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July 17, 1991

“COMPUTER INDUSTRY FAILING TO MEET REAL NEEDS, WILL NOT BENEFIT FROM UPTURN”

By CBR Staff Writer

Large parts of the US computer industry went into recession well before the economy as a whole faltered, and far from recovering sooner, it is going to lag the general improvement, Palo Alto, California research outfit Killen & Associates Inc believes. It will benefit only marginally from an economic uptick because it is not providing products that enable customers to improve bottom-line performance, says the Killen study Information Systems and Management Innovation in the 1990s: A Strategic Market Analysis. It is based on a year of research that included interviews with chief executives and chief information officers in the US and Europe, and points out that even though business installed 10 times more computing power in the 1980s than in all the years since computers became available, white-collar productivity actually declined. As a result, businesses now plan to concentrate on applying innovative management approaches rather than computers. Jack Hancock, executive vice-president of technology at Pacific Bell, with a $1,000m budget, said My emphases for the 1990s are management and technology, in that order. To benefit from recovery, computer companies need to shift their focus from creating alliances that will not affect the market for years – such as the IBM Corp-Apple Computer Inc agreement – to meeting customers’ real requirements now, Killen says.

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