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The Munich Hall Theory of CeBIT Goes Down

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These are hallowed halls, these walls of the Munich Beer Hall. CeBIT's most famous place of distraction, the "Hangover Hall" behind Hall 3.

It's one experience that most CeBIT newbies carry home...along with the hangover and an appreciation of Bavarian culture (acquired, of course, via northern Hannover).

During the heyday of CeBIT, the robust woman who owns the Munich hall, her hands sporting diamonds on every finger, once explained to me she made 2 million euros per night during the show.

Munich Hall

But it's 2011...a new and different CeBIT. It's Friday night, the last evening before CeBIT closes...and the Munich Hall...like CeBIT...is only half full.

Instead of the usual two bands wailing away, there's only one band now and it's playing mostly popular rock. A man on stage dresses as Freddie Mercury and that brings laughs. As the lead singer screams out, "WE ARE THE CHAMPIONS...OF THE..."

The band stops and the singer points the microphone expectantly towards the crowd in a classic moment of audience participation...

Once upon a time the response would have shaken these Bavarian walls-- and rocked with wild crowds dancing on the tabletops, waving steins of German pils...because we were the champions, the champions of the IT world.

This time, this night, this CeBIT... the audience does not feel like WORLD champions and the band must be disappointed by the half-hearted reply. We sit up on high, in an empty second tier looking down on the half-full hall. In the old days. even the second tier was regularly packed, fully booked and crowded.

 

It's Friday night...we expected a packed crowd. I am sitting with a German man who has come to CeBIT more than ten times, yet this is his first visit to the Munich Hall. Two Kenyans who live in Germany have joined us. All around us are people from 90 countries...Chinese visitors enjoying the moment....a Danish company outing...Turkish executives...some Englishmen building a tower of empty Jaegermeister miniature bottles...

I look out on the crowd and I can't see anyone I know. Thirty-one years of CeBIT (OK, I started visiting when it was still a section of Hannover Messe...) and not a single familiar face.

The Munich Hall Theory of CeBIT goes like this: a strong Munich Hall business, where reservations are necessary, means a great CeBIT. If you stop in and there are lots of places still available, there's less attendance, less business at CeBIT. A half-empty hall is a disaster...

Regardless of how tired, how exhausted the 30-year-old concept of CeBIT entertainment is, The Munich Hall, the only "fun" place on the fairgrounds, should be a barometer for CeBIT itself....

On one hand, there was also on the same Friday a free concert in Hall 19. On the other hand, there used to be a multitude of lavish stand parties in every single hall, parties that hired live bands and catered. This year we saw hardly one stand party in any of the halls and lavish would not be a description: it was more like "Come, have beer on our stand, and we'll play music from our iPad..." I think those two factors should wash each other out...and so we need to reflect further...

CeBIT once ran for 8 days and we are down to five. There is 1 million sq meters of exhibition space in Hannover Messe: we once filled all of the Fair and it still kept an active Waiting List. Now nine halls are empty: from 20-22, then 24-27, and the once-all-powerful Hall 1.

More than 4200 companies from over 70 countries participated at CeBIT 2011, including many firms which returned after a break of several years, such as Oracle, HP, Xerox, Canon, Epson and Siemens Enterprise Communications.

CeBIT Four

This year was the premiere of the new "CeBIT Showcase", four thematic clusters for pro, gov, lab and life.Turkey featured as the CeBIT Partner Country this year.

The giant CeBIT was never monolithic and is even more divided these days. The organizers prefer to say "segmented" but it is more like a fracture... It' s as if someone came along and hit it with a hammer because there are no clear, evened-out layers of visible segment. Just sharp shards of an industry breaking up under stress, melted down by the heat of the crucible of the market and hammered in new shapes by competition.

You could say that each CeBIT turns out like a chain of industry clusters...yes, we are all in it together, but somehow we're still separated from one another. Being in Hall 14, for example, my CeBIT experience has little in common with exhibitors in Hall 9-- except that we are both at CeBIT. Based in Hall 14, I have as much in common with someone in Hall 2 as an Italian with a Norwegian. Sure, both are European but the two cultures are clearly different.

The average CeBIT exhibitor never actually sees CeBIT. Not in years before and not during this year. The exhibitor was once mainly pinned down by the volume of traffic and potential business in the hall. The hall where his company stand sat was based was his or her CeBIT. Perhaps an odd trip out to one hall or two on appointments, a walk down to the Press Office, and, of course, the long walk into the show each morning.

Today it is not much different except it's no longer the raw volume of traffic but the proportion of salespeople to attendees that pins the exhibit staff to the stand in their own hall. Companies cut back staff and there are no longer (in most cases) the changes in shifts (not just inside the day but companies used to rotate and send in a whole new staff during mid-CeBIT).

This year I made an effort to see each and every hall. Some halls reflect the nature of their market segment: PC Components halls were raucous, noisy and full...Auto ID was thin, business-like and so serious. Networking was less traffic (but with better connections...lol)

The IT-in-government hall,  Hall 9, literally held a carnival on one day (symbolizing, no doubt, the many recent revelations of indiscretions in numerous European countries with our taxpayer's money) and was stacked wall-to-wall with visitors on the other days. You had to fight your way through the stands in Hall 9, a sight that would have driven Hall 16 exhibitors to distraction.

