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Down Is Not Out

The pillars of IT are cracking. The question is: Are they crumbling too?

If you scan the news, it's easy to get worried about the futures of firms like CA, McData, and Sun. Despite years as leaders in the IT software and/or hardware space, these are clearly companies at a crossroads.

The challenges facing each are different. CA, an IT software powerhouse, was burnt by a $2.2 billion accounting snafu and subsequent accusations of fraud against ex-CEO Sanjay Kumar. The company faces a range of woes as it struggles to rebuild, including executive burnout and heightened investor scrutiny. (See McData Trails Switch Rivals.) And as I mentioned in a recent blog, it's likely that customers will question their commitment as new problems emerge.

Fibre Channel switch maker McData showed substantially lower revenues last quarter than rivals Brocade and Cisco. (See CA Delays Earnings Report.) But its relative tardiness in delivering 4-Gbit/s wares appears to have shortened its stake in this new market.

Sun, which plays in a range of IT hardware, software, and services segments, is perhaps the most worrisome of the chipped IT icons. Here is a company facing a crisis of confidence in its fundamental direction. (See Sun Ships Little, Talks Big, Sun Takes Action Amidst Concerns, and StorageTek Users Voice Support Fears.)

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