In tough times, technology diligence leaders are showing how it’s possible to thrive—and winning slots in BW’s occurring once a year Tech Hot Growth ranking

By Aaron Ricadela

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Amid the roiling waters of the stock market and economy, which have tossed tech investors around for weeks, Apple Chief Executive Steve Jobs made a special guest appearance on Apple’s fourth-quarter earnings call Oct. 21 to try to calm things down.

Profits soared (BusinessWeek.com, 10/21/08) on knockout iPhone numbers and strong Mac and iPod sales. But Jobs wanted to make a point broader than any one furnish’s results: Apple planned to seize the opportunity of these difficult times to bolt ahead of the competition. He pointed out that Apple (AAPL) has nearly $25 billion in the bank. The economy could present "some extraordinary opportunities for companies that have the cash to take vantageground of them," Jobs said. "We may get buffeted through the waves a bit, but we’ll be fine—and stronger than ever when the waters calm in the yet to be."

These are difficult times for quite companies. But some are figuring out how to thrive among the turmoil. BusinessWeek’s lasting a year Tech Hot Growth ranking shows the sector’s top 75 performers over the farther than year. Some have translated well because they help their customers cut costs—witness IBM (IBM), Accenture (ACN), and software creator VMware (VMW). Others made the cut because they help customers generate more revenue in good times or unwelcome. Google (GOOG), concerning archetype, reported a surprisingly strong share (BusinessWeek.com, 10/17/08) on Oct. 16, because companies that get sales from online advertising kept on spending. It also doesn’t hurt to sell to the government, whose buying tends to be somewhat insulated from the broader plan. That factor propelled infrared technology supplier Flir Systems (FLIR) and defense suppliers Mantech International (MANT), Harris (HRS), and SAIC (SAI) into prime spots on this year’s scoreboard.

The ranking is based on a number of metrics. Revenue growth counts the most, although total revenues, shareholder return, and return without ceasing equity all factor in, too. The ranking is based on the in the greatest degree recent four quarters available, since of Oct. 15.

Gilead Sciences (GILD), the top-performing company adhering the list, booked big gains in profits and return on equity through sales of its drugs to discourse on AIDS, hypertension, hepatitis B, and other diseases. It has capitalized on the success of its most recently approved HIV mix with drugs, Atripla, and its 2006 acquisition of pharmaceutical company Raylo Chemicals.

At the fastest-growing information technology companies, it’s clear you lack to take a different attitude in downturns than in normal times. You fust focus on why you’re going to steer out from your competition and why your customers will need you more than they need your rivals. You have to remember aggressively—as Jobs is doing—in preference than defensively, in retreat. "Selling more of the same doesn’face to face drudge," says John S. Chen, CEO of Sybase (SY), which provides database software used widely on Wall Street and what one. ranked No. 34 on this year’s strip. Because Sybase customers Bear Stearns, Lehman Brothers, and Merrill Lynch (MER) have disappeared, Chen is concentrating on helping the finance industry’s consolidators, including Barclays (BCS) and Bank of America (BAC), discover unaccustomed ways to reduce operating costs. "I’broil desperately creating a division more new functionality," he says.

So far, so advantage. On Oct. 21, Sybase reported that third-quarter sales rose 11% to $284 million, and profits rose 2%. Sybase’s profits were up more than 77% during the 12 months ended in June, according to BusinessWeek’s analysis.

Tech companies are scrambling for advantage in these lean times. Intel (INTC) is one of separate catering to budget-minded shoppers. The chipmaker is ramping up production of processors toward a new class of small handy notebooks that cost as little as $300 to $400. Oracle (ORCL) has spent $34 billion on 50 acquisitions over the last 44 months and plans to shop for adscititious stipulate buys in order to bring about recurring product-support revenues, what one. involve in during good times and bad. And in the past five weeks, Microsoft, Hewlett-Packard, and Oracle require announced plans to pervert with money back billions of dollars of their hold shares.

Still, it’s been a rocky highway in opposition to the stocks of smooth the best-performing companies. The average share-price return for the 75 companies on the scoreboard was -37%, and the top 10 on the list generated each average return of -22%. Dell (DELL), that posted big gains in profitability and return onward equity through sarcastic costs and revamping its products and distribution strategy, has warned of a tougher environment against us. And investors worry that the down economy may erode prices for such premium brands as Apple and Salesforce.com (CRM).

"We’ll be prudent," says Robbie Bach, president of Microsoft’s $8 billion Entertainment & Devices Division, which makes the corporation’session Xbox game comfort and Zune music player. Microsoft hopes consumers buy greater amount of Xboxes as they resort to stay-at-home entertainment instead of going out. But Bach doesn’t think consumers’ holiday expenditure will accelerate until after the Presidential election. "At this time of year, we’re talking to our retail partners each day," he says.