Dr. Bernard Malamud, Department of Economics, UNLV

Anne Chahal, President & CEO, Janalent

Rocky Griggs, Marketing Manager-Southwest, Microsoft

Joe Honan, Vice President-Solutions, Janalent

Joe Honan, Janalent

Dr. Bernard Malamud, UNLV

Rocky Griggs, Microsoft

Anne Chahal, Janalent

Where we are & how we got here

Southern Nevada & SW US Outlook

What every company needs to consider

What our customers are doing

Dr. Bernard MalamudProfessor of Economics

Easy

Money

Policy

Capital Inflows

Eager Home

Buyers

Innovative

Banks

Rating

Agencies

Ambitious

Mortgage Brokers

Securitization

MBSs

Escalating

House Prices

Gov’t Sponsored

Enterprises

Developer Clout

Bank Regulators

The best

of times

A “Global Saving Glut”

The Boom Years: High Real GDP Growth Declining

Unemployment

1997 – 2000

2003/4 - 2006

Growth > ~ 2.5 % Unemployment

Easy

Money

Policy

Capital

Inflows

Eager Home

Buyers

Innovative

Banks

Rating

Agencies

Ambitious

Mortgage Brokers

Securitization

MBSs

Escalating

House Prices

Gov’t Sponsored

Enterprises

Developer Clout

Bank Regulators

The best

of times

The Downturn: Slowing GDP Growth Rising Unemployment

Growth < ~ 2.5% Unemployment

Employment in Las Vegas Metro AreaJanuary 2009 vs. January 2008

Total All Industries

January

2009

January

2008 % Change

880.9 919.5 -4.2%Basic Industries

Accommodation 164.7 176.7 -6.8%

Casino Hotels and Gaming 158.9 171.2 -7.2%

Construction 82.6 95.0 -13.1%

Manufacturing 24.3 25.9 -6.2%

Other Industries

Financial Activities (FIRE) 45.9 48.0 -4.4%

Retail & Wholesale Trade 120.8 125.6 -3.8%

Trans, Warehousing & Utilities 37.2 37.6 -1.1%

Professional & Business Services 106.9 115.9 -7.8%

Employment Services 10.7 15.7 -31.8%

Education and Health Services 67.1 64.6 +3.9%

Government 100.9 98.6 +2.3%

Federal 11.5 11.3 +1.2%

State 15.4 14.9 +3.4%

Local 74.0 72.4 +2.2%

Unemployment Rate 10.0% 5.6%

Financial System Meltdown

At home

Gov’t Supported Takeovers

•Countrywide BofA

•Bear Stearns JPMorgan Chase

•Silver State Bank Nevada State

•Merrill Lynch BofA

•Washington Mutual JPM Chase

•Wachovia Wells Fargo

•Security Saving Bank of Nevada

Interventions/

Nationalizations/

Pre-privatizations

•IndyMac

•Fannie Mae/

Freddie Mac

•AIG

Bankruptcies

•New Century Financial

•Lehman Brothers•Washington Mutual Inc.

Abroad

•HBOS Lloyds Bank

•Fortis PNB Paribus

•Northern Rock

•Royal Bank of Scotland

•Dexia

•Glitnir/Kaupthing/

Landsbanki

Baa-AAA Interest Differential The Good News: 1932 was worseThe Bad News: This downturn isn’t over until 2010

0.00

1.00

2.00

3.00

4.00

5.00

6.00May 32

5.64%

Apr 38

3.17%

Sep 82

2.69%

Dec 08

3.38

Responses Lender of Last Resort / Spender of Last Resort

• Tax Rebate $124 bil.• Fed Fund Rate Cuts• Fannie/Freddie $200 bil.• Bear-Stearns $29 bil.• AIG $174 bil.

