“There are hopeful glimmers that the long-anticipated yet elusive recovery in the information technology business may finally be coming into view. Besides the recent surge in technology shares on Wall Street are more substantive signs like the fact that orders for many computer products and semiconductors are stabilizing and even gradually gaining ground,” writes Steve Lohr in today’s New York Times.

“Yet many skeptics remain. And even if a recovery is indeed getting under way, industry analysts say, it promises to be a pretty sober affair — slow and uneven. Instead of leading the economy, as it did in the 1990’s, the technology sector is being pulled along with it, behaving more like other industries and less like a business that operates by its own ‘new econom’ rules.”

“And so it may be that Wall Street has gotten ahead of itself, acting as if an old-fashioned tech rebound were under way. Stock prices on the Nasdaq, where many technology companies are listed, are up roughly 30 percent since March 11. And the Standard & Poor’s 500 Information Technology Index is up about 50 percent since hitting a recent low last October.”

“Perhaps the most significant reason to expect only a measured, plodding recovery is the changed attitudes of, and new pressures on, the corporate buyers of information technology — computer hardware, software and services — whose purchasing habits largely control the industry’s fate.”

“Long gone is the irrational optimism of the 90’s and the notion that technology alone can transform a business. Today, corporate executives regard technology as simply a tool — though a crucial one, if used wisely. But it is also a costly tool: Information technology accounts for nearly 60 percent of all business equipment investment. So there is plenty of incentive to restrain spending.”

“Technology is still a big corporate expense, but technology budgets have flattened out, if not fallen, at most companies. That is a very different world for senior corporate technology executives, often called chief information officers, or C.I.O.’s, who for years became accustomed to having their budgets rise by 10 to 20 percent annually.”

” ‘C.I.O.’s, after years of being asked to do more with more, are being asked in a serious way to do more with less,’ said Richard Hunter, a research fellow at Gartner Inc., a technology research firm.”

“When it surveyed more than 600 C.I.O.’s worldwide earlier this year, Gartner found that their top three goals, in order of importance, were cutting costs, shoring up information security and supporting innovation. ‘It shows you how much pressure C.I.O.’s are under, when cutting costs is No. 1 and supporting innovation is No. 3,’ Mr. Hunter observed.”