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To: Lizzie Tudor who wrote (14429)	10/21/2002 3:20:27 PM
From: stockman_scott	Respond to of 57684

Could Tech Slump Be Near The End? By Brian Deagon Investor's Business Daily Monday October 21, 10:50 am ET The tech industry's downturn may be nearing an end. Quarterly sales and earnings reported by large technology firms in the past week suggest as much. The bad news, though, is there's nothing in site to suggest the industry will ever return to a time - peaking in '99 - when billions of dollars were tossed about like candy and the nightly news routinely talked of soaring IPOs. The odds of a recovery in technology between now and June have improved. That's partly why the stock market has been on a rally for more than a week. But analysts warn that unwanted surprises may lurk around the corner. "We're still likely to see some massive restructuring announcements and perhaps major players exiting certain business," said Pip Coburn, global technology strategist at UBS Warburg. Comments from big tech companies in the past week presented a mixed bag. IBM Corp. fueled the tech rally last week when it beat third-quarter views and reaffirmed fourth-quarter guidance. That was preceded by an upgrade of IBM by brokerage Lehman Bros., the first time in two years it gave a computer company its No. 1 buy rating. But the tech news was not upbeat all around. Intel Corp. missed third-quarter views and said the fourth quarter didn't look good. "The economy is still not recovering in our industry," Intel complained. Finally, Earnings Growth Microsoft Corp. beat expectations but said its current momentum may not be sustainable. "The global economic outlook continues to be uncertain," it said. EMC Corp. succinctly described the conditions in its business, data storage, as "brutal." Motorola Corp. showed a profit, but scaled back sales and earnings guidance for the fourth quarter and 2003. Overall, though, a slight sense of optimism has poked through the surface. Tech earnings, on average, are up 14% in the third quarter from last year, says First Call Financial. It's the first time in six quarters that an average of tech company earnings from the S&P 500 index has shown growth. And First Call projects a 24% growth in earnings in the fourth quarter. Earnings growth had been shrinking since the beginning of 2001. Earnings were flat last quarter and turned positive since then, according to First Call. Tempered Optimism In terms of sales, they are expected to fall, on average, about 2% in the third quarter from a year ago. But it's the third quarter in a row that the decline in sales has slowed. The worst quarter was last year's fourth, when sales were off 20% from the year before. "The tech recovery is coming at a glacial pace. It's sure not the V-shaped rebound that many expected," said Chuck Hill, director of research at First Call Financial. Hill said many pundits had set their expectations far too high. Analysts have slowly tempered their optimism, especially now that most tech firms say they can barely see beyond the latest quarter. "This is not your business-as-usual recovery," said Hill. "Our crystal ball is fuzzier than it normally would be." Business spending, after falling off a cliff in 2001, is beginning to grow again, albeit slightly. It used to be that tech budgets grew on average about 11% a year. Current surveys suggest that over the next year, business spending on tech might grow no more than 5%. Overall, the good news may be that the bad news is not as bad as many secretly believed. As a result, investors have crept back into tech stocks for now. Price Wars "Investors have been so bearish on tech that even just a little bit of good news makes them want to jump back in," said Coburn. By and large, though, industry watchers think tech firms have a lot more work to do. "I still have a skeptical view toward tech," said Andrew Hodge, group managing director at DRI-WEFA, a unit of Global Insight Inc. He points out that many tech firms sell goods so cheaply that it's hard to make a profit. "Competition and price wars have always been a problem for this industry," he said. Hodge does foresee a recovery in the computer sector next year, but not in telecom, which is the second largest buyer of technology. "Telecom looks like death," he said. "They made this huge overinvestment in infrastructure and now they are having a price war in voice, including wireless." biz.yahoo.com

To: Lizzie Tudor who wrote (14429)	10/21/2002 3:28:44 PM
From: stockman_scott	Read Replies (1) \| Respond to of 57684

