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Low spirits at Cannes tech conference

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CIOL Bureau
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Astrid Wendlandt and Kirstin Ridley



CANNES, France: Concerns about soaring oil prices and terrorism have injected fresh caution into global markets over the last six months, executives and investors said at a technology conference in Cannes.



Telecoms and technology executives networking at the annual ETRE trade gathering in the French riviera resort also spoke of looming price cuts, lengthening sales cycles and mounting competition.



"The marketplace is less optimistic than it was six months ago," Mohsen Moazami, vice president of the Internet business solutions division of Cisco Systems, the world's largest communications infrastructure maker said.



"There is still a sustainable level of growth, but the market is more cautious because $54 a barrel (of oil) and the uncertainty with the U.S. elections and terrorism are causes for concern."



The telecoms and technology industry has staged a fragile recovery after the abrupt end of the heady bull market in 2000, and from their podiums, at least, executives spoke with optimism about rising customer demand for new technologies.



However, while customers have started re-investing in new technologies, the pace at which they commit themselves to fresh spending has slowed since January, participants said.



Germany's SAP, the world's largest provider of enterprise planning software, said its sale cycle had lengthened to nine months from about six to nine months over this year, a trend that was echoed by German encryption software group Utimaco Safeware AG and others.



DOUBTS ABOUT RECOVERY



"We think organisations everywhere are still under immense pressure to cut costs," said Sally Davis, the president of BT's Global Services unit, which has risen from the ashes of the British group's once-ambitious overseas expansion plans and sells corporate telecoms and IT services.



"It's not easy. It hasn't been easy in three years -- and why should it be? It's tough."



Data in recent days showed unexpectedly weak industrial output in Germany, France and Italy in August, raising fresh doubts about the strength of the euro zone's recovery.



Economists say growth in the euro zone is slowing, although not dramatically.



About 700 participants came to the ETRE (European Technology Roundtable Exhibition) conference this year, 165 more than last year, and discussion rooms were packed and the audience jostled for seats during some corporate presentations.



Many chief executives were harried by eager entrepreneurs as they came off stage, and left the room with pockets full of business cards.



Young start-ups such as German-based egip Software set up shop at the conference hall door to tout for strategic partners.



The industry rout since the heady bull market in the late 1990s and early 2000 has weeded out those motivated by pure greed -- or without the mettle, cash or luck to survive. The new breed of entrepreneurs is made of sterner stuff.



"In 1999, they just wanted to make money," said Tim Draper, a managing director at venture capital group Draper Fisher Jurvetson. "Now they do it for love."



"They want to change the world."

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