The Tech Investor's Guide to 2009

More Clouds to Form

Cloud services, which offer computer power and storage via the Internet, will make their mark in 2009 as users struggle with shrinking tech budgets.

Even the Department of Defense has rubber-stamped cloud technology, which is championed by the likes of Hewlett-Packard(HPQ Quote) and Google(GOOG Quote).

Storage specialist EMC(EMC Quote)also is getting in on this act, as are IBM(IBM Quote), Sun Microsystems(JAVA Quote), and Microsoft(MSFT Quote), which recently unveiled a cloud-based version of Windows.

However, cloud computing is not without its challenges, and was recently cited by Cisco(CSCO Quote) as one of security professionals' biggest headaches.

Outages, such as those suffered by Amazon's(AMZN Quote) S3 offering, also have focused attention on the reliability of cloud services, not to mention negative comments from detractors such as Oracle's Larry Ellison. The technology will nonetheless be a big part of 2009.

H-P to Blaze a Trail

Few, if any, tech companies will emerge from the economic crisis unscathed, although H-P is blazing something of a trail for others to follow.

The company beat Wall Street's revenue estimates in its recent fourth-quarter results, largely thanks to its booming services business.

H-P, which has $10.3 billion in cash, also is earning a reputation for tight expense control and expects to shave $1 billion off its expenses through its ongoing integration of services giant EDS.

"Though macroeconomic conditions are likely to remain very challenging, we believe HP will effectively manage expenses, expand operating margins and drive EPS in Fiscal 09," wrote R.W. Baird analyst Jayson Noland, in a note. "We continue to recommend HP as a diversified, well-positioned player with attainable cost cutting improvements through F'09."