Fiorina: IT dip is not due to cyclical trends

The IT market is not down because of cyclical economic trends but because of changes in customer requirements that are here to stay, HP Chairman and CEO Carly Fiorina said Tuesday.

AMSTERDAM – The IT market is not down because of cyclical economic trends but because of changes in customer requirements that are here to stay, HP Chairman and CEO Carly Fiorina said Tuesday.

Fiorina brought her “return on technology” theme to Europe in a keynote address at HP’s ENSA @ Work storage event here, hoping that IT buyers will spend their tight IT budgets with the Palo Alto, Calif., vendor. She talked about the same topic in November in a keynote at the Comdex trade show in Las Vegas.

“Customers now realize that it is not the glamour of technology that is most important; it is return on technology that is most important,” Fiorina said. Return on technology is a play on the phrase “return on investment,” which is on the minds of many buyers today.

“We all know that this is a tough IT market, and I think that a lot of the commentary has evolved around a cyclical economic environment… The market trends today are not driven by cyclical economics. They are driven as much by changes in customer requirements. That means these are long-lasting changes in the economy,” she said.

Still, the HP head said she is “more hopeful and more optimistic” than she has ever been about the industry, even with war, depression and terror on the minds of many.

“We are actually not at a crossroads. We are on a path to the future – and that path simply requires us to take one step at a time,” she said.

Customers are no longer interested in “hot boxes and the latest killer apps,” but want to lower their technology costs and align IT with business requirements. HP can offer that, Fiorina told a record 3,970 attendees at the company’s annual European storage-focused event.

“We hope to be, we aim to be, we are investing to be the company that helps you get more out of your IT investments,” Fiorina said. “Smart application of technology increasingly will determine winners from losers.”

The pitch is the right one to make, said Robin Burke, a France-based principal analyst with research firm Dataquest.

“During the boom years people would spend on anything, the newest possible technology, whether it was proven or not. Now what Fiorina says, which is true, people buy the stuff they need to stay in business and to make their business grow,” said Burke, who attended the keynote.

Josh Krischer, a Germany-based vice president and research director for Gartner, agreed.

“The market is now at the normal size, it is not inflated anymore. What is normal is the market situation today, not the situation two years ago when people were running after fashion,” said.

Both Burke and Krischer are impressed with the high number of attendees at the ENSA@Work conference, which in 1998 as a Compaq event drew only 100 people to a conference room in Nice, France.

“The number of participants here is quite amazing; it means storage is on top of the user’s agenda. This is something Gartner has been saying for a long time and it is now proven by the turnout here,” Krischer said.

Fiorina’s keynote address was on the mark, said two conference attendees from different HP partners.

“Customers continue to mature to a point that they really want to get the advertised benefits,” said Ashraf Kullab, a general manager of sales at Jeraisy Computer & Communication Services of Riyadh, Saudi Arabia. Customers buy only when vendors deliver what they promise, he said.

Nikolaj Olsen, a business manager at Websales A/S of Glostrup, Denmark, agreed.

“What I take home from this keynote is that she talked a lot about return on investment,” Olsen said. “This change away from hot boxes and killer apps is especially true for large companies. Small companies still look for the best feeling when buying IT.”

“Fiorina relates technology to actual life really well. It is no more technology for the technology’s sake, it is technology for actual business,” said Kullab.