Friday, October 10, 2008

How We See It

Tech sales feeling pinch of economic crisis

By Mass High Tech Staff

Tech companies have been working and selling over the past several months, feeling rather sheltered from the hurricane-force economic winds laying waste to the financial markets. And until recently, although sales cycles had been slowing and customers were feeling nervous, many businesspeople in the tech sector were still optimistic.

That appears to have changed. This week’s New England Technology Stock Index took one of its worst hits in the eight years that Mass High Tech and Bentley University have tracked the region’s public tech companies, dropping 10 percentage points in less than a week (to see who suffered the most, see Datapoints, Page 9). And private companies are saying that while sales are closing and invoices are going out, some customers are putting the brakes on additional services until the clouds clear.

That said, many entrepreneurs at the earliest stages remain optimistic: Bill Warner was the latest one, just last week, when he described his timing for starting Avid Technology in 1987 soon after Black Monday. And Tim Healy, the young, energetic CEO of EnerNOC, said his company has cash “tucked away” so he’s not panicking. “We’re seeing some irrationality and volatility ... in the market,” he told us this week. “But we’re not seeing uncertainty from customers.”

Now it’s just a matter of making sure those customers come through when the invoices are due.