It has become a bit of a cliché: really innovative technology comes from garage-level startups. Once a company gets too large, it focuses its energy on keeping its existing customers happy, and loses its edge. But, for the most part, the technology we rely on for getting things done—providing the hardware and networking infrastructure, for example—comes from mature, profitable companies. So, we thought it might be interesting to take a step back and look at what tech companies are among the most successful at marketing products and services that are widely put to use.

Of course, any measure of "success" is inviting argument. Should it be profits, units sold, recent growth? We settled on two measures. The first is the market capitalization, which provides some sense of how the financial community views both a company's current fiscal strength and its potential for future growth. To provide some sense of how much of that is growth potential, we chose the price-to-earnings ratio as our other measure—the higher the number, the more the company's perceived growth potential factors into its market cap.

Defining tech

For starters, a couple of thoughts on companies we've chosen to leave out. One category that is extremely high-tech is the pharmaceutical industry. Either through in-house work or acquisitions, every major pharmaceutical company is now a biotech powerhouse, and relies on some really cutting edge approaches to generating products. Pharma companies are also huge. J&J, Roche, Pfizer, and Novartis are all within the top 30 (3 others are in the top 50), and would have made it onto our list, displacing more traditional tech companies.

Similarly, we're excluding telecommunications providers, even though some of them are equally huge. (China Mobile sits right behind Apple, AT&T is ahead of Google, and Telefonica and Vodafone are in the top-50). They both integrate lots of high-tech products and enable the latest and greatest tech toys, but progress here has been pretty evolutionary of late, and it's hard to escape the sense that they're simply offering pipes for others to send innovation through.

A couple of these are judgement calls. GE and Siemens, for example, would make the list, and definitely have a significant high-tech portfolio. But they're also massive conglomerates that make a lot of industrial equipment, so their market valuation is largely dependent on something other than tech. Samsung may have a significant presence in markets like home appliances, but it plays a major role in the tech world both as a chipmaker and as a seller of end-user products like hard drives, displays, and phones, so it made the cut.

So, who's left?

(All positions are taken from the Financial Times' list for the end of 2009. Market capitalization and P:E ratios were obtained on August 19th, and may not reflect the positions at the start of the year, or the date you're reading this. Currently, both values are relatively low for most stocks, due to recent volatility.)

Microsoft

Market cap: $212.27 billion, 4th overall; P:E of 11.7. The fact that Microsoft has stayed near the top of the heap for so long despite the fact that its stock price hasn't changed much in years is a testament to the staying power of its primary products: Windows and Office. Over the past several years, its Server and Tools group has joined Office and Windows as a steady contributor of profits for the company. These three divisions will ensure that Microsoft won't drop out of the top 10 anytime soon, and the pervasiveness of Microsoft's software means that it provides a backdrop for just about anything that happens in the technology world.

If the Office/Windows/Server trinity ensures that there will be no unpleasant surprises, though, the company has suffered from a dearth of pleasant ones in recent years, which has shifted it's P:E ratio well out of the growth range. The two areas that have shot Apple and Google into the top 10—portable consumer devices and Web services—remain thorns in Microsoft's side.

If those general outlines of the company's revenue are apparent to anyone who is paying attention, some of the specifics can be pretty difficult to figure out. Microsoft's internal organization often results in some odd pairings. For example, Entertainment and Devices includes the Xbox, Zune, and phone groups—but has also played host to the Macintosh software division. The group that registers Windows income, which is undoubtedly large, is saddled with Windows Live services, which will probably take a while before some substantial up-front development costs turn into a steady income stream for Microsoft's cloud services.

Those substantial caveats aside, as of the last financial quarter, the Windows and Business divisions are hugely profitable ($3.1 billion and $3.3 billion in income, respectively), while Server and Tools is pulling in nearly as much revenue, but costs a bit more to run—it produces a mere billion and a half in income from revenue that's only slightly lower than that of these other two divisions. Right now, those billions are floating the Online division, which continues to lose significant amounts of money, and the Entertainment and Devices group, which tends to bounce around being income-neutral.

Over the past few months, Microsoft has famously swapped places with number two on the list, Apple, although the situation remains fluid in the current, volatile market.

Apple

Market cap: $229.68 billion, 10th overall; P:E of 18.9. Anybody who has followed the company's history can remember times when adjectives like "beleaguered" and "insignificant" seemed permanently affixed to Apple. In terms of valuation, though, the company has now cracked the top 10 globally and is shooting towards the top. Although its valuation is typically ascribed to growth potential, the company's ability to keep adding profits through the recession means that it's now solidly in the middle of the pack when it comes to the P:E ratio of a typical tech company. And, as the company's earnings continue to climb, the ratio is actually dropping rapidly.

Even with those numbers, it seems that Apple's recent success has allowed it to have an impact beyond its numbers. We've reached the point where Apple can simply announce its intention to enter a market—take e-books, for a recent example—and trigger a complete reset. It's impossible to separate unreasonable expectations (on the part of everyone—consumers, press, competitors, etc.) from a realistic recognition of the company's marketing prowess and intensely focused management.

