How are you viewing the overall market at this point in time?

Global markets today appear to be shaking off the recent unprecedented withering of the financial system and are looking for an upturn. But is it sustainable or is it a short-term event? So far, a string of drastic actions by the Federal Reserve and the Bush Administration has yet to turn around a bunker mentality. Banks fear lending money to each other and to their customers. Businesses are reluctant to hire and boost capital investments. Consumers have hunkered down.

All the economy's problems are feeding off each other, creating a vicious cycle that Washington policymakers are finding difficult to break. Even if the turmoil gripping Wall Street were to let up and badly shaken confidence in the banking system fully restored, a "broader economic recovery will not happen right away," to quote Fed Chairman Bernanke.

In what ways does this inform what the technology industry may have in store?

Obviously, the technology industry is not immune to the current economic downturn. Companies in the technology groups will not only be impacted by the downturn, but overall technology spending may also be curtailed significantly going forward. While lower prices on consumer electronics may help carry the tech industry through a difficult holiday shopping season, corporate spending on computer servers, PCs and business software is entering a period of slower growth that may last well into next year. The impact on businesses is also not encouraging: Forrester is projecting that overall business information-technology sales will grow 5.4 percent this year and 6 percent in 2009, compared with 7.2 percent in 2007.

Generally speaking, companies in the tech sector are expected to be impacted negatively, not only from a lack of credit availability to finance their letters of credit, but also from their customers who will have an increasingly difficult time to finance their purchases from these companies. This implies that tech companies with high debt ratios may have a difficult time, while those with high net cash in their respective balance sheets may be able to sustain the credit crunch. In other words, stay away from companies that are highly leveraged.

So give us an overview of the software industry, as you see it.

While software stocks have suffered in kind with the market recently, we believe they generally represent a compelling opportunity, even if we are in a recession, especially relative to other technology sectors.