When I started the InformationWeek 100 index 10 years ago, one of the rules I created was that no stock could drop below $5 for more than a quarter without being replaced. Very few exceptions have been made over the years. Unfortunately, this year's InformationWeek 100 list shows many stocks at less than $5.

The list is truly astounding and isn't limited to just fly-by-night outfits. Companies include Akamai Technologies at 90 cents, Ariba at $1.53, BroadVision at $1.79, Gateway at $2.97, Interwoven at $2.10, i2 at 69 cents, Legato at $2.28, Lucent Technologies at 99 cents, Manugistics at $3.84, Nortel Networks at 67 cents, Novell at $1.96, and Sun Microsystems at $2.94. Some market leaders are getting very close, including EMC ($5.79) and BEA Systems ($5.19). No wonder most of us have stopped looking at our portfolios.

Clearly, I've had to make more exceptions regarding removing companies from the list this year than ever before. There are few new companies that could take the place of those that are struggling. This doesn't mean innovation is dead. New ideas occur all the time, but few new companies are going public. This is normal during a downturn.

Still, the equity capital markets eventually will cycle back -- under more normal circumstances, one hopes. Newer companies may actually have a reasonable level of sales with the associated profitability before going public. They'll have more customers and the management teams will have better operational skills. And some of them may stick around for a while. Pricing at initial public offerings will likely be more rational and consistent with normal historical financial metrics such as price to earnings. Business-technology managers will have more confidence in the newer companies and value their longer-term outlook. Employees will appreciate the durability of the businesses because they'll be expected to survive through up and down markets.

In addition, with improved capital markets, company management teams may appreciate the value of their stock because it will have more tangible value for the long term. When they decide to use it for currency to buy another company or product, they might seriously consider whether it's in the shareholders' best interest to use cash or equity, noting that the cost of equity is usually much higher than the cost of cash. Governance on boards will improve and board members will be independent. Board members will act virtuously on the shareholders' behalf at all times and hold management accountable for their actions.

We may not get to this utopia, but in the next growth cycle, we'll get closer. Investors and IT managers need to hold companies and management more accountable at every level. It's important that we as customers and investors have sustainable businesses. We have to put our money behind management teams that think of their businesses and customers with the long-term view in mind. Only in this way can we create lasting shareholder value. Otherwise, we'll look at a technology universe that has shrunk to a short list that includes only the most recognizable names such as IBM, Microsoft, and Oracle.

William Schaff is chief investment officer at Bay Isle Financial LLC, which manages the InformationWeek 100 Stock Index. Reach him at bschaff@bayisle.com.