Apple tends to focus on unit sales of each of its major products—desktops, portables, iPods, iPads, and iPhones—but its 10-Q form contains a section with dollar figures on these (for its most recent quarter, it was on page 35). Desktops brought in $1.3 billion, laptops $3.1 billion, and iPods $1.5 billion. Two mind-blowing numbers: iPhones and related services were $5.3 billion, over a third of the company's revenue; and the iPad is already worth over $2 billion. Music products and services kicked in another $1.2 billion, and peripherals and software a few hundred million.

The actual income from each area isn't broken out, so it's difficult to know what to make of some of these figures. The company typically says that its music sales do a bit better than breaking even, but in a recent quarter, those were bringing in nearly the same sales that iPods themselves are. Apple has always used its software as a lure for hardware sales, but the relatively small sales figure suggest it could start giving all its software away for free tomorrow, and its bottom line would barely notice it.

IBM

Market cap: $162.14 billion, 17th overall; P:E of 12.1. IBM may have helped to fuel the personal computer revolution, but the number of IBM-branded PCs in existence is steadily shrinking as they retire. Although a major portion of its income comes through consulting now, the company has managed to stay relevant in a large number of areas of interest to the tech community through its open-source work, fabs, supercomputing efforts, and so on—its research labs make regular appearances in our science section, as well.

Although IBM is in some markets with a potential for growth, those are simply too small a portion of the company overall for anyone to consider it a growth stock.

In IBM's most recent quarter, it drew in $23.7 billion, good for an income of $3.4 billion. $5 billion of that came from software sales, like WebSphere and Tivoli; this group also had gross margins of nearly 90 percent. Hardware like mainframes and POWER systems supplied another $4 billion, but only had margins of 36 percent.

The conclusion that IBM is no longer a hardware company becomes more obvious when you start to consider the services divisions. Global Technology Services kicked in $9.2 billion in revenue and Global Business Services $4.5 billion. A large part of the company's earnings release is devoted to describing the amount of service contract income still outstanding, as well. None of this is to say that the company's hardware is completely unimportant. Some of IBM's software is run on its own hardware, and some of its service contracts are met using it. But it's certainly not essential, given that something like WebSphere also runs on Linux, Solaris, and Windows.

Google

Market cap: $150.80 billion, 26th overall; P:E of 20.6. Google has a P:E ratio that says growth, and it's not difficult to see why: two quarters ago, its year-over-year earnings growth was over 400 percent. Although the recession caused Google to cut back on some of the experimental projects that weren't working out, the company can still afford to keep things in beta for years without putting a dent in its overall growth.

To some extent, you might expect that Google's influence would be limited by the appeal of its cloud services. Lots of folks like online e-mail services, but a lot less enjoy editing a word processing document in a Web browser. But the company's tendency to integrate and aggregate means that events like its rollout of the Buzz social service, which inadvertently dragged in a lot of casual Gmail users, can have an overly large impact.

Right now, the company is in a somewhat unusual position, in that it doesn't entirely control what its next major move will be. Judge Denny Chin will get to decide whether Google becomes a book retailer and copyright clearinghouse or not, a decision that could have a very disruptive effect on a number of markets.

Until that happens, Google is likely to continue to be a one-trick pony, with over 95 percent of its revenue coming from advertising. That figure helps make sense out of some of the chaotic collection of services that the company is developing and testing: all of them either put ads in front of users or help Google to index information that enables them to target more relevant advertising. There's no doubt that Google would love to have sold more of its Nexus One hardware and more licenses to its cloud services, but, so far, it certainly hasn't had to.

Cisco Systems

Market cap: $126.61 billion, 34th overall; P:E of 16.8. When most people think of Cisco, they think of the high-end routers that help manage the traffic flows within and between large institutions. But, over the past several years, the company has been making strategic moves that indicate a desire to have access to the consumer market. It has purchased consumer networking company Linksys, the set-top box maker Scientific Atlanta, and is now making noises about wanting in on the hardware portion of the smart grid. In nearly every one of its markets, however, it's competing with a handful of companies that make substantially similar products, which is one reason that its announcements don't attract the attention of some of the companies in the same neighborhood, even when they've been excessively hyped.

Financially, it's been a steady money maker, and its cash reserves substantially outweigh its debt. Still, it's not paying a dividend, its P:E ratio has been on the high side until recently, and there are reasonable questions as to whether any of the markets it's currently in have the potential for sort of growth this ratio implies.

Cisco's 10-Q filing is infuriatingly vague about how it makes its cash. Over $1.7 billion from routers, another $3.6 billion from switches, and then everything else is dumped into Advanced Technologies ($2.4 billion) and Services ($1.9 billion). The advanced group is defined as including "application networking services, home networking, security, storage area networking, unified communications, video systems, and wireless technology." There's no effort made to define services or provide a glimpse into whether any of these segments are more or less profitable.

So about the only thing that can be said is that Cisco's attempts at diversification are generating some sales for the company, but it remains heavily reliant on its core businesses in the realm of high-end hardware.