Tech & Biz

IT Fallout of the Wall Street Crash

by Jordan Yerman | September 21, 2008 at 06:29 am

247 views | 15 Recommendations | 4 comments

Wall Street's banking giants seek out the best computer equipment and the most robust networks that (lots and lots of ) money can buy. Now, as Lehman Bros and Merrill Lynch prepare for takeover, their IT infrastructure is their only truly viable asset, at least on paper. As for th human element, one should probably prepare for layoffs.

According to specialist website Datacenterknowledge.com, Lehman Brothers' two data centres were central to the deal in which Barclays paid $1.75bn to acquire most of Lehman's North American operations. The data centres and Lehman's headquarters building 'accounted for $1.5bn of the deal's value, with the British bank paying just $250m in cash for Lehman's North American investment banking and capital markets businesses,' it said.

Meanwhile, the companies that supply such infrastructure, from the computer manufacturers themselves to the contractors and consultants that build out the networks, will have to get used to a shallower client pool.

The waves generated by Wall Street Crash 2.0 will also wash up on very distant shores. Expect to see them in Bangalore, for example, and other Indian centres that have ridden the boom in outsourcing of IT support. As Western institutions disappear or merge, there will be a need to liquidate or consolidate the service contracts they have with Indian companies. So service businesses that looked rock-solid six months ago are in for a turbulent time.

There may also be a larger window for open-source solutions for some of these networks as well, though I don't think that that will happen soon: IT folks like it, but the ones who sign off on network changes tend to like their IT products shrinkwrapped.

The article above also touches on cybersquatters' lunge for presumed merger-corrected bank URLs.

0 See all footage | View Slideshow

Share: email story | add to any | | facebook | stumbleupon

recommend This comment thread is now closed

Karen Hatter

flagged this story as Good Stuff

at 07:55 on September 21st, 2008

Jordan, good stuff.

Rhonda J Mangus

flagged this story as Good Stuff

at 08:10 on September 21st, 2008

jordan, I like this story. It's good stuff.

panzerlawyer

at 08:25 on September 21st, 2008

Great story. You write a lot of great stories. I'll be watching you.

jocarnell

at 02:14 on September 22nd, 2008

Could Open Source drive a wedge into the big institutions now, probably not but it would be good if an economic downturn could drive down the reliance on Microsoft.