Pride cometh before the fall, with Lehman Brothers having spent $309 million on information technology infrastructure in the quarter before the venerable financial firm went belly-up, which was up from $282 million the previous quarter. The company spent $1.1 billion on IT in 2007. Projects included a system for the London Stock Exchange to create an anonymous, automated way for traders to do business (which, in the wake of the United Airlines share price debacle, sounds like a fantastic idea). While the relevant divisions can be split off and sold (and the IT grunts are still hard at work), as more banks fail, selling IT equipment to financial firms doesn't look it's going to be a growth business for some time to come.
"The financial services sector is the bellwether sector for the IT industry because of its amount of spend on IT," she said. "The demise of banks such as Lehman creates a sudden, very large reduction in revenue for the IT sector."
Which is terrible news for companies like Dell, which is already seeing "conservatism in IT spending in the U.S., which had extended into Western Europe and several countries in Asia." Could be good news for eBay, though, if equipment needs to be auctioned to cover some of those billions in write-downs. (Photo by AP/Mary Altaffer)