President's Tech Adviser, CEOs Offer Mild Optimism At CeBit

But at an executive forum two days before the official launch of CeBit, he and a handful of CEOs assembled here for the ICT World Forum somberly acknowledged that there's no end in sight to the slowdown in the high-tech industry.

"Information and communication technology are having a profound effect on the lives of people throughout the world--governments, business leaders and consumers--but the transformation of societies around the world has more to go," said John Marburger, director of the Office of Science and Technology Policy for the Executive Office of the President of the United States. "I'm optimistic about the information revolution, but the current situation is very fluid."

The IT industry's grim outlook--an all-time low in technology spending, global recession and imminent war--permeated the halls and the damp mood at the Hannover Congress Centrum here on a cloudy, gray day, where government leaders and high-tech CEOs tried to put a positive spin on Web services, business applications and 64-bit computing. And it didn't make things any easier to sell that message on a day when German networking giant Deutsche Telekom posted a $27 billion loss for its 2002 fiscal year.

This year, CeBit's attendance is projected to be 300,000, down sharply from around 500,000 in prior years, according to CeBit officials. Ernst Raue, a member of CeBit's managing board, said the "political situation" between the United States and Iraq and the threat of war cut the number of Americans willing to hop the pond this year.

Still, James Hall, a managing partner at the London office of IT consulting firm Accenture, claimed that a pot of gold lays beneath the global economic uncertainty.

"We're going through the worst period of tech spending in my 26 years in this industry, but there's a great deal to be optimistic about," Hall said in a presentation. "When we look back on this period, we'll find that in 2003 we're only scratching the surface of the application of technology. The extent of technology to business over the next five years will overwhelm everything that's happened before."

At a midday roundtable, Advanced Micro Devices CEO Hector Ruiz said that although telecommunications giants worldwide are struggling, increasing network bandwidth and decreasing memory costs will fuel a new generation of 64-bit, data-intensive applications and connectivity. But he couldn't say when that generation would arrive.

"The only detail missing is timing," said Ruiz, whose company's semiconductor concern operates a factory in nearby Dresden, Germany. "When the industry recovers, we'll start where we left off--with ERP and CRM applications, but now compounded with business intelligence, analytics and data security."

Thomas Ganswindt, group president of Siemens Information and Communications Networks, said carrier customers and service providers are seeking a better return on investment, not an exit from the technology marketplace.

"We are in a telecom winter," Ganswindt said, disputing reports that the telecom industry is now in an ice age. "The business models are changing. To meet the crisis, enterprises must focus on more efficiency and less-complex networks."