Which Tech Companies Will Get Hammered the Hardest by Credit Crisis?

Ann All

Not long ago, some tech companies seemed almost smug in their assumptions that they might not take a hard financial hit, even as the U.S. credit crunch worsened. But now, with the economy turning into an increasingly ugly train wreck, that smugness is turning into foreboding or downright fear.

Which companies will get hammered the hardest? No one knows for sure, but I've collected some of the more interesting observations I've seen in the last week or so.

  • It's a good time to be selling services, but a bad time to be selling nearly anything else. Stock prices of companies with big services businesses, such as IBM and HP, remain relatively stable while other tech prices plunge. According to a recent Forrester Research survey, many companies plan to spend more on services, even as they reduce other expenditures.
  • Remember when folks extolled the virtues of startups, so agile they could take on the tech behemoths and give them a real run for their money? Now companies specializing in cutting-edge technologies are at risk of bleeding to death. The financial services industry has long "played something of an incubator role" for such technologies, notes IT Business Edge blogger Carl Weinschenk. As the industry consolidates and trims near-term spending, there will be fewer customers to go around for startups. Perhaps their best hope is to be acquired by a deep-pocketed giant like Cisco or IBM.
  • Some companies will benefit from consolidation in the financial sector, according to Enterprise Networking Planet. Among them: consultants who can help consolidating banks integrate their disparate systems, software-as-service vendors and others who sell stuff on a pay-as-you-go basis, and companies with governance and cost/profitability analysis products.
  • In theory, companies with a global businesswill fare better than those that focus most of their efforts on U.S. customers. Its international clientele is another reason IBM has remained relatively impervious to the bad economy. But now even the once red-hot BRIC (Brazil, Russia, India, China) countries appear to be suffering ill effects from Wall Street's troubles, reports the Globe and Mail.

Add Comment      Leave a comment on this blog post
Oct 6, 2008 11:44 AM Asuri Asuri  says:
The Global meltdown has seriously affected the economy, no doubt. But common man needs to live , buy things and progress in life. If the technology that is being deployed cannot be put to this use then , the present crisis will be felt by almost everyone. However, i feel that there is enough market for the organizations to share but unfortunately these are not being perhaps observed by the so called CEOs. Reply

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