CEBIT - Cebit execs see economy picking up

SAN FRANCISCO (03/17/2004) - Jorg Schomburg, managing director of CeBit Events Worldwide, the organization that oversees the CeBit show in Germany and subsidiary shows around the world, and Mark Dineen, managing director for CeBit America, spoke recently with InfoWorld Senior Analyst Wayne Rash about the signs they see that the IT and telecom industry is experiencing an economic turnaround.

InfoWorld: The high-tech economy has been making life difficult for the tradeshow industry. Can you describe what you're seeing in terms of an economic turnaround worldwide?

Schomburg: As far as I see, at least in North America and Europe, since the beginning of January it seems that we have reached rock bottom of this turndown in the economy and all signs and all indications are that for 2004 there will be an upswing. After the Y2K problem, lots of investment was made. And then when the economic downturn came, lots of investments were stopped. Now we have a backup of waiting investments which cannot (be) postponed any longer anymore, and this starts to drive the IT industry. I see this (in) my own company: We postpone IT investment and telecom investments for at least 2-1/2 years, but we now must invest. So we are very confident that the industry is picking up.

InfoWorld: What areas of IT seem to be rebounding the best?

Schomburg: Security is one of the high (volume) topics. More and more companies are now ready to buy IT security, data security devices, and software. Secondly, mobile networks (are) doing pretty well. What we see, especially here in Europe, is that the small and medium(-size) businesses are more ready now to invest in IT technology. This was not so in the past; the older generations who were the owners of these small and medium-sized companies were not ready to invest in this technology because they still kept to the old way of doing business. But now the younger people are taking over and they are much more open minded to invest in this industry. In central Europe, 75 to 80 percent of the total gross domestic product is coming from SMEs (small and medium-size enterprises). We can see that there's a huge untapped market for the future, and this will be one of the driving forces, in my opinion, in the next three (to) seven years.

InfoWorld: Are you seeing those same trends in the United States?

Schomburg: Yes. The United States is a little bit more advanced in this field because the SMEs were more open minded than in old Europe. So you are at least one or two steps before us, but hopefully we will be picking up.

InfoWorld: One of the metrics of overall health in the technology industries is attendance at shows such as CeBit. What kind of impact is this economy having on CeBit?

Schomburg: In the past two years we lost attendance. We had around 800,000 in the past, but due to the bad economic situation, due to the SARS problem, due to the turmoil in the Middle East, and followed by traveling restrictions, we suffered quite a lot in the past two years. This did not only happen to CeBit, this happened to all European tradeshows and also to most of them in North America. But we have the feeling that the number of attendees starts slowly to grow.

InfoWorld: What do you anticipate your attendance to be this year?

Schomburg: If it comes to the same result as last year, let me say 500,000 (to) 600,000 would be satisfactory for us. For next year, we expect again to return to a level of 600,000.

InfoWorld: CeBit has spawned CeBit America. Was this done to better tap the U.S. technology market or to help overcome travel restrictions?

Dineen: A lot of the mainstream shows were not faring as well any longer, and through research prior to launching this event there was (found to be) a need for a better quality and more verticalized event, but yet not going specifically to the singular vertical shows only. So a combination or a hybrid of a horizontal show, mixed in with a qualified vertical market audience, based on high-end enterprise companies. We classify enterprise, for CeBit America, as 100 employees or larger. We're not looking at the small business and the consumer, but strictly qualified business, qualified attendees for an enterprise-type marketplace. The request was to do a strong event along those lines on the East Coast marketplace because that's where the majority of the enterprise and major corporations are housed.

InfoWorld: What has been your experience regarding the IT economy?

Dineen: I agree with what Mr. Schomburg said. The buyer is definitely becoming much more involved. We are seeing interest in our show. People are looking to start opening up their purses a little bit. It's getting to the point where they do have to start bringing new product and new applications to their companies because a lot of them have been sitting with the same programs for years now and they just have to upgrade no matter what. Not to the extent where they were upgrading five years ago where they were buying brand-new applications and brand-new systems every few months and bringing in whole new applications, but nonetheless they have to start moving forward.

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