More than 300 technology chief executive officers and senior vice presidents gathered in Budapest, Hungary last week at ETRE (the European Technology Roundtable Event), one of the premier CEO get together events in the computing industry calendar. The theme of this years conference was ‘Inside the Digital Tornado’, and there were round table sessions on […]
More than 300 technology chief executive officers and senior vice presidents gathered in Budapest, Hungary last week at ETRE (the European Technology Roundtable Event), one of the premier CEO get together events in the computing industry calendar. The theme of this years conference was ‘Inside the Digital Tornado’, and there were round table sessions on the growth of the internet, telecoms and computing, internet telephony, electronic commerce and customer centric computing. Most of the attendees, however, were there to hook up with venture capitalists, seek out new partnerships, or to share gossip.
The keynote speaker of the conference was Jim Barksdale chief executive of Netscape Communications Corp. Following widespread reports in the press of Netscape’s pending demise at the hands of Microsoft Corp, Barksdale was in a combative mood. I want to prove a lot of people who are writing about the demise of the company wrong, he said. While he conceded that Netscape has lost some ground to Microsoft in the internet browser space, he claimed that the company still has a 70% market share. He was also bullish about the company’s future prospects in the wider internet market. The internet is, he said, the fastest growing market of all time and, by the year 2000, he believes that companies will be spending $100bn plus on building and accessing Internet systems. All I need to get is a 20% share of that market to keep being the fastest growing company. It isn’t win or lose. Barksdale also claimed that, contrary to popular belief, Microsoft has strengthened rather than weakened the company, We are a better company because of Microsoft, they are a better company because of us. And he warned his competitors not to become complacent. People underestimate what companies can do under competitive pressure. Nobody saw Netscape coming and no-one is really sure where we are going.
Another chief executive who has reportedly been feeling intense pressure from competitors over the past few months is Eckhard Pfieffer, head of PC market leader Compaq Computer Corp. At ETRE, however, he denied that Compaq is withering under the shadow of Dell Computer Corp. Compaq has been gaining more market share than Dell, he said. Only if we made significant mistakes would we offer them an opportunity to overtake us on the PC side. Furthermore, Pfieffer claimed that with the purchase of enterprise computer vendor Tandem earlier this year, Compaq is now a formidable competitor across the computing spectrum. This year we will be another $2bn larger in revenues … We will be as much of a PC company as we have always been but we will be much more of a computer company. The Tandem deal, said Pfieffer, means Compaq can now compete with ‘anyone’ at the enterprise level. If you take out the printers, Compaq is now a bigger computer company than Hewlett-Packard, he said.
Roel Pieper, ex-chief executive of Tandem Computers Inc and now senior vice president and general manager of Compaqs worldwide sales, marketing, service and support group, also took to the podium. Echoing his new consumer-oriented focus Pieper forecast that, in the future, The IT world will live 98% off consumers.
Echoing that theme, Eric Benhamou, chief executive of networking giant 3Com Corp, was at ETRE to discuss his company’s recent take-over of the world’s leading modem supplier US Robotics Inc. The company’s modem business was not, however, said Benhamou, the primary attraction. What we valued the most was its ISV network and its network access infrastructure, he said. According to Benhamou, consumer networking will be a very big market by the year 2000 and, he said, US Robotics’ strong retail presence will offer 3Com a significant competitive advantage, as will the company’s handheld Palm Pilot computer. The Palm Pilot, said Benhamou, will become the network extension you carry around in your shirt pocket. Benhamou also used ETRE to set the record straight over his involvement with the troubled Apple Computer Corp. Benhamou, who has been massively successful during his seven years at the helm of 3Com, confirmed that he had been offered a seat on the Apple board but turned it down. He said that he was keenly interested in the offer and is a strong Apple customer, user and supporter but declined because he was too busy. Apple is a company which is going to require a lot out of its directors, he said. Asked if he thought Apple would survive, Benhamou only offered a cautious maybe. Benhamou also offered his view on Microsoft’s $150m investment in Apple Computer Corp. In financial terms, said Benhamou, the deal was meaningless, but strategically it was brilliant. For Microsoft it was a low-cost hedging strategy, an excellent defense against the Department of Justice.
A large part of the ETRE conference, unsurprisingly, was given over to discussion on how to realize Europe’s potential as a major technological force. According to Michael Nevens, director in the Silicon Valley branch of consultancy McKinsey & Co, If you encouraged OECD companies to implement best IT practices, it would increase world GDP by 10%. But for this to happen, he said, governments need to enforce pro-competition policies. Large IT companies in Europe are under virtually no social pressure to produce for shareholders. Nor, it seems is academia. According to Nevens, MIT companies (those founded out of research projects at the Massachusetts Institute of Technology) earned $60bn in revenues last year. In comparison, the revenues generated by companies nurtured by European universities was barely on the scale. The buoyancy of the US high-tech sector was borne out by the American Electronics Association (AEA). They said 42 out of every 1,000 private sector workers in the US are now employed by high-tech firms and IT is now the largest manufacturing employer. Employment in IT in the US jumped by 240,000 jobs last year to 4.25 million, with California accounting for 724,000 of those workers. US high-tech good exports totaled $150.2bn last year, just under a quarter of total US exports.