Gaming Hall

The Gaming hall followed wave theory: if an attraction was on stage, it was packed. When the attraction, say a gaming competition, concluded, the hall thinned out. When another attraction started, the wave of visitors would wash in and back up as it met resistance, filling up the hall again...and again.

Certainly we didn't suffer a shortage of good attendees in the ICP Pavilion, a park organized by TT-Messe's Jan Nintemann inside the trade-only Planet Reseller, and sponsored by this publication.

Based on the Munich Hall Theory, this year you would have expected Deutsche Messe to report less CeBIT visitors in 2011. A labor strike on Friday cost CeBIT 10,000 visitors, lamented the show organizers, but despite the strike they reported attendance was up, barely up. But up.

While last year 334,000 visitors from 83 countries trudged through another SnowBIT, this year weather was kinder and show organizers reported 339,000 visitors from 90 countries. While an additional 5000 would hardly be noticed as a percentage, the Munich Hall Theory suggests three obvious possibilities: Germans can't count...or the demographics of that 339,000 is changing. Or there are far more things to do in downtown Hannover these days.

From my personal experience, I find Germans rather excellent at counting...demographics always change, almost as often as Kylie Minogue on stage...and nothing much ever changes in Hannover downtown. My prime suspect is the demographics...

I heard many comment that CeBIT attendance "was down dramatically," yet the same people would insist their stand, their own client contacts were fine. It's just that they had the sense that CeBIT crowds were thinner.

I shared that sense. My experience in Hall 14 was postive, yet I would insist-- based on The Munich Hall theory and its corollaries-- that attendance overall was down.

Then last night I watched a National Geographic documentary about alligators. Near DisneyWorld in Florida, America's largest alligator-filled lake saw hundreds of alligators suddenly drop dead. Authorities suspected murder and sent examiners who found the alligators unmolested by Americans and their penchant for shooting. Locals suspected pollution but the lake and an alligator autopsy showed no chemicals. Fifteen government agencies and their reseachers took more than 6 years until they accidentally figured out the poor animals had a B1 vitamin deficiency. The culprit: the lake was over-riden by a particular fish that had become the alligator's primary food source...and that fish carried a toxin that shuts down B1 vitamin absorption. Authorities solved the problem by removing the fish.

I know you thought I was going to draw a clever analogy between alligators, fish and the IT industry but I'll have to leave that job with you. My own point is simpler: there are a lot of complex variables in what appears to a be an ordinary lake...and yes, in an ordinary (but still super-sized) trade show.

While marvelling over how long it took all those agencies to solve the mystery in a land-locked body of water, it occured to me it had taken far longer for me to finally shoot down The Munich Hall Theory of CeBIT.

If you consider CeBIT as its own universe, you cannot see the universe well if you standing in it. (Try describing Earth accurately if you are standing on it and if you had never seen a photo from Challenger or the Hubble. That description certainly stumped our ancestors for thousands of years.) That's the single-pointed view most exhibitors have when they try to gauge CeBIT.

Then, there's the view of an attendee. An attendee is like Elton John's proverbial RocketMan, who can certainly see some of the universe as he flys by... but he sees what's only alongside his direct course. Like describing an elephant if you've just walked past it from behind. Oops, you never saw the trunk...

The only people who can see the universe for what it really is are the astronomers ...and those are the industry observers who are willing to stand back, and take in a pespective.

It suddenly came to me, the obvious reason Munich Hall was down so dramatically: there are far less exhibitors, far less exhibitor staff, and far less budgets to entertain staff.

The faces I normally recognized on my previous visits to Munich Hall, if I think about it, were always exhibitors. USA Pavilion, for example, would invite all their exhibitors. Epson would invite all their stand staff....Exhibit staff, not attendees, are the most likely audience of the Munich Hall.

Please, now that I mention it, don't say you already knew this...you'll sound like the Floridans who insisted they knew all along about an obvious B1 deficiency in local alligators.

Unless your business depends on selling to exhibit staff, you need not worry about CeBIT. You may have to worry about your particular Hall, your stand location in that Hall, but CeBIT in general is still drawing a massive amount of customers. You can't possibly gather together 4000+ exhibitors without drawing a lot of prospective trade customers and end users. Sure, it's sad we don't still have 7000 exhibitors and 800,000 visitors but, really, this is not a tragedy. Like a fat man on a healthly diet, the leaner CeBIT is, the better it is for us.

Whether we had 339,000 visitors or 300,000 visitors or 337,777 visitors is not the point. For an exhibitor, the real point is clear: did you see enough potential clients to justify the cost of your participation in CeBIT?

If the answer is yes, those exhibitors will be back next year, selling their hearts out (and their inventories), but yet still subscribing to The Munich Hall Theory (and those other related corollaries like the Food Line, Taxi Line and Tram Line Theories).

Much like the restaurant-goers headed back to the same restaurant, always noting the "Food used to be better here." So why then do they come back? Obviously because while food used to be better here, it still is better here than in most other places.

As I sat in Munich Hall, I couldn't help but notice that although less exhibitors made it to Munich Hall, the ones that did attend seemed to be having a good time. They may not still feel like Champions of the World, but I bet they are now glad they know who Alice is.

Author's note: Longtime CeBIT visitors will recognize "Alice" as a popular alternative version of the song Living Next Door to Alice-- this one modified by a Dutch group with a colourful but limited vocabulary.