Attacks could worsen tech slowdown

STAMFORD: This month's devastating air attacks on the World Trade Center and

Pentagon could exacerbate an already sharp technology slowdown that caused

software spending growth to drop in the first half of 2001, according to

Dataquest Inc., a unit of industry research group Gartner Inc.

Worldwide spending on new software grew six per cent in the first half of

this year, significantly less than the 18 per cent growth rate posted during all

of 2000.

Dataquest forecast that new software spending in 2001 will grow slightly less

than seven per cent with new license revenue of approximately $77 billion.

"The impact from the events on September 11 will extend and intensify the

economic slowdown impacting the global software industry for the next 18

months," said Joanne Correia, vice president for Dataquest's Software

Industry Research group.

Industries most likely to further reel in spending include airlines, travel,

automobiles, insurance and new consumer personal computer segments, Dataquest

said.

On the other hand, vendors of security, network storage and systems

management and collaboration software could see sales increase as corporations

respond to the attacks by increasing security and data-protection efforts.

The main challenge for large and small software vendors will be to manage

their expenses with enough agility to remain solvent and profitable, the

research firm said.

(C) Reuters Limited 2001.