Thought for the day: It's not all gloom and doom

Technology has had a tough time over the past few years, but even self-confessed cynic Simon Moores is cheered by the first...

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Technology has had a tough time over the past few years, but even self-confessed cynic Simon Moores is cheered by the first glimmers of recovery.




Every cloud, I'm told, has a silver lining, but optimism has been in short supply for any of us working inside the IT industry.

As a fully paid-up prophet of doom, I've been warning readers that the recession in the technology sector is still far from over and have found very little to make me even mildly optimistic about the future, until now that is.

Perhaps it's something to do with spring and more hours of daylight but, quite suddenly and unexpectedly, several of the bellwether technology companies have issued results that suggest the industry is slowly crawling its way out of the dark pit into which it fell when the internet bubble burst almost exactly three years ago.

At the time, I was playing an imaginary stock portfolio on a TV investment show and had seen my £100,000 virtual stake quickly turn into £478,000 within two months of picking the likes of Red Hat, Silverstream and QXL.

Around the same time, I decided that the technology sector was trading far too high and so I jumped out of both virtual and real stocks in what turned out to be lucky timing. That same £100,000 TV portfolio is worth less than £5,000 on today's market, which comes as no surprise if you've been following the value of your pension fund lately.

This month, however, I'm seeing encouraging evidence that at last businesses are prepared to start spending money on IT once again. This isn't characterised by a dramatic leap in company results but rather by signs that on a project-by-project basis business is increasingly prepared to say "yes" to a proposal instead of "no".

Given the decline in global markets since this recession began, there's a very long climb ahead towards anything approaching the profitability of the past.

It's more than likely that business will never lavish as much on its IT ambitions as it was prepared to do in the past, perhaps with government as the single exception, as it's less accountable to its shareholders than the directors of real companies looking for a return on investment.

So there you have it. Simon Moores, officially rated as one of the UK's most cynical columnists, is suddenly encouraged by what looks very much like the first signs of recovery in this most battered of all sectors.

It's far too early to celebrate for the survivors and, for thousands of small IT businesses in administration, it's far too late, but let's wait for the next set of results, later in the summer, for Dell, IBM, Cisco, HP, EMC, Intel and Microsoft, and see if the trend remains a positive one.

If it does, then perhaps the first months of 2004 will finally see the end of the worst technology recession that I can remember in the past 20 years.

What do you think?

Can you see any signs of recovery for the IT industry?   Tell us in an e-mail >> reserves the right to edit and publish answers on the website. Please state if your answer is not for publication.

Setting the world to rights with the collected thoughts and opinions of leading industry analyst Dr Simon Moores of Zentelligence.

Acting globally, Zentelligence (Research) advises governments, suppliers, business and the media on the evolution, application and delivery of leading-edge technologies and specialises in the areas of eGovernment and information security.

For further information on Zentelligence and its research, presentation and analyst services visit

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