Technology Trends for 2012 – Baird Analysts Share Predictions Ahead of Industry Conference
SAN FRANCISCO, Nov. 17, 2011
Baird, an employee-owned international capital markets, private equity, wealth and asset management firm, will host its inaugural Technology Conference in San Francisco on Nov. 29, bringing together institutional and private equity investors to hear presentations from public and privately held companies in the sector. As a preview to the conference, Baird’s Senior Research Analysts share their thoughts on the key technology trends for 2012.
Internet - Colin Sebastian
“During the most recent macro downturn, e-commerce gained market share over bricks-and-mortar retail, and our research suggests that online shopping is viewed by consumers as an attractive and convenient channel to find good values and comparison shop. The Internet is evolving as a fundamental part of the global economy. So despite whatever headwinds we may encounter in 2012, we don’t see those factors significantly impacting a business that is the most dynamic and important consumer platform.”
Wireless Communications - William V. Power, CFA
“Currently, we favor carriers and smartphones over software and infrastructure names. While heightened economic uncertainty could lead to further weaknesses in carriers, overall wireline trends have begun to improve and should be relatively stable in the near- to medium-term. Additionally, the transition to smartphones and tablets is a strong secular theme that we believe should continue to drive Apple and key Android partners, irrespective of market conditions.”
Software - Steven M. Ashley
“Enterprise software spending continues to be robust given that software is typically used to increase productivity and/or cuts costs. We think that trend will continue into 2012 as organizations continue focus on staying lean. In addition, several of our covered software companies have strong secular trends driving growth, including SaaS, desktop virtualization, private and public cloud adoption, next-gen business intelligence, and a new low cost distribution model.”
Semiconductors - Tristan Gerra
“We remain cautious about next year’s first-half outlook given our expectation for continued inventory deleveraging and below-seasonal end-demand, combined with year-over-year declines in gross margin. For the remainder of this year and next year, areas for optimism include smartphones and NAND flash. Secular themes two-years out include Long-Term Evolution communication infrastructure build, computing infrastructure, and ultra-mobile computing appliances.”
IT Systems & Networking - Jayson Noland, CFA
“We expect network security to prove more resilient in an uncertain macroeconomic environment given that security is a more easily defendable portion of the IT budget during a period of constrained spending. Many security vendors also benefit from a significant stream of recurring software license revenue. WAN Optimization is another secular theme that should be fundamentally advantaged in a low-growth IT end market. WAN Optimization is one of the few vendors of IT equipment that should directly benefit from cloud computing, as data and applications move further from users.”
Baird’s Research Department consists of approximately 110 research professionals covering more than 660 U.S. companies. Baird analysts have been recognized repeatedly in The Wall Street Journal’s
annual “Best on the Street” survey and honored by StarMine as top analysts.
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Baird is an employee-owned, international wealth management, capital markets, private equity and asset management firm with offices in the United States, Europe and Asia. Established in 1919, Baird has more than 2,600 associates serving the needs of individual, corporate, institutional and municipal clients. Baird oversees and manages client assets of $89 billion. Committed to being a great place to work, Baird ranked number 14 on FORTUNE’s “100 Best Companies to Work For” in 2011 – its eighth consecutive year on the list. Baird’s principal operating subsidiaries are Robert W. Baird & Co. in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird’s private equity operations. For more information, please visit Baird’s Web site at rwbaird.com