UK technology companies can weather the economic storm if they are financially disciplined, do not abandon research and development, and focus on products that customers want, according to senior IT industry figures.
A Technology Insights report published by consultant Ernst & Young has highlighted resounding optimism among 10 of the UK's technology elite - including Oracle, Intel and Autonomy.
Despite the continuing fallout from the dotcom collapse, all of the report's respondents expect technology to continue to drive fundamental changes in society. Most see wireless as the lynchpin technology in this transformation.
But opinions remain divided on how long the current downturn will last, with the most optimistic predictions anticipating an upturn in early 2003.
Whatever the timing, respondents are unanimous that even when the market recovers, the industry's growth will be nowhere near its rate in the late 1990s.
"As far as recovery is concerned, I would err on the side of caution," said Nick Powell, technology partner at Ernst & Young. "Companies are quite bored with technology itself. They now want to find out what this technology they've spent so much on can do."
Customers are going back to basics and increasingly expect suppliers to demonstrate clear financial benefits of their technologies.
"In the past it's tended to be a scare tactic that companies will get left behind. But that doesn't work anymore," Powell said.
"Two years ago, there were so many competitors and new developments that you had to decide on a vendor and go for it. Now making no decision is an option," said Oracle UK managing director Ian Smith.
Brian McBride, vice president at Dell, said customers "are not looking for another big technology craze at the moment. Once you have got all the toys - PCs, small slim notebooks, mobile - what you want is a fast and easy way to use them together, especially on the move."
But wireless technologies are expected to revolutionise the industry, facilitating access to information and opening up opportunities for new products and services.
"Too many people have had their fingers burnt with technology investments. Wireless is the technology that could stimulate a change in the infrastructure and hence a change in technology investment," Powell said.
"The general feeling is that valuations will return to sensible levels based on strong management rather than pure speculation.
"There's general enthusiasm that we're at the beginning of a revolution rather than the end, with the internet continuing to change the way we live and work," he added.
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