Fed “Facilities”• Primary Dealer Credit Facility (PDCF) $58 bil.• Treasury Security Loan Facility (TSLF) $133 bil.• Term Auction Facility (TAF) $416 bil.• Asset- Backed Commercial Paper Funding Facility (CPFF) $1,777 bil.• Money Market Investor Funding Facility (MMIFF) $540 bil.• More Fed Fund Rate Cuts … Hold At ~0%• Fed Purchases of Long-Term Securities: GSEs & MBSs $600 bil.• Term Asset-Backed Securities Loan Facility (TALF) $200 bil.• Emergency Economic Stabilization Act/TARP $700 bil.

Government LoansGovernment Equity

• Stimulus Package $787 bil.aka The American Recovery and Reinvestment Act

• TARP II• Stress Tests

• Total funds to State of Nevada ~$ 1,710 mil.• Education Stabilization & Construction 610 mil.

• Medicaid Assistance 419 mil.

• General Budget & Other 249 mil.

• Highways & Bridges 218 mil.

• State energy & Weatherization 80 mil.

• Clean Water Programs 48 mil.

• Transit capital 45 mil.

• Unemployment & Worker Training 22 mil.

• Child Care/ Foster Care/adoption 19 mil.

Anne ChahalCEO & President

• “Las Vegas 1st Place” in Bizjournal’s analysis of the nation’s current growth centers. Metros with most momentum entering the recession– Nov 2008

• “Nevada Ranked Number Two” in the Small Business & Entrepreneurship Council's "Small Business Survival Index 2008" – Dec 2008

• US LEI (leading economic indicators) have trended positive in the last two months. – Feb 2009

• US New Housing Starts up 22% in February 2009 according to the Commerce Department– March 17, 2009

• Fastest growing region over the next 25 years

• 5 of the top 10 fastest growing states (Nevada, Arizona, Utah in top 5)

• Predicted to be the hub for renewable energy and “green collar” research, jobs, & industry

• ~Possibly $7.35 B in energy investments or borrowing authority for Nevada -Feb 2009 estimates

• 70% of all goods from pacific rim will go through SouthWest

• Well positioned as leader for solar, geo-thermal, wind, and other green collar industries

• Hoover Dam bypass bridge evolving “western-slope” Hwy 93 NAFTA trade route

• High-speed rail between SoCal & Las Vegas becoming a reality and partially funded

• Affordable and available commercial & residential property

• Business friendly regulatory and tax climate

• Unmatched ability to transform

• Well established base community & industries

• Fantastic retirement community

• Technology and infrastructure (i.e. supernap datacenter)

• World’s center for hospitality and entertainment• Film production industries

• Gaming/resort industry administration

• Increased funding for education, healthcare & energy

• Possibly $3.25 B in borrowing authority for upgrading NV regional power grid

• $15 B in Small Business assistance

• $250 M in local NV transportation projects

• Ability to write down 5 years of losses

• Reduction of estimated tax payments by 10%

• Accelerated asset depreciation

• Increased SBA loan guarantees (from 50 to 95%)

+ Climate & Weather

+ Positioning as renewable resource hub

+ Leadership in national “clean energy”

+ Business friendly

+ Supply & demand

+ Population migration trends

+ Increased industry expansion / diversification

+ Stability & ease of access

+World class hospitality and tourism

• Don’t just sit and watch it happen or watch other companies make money off of it.

• Change happens. Technology happens. Embrace it!

• No one plans to fail, but too many companies fail to plan or make necessary adjustments

• If small businesses do some effective planning, manage their cash flow, keep on selling and acceptchange, they will be well-positioned in the SW marketplace as we move into the future.

Rocky GriggsPartner Marketing Manager

• It’s not that bad, you got a free meal

• Words of wisdom

• Industry Insights from Microsoft customers large and small

• 50 million = 38/13/5

• Who was Federal Expresses largest customer?

• We always overestimate the change that will occur in the next 2 years and underestimate the change that will occur in the next 10. Don't let yourself be lulled into inaction.

• If GM had kept up with technology like the computer industry has, we would all be driving $25 cars that got 1000 MPG.

