If planning is a critical core competency of any company, year-end planning is even more critical. It gives leaders a chance to learn lessons from the past year as they put the finishing touches on next year's roadmap. But not all planning processes are created equally: As 2011 looms, some companies are looking at a more challenging year than usual. Are they up to it? Time will tell.
The dominant software vendor continued its long, often painful transition toward a post-Windows, post-Office future. Windows 7, launched late last year, succeeded in erasing dark memories of its ill-starred predecessor, Vista, as it racked up solid sales through the year.
Office 2010 launched in June, and while its feature set wasn't radically different from earlier versions, its web-savviness was. The new productivity suite is closely integrated with a more robust range of online tools designed to bridge Windows to a webified future and compete with the increasingly capable Google Apps. Windows Phone 7, Microsoft's mobile operating system answer to Apple's iOS and Google's Android, launched last month to generally positive reviews.
For 2011, Microsoft's major weakness remains a seemingly non-existent tablet strategy. Apple's iPad success illustrates just how important tablets are and how clay-footed Microsoft's response has been. In recent years it's teased a number of prototypes running warmed-over versions of Windows, but has thus far failed to bring anything significant to market.
The HP Slate 500, powered by a tablet-capable version of Windows 7, is targeted directly at enterprise customers and is hardly the iPad killer Microsoft needs to get back in the game.
This past year was one of the most eventful in this storied firm's history. Despite two high-profile acquisitions, Palm and 3PAR, that heralded bold moves to solidify its presence in the mobile and enterprise data centre markets, respectively, the company garnered more headlines from the abrupt, under-a-cloud departure of CEO Mark Hurd.
For 2011, HP's major challenges involve completing the integration of its recently acquired properties and bringing new mobile products to market to compete against Apple and Google in both the smartphone and tablet spaces — a tall order given Palm's near-death condition when HP announced the deal in April. Like Microsoft, HP's challenge is timing-related: The smartphone and tablet market, increasingly defined by Apple, Google and Research In Motion, may have simply evolved beyond the point where HP can garner much attention.
Research In Motion
Despite the never-ending stream of negative headlines, RIM actually had another record-breaking year. Double-digit revenue and subscriber growth coupled with record sales in virtually every region where it does business told the story of a company that continues to execute the fundamentals exceptionally well.
The BlackBerry maker was challenged by persistent demands from governments in Saudi Arabia, the United Arab Emirates, India and elsewhere to grant security agencies greater access to encrypted messaging traffic. For 2011, RIM needs to finalize deals in each country and move on, as the continued threat of service shutdowns in these regions will compromise growth if this issue isn't finally resolved.
The BlackBerry Torch — a sliding-keyboard, touchscreen-equipped device — shipped this summer with RIM's new BlackBerry 6 operating system. While RIM's relatively diverse range of device offerings means no one BlackBerry will ever be a breakout hit like the iPhone, the company continued to be criticized for relatively tepid sales. This is largely unfounded, as the Torch set the stage for additional devices based on BlackBerry 6 — the Bold 9780, for example, is now selling internationally — and reinforces the company's ability to seamlessly roll out major OS upgrades.
The most daunting challenge facing RIM in 2011 lies in the tablet space. The company announced the BlackBerry PlayBook in September, and will begin shipping it to U.S. customers in the first quarter of 2011, and internationally by Q2.
Advanced Micro Devices
The world No. 2 chipmaker has had a tough few years living in Intel's shadow. Its processor designs continue to lag those of the industry giant, thanks largely to its relative lack of capital. Each generation of processors represents a multi-billion-dollar bet — and Intel's cash pile far outclasses AMD's. As Intel quickly transitions its designs to a smaller 32 nanometer standard — in the chip world, semiconductors based on smaller manufacturing processes can run faster and cooler while consuming less energy — AMD soldiers on with less efficient and ultimately less desirable 45 nm chips.
AMD, which finally retired the ATI brand four years after acquiring the Canadian graphics vendor, has thus far failed to realize the technological synergies that supposedly justified the original deal. In 2011, it will continue to be challenged to convince enterprise customers building ever more dense and efficient data centres and devices that its technology deserves a place in an increasingly Intel-centric world. Ultimately, without the cash reserves needed to leapfrog Intel on the product front, AMD's roadmap is bleak.
The just-announced deal to buy storage vendor Compellent signals Dell's continuing drive to compete head-on in the enterprise space against diversified giants like HP, IBM and Cisco. With PC hardware margins continuing to shrink, 2011 is a crucial year for Dell's strategy of shifting the bulk of its business into the more lucrative services market. A year after swallowing Perot Systems for $3.9 billion, the challenge remains finishing the integration process and getting enterprise customers onboard. Now renamed Dell Services, the unit lags HP's and IBM's dominant services arms in a market that craves scale.
On the consumer side, Dell has stepped into the tablet space with its Streak device. Although the initial unit sports a barely-larger-than-a-smartphone 5-inch screen, successive 7- and 10-inch models will round out the line and give Dell competitive, Android-powered alternatives in an increasingly crowded market.
These companies are hardly unique in facing steep challenges in 2011. But their leadership positions within the industry — and the far-reaching consequences if they stumble — will make them even more compelling to watch as the year unfolds.