CeBIT Study Finds Surge in Growth, Confidence in Global IT Industry

By Wayne Rash  |  Posted 2014-01-28

CeBIT Study Finds Surge in Growth, Confidence in Global IT Industry

HANNOVER, Germany—How do you know when an industry is growing? When the trade show company putting on the industry’s biggest show has to line up more space. That’s the situation facing Deutsche Messe and the managers of the massive CeBIT trade show here.

At CeBIT's Preview Press conference here, Bitkom president Prof. Dieter Kempf presented the results of a study done by his company that found 85 percent of IT companies expect to see a growth in sales of IT services in 2014 over sales in 2013. In addition, 87 percent expect to see an increase in software spending.

Prof. Kempf told eWEEK that the growth in Europe is very strong, starting with sales in the second half of 2013, with the U.K. and the United States being slightly stronger. He also said that hiring in IT will be extremely strong in 2014, and he said that he expects the demand for trained IT staff in parts of Europe, especially in Germany, to exceed supply. Bitkom is the trade association for German technology companies.

Prof. Kempf said that the strong growth in the IT sector is a part of the rebound in the economy, and also partly due to the growing integration into some critical industries, especially industries such as auto manufacturing. Europe, like the United States, was hard hit by the Great Recession and the subsequent European debt crisis, but is now recovering.

In an interview with eWEEK, Oliver Frese, the Deutsche Messe board member responsible for CeBIT, said that this strong growth in IT as well as a change in focus for the trade show has translated into growth for CeBIT. In a process that began a few years ago, CeBIT has been transformed from a general technology trade show to one that focuses exclusively on information and communications technology. Frese said that a number of companies, including HP, which will have a pavilion of its own for 2014, are expanding their presence. Previously, HP had shared a partner pavilion.

The automobile industry is one of the manufacturing sectors that’s having a major impact on IT, according to Continental AG senior vice president Ralf Lenninger who said that the connected car is only part of the merging of automotive electronics and IT.

Lenninger said in remarks at the press conference that an event called the “Traffic Collapse” is on the horizon in large cities. A traffic collapse happens when commute times exceed 60 minutes—an event that’s already happened in a few large cities.

CeBIT Study Finds Surge in Growth, Confidence in Global IT Industry

Lenninger said that a collapse will have a significant impact on the large cities where it happens, and much of the impact will be economic. He said that the solution has to involve information technology because the amount of data has become so large that it really can’t be handled any other way.

The solutions include systems that compile traffic condition reports from many vehicles to generate crowd-sourced navigation database that helps smooth traffic flows. He noted that while self-driving cars will appear soon, it doesn’t help much if they don’t have the ability to avoid traffic problems.

Because of the demands of the automotive industry, Lenninger said that the IT industry must grow to meet it. He noted that networks in cars already communicate with about 80 computers inside the vehicle. When those cars transmit information to a central traffic database, the amount of data will be so great that a true big data solution will be necessary to handle it.

Frese said that the growing demand for IT products and services along CeBIT's sharper focus on information and communication technology, have combined to support a larger event. He said that the show has grown to the point it now will require 40 halls to house it.

At CeBIT each hall is approximately the size of a convention center on its own. In 2013, 26 of these buildings at the Hannover fairgrounds were occupied by CeBIT. Adding the additional buildings was required in part by larger displays being planned by a number of exhibitors.

The growth in the IT industry is part of a larger economic rebound in Europe and in the United States. British Ambassador to Germany Simon McDonald said in remarks at the conference that the British economy has grown by 2.4 percent, resulting in the largest number of people being employed in the country's history. He said that the U.K.’s Tech City in London is showing record growth as well. The U.K. will be a national sponsor of CeBIT for 2014.

The growth in information technology sales and employment appears to be coupled with a growth in IT hardware sales, although exact figures weren’t available in Hannover because the United States and China dominate IT hardware manufacturing.

Still, even without those detailed hardware sales numbers, it seems clear that the economic rebound is a tide that lifts all boats. This is reflected in the growth of the IT trade show business, especially because many companies see trade shows, as an optional if important expense. Now it seems that companies are opting in on the cost of exhibiting at those trade shows.

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