Janalent Microsoft Economic Forum Presentation

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Slide deck from March Economic Forum event hosted by Janalent & Microsoft.

Slide deck from March Economic Forum event hosted by Janalent & Microsoft.

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  • 1. Dr. Bernard Malamud, Department of Economics, UNLV Anne Chahal, President & CEO, Janalent Rocky Griggs, Marketing Manager-Southwest, Microsoft Joe Honan, Vice President-Solutions, Janalent
  • 2. Where we are & how we got here Dr. Bernard Malamud, UNLV Southern Nevada & SW US Outlook Anne Chahal, Janalent What our customers are Rocky Griggs, Microsoft doing What every company needs Joe Honan, Janalent to consider
  • 3. Dr. Bernard Malamud Professor of Economics
  • 4. A “Global Saving Glut” The best of times Capital Inflows Easy Escalating Money House Prices Policy Eager Home Ambitious Buyers Mortgage Brokers Developer Clout Innovative Banks Securitization Rating Gov’t Sponsored MBSs Agencies Bank Regulators Enterprises
  • 5. The Boom Years: High Real GDP Growth  Declining Unemployment 1997 – 2000 2003/4 - 2006 Growth > ~ 2.5 %  Unemployment
  • 6. The best of times Capital Inflows Easy Escalating Money House Prices Policy Eager Home Ambitious Buyers Mortgage Brokers Developer Clout Innovative Banks Securitization Rating Gov’t Sponsored Bank Regulators Enterprises MBSs Agencies
  • 7. The Downturn: Slowing GDP Growth  Rising Unemployment Growth < ~ 2.5%  Unemployment
  • 8. Employment in Las Vegas Metro Area January 2009 vs. January 2008 January January 2009 2008 % Change Total All Industries 880.9 919.5 -4.2% Basic Industries Accommodation 164.7 176.7 -6.8% Casino Hotels and Gaming 158.9 171.2 -7.2% Construction 82.6 95.0 -13.1% Manufacturing 24.3 25.9 -6.2% Other Industries Financial Activities (FIRE) 45.9 48.0 -4.4% Retail & Wholesale Trade 120.8 125.6 -3.8% Trans, Warehousing & Utilities 37.2 37.6 -1.1% Professional & Business Services 106.9 115.9 -7.8% Employment Services 10.7 15.7 -31.8% Education and Health Services 67.1 64.6 +3.9% Government 100.9 98.6 +2.3% Federal 11.5 11.3 +1.2% State 15.4 14.9 +3.4% Local 74.0 72.4 +2.2% Unemployment Rate 10.0% 5.6%
  • 9. Financial System Meltdown At home Interventions/ Nationalizations/ Gov’t Supported Takeovers Pre-privatizations Bankruptcies •Countrywide  BofA •IndyMac •New Century Financial •Bear Stearns  JPMorgan Chase •Fannie Mae/ •Lehman Brothers •Silver State Bank Nevada State Freddie Mac •Washington Mutual Inc. •AIG •Merrill Lynch  BofA •Washington Mutual  JPM Chase •Wachovia  Wells Fargo •Security Saving  Bank of Nevada Abroad •HBOS  Lloyds Bank •Northern Rock •Fortis  PNB Paribus •Royal Bank of Scotland •Dexia •Glitnir/Kaupthing/ Landsbanki
  • 10. Baa-AAA Interest Differential The Good News: 1932 was worse The Bad News: This downturn isn’t over until 2010 6.00 May 32 5.64% 5.00 4.00 Dec 08 3.38 Apr 38 Sep 82 3.00 3.17% 2.69% 2.00 1.00 0.00
  • 11. Responses Lender of Last Resort / Spender of Last Resort • Tax Rebate $124 bil. • Fed Fund Rate Cuts • Fannie/Freddie $200 bil. • Bear-Stearns $29 bil. • AIG $174 bil. Fed “Facilities” • Primary Dealer Credit Facility (PDCF) $58 bil. • Treasury Security Loan Facility (TSLF) $133 bil. • Term Auction Facility (TAF) $416 bil. • Asset- Backed Commercial Paper Funding Facility (CPFF) $1,777 bil. • Money Market Investor Funding Facility (MMIFF) $540 bil. • More Fed Fund Rate Cuts … Hold At ~0% • Fed Purchases of Long-Term Securities: GSEs & MBSs $600 bil. • Term Asset-Backed Securities Loan Facility (TALF) $200 bil. • Emergency Economic Stabilization Act/TARP $700 bil. Government Loans Government Equity • Stimulus Package $787 bil. aka The American Recovery and Reinvestment Act • TARP II • Stress Tests
  • 12. • Total funds to State of Nevada ~$ 1,710 mil. • Education Stabilization & Construction 610 mil. • Medicaid Assistance 419 mil. • General Budget & Other 249 mil. • Highways & Bridges 218 mil. • State energy & Weatherization 80 mil. • Clean Water Programs 48 mil. • Transit capital 45 mil. • Unemployment & Worker Training 22 mil. • Child Care/ Foster Care/adoption 19 mil.
