2011 Predictions: Economy Stalls, Obamacare Dies, iPhone Rules

With 2011 just around the corner, it's time for my annual predictions for the coming year on subject that are (or should be) important to sales professionals.

This time, I have five specific predictions and I've included a brief analysis of how you might take advantage of the various situation as the predictions prove true.

So, with no further ado, here are my predictions for the coming year:

Click to see my first prediction »PREDICTION #1:
The Economy Will Continue to Sputter

Despite signs that the economy is slowly recovering, there will be no recovery in unemployment and very possibly a double dip recession. The reason is simple - it is not in the interest of the Republican party to do anything fix the economy until after 2012.

This is not say that there are all kinds of good ideas floating around that could help. In fact, the problems with the economy are probably systemic, and the result of decisions going back to the Clinton years, or even the Reagan years. As such, they're not easily fixed.

However, even if there were something effective that could be done, the Republican party would be committed to seeing that it doesn't happen yet, because the natural (and entirely reasonable) priority of the Republican party is the return of one party rule... for the Republican party.

The oft-stated Republican strategy is to ensure that Obama is a one-term president and is replaced by a Republican in 2012, while recapturing the Senate with a filibuster-proof Republican majority to go along with their majority in the House. That's an entirely reasonable goal for a political party, BTW. No shame there.

The easiest way to accomplish this is to make sure that the country remains in economic pain and unemployment remains high, because the public will inevitably fix the blame for both situations on the party that appears to be in power (the Democrats) rather than the one that's actually running things (the Republicans).

The tactical implementations of this "scorched earth" strategy on the economy are already coming into place. The best evidence for this is the appointment of Ron Paul to the chairmanship of the committee overseeing the Federal Reserve. Ron Paul is a doctor who thinks he understands economics and wants a return to the gold standard (among other things).

A crackpot, in other words.

Back when I worked in the Fortune 50, whenever we wanted to bollix up an initiative from another group, we made sure to appoint an opinionated fool to head the cross-functional committee. There's no surer evidence that the Republicans want the economy to stay down than letting loose this particular bull in that particular China shop.

I could give you other examples, but the strategy is so obvious that it's hardly controversial. The Republican party wants the economy to remain a pig's breakfast because that's the surest ticket to one-party rule in 2012.

What this means for sales professionals is simple. The economy will continue to remain weak, with small to medium businesses remaining in the doldrums. Big companies -- the ones who are favored by lax regulation, bailouts, billionaire tax breaks, etc. -- will continued to suck the air out of the economy, making it tougher for everyone else.

Therefore, if you're planning on making big money next year in sales, either get a job with a big multinational, or sell to them. They're the ones that are going to do well. Everyone and everything else... not so much.

Click to see my second prediction »
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What will remain, after the evisceration, will be a few consumer protections, which will be paid for (and then some) by massive increases in premiums for individuals and small businesses.

Here's why. The purpose of the healthcare industry in the United States is to make a profit, not to keep people healthy.

To do this most effectively, the healthcare industry must ensure that 1) people who might get sick don't get insured, 2) people without money don't get treated, and 3) both groups die as quickly as possible after they've expended whatever money they do have (or if they can't get somebody else to pay their bill.)

If you disagree with the previous paragraph, you're letting your emotions get in the way of your common sense. What part of "for profit" don't you understand?

In the United States, big business largely controls the outcome of elections, and provides the main source of employment for politicians who leave office. As a result, the only "healthcare legislation" that's going to get passed, and stay in the law books, is legislation that increases the profits of the healthcare industry.

A perfect example is the Medicare Drug Plan from the Bush era, which essentially got middle class Americans to pay massive amounts of money to drug companies to provide over-priced drugs to old people. It's corporate welfare at its finest, with grandma getting the benefit.

Obamacare would have had the same effect overall (in terms of goosing healthcare profits), by insuring vast numbers of poor people, and transferring the charge to the middle class. That's why it got passed, rather than some form of universal healthcare that would deconstruct the for-profit element. It's corporate welfare at its finest, with cousin Clem (the unemployed coal miner) getting the benefit.

However, unlike old people (who tend to vote Republican), poor people (especially the ethnic poor) tend to vote Democratic. Therefore, it is not in the interest of the Republican party to keep those folks healthy and alive, even though it would mean higher revenues for the healthcare industry.

It's kinda like the way the Republican party keeps blocking the idea of moving election day to a weekend, when more poor and working people would be able to vote. Even though that would make for a more representative democracy, it would also make it harder to elect Republicans... so it's not going to happen.

Now, please, please, please do not think that for a moment I believe that more than a very few Republicans consciously comprehend the REAL reason behind the Republican party's organizational opposition to anything resembling universal healthcare -- that it would be better for the party if poor people croak before they can vote.

Most of the Republicans that I know personally are kindhearted folk who would give you the shirt off their backs. Even so, organizations have an "intelligence" of their own, which often transcends the intent of the people within the organization. In this case, the organization wants poor people (i.e. Democratic voters) to die more quickly, even if the individual members give heavily to charities that help the poor.

Since there's a disconnect between organizational goals of the Republican party and the personal values of individual Republicans in the party, the REAL reason for Republican party opposition of Obamacare will never come up.

Instead, the opposition will get melded into arguments about what's "constitutional", which is a pretty hilarious argument to have in a country that's just established the right to arbitrarily assassinate any U.S. citizen without even a judicial review. (Constitution? Yeah, right. Tell me when it gets back from vacation, OK?)

