The Post-COMDEX Report By Judy Cushman

The Reality of the Downturn and the September 11th Tragedy

For me, knowing the world had changed on September 11^th and confronting that reality happened at COMDEX as it did collectively, I believe, for many seasoned veterans of the show on both the PR and media side. 

I wrote extensively in the last newsletter about the grieving process and how we in this country are all victims. I describe how we shared collectively in the shock of the loss of lives, the loss of freedom and the loss of our sense of invincibility. 

For technology communicators experiencing the market downturn, many for the first time, the show was yet another depressing piece of their experience. Not only had the market been on a slide, the September 11^th attacks removed any glimmer of hope of a near term recovery. The stark reality that we were a long way from pulling out of the recession confronted seasoned COMDEX-goers and their reaction was emotional and wrenching. It was reflected in the editorial coverage and in conversations everywhere during the show.

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The Media Coverage of the Show Impacted by September 11th

Instead of focusing on the technology and content, the stories that were filed, talked about the empty halls, the vacancies at hotels, and the shrinking number of exhibitors. There was speculation that said, ominously, “Who will be back at COMDEX next year? Has the show become so small or have others become so important that the COMDEX brand has been compromised?” (I’m told, if I recall correctly, that there are 22 COMDEX shows worldwide so the death of  COMDEX seems extraordinarily premature. Although, I might add, a more flexible customer-focused approach would be an excellent signal that Key3 is listening to the marketplace. )

My interpretation of the reason for the fixation upon the decline of the show ties in the emotional sense of loss reporters and the PR community was experiencing. It was a time for mourning, assimilation and internalizing a painful new sense of our world. This experience dominated our  hearts and minds. It was extremely difficult to get beyond the shock of the changed world to cover the technology trends that were happening.

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Understanding the Reasons for the Show’s Decline

Executives at Key3 Media were assaulted by the barrage of reporters who were seeing the demise of COMDEX in this show. In my opinion, the reality was far more complex. The Sands, normally filled to capacity with smaller companies and experimental technologies and products, was empty.  The companies had vanished from the show because 500 exhibitors on the floor in 2000 were no longer in business. They could not be replaced, certainly not under these market conditions and given the limited time available.

Another ongoing trend is the segmentation of the technology marketplace.  The need to be at an expensive conference (and COMDEX was the largest technology show in the US—I don’t know if it still is based on this years figures) may no longer be a cost effective centerpiece of a marketing strategy.

It is way too premature to judge that COMDEX no longer serves an important market. By 2002, assuming the market has moved out of the slump in sufficient time for budgets to return to more normal levels, we will see what the new reality is.

My sense is companies will return to the show but not approach the level it was in 2000. This past year Key3 said it expected 150,000 attendees which was wildly optimistic. Informal estimates were more at the 80-100,000 level.  I would expect next year the numbers could settle in at the 120-135,000 range.

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A Valuable Show

Despite the decline in attendance, several vendors I spoke to said they were pleased with the quality of the customer contact. They added, this was not a casual group of “lookers” who had come to Vegas for frivolous reasons, but very committed  potential buyers. The Microsoft Partner Pavilion was constantly busy with productive conversations. The PR teams for Microsoft had worked hard to make the conference a media success. That hard work and pre-planning all paid off.

The show serves as a valuable backdrop to companies with important corporate positioning and business objectives. The reach is extensive both to potential customers and to a broad spectrum of media.  Here is where Larry Ellison of Oracle wades into Microsoft territory to challenge MS’s dominance of key markets or to defend its turf with major league customers. EDS took the opportunity to tell customers worldwide (and the media, of course) that it had been in the security business all along and was prepared to offer solutions to companies that never had to address those issues before. EDS is building a new brand awareness through COMDEX.

For those attending the show for the first time, what to old-timers appeared to be a shell of its former self, seemed quite normal and busy.

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Significant Trends

The news and trends of COMDEX were more apparent to me at the “Shows within Shows,” those evening (mostly) and sometimes early morning breakfast events where companies in specific industry segments hosted media receptions. There were declines in the number of sponsors at all of the receptions with overlap in participants from show to show.  Silicon Northwest said they were signing sponsors right up to the last minute. Showstoppers had less than 30 sponsors compared to well over 40 in 2000. However, they were pleased with the event and relieved that it was as strong as it was considering the circumstances.

