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Thursday, August 22, 2013

Daily Report: As Tech Industry Shifts, Big Players Scramble to Adapt

Outsiders often think of Silicon Valley as a constantly changing landscape, a place where fortunes rise and fall with the next great idea. Now some of the technology industry’s biggest names are finding out that once you fall behind, it is pretty hard to catch up, Quentin Hardy reports.

On Wednesday, Hewlett-Packard announced several significant personnel changes, along with sharply lower revenue and narrower operating profit margins. It was the latest in a string of disappointing earnings news from big technology companies that has some asking if the industry, after at least five years of growth, is finally slowing down.

“We’re doing a turnaround in not the greatest economic environment,” Meg Whitman, H.P.’s chief executive, said in an interview. “Everyone is trying to position themselves for the new style of information technology. The fittest will survive.”

But the bad earnings news from older, big tech companies does not â€" so far â€" appear to be spreading to more youthful Internet companies like Google or Salesforce.com, which provide their software as a service over the Internet.

H.P.’s news, for example, comes on the heels of surprising plans announced last week to cut about 5 percent of the work force at the network computing company Cisco Systems and continuing issues at Oracle, Intel and even Microsoft.

If there is a common thread among these older outfits, long considered bellwethers for their industry, it is that they are all struggling to adapt to a computing world where people use the Internet on mobile devices like smartphones and tablets. Likewise, the information they retrieve is stored in a cloud of network computers that are used by many companies at the same time.