  • 13. Anne Chahal CEO & President
  • 14. • “Las Vegas 1st Place” in Bizjournal’s analysis of the nation’s current growth centers. Metros with most momentum entering the recession – Nov 2008 • “Nevada Ranked Number Two” in the Small Business & Entrepreneurship Council's "Small Business Survival Index 2008" – Dec 2008 • US LEI (leading economic indicators) have trended positive in the last two months. – Feb 2009 • US New Housing Starts up 22% in February 2009 according to the Commerce Department – March 17, 2009
  • 15. • Fastest growing region over the next 25 years • 5 of the top 10 fastest growing states (Nevada, Arizona, Utah in top 5) • Predicted to be the hub for renewable energy and “green collar” research, jobs, & industry • ~Possibly $7.35 B in energy investments or borrowing authority for Nevada -Feb 2009 estimates • 70% of all goods from pacific rim will go through SouthWest
  • 16. • Well positioned as leader for solar, geo-thermal, wind, and other green collar industries • Hoover Dam bypass bridge evolving “western-slope” Hwy 93 NAFTA trade route • High-speed rail between SoCal & Las Vegas becoming a reality and partially funded • Affordable and available commercial & residential property • Business friendly regulatory and tax climate • Unmatched ability to transform • Well established base community & industries • Fantastic retirement community • Technology and infrastructure (i.e. supernap datacenter) • World’s center for hospitality and entertainment • Film production industries • Gaming/resort industry administration
  • 17. • Increased funding for education, healthcare & energy • Possibly $3.25 B in borrowing authority for upgrading NV regional power grid • $15 B in Small Business assistance • $250 M in local NV transportation projects • Ability to write down 5 years of losses • Reduction of estimated tax payments by 10% • Accelerated asset depreciation • Increased SBA loan guarantees (from 50 to 95%)
  • 18. + Climate & Weather + Positioning as renewable resource hub + Leadership in national “clean energy” + Business friendly + Supply & demand + Population migration trends + Increased industry expansion / diversification + Stability & ease of access + World class hospitality and tourism
  • 19. • Don’t just sit and watch it happen or watch other companies make money off of it. • Change happens. Technology happens. Embrace it! • No one plans to fail, but too many companies fail to plan or make necessary adjustments • If small businesses do some effective planning, manage their cash flow, keep on selling and accept change, they will be well-positioned in the SW marketplace as we move into the future.
