as Meta growth declines for the first time (Sidenote: even though I’m a Metaverse skeptic, this rough earnings report isn’t really a commentary on there, except that Metaverse is nowhere near contributing to the bottom lines and boosting Meta’s profits, outside of gaming).

It’s a similar refrain at Microsoft: Microsoft Q4 fell short of expectations, but Azure is set to drive double digit growth this year. Like Amazon, Microsoft’s cloud business is enough to offset the consumer spending blues, at least for investors. Stuart:

Wall Street was commendably calm about the numbers falling short of expectations, perhaps bolstered by Microsoft’s forecast that Azure will drive double-digit revenue growth in the coming fiscal year.

Then, closer to enterprise concerns, there’s ServiceNow: ServiceNow softens short-term guidance due to macro headwinds, but is bullish on future success. Derek wrote:

What is important is looking at long-term indicators. Deal size increases. Existing customers are expanding their footprint. Strong renewal rate. By these metrics, ServiceNow is well positioned to address any short-term disruption.

We can’t read too much into these well-positioned behemoths; I expect Wall Street’s take on companies that aren’t fueled by cloud infrastructure plays is a bit more bleak. Recession or not, I’m counting inflation and wallet-guarding consumers as just a headwind at this point. I have yet to see the crisis that will make it a truly dire event. Meanwhile, Derek’s point carries the day: “McDermott is right, while some companies may be cautious this year, they also know that cutting back on digital and technology investments is not the answer..”

That is, “tech,” as a sector, provides some protection, but not enough to issue a pass for poor execution. I can imagine the times in tech that you can do well just by getting out of bed and showing up. This was not one of those times.

Diginomica picks – my top diginomica stories this week

Vendor review, diginomica style. Here are my top three picks from our vendor coverage:

Some more vendor options, without quotables:

Jon’s grab bag – Martin explores the future of enterprise developers in a low-code era on Becoming the ‘manager of the managers’ – platform thinking revisited by OutSystems. Chris applies a critical eye to the UK’s drone dreams/policy in Make way for the drone superhighway, says the UK. Bonus points for calling last-mile urban drone delivery an “absurd concept.”

Best in the enterprise web

My top seven

• Intel CFO says we’re ‘bottoming out’ after company misses profits and stock sinks – Intel’s controversial earnings report comes with a lot of internal questions (and baggage). I’m glad Intel isn’t just hiding under macro-economic reasons, because there’s more at play here. Important nugget on the vulnerability of SMB vs. enterprise.
• Apple beats expectations on revenues and profits, but growth slows – Getting people data right (even more often than Google or Meta) has served Apple well, but when hardware demand drops , what is plan B?
• How to Save a Software Implementation Gone Wrong – Eric Kimberling on his project-intervention wheelhouse: “You should have the ability to see what your system integrator is doing and why they are doing it.”
• Trade Finance Scandal and Ransom: SAP’s Business Network Makes Improbable Progress – I’m really not sure how Josh Greenbaum can tie a trade finance scandal to a SAP Business Network opportunity (of sorts), but in I really think he managed it.
• How to foster connectivity in today’s office space – This is a podcast (and transcript) from McKinsey, so it’s not a concise narrative, but I’m a forward-thinking/honest look at what works in the settings of office, and where the remote is coming from. in short – even the discussion of proximity in office design needs more attention. Last I checked, peeps aren’t that interested in going back to the cube sardine life.
• Overcoming Obstacles to Using Channel Data – Lora Cecere has been on a hot streak of data-filled, unflinching supply chain posts.
• TikTok and the Fall of the Social-Media Giants – Although I don’t share Cal Newport’s wishful thinking optimistic conclusion about TikTok forcing a more open Internet, this is still one of the best pieces on the state of social media I’ve read in a long time.

Whiffs

In 2018, with one of the cheesiest ad campaigns ever imagined, Facebook announced its “A place for friends, not for things that get in the way.” Fast forward four years, and, well, TikTok got in the way of Meta. Now, in response, Facebook is actually putting its AI algorithm in the way of you and your friends:

I haven’t had much satirical fun with DAOs in this column. Well, let’s fix that, shall we?

Oh, and there’s a viable scientific explanation that was recently presented to explain the possibility of the “Loch Ness Monster.”

Hey, I’ll take good news wherever I can find it. Finally, basketball legend and stellar human being Bill Russell passed away this weekend. In a tribute thread, a stunning photo of Russell with Ali and Abdul-Jabbar in their prime was spotted:

Nothing guarantees us a pass from the whiffs section, but living well is probably the best defense. See you next time…

If you see one #engsw piece that qualifies for hits and misses – in a good or bad way – let me know in the comments as Clive (almost) always do. Most of the Enterprise hit and miss articles are selected from my curated @jonerpnewsfeed

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