More Tech Firms Stung By Weak Financial Sector
from the ouch dept
Because a company can only be as strong as its customers, there's no way for tech companies to be completely insulated from broader economic events. Companies with a lot of exposure on Wall St. are going to be particularly susceptible to a slowdown, as some companies, like Cisco, have already stated that they're seeing weakness in this market. The latest to sound a similar warning is Tibco, a software provider with a lot of customers in finance. The firm described the financial sector as "notably weak" blaming it for an overall earnings shortfall. It should be noted that Tibco hasn't had a particularly stellar few years, so the company was already struggling a bit. Still, what's affecting Tibco is likely to affect a host of other related companies. Right now, there's a lot of concern about the health of the financial sector, but if troubles continue to persist, then the malaise is likely to spread elsewhere, potentially leading to spending slowdowns in other sectors.
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Paul Kedrosky on tech-subprime exposure
TV commentator Paul Kedrosky analyzed some major tech firms and their involvement in the financial sector (and, by implication, their vulnerability to the subprime meltdown):
http://paul.kedrosky.com/archives/2007/09/06/revisiting_the_1.html
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Tech services - not "tech" as a whole...
The subject is a bit misleading - the financial sector is likely to affect the tech services sector (as would a downturn in any other sector that's heavily dependent on systems integrators, business software, etc.). But web-based technology companies - and even consumer electronics - arguably the "hottest" sectors in tech right now won't feel the "Wall St. Effect" as much as their brethren in services.
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Not so fast
My company (ADTRAN, symbol ADTN) has been doing just fine recently. Maybe cisco is having trouble because they continue to only offer gear without any real support.
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