Skipper Sees Another Year of 'Tough Sledding' for Big Tech

I suspect we're going to spend most of 2003 figuring that out. This means 2003 is going to be a better year for the incumbents than it is for the start-ups.

3. Which incumbents specifically will benefit?

That means market share for guys like Cisco, Microsoft, Oracle(ORCL Quote - Cramer on ORCL - Stock Picks) and SAP(SAP Quote - Cramer on SAP - Stock Picks) is going to go up. [McNamee owns shares of Cisco and Microsoft, but not Oracle and SAP.]

I don't expect a significant PC upgrade cycle this year. The thing that people are missing is that, again, the law of large numbers has gotten in the way. The PC industry is so big that it's hard to move the needle. They look back at all those PCs bought in 1999 as part of Y2K. Half those people no longer work at those companies. You don't need to upgrade a computer for a guy who's not working anymore. So, these upgrade cycles just feel like business as usual. They're happening, they just don't move the needle.

It may move it a little this year if people are sufficiently confident because a lot of deferred purchasing may take place.

Prices are down a ton, right? In an environment where units aren't growing because business is too big and prices are falling, that's a formula for an ugly environment.

4. Why, in this environment, do you own Cisco as a top 10 holding? This time a year ago, you were saying Cisco wasn't a good bet. What's changed?

We bought Cisco back in September.

Here's the way I look at Cisco: They have more cash than their competitors have in market cap. They're really smart. They're doing things designed to make them stronger.

Their competitors have been weakened by a lot of factors, not the least of which was the apparent fraud of many of its customers, right? You can say what you will about the folks at Lucent(LU Quote - Cramer on LU - Stock Picks) and Nortel(NT Quote - Cramer on NT - Stock Picks), but their customer base included a lot of people who appear to be very dishonest.