Mr. Read: I guess I'd break it down into two separate areas, IT services, which would be the consultancies, and the folks that do system integration and application development, as well as some outsourcing work - so think of that as Accenture, Cognizant, Syntel and CIBER - and then a variety of hardware players. You've got some of the mobile computing and bar coding guys, such as Intermec and Zebra, and NCR and Diebold, which do ATMs and some retail, and then you've got some other players, like Plexus and Plantronics as well.
TWST: In which end markets do you see the biggest opportunities for growth? Which companies are doing the best job of selling or preparing to sell to those end markets?
Mr. Read: I think in the IT services area, some of the key service offerings that seem to be gaining some traction are application development and consulting. If you look at where things were in the downturn, people were very internally focused; they were looking at a lot of cost-reduction efforts. And now I think as things have settled back down a little bit, you're starting to get more and more of these companies that are looking external to their company, and how they should be participating in that environment. On top of that, you've got an awful lot of regulatory change. So that's driving a lot of application development and consulting, particularly if you think about financial services, with all of the merger integration. You've got Congress looking at regulatory reform and things of that nature; that really tends to drive this type of business. I think you can also draw that into health care, with all of the changes that are being proposed out there not just at the legislative congressional level, but also there are a number of regulatory changes that are taking place. And again, that drives a lot of that. So companies like Accenture, which have terrific relationships at the C-suite level, I think will benefit from this. And then companies that have a good exposure to financial services and health care, such as a Cognizant Benefits.
I think if you look at the hardware side of things, mobility is a big theme out there. Particularly in field service and field sales, the ability to adapt ruggedized mobile devices out there that can do all sorts of transactions out in the field rather than doing those in batch mode now that they have wireless. But those are also devices that can enhance revenue. If you think about the utility guy or the cable guy, he's typically the only point of contact that a customer would have with that particular company, and mobile devices give those folks an opportunity to sell incremental services on the fly. And so companies are looking at them that way.
Then on the manufacturing side of things, I think if you look at a Plexus, somebody that has participated in the wireless and wireline spaces, which are getting some very good traction and have driven into some new business areas that are seeing very good backlog, and I think are starting to build some very good opportunities for themselves.
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