Economic Slump Offers Opportunity for Innovative Companies

Dennis Faas's picture

It's no secret that the global community is caught in the midst of an economic slump. But is it possible for some industries to prosper at the expense of others? The answer may depend on the tactical maneuvering of emerging start-ups.

As analysts are beginning to notice, some of the most powerful companies have risen during times of economic distress. The ever-expanding "dot-com" wave of the nineties slowed down any strides made by Sun Microsystems and America Online, while creating opportunities for future powerhouses like Google. (Source: nytimes.com)

The recession of that decade also anchored IBM for five years at the height of their popularity. Still, these were the times in which Microsoft, Dell and Compaq (later acquired by Hewlett-Packard) became household brands.

Now with the first real recession of the twenty-first century, many are asking who will be left standing when the crisis is over?

Microsoft has seen better days. For the first time in its history, revenue fell in the last quarter of 2008. While the company hopes to see sales increase after reducing the price of their Vista operating system, it should be noted that it only did this in response to the rising popularity of Linux, a free operating system, being installed on some notebook computers in place of Windows.

Intel has also been rocked in the revenue department after sales fell 23 percent last quarter. This marks the steepest decline for the chipmaker since 1985.

Meanwhile, more experimental but lower-cost technologies, like netbooks and Internet-based software services (like cloud computing and virtualization, which lets companies run more software on each physical server), are all showing signs of increased interest among casual consumers. (Source: iht.com)

So who will be left standing when the crisis is over?

Those offering "bare-bones" computers aimed at convenience instead of expensive "extras" look to be in the best shape.

The irony of the situation: the companies winning the most in the end could be the ones who offer the least.

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