Or the opposition will focus on "affordability", even though Obamacare would have paid for itself and the country apparently has enough extra money floating around to give billionaires a humongous tax break during a deficit-exploding recession.

Besides that, the U.S. is already paying vastly more per person than any other country on healthcare, with inferior results. (It always amazes me that people who believe in American exceptionalism can also believe that we can't possibly implement cost-effective universal healthcare better than Canada.)

Anyway, what this means for sales people is that the for-profit healthcare industry will continue to grow like gangbusters, consuming ever larger amounts of the U.S. economy. Jobs in insurance sales, medical equipments sales, hospital services, etc. will continue to be secure and (for those who are skilled) lucrative. Overall, a move to a career in the healthcare sales is probably the smartest thing a sales professional can do at this point.

Especially if the job comes with health insurance.

Click to see my third prediction »
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This prediction runs contrary to what most pundits seem to believe, which is that the Verizon iPhone will largely cannibalize AT&T's base. I think the punditry-that-be continues to underestimate iPhone because they're replaying the Macintosh vs. PC narrative in their baby-boomer memory.

But that ancient narrative simply doesn't apply in this case. That was then; this is now. Instead, here are six reasons that the Verizon iPhone will kick Android's little plastic tuchus:

• Reason #1: Android phones have been available on AT&T for some time but iPhone continues to be the big seller that's in big demand.
• Reason #2: Android phones are not consistent with each other and therefore are going to be competing with each other for the people who don't want an iPhone.
• Reason #3: Android phones are not significantly less expensive than iPhones and do not offer any significant advantages, other than running on other carriers that AT&T. A disappearing primary market differentiator, in other worlds.
• Reason #4: Android applications are largely unvetted and are a hacking disaster waiting to happen. By contrast, Apple's controlled distribution model is far more consumer friendly.
• Reason #5: Android phones are consistently one generation behind iPhone, as evidenced by the inability of the Android community to come up with a viable iPad competitor.
• Reason #6: Android phones are less family-friendly, and as smartphones grow in market share, much of growth will be in family plans, with phones used by children.

What this means for sales professionals is simple: the iPhone is going to be the standard handheld device for sales professionals. Despite the current noise about support for other platforms, the action (and the applications you want) are going to be on the iPhone. It's really that simple.

Click to see my fourth prediction »
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Here's the situation. Some regions in China tolerate employment practices that make antebellum slavery in the U.S.A. seem like a picnic in a park. In one recently reported case, a Chinese company imprisoned retarded people, forced them to manufacture construction materials without pay, fed them dog food, did not let them shower for years, and beat them when they tried to escape.
As I see it, it's only a matter of time before somebody starts tracing up the supply chains of companies like Apple, HP, and Dell to find abuses that, if not as dramatic as the example above, are likely to make American consumers (who are basically decent folk) want to puke.

The problem, of course, is outsourcing, which is a way to reduce cost-of-goods by relocating the manufacturing where it can be done more cheaply. And while some of that cost-savings comes from lower salaries, a lot of it also comes from lax and unenforced environmental and labor laws.

The reason I think the scandal is going to break is that we're entering a period where "leaks" are getting more publicity and attention. I believe it's only a matter of time before somebody finds a smoking gun showing that U.S. top executives know of (or should have known of) slave labor somewhere in their supply chain.

When this proverbial hits the proverbial, there's going to be hell to pay for the sales professionals selling for the firms that get caught. To protect themselves, sales professionals in high tech hardware should be laying the groundwork to move into the software and services segments, which will not be affected.

Click to see my final prediction »
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Over the past decade, there's been an explosion of new technology for sales and marketing, much of which has taken the form of add-on applications to on-demand CRM systems, specifically Salesforce.com.

What we have now is a market for sales and marketing software that's dominated, on the one hand, by two enormous enterprise CRM vendors (SAP and Oracle) and, on the other hand, by Salesforce.com and its extensive collection of AppExchange partners.

This creates an inherently unstable market, where the smaller vendors are ripe for acquisition by the larger ones. That, in fact, already began last year, with Salesforce.com's plans to acquire the lead generation firm Jigsaw.
Salesforce.com's press release on that deal was telling, in that it discussed the purchase as "a strategic entry into the $3 billion market for cloud-based business to business data services." That's the kind of noises that companies make when they feel that they're not getting a big enough piece of the pie.

I therefore believe that Salesforce.com intends to begin purchasing selected AppExchange vendors in order to continue the growth in their revenue stream. The public positioning will be "better integration" but the real issue will be how much money and market share will be going to Salesforce.com.

My sources say that the rumors at the recent Dreamforce conference were that the companies likely to be acquired include Cloud9 Analytics, Marketo and VerticalResponse.

I've discussed this prediction with several AppExchange CEOs (not from the firms mentioned above, needless to say), all of whom believe that this is how the market will probably play itself out. As one CEO rather colorfully put it: "[Salesforce.com CEO Mark] Benioff is dying to get into a d**k waving contest with Larry Ellison and Steve Ballmer."

What this means for sales professionals is some churning and complexity in their sales and marketing systems. As your vendors are acquired and merged, it will become more difficult to ensure that applications will run as expected. However, this will have some advantages to the sales force because the big vendors will add credibility and longevity to the software that's acquired.

Also, it's likely that the price for sales technology will go up as control of integrated functionality devolves into a smaller number of companies. This will begin to play itself out next year and continue for about 5 years, after which things will settle down with three or four dominant vendors, probably SAP, Oracle, Microsoft, and a vastly expanded Salesforce.com.

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