What I saw was a distinct marketing focus to the positioning of products, rather than a “gee whiz isn’t that great technology” approach to selling. This year, companies at COMDEX were clearly interested in telling consumers that their products were simple, easy to use and reliable. Gone was the emphasis on all the neat smart features. It seems  engineers are realizing that what the buying public wants is not another gaggle of fancy options but ease of use for the applications that matter to them. 

Reaching out to the consumer to talk about how easy a product is to use is a major breakthrough in direction and emphasis. Have we finally reached the age where marketing decisions will be as respected as technical ones? This is the first time I saw that focus in all the years I have been at COMDEX.  I think we have reached critical mass this year as company after company came out with simplified messages and moved away from loading products with more new features.

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New Products?

I saw a great deal of experimentation with combining (wireless, of course) personal productivity tools (not creating another stand alone “gadget.”) The most obvious example is the use of the phone for all sorts of database functions, Internet connections and of course, e-mail. The problem still is, who knows which tools make sense to combined be combined and if the new product is really practical to use and will catch on with the consumer.

Cleverness abounds, with National Semiconductor coming out with what I call the “Swiss Army Knife of the Laptop.” The trade press was swarming all over the prototype but as one reviewer said, it combined the worse features of all of them—laptop, PDA, phone, etc. That does not detract from the effort and the direction these products are going. Eventually, they will figure out the puzzle.

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Digital Imaging

The use of digital cameras  and the heightened emphasis on video conferencing as a result of the September 11^th attacks, are driving growth in the that sector. Prices are dropping to mass-market levels and customers are discovering how economic and easy they are to use. Now what do we do with all those images and how can we get our email to send them without inordinate delays? These are all categories for growth.

With so much emphasis on these products at the show, I see a convergence and an overlap notably with CES (the Consumer Electronics Show). For the moment, companies are hedging their bets, but I do believe this category will eventually thin out at COMDEX as many organizations leave for more consumer focused shows.

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A Fun Event and Parties

One high spot was a breakfast hosted by Nvidia, a semiconductor company producing chips for gaming and related applications. What fun it was to have a major private event for the media and remember how just a few years ago these events were the norm. We all miss those days and know how exceptional this event was.

About the party scene (as many of you know, I publish the definitive COMDEX party list), there were just a few major events. The MS Geekfest (I did not go but I was told) was quite flat this year as it was last. There was an effort to control invitations and that might have backfired. Will the party happen  next year or will MS try a new approach? Novell hosted a great party, gave away prizes and the next day announced layoffs. Ziff Davis replaced the Katt party with a corporate event and that also was practically empty, sad to say.. The media events—Imagescape, Lunch at Piero’s, Showstoppers, Silicon Northwest were very well attended, again reflecting the serious, working nature of the show.

That’s my summary, now here is Bob’s report:

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The Technology Report by Bob Quick

By Bob Quick, Technology and Operations Manager, King County, Washington (bobquick@att.net)

Comdex this year was significantly smaller than in previous years, at least since I have been attending (12 years). Reportedly, the floor space was reduced from over one million square feet to 750,000 with the elimination of the Sands Exhibition Center. I think the total of the Las Vegas Convention Center space may have been as stated, but it was definitely “looser”, with wider aisles, resting spaces, and holes on the exhibitor floor. The stated vendor count was reduced from 2300 to 1750. The attendance was claimed to be 150,000, reduced from 220,000 in 1999 (which I never believed, anyway). The taxi drivers’ estimate was 80,000 to 100,000; still a lot of people. The only exhibitor that was packed as in the past was the Microsoft pavilion.

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The Best COMDEX

Nonetheless, this was the best COMDEX I have attended for a few years. Probably the high cost and difficulty of attending, as well as the events of September 11^th, filtered out the attendees just looking for a Las Vegas event. The quality of the exhibitors was very high, and I repeatedly heard satisfaction from them of the quality about the attendees and the contacts they were making.

One major trend has been the movement from exhibitor parties in the evening to shows within the show. Each of the evenings I was there (Sunday, Monday, Tuesday) I attended a three hour show. In effect, this extends the working day with exhibitors from 10 am to 10 pm. Most days started with 8 am meetings and presentations.

The parties that did take place were sparsely attended, with only a few exceptions.  This continues a trend since the mid ‘90s. Major vendors of technology (AT&T, IBM, Dell, Compaq-- meaning Digital, also-- have left, as have the major distributors and the start up software companies. The atmosphere at COMDEX has become more and more serious, more “corporate”.

