Fric Dean is the ideal high-tech buyer. As chief information officer at UAL Corp., the parent of United Airlines, he presides over a budget of up to $650 million a year. But he also exemplifies a big reason tech is in a brutal, protracted slump that may not end until 2004―if then. Dean's annual budget is down 20% to $525 million a year now, and he says the big spending days are over. "There is no commercial incentive to upgrade computers anymore. The hardware and software guys know it -and they are desperate about it," he says. In the Nineties the airline obediently went along with the constant upgrade cycle that Intel, Microsoft and other tech powerhouses foisted on corporate America. United usually replaced its 15,000 PCs every two or three years. Now Dean says he will do the next big overhaul "in a few years―maybe." High tech is in deep trouble, and that owes to more than the economic downturn. The doldrums will end eventually, but for years to come tech vendors could be hampered by basic changes in how businesses spend $375 billion a year on technology and what they demand from it. Part of the problem is an industry that has innovated to the point of self-annihilation. Hardware and software makers pushed ever shorter prod- uct cycles and provided ever more power for the same or lower price, flooding customers with capacity. But many big customers have gone the opposite way, slowing and extending their own buying cycles and focusing on how to better use what they already own. Perhaps worst of all, some big spenders have lost their lust for the promise of new technology. Amid this customer ennui, no Next Big Thing―the fabled "killer app" that drives every boom―has vet emerged to offset it.
展开▼