• You don’t have to be great to start, but you have to start to be great

0%

20%

40%

60%

80%

100%

10-200 200-500 500+

15%35%

68%

75%

46%

11%

10%19% 21%

Increase

Decrease

No Change

11%

23%

57%

64%

25%37% 35%

44%

85%

64%

32%

16%

10-200

200-500

500+

• Help our customers identify ways to take unnecessary cost out of doing IT

• Enable customers to focus on their core business

• Raise the stacks in Research and Development by increasing investment from $8 to $9 billion this year

• Continue focus on key strategic partnerships that have a ripple effect in the economy

Joe HonanVice President-Solutions

Key Ways to Get Fit, Get Strong

Reassess strategic plan often, control spending, drive costs out of IT, strengthen core systems, operations, and processes.

“Leading regional healthcare provider is on track to save over $500,000 annually in facilities and maintenance cost by virtualizing and moving off of legacy platform to a Microsoft infrastructure. (Novell to Microsoft)”

Analyze current burn

Identify & eliminate duplicated expenses

Rationalize & renegotiate maintenance contracts

Virtualize as a strategy, not a project

Consider on-line services where appropriate

Key Ways to Spend more… Wisely

Smart companies are increasing their bets and investments in strategic areas while their competitors “re-trench”

“By focusing on business intelligence (CRM) and increased marketing budget, regional services firm has been able to drive over $300,000 in new revenue and 10 net-new customers so far in Q1”

Spend to Save!

Analyze & provide business case to support plans

Identify & rank spending opportunities / priorities

Use the opportunity to spend on value to customer

Take advantage of stimulus & incentives

Key Ways to Increase Focus & Take Advantage

Increased focus rather than “shot-gun” diversification is a key differentiator between leaders & laggards in turbulent times…

“By replacing legacy systems, regional photography organization has been able to spend more time on generating revenue & enhancing online presence, rather than managing ailing systems ”

“Double down” on strengths, cull non-performers

Identify & dump non-profitable relationships

Create 5 new ways to increase value-proposition

Invest in business analytics & customer mgmt.

Find ways to save your customers money

Key Ways to Expand Base & Embrace Technology

Expanding customer base by thinking and acting in new ways is the what is separating the up-starts from the start-ups…

“By implementing our business intelligence system and enabling community site links, we now have 10 times more visibility into the contacts and details of our prospects with 10 times less expense”

It’s not your father’s internet…it’s your kids…

Viral marketing has had a HUGE impact

Get your “out there message” out there

Build a community of customers for customers

PROVE technology is strategic to your organization

Key Ways to Deepen / Strengthen Relationships

Rely upon key vendors, deepen relationships with key partners, strengthen networks of friendly competitors

“By focusing on how we can help customers better exercise their existing Enterprise Agreements, we have become THE trusted advisor for several organizations by proactively finding ways to save by working with us”

Open up to key vendors, they’ll find ways to save

Focus partnerships and execute on a plan

Build bridges rather than moats w/ competitors

Collaborate & Communicate… with everyone

Develop an organizational “Elephant Memory”

Expand Base & Embrace Technology

Find new customers through using new methods of reaching them (e.g. Twitter, Social Networks)

Steps to Survive & Thrive in this recession

Get in Shape

Control spending, shed excess expenses, Virtualize, strengthen core systems & processes

Spend more…Wisely

Increase investments in strategic areas, take advantage of competitors “retrenching”

Increase focus & Take Advantage

Increase focus rather than diversification, leverage business intelligence to better understand customers

Deepen / Strengthen Relationships

Rely upon key vendors, invest into key partnerships, find ways to work with competitors

Virtualize as a strategy, not a project

Continually assess &

Move email & collaboration on-line

Increase investments in getting your message out

Replace bad with good (e.g. legacy systems, storage)

Track & evaluate your spend (eg CRM)

Hyper-focus your message, utilize CRM

Only 2 things - Support revenue generation or save $$

Create new value, everyone is listening

Embrace and leverage the power of communities

Build communities for your customers

Prove the value of technology to your organization

Ask key vendors to find way to save you money

Use technology to prevent “slipping through the cracks”

Use trusted advisors to exercise existing agreements