I began this article as an email to some industry friends to discuss but thought I’d share these observations with the wider community. Since I am no financial analyst you can take these thoughts with a pound of salt, but the comparisons are interesting none the less, and you can draw your own conclusions from the stock itself.
Many companies took a steep dive in recent months including Apple, Microsoft, Red Hat and Engin. The general trend however is the increasing value of stock of a 5 year period as the IT world recovers from the millennium slump of 2000 that saw the end to the world’s largest IT bloom that inevitably ate its own tail with the y2k doomsday that never was. It’s any wonder that faith was lost in the promises of the digital faithful from that point.
So lets put the magnifying glass over a few key companies and see if we can spot the trends, the good times and the bad times and everything in between. The retrospective will perhaps illuminate the direction of things to come.
Microsoft – Stock has held considerable strength despite the post 2000 slump. Overall however the company fluctuates wildly in comparison to other tech stocks with regular peaks and subsequent lows. Windows XP’s 2001 launch is followed by a shareprice decline, but 2003’s growth co-incides with the release of Windows 2003 server platform. Microsoft’s last peak follows Windows XP service pack 2 release but as is the trend with most tech stocks declined heavily this year, perhaps more dramatically than most probably due to the vaporware experience caused by Vista’s lengthy delays and tumultuous project management woes.
Red Hat – Almost behaving inversely compared to Microsoft’s stock, Red Hat has weathered the bursting bubble with strong gains in the last few years but like the others, doesn’t escape the recent 2006 decline. With its hand now firmly in the corporate / enterprise and server markets Red Hats stock price reflects a general success of the brands strength. The growth of 2004 represents strong partnership ties in education and government around the world as well as its desktop version release, but bottoms out shortly afterwards after acquiring Netscape enterprises. This recovers through further strong partnerships with Oracle and IBM in late 2005.