The Chinese symbol for crisis is composed of the characters for “danger” and “opportunity”; the implication being that a crisis is regarded not merely as a danger, but also as an opportunity. This is a quick snapshot of some of the dangers and opportunities facing various tech companies that rely on the financial services sector.
Clear And Present Danger
As of Monday, there were three less buyers of technology from the financial services sector. Technology vendors that rely on the financial services sector will see demand dry up. These vendors include Oracle, SUN Microsystems, Salesforce, (Merrill is its biggest customer) and to a lesser degree Juniper, Cisco, Microsoft, and HP will feel the impact of the crisis. HP and eBay have already announced layoffs this week. Expect the others to follow suit as spending on data centers, telecommunications, software, and servers vanish.
More Job Cuts
The financial services sector is big employer of IT personnel such as programmers, engineers, developers, project managers and other technical staff. Most of these people are already out of work as of Monday . Potentially, there are 90,000 jobs which will be lost between Lehman and Merrill. Soon, they will start to flood the tech sector seeking employment. The labor pool for tech workers will increase and put downward pressure on wages. The CEO of Bank of America expects half of the banks in the U.S. will fail in the next five years. There are 8,500 banks in the U.S.
Social Media and Cloud Computing To Benefit
The lower wages and higher gas prices will make telecommuting an attractive alternative for many. Social media technologies and cloud computing services have made telecommuting even easier. Many displaced workers will set up their own business or become independent consultant. They will set up websites and use social media and cloud computing services to run their operations. Mastering the use of such social media technologies will be critical to the survival of some businesses. Providers such as Amazon, Zoho and other online services stand to benefit.
Opportunity To Invest In New Skills
Tech companies will get creative as their customers tighten spending. They, too, will increasingly turn to social media and cloud computing services to run their operations as a result of smaller budgets. They will leverage social media to perform functions ranging from customer service to product innovation. This will benefit a new breed of companies such as Mzinga and Jive (both participants at the Social Media Strategies Conference). There will be a demand for social media savvy personnel that have a new set of skills to maneuver in the new economy.
Related: SAP Layoff Possible
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[...] authority site review wrote an interesting post today onHere’s a quick excerpt The Chinese symbol for crisis is composed of the characters for “danger” and “opportunity”; the implication being that a crisis is regarded not merely as a danger, but also as an opportunity. This is a quick snapshot of some of the dangers and opportunities facing various tech companies that rely on the financial services sector. Clear And Present Danger As of Monday there were three less buyers of technology from the financial services sector. Technology vendors that rely on the financial [...]
[...] September 17, 2008, 3:08 pm Filed under: culture, socialsoftware, technology, web2.0 WebGuild posits that the financial crisis in the US will translate into higher demand for workers with mad social [...]
Interesting point about the jobs. Will the East Coaters come flooding over to Silicon Valley?
Here are some other aspects of the crisis: http://www.siliconvalleywatcher.com/mt/archives/2008/09/silicon_valley_21.php
[...] On WebGuild Daya Baran writes: [...]
[...] On WebGuild Daya Baran writes: [...]
[...] and opportunities facing various tech companies that rely on the financial services sector. (…) in Web Guild, by Daya [...]
[...] referencing John Soule’s phrase “Go West Young Man.” Tom cites a post by Daya Baran from mid September that points out that with “three less buyers of technology from the financial [...]