The Best and Worst Technology Companies of 2006: A Report Card

I have come across several authors recently who have been speculating on the health and long-term viability of many prominent “tech” companies. Unfortunately they only examined things in the very short term which doesn’t give the best picture of how a company might actually be doing. So, here is a list I have compiled that describes how several major companies are performing in today’s market.

Trail blazers—A ~ Apple, Google
Anytime you hear about awards for best design, coolest interface or most innovative offering these two names consistently come up. Their stock is on the rise, and profits are consistenly up, because these two companies are constanly creating things that people want. They don’t try to be everything to everyone, nor do they waste energy on projects unrelated to their core goals. Thus we can look to Apple and Google to be the trend setters for quite some time.

Innovators—A- ~ Intel, Samsung, IBM
These are the three biggest innovators where hardware is concerned. Other companies might take their designs and improve them but these three are the ones constantly pushing the boundries of what is possible. Intel is looking to put dozens of cores on each processor, IBM is working on a quantum processor and Samsung is miniaturizing electronic components we never thought possible.

Successful followers—B+ ~ ebay, Amazon, Yahoo, AMD
Ebay, Amazon, Yahoo and AMD are great companies that are very stable, but not too innovative. Yahoo tends to add certain services only after Google tries it first. AMD produces some of the best chips today, but has no dynamic plan for tommorrow. Ebay and Amazon have almost reached the point where they can’t really add anything new because they have maxed out their business model. So like I said before, these companies are steady performers, but don’t expect too much change from them in the future.

Holding their own—B- ~ HP, Motorola, Sony
Here are three companies who are still in the fight, but things could go either way. HP is beginning to recover from the Carly Fiona disaster and recently began to innovate again. Motorola has done a good bit of steady business in its corner of the market by impressing everyone with its Razor phone. Meanwhile Sony seems to be the most adrift of these three but still doing well inspite of a lack of direction. Each of these companies is profitable, and won’t go anywhere soon, but they also seem to lack the drive and direction that will ensure long-term success.

Slowly dying—C ~ Microsoft, Dell, Creative
If it weren’t for its Xbox division I would say that everything at Microsoft is going downhill. Don’t worry, Microsoft won’t be shutting down anytime soon (its enormous resources will keep it afloat for a decade easy) but it isn’t really doing anything too positive either. Not counting the Xbox (which is rather impressive) every other department in Redmond seems to be just running in place without really getting anywhere. The company’s OS is a nightmare, MSN is getting killed by Google and Yahoo, Office hasn’t changed in a meaningful way in over a decade and nothing else it is producing seems to have any plan behind it (Origami anyone?). Microsoft is slowly and surely killing itself with its incompetent leadership. Thus given enough time even its resources will run out. This is quite unlike Dell, which is doing a wonderful job in its chosen field but failing horribly at everything else (Dell DJ ring a bell?). Dell is in trouble because it doesn’t have anymore room to grow in the computer hardware business. It has reached the point where if Dell wants to grow anymore it will have to expand outside of its core competency. Sadly this is something it just doesn’t know how to do. Meanwhile Creative has resoundingly failed at making a portable music player. Thankfully they also sell other products or else they would be out of business. Ideally they would pick off the pieces, exit the portable music business completely, and start over in something else. However, given the fact that its CEO is crazy, I don’t see this happening. Creative will hang on for a while but its death is only a matter of time.

Dead but doesn’t know it yet—D ~ Sun, Napster
I like Sun, I really do. I like Solaris, it is a very powerful OS. However right now Sun is selling something that most of the market just doesn’t want. It has a quality product, it just isn’t what is needed right now. Maybe under new leadership things will change for the better, but realistically I don’t think Sun will even exist in 10 years. Maybe sooner if someone buys them out. [Note to Microsoft, if you are looking for a stable OS on the cheap Solaris might be for you] Then there is Napster. What can I say that hasn’t been said a hundred times before? Its service sucks, its DRM is insane and it is easier to use iTunes. Napster (and all of its clones like Urge) are doomed to fail and I can’t even think of an “unless this happened . . .” kind of best case scenario that might save it. The end is here, just wait and see.