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CES Has Nothing To Do With Servers  And Everything

The huge trade show in Las Vegas can serve as an indicator of where the high-tech economy is headed.
The huge trade show in Las Vegas can serve as an indicator of where the high-tech economy is headed.First, lets state that the Consumer Electronics Show (CES) is well and truly all about consumer electronics, and among the 2,700 vendor exhibits there is almost nothing related to SMB servers. Even in the sprawling Intel booth the closest thing to server technology was a demonstration intended to show the graphics power of the quad-core i7 processor. (Not that the demonstration wasnt memorable, being a flat, window-sized touch screen that looked and acted like the workstation Tom Cruises character uses in Minority Report.)

But the server arena is an artifact of the electronics economy, of which consumer electronics plays a huge part. So, gauging from CES, Id have to say that the high-tech world is not coming to an end, and so, presumably, neither is the server arena.

The leading indicators are the aisles between the exhibit booths. You could not see any distance down the main aisles shortly after opening, since the crowd was so thick. Thats good. However, you could walk at a moderate pace rather than shuffle haltingly along, as is the case during boom years. So we have mixed indicators.

Then, theres the projections of the statisticians of the Consumer Electronics Association (CEA, sponsor of CES) presented just before the show opened. Consumer spending is a major economic engine, and the CEA figures showed that consumer spending grew modestly in Q1 and Q2 2008 (each quarter showing an annual rate of about 1 percent) but the graph plunged in 3Q08, falling -4 percent. But Q408 was an improvement, being closer to -3 percent, and the CEA projects that Q109 will be basically flatfurther improvement, in other words. Quarters after that will be in positive ranges, at least one point above the baseline. By the end of 2010 it may as well be 2007 again, with growth of 4 percent.

In 2009, PC unit sales are expected to rise 5.1 percent, to 29 million. (Revenue may not rise, due to price erosionPC revenue fell 1 percent in 2008 while unit shipments rose 6 percent.) Sales are expected to hit 43.3 million units in 2012.

The netbook/subnotebook category is projected to grow 80 percent during 2009, making it one of the fastest growing product categories. (In case you were wondering, OLED displays are expected to be the fastest growing category, rising 149 percent.)

None of this makes it look like the high-tech world is coming to an end. So while the rest of the economy may be rocky, IT may end up being an island of calm.

At least, we can always hope.

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