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Observations

While PC originated technology was the common theme, much of this technology has expanded into “IT” and “Consumer” products with the universal connectivity and communication of the PC as the common elements. As a result, many products shown at COMDEX were either in the industrial strength infrastructure space, or very smart special purpose computers embedded in such devices as cameras, DVD players, PDAs, sound systems, etc.

Wireless connectivity was everywhere. Devices were wireless enabled with Bluetooth, infrared, 802.11b, and various cell technologies, frequently in the same device. There were some vendors showing mockups of 802.11a (57 mb) devices. Apparently the idea is that you can be wirelessly connected wherever you are. Different vendors will supply different connections in airports, shopping malls, schools, ski areas, and just about any public space. That way, all you have to do is use the phone, check your email, reschedule an appointment, etc., and the device you’re using will automatically select the best method and carrier. It’s going to be real interesting when wireless local area networks will be able to handle voice over IP. (As an aside, some local Seattle area apartment dwellers are connecting to their neighbors’ wireless LANs and piggy-backing on their broadband connections to the Internet).

I spoke to one 802.11b vendor who had just finished installing a wireless network on a Navy destroyer for access by wireless PDAs. It took 34 access points. It certainly is cheaper than drilling through steel (or concrete) as long as the lower bandwidth is acceptable.

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Consumer Demand Driving Wireless Connectivity

This trend is being driven by consumer demand. The explosion of digital media, digital video, digital photography, and digital music, has created the need to simply and universally connect devices to move content around. Once you take 1000 digital pictures, what are you going to do with them? The resulting technology will drive prices down and increase choice. Microsoft is showing a device that plugs into a TV and will play a slide show from a floppy disk. They are bundling it with pc picture editing software, and are marketing it through Infomercials, just like the latest kitchen wonder. Their slogan is “You’ve taken the picture, now what?”

Another compelling application was getting MP3 music around a house, playing in different rooms on different devices, and moving in and out of portables. This home application was shown principally on hard wire (Ethernet, phoneLAN, power network), but everyone was agreeing that the only thing that made economic sense and would overcome consumer techno-phobia is wireless.

The movement of digital media between many types of devices is also driving application development toward Web services, rather than client/server. I did not see any new client server applications, but Web services applications were everywhere, from cameras to network analyzers to group calendaring.

Many of these Web service applications were running on embedded Linux.

There was an amazing refinement of engineering. Products are getting smaller and more multifunctional, and less expensive.

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Video Everywhere

Video was also everywhere. Video cameras have gotten very inexpensive and exhibitors were showing bundled video instant messaging, security systems, video conferencing, process control, monitoring, etc. All of these applications were IP based.

Most of the security at COMDEX revolved around access and identification. Biometrics of all sorts were represented; retinal, fingerprint, writing, facial, odor, and iris recognition. 

DVD-RW has become very inexpensive, and there were hundreds of products ranging from pc units to data center class backup devices.

There were many software and hardware products in the storage area network and network attached storage space. Gigabit IP networks are taking over from channel attached devices.

There was absolutely nothing new or exciting about traditional PCs.

That wraps it up!

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Responses to the Pre-COMDEX Newsletter

In the Pre-COMDEX newsletter I talked about the emotional impact of the Sept. 11th tragedy and invited comments. There were several that told me my reaction was shared by many. Excerpts from those e-mails follow. 

Further comments at COMDEX; I briefly talked with a Red Cross volunteer from the media who was on site at the World Trade Center on September 11th. He took time from his work to devote himself to helping others and was just resuming his livelihood when we ran into each other. 

A tech editor that I casually knew was wearing two wrist braces and I asked if she suffered from carpal tunnel syndrome. No, she said, "I was in the WTC and escaped. I was rescued by a firefighter who extinguished the flames in my hair and helped me out. I broke my wrists but I am happy to be alive." She took months off to help others and was at COMDEX picking up where she had left off. In the time away from her career, her job had been lost, again as a result of the attack. She was looking for work and moving forward with a new perspective on what was important. I was impressed by her inner strength and her matter of fact attitude about handling uncertainty--what spirit! 

To view the responses from readers to the newsletter, go to

http://www.jc-a.com/CareerAdvice/CR_911Response.htm

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