Prospects are getting brighter for increased revenues in the hardware and software sectors, but strong expansion won't occur in the near term, reports Ovum Ltd., a London-based research firm. Though the hardware market slump has bottomed out, growth won't return until at least 2003, says Philip Carnelley, research manager for Ovum's technology group. Expansion will be modest next year, with hardware sales not reaching their 2000 levels until at least 2006, he predicts.

"Software markets will do better, but it will be the large and fairly traditional companies, such as Oracle Corp. and SAP AG, who will profit from it," Carnelley notes. "Pure-play e-commerce providers and those without clear profit potential will struggle to survive."

If companies are to last, they must maintain existing long-term customer relations, employ experienced management, supply solid, established products and/or services and keep their balance sheets both healthy and transparent, adds Anthony Miller, principal analyst and research manager for Ovum Holway. "The boring will inherit the earth in this instance,” he notes.

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