ElectronicHealthcare

ElectronicHealthcare 2(1) February 2003 : 29-32

Was it really only a scant few years ago that Silicon Valley was booming, dot.coms were the next big things and Nortel shares were trading at more than $100?

David Menzies

Abstract

Alas, there's nothing like a pinch of reality to pop an over-inflated hype bubble. These days, so many of those whiz-bang dot.coms are dot.goners; Nortel shares are penny stocks; and the busiest folks in Silicon Valley aren't new age high-tech gurus, but rather a legion of repo men towing BMW and Mercedes sports coupes back to the impound lot.

Since the turn of the new millennium, the business casualty list - especially in the IT sector - has become increasingly bloated. A McKinsey Quarterly report released last year determined that out of 492 software companies defined as "struggling," only 13% were subsequently able to revive themselves. McKinsey noted that executing a turnaround in the software sector is an especially difficult task because at the first signs of trouble forces specific to the industry combine to create a deadly downward spiral.

 

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