  • 20. Rocky Griggs Partner Marketing Manager
  • 21. • It’s not that bad, you got a free meal • Words of wisdom • Industry Insights from Microsoft customers large and small
  • 22. • 50 million = 38/13/5 • Who was Federal Expresses largest customer? • We always overestimate the change that will occur in the next 2 years and underestimate the change that will occur in the next 10. Don't let yourself be lulled into inaction. • If GM had kept up with technology like the computer industry has, we would all be driving $25 cars that got 1000 MPG. • You don’t have to be great to start, but you have to start to be great
  • 23. 10% 100% 19% 21% 80% 11% 46% Increase 60% 75% Decrease 40% No Change 20% 68% 35% 15% 0% 10-200 200-500 500+
  • 24. 85% 64% 64% 57% 44% 37% 35% 25% 10-200 23% 32% 11% 16% 200-500 500+
  • 25. • Help our customers identify ways to take unnecessary cost out of doing IT • Enable customers to focus on their core business • Raise the stacks in Research and Development by increasing investment from $8 to $9 billion this year • Continue focus on key strategic partnerships that have a ripple effect in the economy
  • 26. Joe Honan Vice President-Solutions
  • 27. Reassess strategic plan often, control spending, drive costs out of IT, strengthen core systems, operations, and processes. Key Ways to Get Fit, Get Strong Analyze current burn Identify & eliminate duplicated expenses Rationalize & renegotiate maintenance contracts Virtualize as a strategy, not a project Consider on-line services where appropriate “Leading regional healthcare provider is on track to save over $500,000 annually in facilities and maintenance cost by virtualizing and moving off of legacy platform to a Microsoft infrastructure. (Novell to Microsoft)”
  • 28. Smart companies are increasing their bets and investments in strategic areas while their competitors “re-trench” Key Ways to Spend more… Wisely Spend to Save! Analyze & provide business case to support plans Identify & rank spending opportunities / priorities Use the opportunity to spend on value to customer Take advantage of stimulus & incentives “By focusing on business intelligence (CRM) and increased marketing budget, regional services firm has been able to drive over $300,000 in new revenue and 10 net-new customers so far in Q1”
  • 29. Increased focus rather than “shot-gun” diversification is a key differentiator between leaders & laggards in turbulent times… Key Ways to Increase Focus & Take Advantage “Double down” on strengths, cull non-performers Identify & dump non-profitable relationships Create 5 new ways to increase value-proposition Invest in business analytics & customer mgmt. Find ways to save your customers money “By replacing legacy systems, regional photography organization has been able to spend more time on generating revenue & enhancing online presence, rather than managing ailing systems ”
  • 30. Expanding customer base by thinking and acting in new ways is the what is separating the up-starts from the start-ups… Key Ways to Expand Base & Embrace Technology It’s not your father’s internet…it’s your kids… Viral marketing has had a HUGE impact Get your “out there message” out there Build a community of customers for customers PROVE technology is strategic to your organization “By implementing our business intelligence system and enabling community site links, we now have 10 times more visibility into the contacts and details of our prospects with 10 times less expense”
  • 31. Rely upon key vendors, deepen relationships with key partners, strengthen networks of friendly competitors Key Ways to Deepen / Strengthen Relationships Open up to key vendors, they’ll find ways to save Focus partnerships and execute on a plan Build bridges rather than moats w/ competitors Collaborate & Communicate… with everyone Develop an organizational “Elephant Memory” “By focusing on how we can help customers better exercise their existing Enterprise Agreements, we have become THE trusted advisor for several organizations by proactively finding ways to save by working with us”
  • 32. Steps to Survive & Thrive in this recession Get in Shape Virtualize as a strategy, not a project Control spending, shed excess expenses, Virtualize, Continually assess & strengthen core systems & processes Move email & collaboration on-line Spend more…Wisely Increase investments in getting your message out Replace bad with good (e.g. legacy systems, storage) Increase investments in strategic areas, take advantage of competitors “retrenching” Track & evaluate your spend (eg CRM) Increase focus & Take Advantage Hyper-focus your message, utilize CRM Only 2 things - Support revenue generation or save $$ Increase focus rather than diversification, leverage business intelligence to better understand customers Create new value, everyone is listening Expand Base & Embrace Technology Embrace and leverage the power of communities Find new customers through using new methods of Build communities for your customers reaching them (e.g. Twitter, Social Networks) Prove the value of technology to your organization Deepen / Strengthen Relationships Ask key vendors to find way to save you money Rely upon key vendors, invest into key partnerships, Use technology to prevent “slipping through the cracks” find ways to work with competitors Use trusted advisors to exercise existing agreements