NYTimes asks if technology can grow bigger and not just older. It also suggests some areas to look forward to:
“Growth was synonymous with tech investing in the 1990’s,” said David Readerman, a senior analyst at Marsico Capital Management. “That relationship has been broken.”
Which markets will prosper? Mr. Readerman, who began his career in 1983 as a personal computer software analyst, just returned from a trip to South Korea, where he studied the frontiers of wireless and broadband technology in a market far more advanced than the United States. Throughout Asia, as well as Europe, the market for high-end mobile phones with cameras, color screens and other features is booming.
Such surging sales, Mr. Readerman noted, helped Motorola triple its quarterly profits, while Nokia reported disappointing results because it could not keep up with the demand for high-end phones. And he pointed to Qualcomm, the creator of one of the main digital cellphone technologies, which reported last week that its quarterly profits jumped more than fourfold. Qualcomm’s technology, known as CDMA, is used in cellphones to send and receive music, video and data services. “When you look beyond a PC-centric view of technology, there are some very interesting opportunities,” Mr. Readerman said.
Other fundamental shifts are taking place. “There is potentially a huge transition from technology being sold as a product to technology being sold as a service,” said Roger B. McNamee, general partner of Integral Capital Partners.
After all, he noted, the popular Web sites for shopping and search are services. The stellar quarterly earnings of Amazon.com, Yahoo and eBay show that the march of the Internet is continuing, despite the dot-com collapse. And the imminent initial public offering of Google is the most eagerly awaited I.P.O. since Netscape sold shares in 1995, touching off the Internet boom. The other notable Silicon Valley offering expected this year, Salesforce.com, also fits the technology-as-service theme. It markets sales-force automation as a utilitylike service over the Internet, instead of a software product.
There is also a basic overhaul of computing under way in corporate data centers, according to Mark Stahlman, an analyst at Caris & Company. The trend involves building more powerful, efficient and secure data centers by lashing together swarms of computers using low-cost microprocessors and clever software that can divvy up work across hundreds or thousands of machines. That vision of virtual computing, Mr. Stahlman said, is being pursued by big companies like I.B.M., Hewlett-Packard and Sun Microsystems and little-known start-ups like Azul Systems, Vieo and Cassatt.
“It represents a huge shift that will play out over the next 5 to 10 years,” Mr. Stahlman said. “Things are up for grabs in that market, and there is plenty of opportunity.”