For weeks, some of us have been watching the financial markets swoon, wondering when the bank trouble would extend to the high-tech sector.
On Sept. 29, which some pundits are already calling Black Monday, we got our answer. Within a few hours of trading, Internet bellwether Google’s stock plummeted 8 percent and ended the day down 11.6 percent to $381. That’s $50 per share down the toilet.
Apple, whose iPhone has been the most successful consumer device since Apple launched the iPod, fell to $100 in midday trading and closed down 17.9 percent, or $22.98, at $105.26. Microsoft lost $24 billion in market capitalization.
The House of Representatives hardly helped alleviate the stress, voting down an aid package yesterday. Welcome to the bear market.
“There have been thoughts on tightening budgets and reducing spending,” Gartner analyst David Mario Smith told me today. “A lot of people are stunned and shocked and scared, but from an enterprise perspective I do expect some budget tightening. That’s par for the course.”
High-tech companies may not be laying off staff in droves…yet. To help avoid the chaos, high-tech analysts say companies can cut costs a number of ways. Travel is a prime candidate, according to Forrester Research’s Rob Koplowitz:
“In a down economy, T&E gets cut early and often and companies turn to collaborative technologies to drive more productive interactions without the need to be face to face. Web conferencing thrived and became a legitimate technology in the downturn following 9/11. I would expect Web conferencing and teleconferencing to thrive.“
Gartner’s Smith agreed, noting that Gartner has been seeing businesses increasingly embrace real-time tools, such as Web conferencing and enterprise instant messaging. Smith said:
“We will see companies continue to investigate using Web conferencing tools, instant messaging and team workspaces, all of which not only cut costs but are greener because they cut down on the carbon footprint. I can cut X amount of travel times in face to face meetings by conducting these same meetings over the Web.“
What sort of specific solutions can we expect to see an uptick? Smith named the obvious players. They include Cisco, which has been making a strong unified communications and collaboration push and agreed to buy enterprise instant messaging stalwart Jabber, IBM’s Lotus Sametime and Microsoft Office Communications Server.
SAAS, Skype Are Part of the Cost-Cutting Mix
That doesn’t mean that only Cisco, IBM and Microsoft will be sitting pretty. There are a host of Web collaboration providers that stand to benefit from the exposure more Web conferencing can afford them.
Yugma, Yuuguu, CallWave and others are all ready to provide either free- or low-cost Web conferencing apps. Smith sees these smaller vendors successfully catering to smaller businesses.
Indeed, Koplowitz said new technologies offered in a SAAS model are garnering interest.
Again, there is an interesting analogy to Web conferencing after 9/11 in that organizations could use the technology without a large capital expenditure, so it was more immune to the effects of the downturn. With SAAS, you can pay as you go.
Also, organizations that are looking to move into new technologies, normally a project that would be put on hold when budgets are tight, can still do small implementations with SAAS, including blogs, wikis and social-networking tools to lower costs.
If low-cost SAAS and Web collaboration tools are more attractive to companies in a financial crisis, then I imagine Skype is part of that mix. The company offers free PC-to-PC voice and video calling and instant messaging and group chat for consumers and similar services for businesses.
Skype President Josh Silverman claims the company just enjoyed its 1 billionth download on Sept. 28, a third of which are actively using the service to obviate long-distance phone calls that can prove costly as the days and months go by.
It’s not a stretch to think other cost-conscious consumers and businesses could turn to IP-based telephony solutions such as Skype to trim expenses.
If you’re a company executive, what will you do to ensure budgets stay reasonable in this bear market? If you’re just a worker bee, what do you think you’re company can do to cut costs?
EWEEK is interested in your input.