Although not quite as big as it was last year, CeBIT - which opens its doors in the northern German city of Hanover - is still comfortably the world's largest marketplace for IT and communication products and services, reports Andrew Baxter.
There is nothing like a trade show to help an industry put its troubles behind it for a while and show a confident face to the outside world of customers, analysts and media. And there is nothing quite like CeBIT.
In spite of the downturn in the IT and telecoms sector, set in train by the bursting of the dotcom bubble in spring 2000, the shock of September 11 and the conflicting signals so far this year about the business outlook, the world's biggest information and communication technology marketplace kicks off in Hanover today - nearly as big and as hectic as last year.
Over the next eight days, around 800,000 visitors from all over the world are expected to undergo the test of planning, stamina and ingenuity that a visit to the 27 halls and 1m square metres of the Deutsche Messe exhibition grounds at Hanover involves. Those three qualities are as much in demand for planning the trip into the showground, and finding a place to stay, as working out the best route round the show to make the most of the 1.8 to two days that the average visitor spends there.
Exhibitors, meanwhile, are looking for a return from the hundreds of thousands of dollars or euros spent on a presence at CeBIT, in increased sales stimulated by the contacts made at the show. With such a large event they are also seeking novel ways to stand out from the crowd: California-based Fujitsu Software Technology, for example, has hired actors to entertain passengers on trains from Frankfurt to the showground.
Given the current uncertainties in the sector, CeBIT's organisers have had to draw on their years of global marketing and promotional experience to ensure the show's continued success. "We spend much more than other trade fair organisations on promoting our brand," says Ernst Raue, a member of the Deutsche Messe managing board with responsibility for CeBIT. "For more than 20 years, we have been doing pre-CeBIT press conferences in 60 countries, and this creates brand awareness."
In spite of these efforts, however, the number of exhibiting companies has slipped from 8,093 last year to 7,962. The final figures released last week show a big fall in US exhibitors, from 477 in 2001 to just 345 this year. This reflects a large number of late cancellations - in December organisers were still forecasting a rise in US exhibitors. There were also a few last-minute UK cancellations.
By tapping the long waiting lists that have built up from previous years, and reorganising the hall plan, organisers have ensured that total occupied space has slipped only marginally to 424,173 square metres - albeit in one extra hall. But exhibitors have been saving money by reducing the number of second floors they build on their stands, says Jorg Schomburg, managing director for worldwide CeBIT events. "They are keeping their ground floor space because they know in two years the economic situation will be much better, and then they may not be able to increase it." The decline in US exhibitor numbers reflects continuing uncertainty over business prospects and the after-effects of September 11 on business travel.
Some companies had cancelled as early as last May, soon after the start of the US downturn, but organisers had thought they had seen the last of the cancellations by December. Visitor numbers are harder to project, but - speaking in January - Mr Schomburg was confident they would reach 800,000-850,000, compared with 849,300 last year. Attendance from the US and Japan is expected to be down sharply because of the continued business travel restrictions, but a 50 per cent drop in US visitors would still reduce total numbers by only 4,000-4,500. In Europe, which accounts for some 90 per cent of visitors, business travel restrictions have gone, says Mr Schomburg.
He points out that all the other IT and telecoms fairs have lost visitors in the last six months. (Attendees at Comdex Fall 2001, held at Las Vegas last November in the wake of September 11 and much more reliant on US visitors, dropped from 211,625 in 2000 to under 125,000.) CeBIT's relatively strong performance partly reflects its dominant position in the sector's trade fair calendar and its importance as a showcase for new products and strategies.
Fujitsu Softek, which produces storage management software, is among the US exhibitors making its debut at this year's event. Founded only in April last year by Fujitsu and Amdahl Software, the company is announcing a range of new products and applications. Steven Murphy, chief executive, is gunning for what he calls the "800lb gorillas" of the storage industry, and says: "We wanted a world-class venue to establish our position. And you can't find anything bigger than CeBIT."
As in the past two years, many of the visitors to CeBIT 2002 will be looking for signs that the promise of the latest wireless technologies, including third-generation (3G) mobile telephony, is closer to fulfilment. Phil White, deputy practice head at PA Consulting Group's wireless technology sector, hopes to see some innovative ideas for the implementation of GPRS (General Packet Radio Service), the so-called 2.5G technology with an always-on internet connection that will point the way towards 3G. "The world is watching GPRS," he says.
Mr White expects to see a range of innovative 3G terminals, with features such as colour screens and video technology, which will demonstrate the capabilities of forthcoming models for sale. Japan, spurred by the phenomenal success of NTT DoCoMo's i-mode service and the recent limited introduction of the Foma 3G service, has led activity in this area. This is also likely to be the year when the Bluetooth short-range wireless standard comes into its own, says Mr White. "Last year it wasn't really mature and there were some issues such as bad interworking between different handset vendors. But it does have the capability to get down to low costs, and once it is established into every PC as standard, then along with GPRS for mobile phones, it will enable people to be always connected."
Wireless technology will be in use at CeBIT as visitors will be able to download show and exhibitor information to their personal digital assistants (PDAs) using an infra-red link or by loading up their handheld computers at four "data filling stations."
Other innovations this year include extending the event from seven to eight days, to create more flight and other transport opportunities for visitors, and give them more time at the show. The layout of the halls has also been redesigned to make it easier for visitors to find their way around. And 130 long-standing exhibitors, producing such humdrum items as printer peripherals and binder equipment, have been given their marching orders.
One of the reasons for the spring-clean is that - notwithstanding the slight fall in exhibitor numbers this year - CeBIT Hanover is more or less full up. To capitalise on growing regional IT markets and avoid having to turn away would-be exhibitors from Hanover in future years, CeBIT has been methodically developed into a global exhibition brand in recent years. Turkey, Australia and China are the three main areas where CeBIT is concentrating its international efforts, says Mr Raue.
The importance of the Chinese market is underlined by Deutsche Messe's decision, along with the two other main German trade fair companies, Dusseldorf and Munich, to build an exhibition centre in Shanghai's special trading zone of Pudong. The new centre will be ready for the second annual CeBIT Asia event, to be held from September 2 to 5.
This international activity has a trade-off for the main CeBIT event - Turkish exhibitor numbers have trebled to 30 this year, while the Chinese contingent is up from 25 in 2001 to 72. Many of this year's visitors to Hanover will have done their homework in advance. Last year, 75 per cent of all attendees, and 90 per cent of foreign visitors, prepared themselves for the event via the internet.
Contrary to some of the early predictions about the likely damage that the internet would cause to the trade fair business, Mr Schomburg sees it as complementary to the real show. "When the internet arrived, people said: 'We don't need CeBIT any more, we will have access to everything online.' But they forget the human factor and the importance of personal communication," he says.
An edited transcript of an FT-IT/FT Deutschland interview with Ernst Raue and Jorg Schomburg can be found on the internet at www.ft.com/ftit.
© Copyright The Financial Times Limited 2002.
