Silicon Valley casts envious eyes on Europe

After a stormy few years, Silicon Valley startups and old hands are looking with enthusiasm to Europe, where they see markets...

After a stormy few years, Silicon Valley startups and old hands have come to appreciate the stolid virtues of Europe, where customers may be more cautious but are also prepared to stay the investment course.

"The last four years have been some of the most difficult for those in the industry," said Eric Benahamou, chairman of 3Com and PalmOne at this week's Cal-IT Europe forum in London. "But optimism is starting to rise - a new kind of sober optimism."

Although the dotcom slump is behind them, California's IT companies still feel the lingering effects, such as a lack of confidence and investment in the industry. And while more conservative European buying attitudes may not generate the unbridled enthusiasm that marked the dotcom heyday, many industry experts prefer its resistance to technology hype, which forces companies to focus more on providing solid products and reliable services.

What's more, European companies are more open to trying new, foreign technologies and stick with a technology once they have invested in it.

 "US buyers are much more promiscuous," said Allyson Stewart-Allen of International Marketing Partners.

But to break into European markets, US tech companies are advised to show their commitment by establishing a local presence and partners.

"You have to have people in Europe and a genuine investment in infrastructure," said William Archer, president of AT&T for Europe, the Middle East and Africa, who moved to Europe 10 months ago to solidify his company's presence on this side of the Atlantic.

While companies willing to set sensible targets and make a commitment to new markets could have good cause for renewed optimism in the growth of the IT sector, the market turnaround is not for everyone.

"This is not the case where a common tide will raise all boats," said Benhamou, who predicted that security, storage, smartphones, the convergence of voice, data and video and wireless local area networks would drive the market.

Although experts are predicting a turnaround, some IT industry players, particularly from California, are apparently still shaken from the dotcom bust.

"Losses loom larger than gains, so we are not as optimistic as we should be," said Benhamou. "But if we could take a step back and look at where we came from we would feel a lot better today than we do."

Scarlet Pruitt writes for IDG News Service

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