The bear facts.
Soon, IBM had commissioned a report investigating the financial viability of the UK's mid-range server reseller community. Of more than 200 agents, Holway found almost all to be "technically insolvent". That conclusion not only forced IBM to look again at the credit agreements it had with its UK channel, but it also set the tone for Holway's consistently bearish statements about the IT industry, which persist to this day.
The IBM-commissioned report was eventually published and distributed freely, becoming the first of the now famous Holway reports. Produced annually, these tomes pass judgement on the financial performance of the key software and IT services companies in the UK.
The reports have been consistently hailed as astute and influential. At times, they inspire - some even say coerce - senior management at covered companies to change corporate strategy; often his pronouncements move share prices. As each report was published, Holway's cache grew. Then, in 1998, he made a stand that marked him out as something of a maverick. He declared that the runaway growth years for the industry were about to end - abruptly and painfully. "I was pilloried for that one," says Holway.
In fact, Holway was far from the only industry commentator to adopt this doomladen stance. Many rivals pundits still bristle at the fact that Holway was a 'lone voice', albeit a highly influential one - although some grudgingly admire him for cultivating the image. "Richard is a great self-publicist. He is good at promoting himself as the font of all knowledge," says David Johnson, an analyst with corporate financier Altium Capital. "In many ways, these things become self-fulfilling: If you can gain enough currency for your opinions then they acquire a certain weight."
Holway, a little proudly, tells of one IT executive who said he was at least partly responsible for the falling stock market. "It was one of the greatest compliments ever paid to me. If I did have that amount of influence I wouldn't be sitting here talking to you, I'd be on some Caribbean island," he says.
He was, of course, right about the sharp reversal of fortunes that most IT companies were staring in the face, but Holway did not give up there. In November 2002, he gave a presentation in which he pronounced the IT industry as entering its 'maturity' phase, putting it in the same category as the likes of the rail and automotive industries. "I was f***ing pilloried again," he says. And still he refuses to let up on the embattled tech sector. At a speech to a gathering of IT executives in London in early July 2003, Holway said that, if anything, he had been a little optimistic when he pegged future growth at about 4%.
To his critics, the pessimistic line is wearing thin. "It is easy to be bearish all the time, but the really clever ones make money on the way up and get out at the right time," says one City analyst. Nevertheless, to cast Holway in the role of perennial doomsayer over-simplifies his views. He has often praised, as well as condemned, IT companies. Ask Sage and Capita, winners of his 'Boring Award' for companies that have successfully managed revenue grown for 10 years in a row.
Moreover, the charge that he missed out on the IT boom overlooks two pertinent facts: Richard Holway Ltd was highly profitable throughout the 1990s, an achievement that allowed him in 2000 to sell his majority share in company to rival Ovum for [pounds sterling]4.3 million in cash and stock. (He remains a director of Ovum Holway and one of its major shareholders.)
Now, as major financial institutions cut back on in-house technology research, Holway is enjoying something of a renaissance in the City. That will doubtless strike fresh fear into the hearts of UK technology industry executives keen to hype their company's prospects. But there is some good news for them: at 56, he is starting to talk about retirement to the Lake District. The bad news: he says he plans to stay on their case for several years to come.