SMB Nation Blog

SMB Nation has been serving the Bainbridge Island area since 2001, providing IT Support such as technical helpdesk support, computer support, and consulting to small and medium-sized businesses.

Larry Was Right! 4Q GDP Declines…

I’ve always felt that there is seasonality in the SMB channel. The “end-of-year” blues has been a common refrain amongst the media integration companies as SMB partners and sponsors are typically holiday budget lean because most of these unsophisticated entities operate on a simple calendar year. They are either out of do-re-me as year-end approaches and/or are marshaling up financial resources for the coming year. It’s something of a cash flow purgatory where more than one snappy salesman has questioned his or her intelligence quotient.

 This past 4Q was no different. In fact, it was worse. We have been in this line of work for more than a dozen years and something was different this 4Q than in past years. It was unseasonably “slow” and generated more questions internally than we had answers? Had an errant Facebook post on my personal wall about high school hijinks come home to roost with the right wing?

We wanted to know, “What was going on?” In talking with vendors, the common refrain was: “sales sucked” in November in December. An example of this was a major printer manufacturer lamenting the holiday down draft. Larry Walsh (Channelonmics) said it best in his blog “Tech Sector May Have Gone Over Fiscal Cliff” (January 9, 2013). He pegs the days the music died as December 10, based on solution provider and vendor research. It was by far the best evidence I had seen answering “what” and “why” questions about 4Q until now.

Enter today’s news cycle where major outlets are reporting in fact the US GDP *contracted* by 0.1% in 4Q 2012. We weren’t imagining it. You can read the facts in the Wall Street Journal, MarketWatch and CNBC.

What’s it all mean? Fortunately, the 4Q drop was most likely an emotional anomaly with the SMB channel having a collective bad trip with flashbacks to late 2008 and all of 2009. We’re already seeing it was most likely a case of deferred spending as budgets are now opening up. Advanced bookings for 2013 are already ahead of plan, and we are just closing in on February already! If you believe that the stock markets predict six months in advance, then the recent highs attained on the S&P, DJIA and strong NASDAQ suggested good times ahead. God, I hope so!

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Wednesday, 20 June 2018