Enterprises need a new infrastructure to support the digital economy.

So said Ben Verwaayen, the CEO in charge of the French networking giant, who used his keynote speech during this week's Dynamic Enterprise forum in Paris, to point out the two crises the world is currently facing. "The first (shorter-term) crisis is the economic crisis, and then there is the longer-term looming crisis of climate change," he warned.

He said that what the two crises have in common, is that a possible solution can come from the growth of the digital or knowledge-based economy.

"The digital economy brings together the ability to do things," he said. "You need infrastructure for this digital economy," before pointing out that a shift towards all-IP networks and software as a service (SaaS) lies at the heart of this new approach."

He urged businesses to view this scenario as an opportunity to reshape their companies and processes and build a new digitally-enabled future.

"Creating an infrastructure that allows people to contribute and collaborate quickly and seamlessly without impacting negatively on the climate, can create real value for the company and drive innovation," he told delegates.

"We need to take positive action," he said. "It is not a physical world now, it is a digital world. We are not rebuilding what was in the past, we are going to rebuild for the future. It is not about next gadget or footprint. It is about what people value." He pointed to a recent survey that found that the first luxury people were prepared to give up was their sofa. The last thing they were prepared to give up was their access to the internet.

Ben Verwaayen joined Alcatel-Lucent in September last year and has sought to reinvigorate the company as it seeks to take on networking goliath Cisco with a more rounded and complete product portfolio. He described the "buzz in the organisation as very positive, with new exciting plans going forward."

"We have the financial capability, we took action on the balance sheet, we are spending wisely, and we have an amazing pipeline." He pointed to Alcatel-Lucent's "fantastic R&D" capabilities in France and Italy, as well as of course Bell Labs.

"We know what we have to do, we know we have to work very hard this year to show what the digital economy can give back to the organisation," he said. "We have great capabilities in the software business that can contribute to the enterprise."

Meanwhile Gartner's senior VP of research, Peter Sondergaard, warned the audience that it was going to be a tough year ahead for many.

"This is interesting times," Sondergaard said. "You will never see anything like this we are living in now. Mark my words, we are seeing unprecedented declines in IT budgets. If you are holding your breath for a recovery at the end of the year, you will probably suffocate." he said.

Budgets will not change either in 2010 Sondergaard warned. But the answer was not to be found in cutting costs. "You cannot get caught up in cost cuttings and running the business because you'll run yourself into the ground and you'll run your business into the ground," he warned.

He said that instead IT managers need to step up and use the credibility they have built up within their business to push for investment in a "forward-thinking" technology strategy.

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