Alphabet-shaped recovery? Try bathtub-shaped

May 18, 2009

We’ve all heard discussions on what letter of the alphabet the economic recovery will look like. Will it be “V” shaped — as in, a sharp plummeting, followed by an equally sharp upswing? Or more “U” shaped — a downturn followed by a flat period before the recovery starts? Is the lightness we’re witnessing in the economy the mid-point in a more extended recovery process, mirroring the letter “W”? And heaven forbid, let’s not even think we might be stuck in an “L” shaped economy, with no near or medium-term hope of improvement.

We asked the chief executives of Sybase and Symantec, our first two guests at the Reuters Global Technology Summit, what they thought the recovery graph might look like.

Sybase CEO John Chen said he remains cautious about the overall economic outlook despite talk of a “green shoots” rebound and the idea that tech spending has hit a bottom. So it’s unlikely to be a V-shaped recovery or even a W-shaped recovery, Chen said. He think the economy is going through a U-shaped recovery, although it might be a year or more before we begin to climb up the right side of the “U.”

Symantec CEO Enrique Salem discarded the alphabet soup comparisons entirely in favor of even more creative analogies. “A bathtub shape? Or an Olympic pool-shape?” Salem said.

A bathtub-shaped recovery graph is similar to a U-shape, except the period of flat growth is longer. As for what an Olympic-pool shaped recovery might look like, Google was unable to provide an explanation (Salem was probably kidding about that one, but I am no economist, so don’t blame me for not knowing).

Whatever the recovery’s shape, Salem said he’s confident customers will continue to buy security products.

Meanwhile, Bernstein’s IT hardware analyst Toni Sacconaghi said the economy will be slow and flat for an extended period before getting back on track. Kind of like the dreaded “L” shape, even? “I can’t even think of a letter,” Sacconaghi said.

Photo: Symantec CEO Enrique Salem at the 2009 Tech Summit/Reuters.

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