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The credit crisis is resulting in slowdown in technology sales, according to the Wall Street Journal. This credit crunch is a much bigger problem than most people in technology realize.

• Technology financing is estimated to top $88 billion or about 14 percent of the total amount spent on computer hardware and software in 2008, according to IDC.
• Baytree Leasing Co., a company that provides some of this financing, says it has seen the default rate jump from 0.5 percent to 1-1.5 percent.
• Nearly 20 percent of CIOs are delaying buying or outright canceling purchases, according to a survey by CIO Executive Council.
• Most companies who provide credit to tech-buyers are in deep trouble. CIT Group, KeyCorp and others are taking write downs.

What this means is that companies like IBM, Oracle and Cisco Systems will have to open up their coffers to provide vendor financing if they want to keep their revenues growing. If these giants are smart, they could put the credit crunch to their advantage and grow their market share at the expense of some of the less liquid competitors.

Related:

• Will the Credit Crunch Hit Silicon Valley?
• Will the Credit Crunch Help or Hurt Tech Cos?
  

Microsoft today unveiled its next-generation Communications Server product that will allow users to replace their existing phone systems with Microsoft’s software. It’s about time Redmond pushed its VoIP offering further. The product, which goes on sale in February 2009, replaces a PBX system with Microsoft’s VoIP software on a server, allowing employees to make calls to any phone number, to make calls from within Microsoft documents and adding audio conferencing.

The VoIP functionality and integration with Microsoft’s SharePoint product is Microsoft’s answer to the challenge Cisco is offering in the unified communications space. It has some nice features, especially the ability to use presence awareness, VoIP and IM on select mobile phones. Continue »

Earlier this year, when Bill Gates retired from Microsoft, I wrote a post explaining why no one was going to replace Bill and Steve (Jobs) as leaders of the technology. The only person I thought was within striking distance of being the likely replacement was Jeff Bezos, founder of Amazon (AMZN).

Amazon has proved to be a proxy for future trends of web and technology; cloud computing and Kindle being the most recent examples. Today, when I read this quote from him in the New York Times…

“Our willingness to be misunderstood, our long-term orientation and our willingness to repeatedly fail are the three parts of our culture that make doing this kind of thing possible”

…I realized that Amazon would keep pushing the envelope and coming up with interesting ideas and that should make Bezos a lock for the inheritor to Bill and Steve’s crown. His company’s “willingness to repeatedly fail” and focus on the long term is what makes him and Amazon different from others.

P.S. Check out my video interview with Jeff Bezos

Being smart about legal matters can make a huge difference in the value of your company. Each legal decision you make — each strategic partnership, each trademark or patent filing — can add or subtract from it.During the ’90s, my law firm worked with an internet software company whose proposed $400 million sale was stopped dead because of an ill-considered distribution deal it had signed for an Asian market. To the would-be acquirer, the deal was a fundamental obstacle to its own use of the startup’s technology. We eventually fixed the distribution deal, but not in time to save the $400 million deal. It took another 10 years to sell the startup at a favorable price.

Entrepreneurs aren’t typically well-versed in legal issues, and few have deep enough pockets to have lawyers evaluate the implications of every decision they make. That’s why I wrote a book that tells entrepreneurs what they need to know about technology law. As an example, here are five vital legal strategies every digital entrepreneur should know: Continue »