15:06 ET SEBL Siebel Systems may not see near-term benefit from Microsoft pact - Thomas Weisel (6.56 +0.36) -- Update - Thomas Weisel believes that MSFT got the better end of the deal with SEBL announced today (8:35); in the short-term, firm is concerned the partnership will delay SEBL purchases, as customers now need additional time to evaluate the impact of the partnership and the technology requirements that it entails; while SEBL does get some short-term marketing dollars, firm says the revenue benefits from the partnership are at a minimum two quarters out. -briefing.com

To: Lizzie Tudor who wrote (14429)	10/21/2002 3:43:26 PM
From: stockman_scott	Respond to of 57684

The Incredibly Quiet B2B Resurgence Lou Hirsh, www.EcommerceTimes.com Fri Oct 18, 1:35 PM ET There is life after the bubble for technology and portal providers that serve the business-to-business (B2B) sector of e-commerce. But to enjoy that life, vendors must adjust to a new landscape in which spending and cost-cutting priorities have shifted dramatically in response to tough economic times. The good news for vendors is that there is a proven need for B2B offerings that can boost the efficiency of processes and cut costs. However, expectations for what the technology can realistically achieve have become far less grandiose. Bite-Size Projects According to Gartner research director Judith Rasell, companies now tackle technology improvements in much smaller increments than in bygone days. Instead of committing to major capital outlays for technology that will produce results over a five- to 10-year period, companies have shortened their implementation time span to six to 12 months, and ROI expectations have been adjusted accordingly. By dividing implementation into smaller-scale projects, companies clearly are seeking to deflect the risks of new investments in technology. For vendors, that means big-ticket contracts will be few and far between; instead, companies will have to make do by winning one project at a time. "It's become much more realistic and pragmatic," Rasell told the E-Commerce Times. "It's not being driven by market hype anymore." Plenty of Potential For the foreseeable future, there probably will be plenty of new business for companies that specialize in two types of B2B software. One type includes e-procurement and buy-side offerings, and that field is led by such companies as Ariba (Nasdaq: ARBA - news) and Commerce One (Nasdaq: CMRC - news). The other type focuses more on the sell-side and is led by BroadVision (Nasdaq: BVSN - news), Oracle (Nasdaq: ORCL - news) and SAP (NYSE: SAP - news), among others. On the buy side, analysts noted, several small niche players have established large installed bases but have been struggling financially nonetheless. As in other technology segments, consolidation will remain a distinct possibility over the next few years as some of those companies fall by the wayside or are gobbled up by larger players. Business Opportunities Yankee Group program manager Jon Derome told the E-Commerce Times that in the current climate, there is ample room for both large and small B2B players to pursue new business. However, he added, all companies must be more responsive to individual clients' needs and must be able to deliver rapid ROI. He noted that internal automation projects have been delayed for a long time at many firms, but the moment of truth is approaching. "There are companies out there that have been trying to automate their supply chains for 20 or 30 years," he said. Specifically, increased demand for technology in this area is likely among manufacturing firms that want to streamline processes for tracking production, inventory and shipments. Derome added that companies also will be more inclined to automate their partner relationship programs with other firms. This trend could accelerate as businesses increasingly use interactive (news - external web site), interoperable Web-based portals (news - web sites) to conduct daily tasks. Shifting Tides These developments mark a slow but steady turnaround for an industry in which even major players saw revenues decline significantly during the past two years. Few players -- whether on the procurement or sell-side of B2B -- have remained financially unscathed. "In 2001, both sides took major beatings," said Gartner's Rasell, adding that 2002 has not been much better. To ensure that they are part of the ongoing recovery, she noted, companies large and small have begun repositioning their offerings to meet specific requirements of potential clients. While it is still unclear which companies will be the ultimate victors, experts contend that the future generally looks bright for B2B companies that can adjust to new market realities. For the most part, the cost cuts that once threatened providers are now benefiting them, as companies realize the perks of streamlining internal operations and selling platforms. "Anything you can do to improve the flow of information is going to be advantageous," the Yankee Group's Derome said. story.news.yahoo.com