President-elect Donald Trump this week invited leaders of the nation's biggest technology companies to New York...
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to talk tech policy. What policy they'll talk has not been disclosed.
Other than berating Apple for building iPhones in China rather than the U.S. and leveling antitrust allegations at Amazon's Jeff Bezos for "controlling so much," Trump has been sketchy at best in spelling out his tech policy. So guesses are as good as pundits can do; they've floated technology infrastructure, H1-B visas for temporary workers and cybersecurity as possible topics.
Meanwhile, CIOs, their plates full with digital business initiatives and 2017 budget planning, are getting served another helping of uncertainty: What will the policies of an administration led by Trump -- who touts unpredictability as a core political strength -- mean for IT?
Andrew Bartels, an analyst at Forrester Research, argues that Trump's policies are less important to CIOs than the economic impact they will have on the industry they're in and the size and the company they work for. The economic environment "is going to dictate what kind of resources their firm will be able to devote to technology," he said.
"In that sense there are a lot of potential positives and a lot of potential negatives. Their combination really leads to a tremendous amount of uncertainty about what that's going to mean for individual companies."
Bartels wrote a report released this week forecasting tech spending for 2017. It is a post-election projection that sees business and government spending on technology products, services and staff growing by 4.3%. That's reduced from the 5.1% growth in the budget outlook that came out before the election, which assumed that Trump's rival, Hillary Clinton, would have won the presidential election and continued President Barack Obama's policies.
The new report posits that Trump's policy goals for 2017 could have negative effects on the economy. For example, if Trump makes good on his promise to renegotiate major trade deals, business investment could suffer. And stricter immigration laws could worsen labor shortages.
And while tax cuts could spur corporate willingness to invest in plants and development, the full effects won't be known until 2018, the report said.
"Certainly, there is a possibility of stronger growth, but it's worth noting that would come on top of what already is a fairly strong economy," Bartels said. The U.S. unemployment rate fell to 4.6% in November, a nine-year low. "And that means that the potential for inflationary pressures is quite high, and the potential for higher interest rates is quite high."
Next Wednesday CIOs will likely keep their eyes glued to their tablets and screens as tech leaders leave Trump Tower, looking for signs of where Trump's tech policy is headed. It's possible the meeting will begin on a note of discord. Trump has been aggressive on cybersecurity policy, for example, saying Apple should offer U.S. law enforcement a workaround to encryption protection in iPhones during criminal investigations.
But such disagreements may evaporate before the meeting is over, said Johna Till Johnson, CEO of Nemertes Research.
"I'm sure it will be soothing words about how we have to keep the United States strong and secure, and everybody is going to walk away feeling like they won something," Johnson said. "[Trump is] generally pro-business and will generally side with anyone who wants to make money, so I think the tech companies are going to walk away with an irrationally happy feeling that, 'Oh, he gets us.'"
Forrester analyst Rick Parrish, who researches technology use in government, said it's certainly possible that Trump could be tougher on cybersecurity, which would tighten the standards contractors need to meet to do business with federal agencies.
"And that's going to fall, in most companies, on the shoulders of the CIO."
But it's not clear Trump cybersecurity policy will differ much from Obama's policies, he said.
"With Trump you never know if it's going to be a substantive policy difference or the same policy just said more loudly," Parrish said.
CIOs, your customers come first
Regardless of what's broached in the meeting -- or brought to Washington by a Trump administration -- CIOs should continue to focus on the need to "win, serve and retain" customers, Bartels said. And that means investing in technologies such as mobile, to let customers shop and do business on the go, and cloud computing, to support faster anywhere access.
"In an uncertain environment you want to make sure you're really focused on your customer and you're looking for ways in which you understand and are sensitive and can respond to your customers and their own positions," Bartels said.
In case Trump policies do chill the economic climate, he said, then CIOs should be prepared do more with less. They should embrace a time-tested, three-prong contingency plan: reduce costs, renegotiate contracts with vendors and replace systems that don't work as well as they used to.
For example, to cut down on costs, a business could supply, say, salespeople with just tablets, not PCs. Or it could swap old, on-premises business software with some sort of cloud technology.
"Those three considerations of reduce, renegotiate and replace have always been the basic tools that CIOs need when they're faced with cutting costs," Bartels said. "And they'll become even more important in this environment, where there is this uncertainty as to whether things will be great or whether things will go backwards."
CIO news roundup for week of Dec. 5
Trump’s upcoming meeting with tech leaders grabbed headlines this week. Here's what else did:
Google going green. Google's data centers and corporate offices will be running entirely on renewable energy by 2017, the culmination of a seven-year effort, Google said Tuesday. "To reach this goal we'll be directly buying enough wind and solar electricity annually to account for every unit of electricity our operations consume, globally," Urs Hölzle, senior vice president of technical infrastructure at Google, wrote in a blog post. Google began buying renewable energy to reduce its carbon footprint, address climate change and operate its business in an environmentally sustainable way, Hölzle wrote. Private-sector organizations have a responsibility to the environment and their users and should collaborate with policy leaders to initiate "bold" steps that address environmental issues like climate change, he added.
Tech giants join forces to curb terrorist content. Facebook, Twitter, YouTube and Microsoft are partnering to help limit the spread of terrorist content online, the companies announced Monday. They will create a shared industry database of "hashes" -- unique digital "fingerprints" -- to identify potential terrorist content, Facebook said in a statement. "Our companies will begin sharing hashes of the most extreme and egregious terrorist images and videos we have removed from our services -- content most likely to violate all of our respective companies' content policies," Facebook said. While the collaboration entails sharing best practices, each company will independently determine how it chooses to define terrorist content and how and when to remove such content when a match to a shared hash is found, Facebook said.
Microsoft seals LinkedIn deal. The European Commission on Tuesday approved Microsoft's $26.2 billion LinkedIn acquisition, a deal which was first announced in June, making it the largest acquisition in Microsoft's history. "It marks the … beginning of our journey to bring together the world's leading professional cloud and the world's leading professional network," Microsoft CEO Satya Nadella wrote in a blog post Thursday, which marked the closing of the deal and outlined an integration plan. As part of the integration, LinkedIn members will be able to draft resumes in Word to update their LinkedIn profiles, Nadella wrote. The company, together with LinkedIn, will take steps to help people find jobs, develop skills online, and connect and collaborate with colleagues, he added.
Slack dials up partnership with Google. Team communication startup Slack said Wednesday that it is expanding its partnership with Google to enhance the user experience for customers that use Slack and Google Drive together. The integrations, which are expected to become available in the first half of 2017, include Google Drive building a bot for sending update notifications and admins being able to provision Slack for their entire organization from the admin console in G Suite, Slack wrote in a blog post. G Suite is Google's productivity apps package. "Through this partnership we're increasing our joint product and engineering efforts to strengthen the link between the content in Google Drive and the communication in Slack," Google's Nan Boden wrote in a blog post. News of the beefed-up partnership comes a month after the launch of Microsoft Teams -- Microsoft's new work collaboration offering.
Assistant editor Mekhala Roy contributed to this week's news roundup.