Technology companies big and small are seeing sales slump and profits dwindle in the current global economy. Some companies are faring better than others are but many are cutting jobs and looking to tighten up for a rough year.

Some of the largest firms are using the poor economy as a chance to snap up some smaller companies having a hard time in the market. IBM tried to do this with an attempt to purchase Sun, which ultimately failed after an offer to buy the company for $9.40 per share was turned down by the Sun board. Yesterday, Oracle announced that it was going to buy Sun for $9.50 per share in a deal that will be negative for IBM according to analysts.

IBM reported its quarterly revenue and stated that revenue fell by 11%, which was higher than expected on Wall Street. IBM Q1 revenue fell to $21.71 billion from the $24.50 billion the same quarter last year. Analysts had predicted IBM would turn in revenue of $22.56 billion reports Reuters.

Edward Jones analyst Andy Mieder said, "These were decent results in light of the challenging economy. Certainly, the top line is being impacted by the weak economy. IBM is managing the business well, focusing on expense control, and its movement to software and services is clearly evident in the increasing profitability. Net-net we think this is a decent quarter."

IBM reported net profit of $2.30 billion, down 1% from $2.32 billion in the same quarter in 2008. Despite lower profits and revenue than expected IBM was able to turn in profits per share higher than analyst expectations. Profit per share rose to $1.70 from $1.64 the previous year. Analysts had expected profits of $1.67 per share. The increase is due to less shares being offered.

Analyst Peter Misek from Canaccord Adams said, "Short-term bookings look a little weaker than everybody had hoped. That probably means that the next quarter will be mixed. The long-term guide looks solid."

IBM stated again that it would meet its profit projections of $9.20 per share for the full year. CEO Samuel Palmisano said, "We remain ahead of pace for our 2010 roadmap of $10 to $11 per share."

Some analysts are thinking that the IT industry may have reached the bottom. Texas Instruments posted quarterly profits this week better than expectations and offered an improved outlook for the year.

Analyst Ashok Kumar from Collins Stewart said, "It appears that the industry and TI in particular are putting in a bottom for the March quarter."

Analysts don’t expect the new Sun/Oracle combination to affect IBM anytime soon. Wall Street Strategies analyst Carlos Guillen said, "Overall the whole acquisition is negative for IBM. Obviously not being able to have ownership of the proprietary Java programming language, that's definitely a big negative."

Some analysts say that IBM will regret not getting its hands on the Solaris operating system and Java technology Sun owns.