Credit crunch update

We’re still not feeling the effects of the credit crunch at Lynx Networks. Our customers appear to be ignoring the economic indicators and carrying on business as usual. I guess it all depends what sectors you operate in. Luckily we don’t do much in the square mile so we’re not being hit by any immediate cut-backs. Of course, the lack of money in people pockets will feed through eventually but I predict a slowdown, not a recession. Those of us who have been in the network infrastructure industry for a few years are used to coping with that.

Having traded through the recession of the early nineties and the tough times of the dot com bust, I have learned that it’s important not to panic. Look after existing relationships is the key, and keeping our workforce flexible so we can be responsive to changes in demand. We have to careful who you extend credit to, and it’s a good policy to work with the public sector where the medium-term budgets are already fixed and we know we’ll get paid because we do a good job.

As an industry sector, I think the same issue applies whether were in a boom or bust phase: How do we convince potential customers that there is a difference between a thoroughly professional provider and a company that wins the order because it over promises, but doesn’t deliver? We need a recognised qualification scheme, but that’s a whole new topic.

Alan Bullen

Does the Lynx Networks barometer predict a recession for 2008?

At Lynx Networks we usually feel the icy wind of business uncertainty a few months before the deep freeze of a recession sets in. Businesses lose confidence and tend to make do with their current IT infrastructure. It’s been true for the nineteen years that I’ve been managing Lynx Networks that the day that Radio 4 and the newspapers start speculating about a recession the hatches are battened down against the possibility of the storms ahead. However, our business is currently basking in a tropical heat wave: everyone appears to be ignoring the persistent talk of a downturn next year due the credit crunch.

Therefore, I predict a “steady as she goes” business climate for 2008. Then from 2009 onwards we should all be able to benefit from the ripple-down effects of the build-up for the 2012 Olympics.

Alan Bullen
Lynx Networks plc