IT Industry Gaining Economic Traction

Participants of tech trade show CeBIT discuss what to expect in the next stage of the tech sector's evolution

ceBIT America 2004"Tell everyone to stop saying there is a 'tech recovery'", said Tom Henderson, managing director of Extreme Labs and the opening speaker at the Media Analyst's Preview on May 25 at CeBIT America. "We were not sick", he went on to explain, "it is just part of the evolution of the industry." And with that, evolution became the key theme of the meeting.

Following Henderson, Craig Mathias, principal of the Farpoint Group, postured that innovation is still very much alive in the industry and driving the evolution forward. Holding up OQO, Inc.'s model 01 Ultra Personal Computer, a pocket-sized, fully-outfitted, Windows-based computer and communications device as an example of such innovation, Mathias dived into the strongest current of evolution affecting the industry-the wireless boom.


  Describing wireless as the force that will change the industry as we know it, he pointed out several trends that are bringing about that change: First, people are coming to take the wireless world for granted -- they just expect to be able to be connected from just about anywhere. Second, consolidation among cellular vendors will provide customers with wider, better and cheaper services. Additionally, security, TCO and ROI issues have been and are presently being addressed.

So where is this leading? Mathias highlighted six trends that will define the future wireless world:

• Ubiquity -- with inter-system handoffs

• Broadband power -- with over a dozen different technologies being available

• VoIP -- allowing wireless functionality on all systems

• End-to-end security -- with encryption

• Wireless meshes -- micro and sensor meshes

• Service convergence -- but with technology divergence

But, Mathias cautioned, this may still take longer than we think.

Looking at other factors driving IT at this juncture, Crawford Del Prete, senior vice-president of hardware and communications for IDC took the stage to outline several overall trends:

• Business investment and IT investment have become inextricably linked and will continue to be so -- with a 23% investment rate on the part of business in general.

• In the developed world, the increasing ratio of dependents to workers in the workforce underscores the need for productivity growth and therefore a relentless need for IT.

Focusing specifically on "technology megatrends", Del Prete identified the following as key factors:

• Miniaturization -- especially in data storage

• Mobility -- in all types of communication devices Internet access-reaching 1 billion by 2007

• Broadband ubiquity -- making up 50% of all connected households by 2007

• VoIP -- driven by consumer conferencing and video IM applications

• Embedded explosion -- as underscored by RFID technology

Del Prete went on to forecast total global IT spending as rising between 5-6% in the period 2004-2007.

And what does this bode for the industry in the future? "Bet on infrastructure", advises Del Prete, "servers, storage, broadband and management tools; the components that will comprise the network of the future."

By Bill Sell from CeBIT America

Before it's here, it's on the Bloomberg Terminal.