Government Shutdown: U.S. Tech Market Consequences


However, federal government IT service provider Frontier Technologies is currently being "impacted in a big way," said Jayshree Moorthy, CEO of the Wilmington, Del.-based company.

"So many of our proposals, contracts and everything that should have come out by now are on a big hold and we don't know what's going to happen," said Moorthy. "As a small business, we have lenders that work with us, so they look at us on an annual basis. So, if we cannot record revenues this year, it wont look good for us next year."

If the government isn't paying Frontier Technologies, the company will not be able to pay its suppliers and distributors, said Moorthy.

"It's going to be down from the government all the way down to the suppliers," said Moorthy. "The biggest fact is that everybody somehow can make it, but us small businesses, we get scrutinized by everybody, not only government but lenders and creditors, so it makes it very difficult."

According to Moorthy the entire tech industry might not have cause for major concern as a whole; however, the impact of the shutdown brings concern over time.

"From my standpoint, if this continues, it will be disastrous and impact us all," said Moorthy. "We don't want to look bad on paper; our ratings go down and we are always being judged. So if we don't make our payments, it is going to be tough on our credit, so we are always trying to protect that."

Although the tech sector faces declines in the fourth quarter and there will be less IT spending, the industry will stand strong, said Moorthy.

"Regardless of what you say and what you do, the federal government's IT tech market is still huge and won't really go away," said Moorthy. "It may have come down from $150 billion to $100 billion, but there is a lot of support and voice for small businesses. If we want to stay competitive as a country, we need to be on the leading side of technology."

NEXT: Shutdowns Bound To Occur And VARs Must Innovate Businesses To Keep Up