Mobility, Security Pull In Investors

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July 1, 2010 12:07 PM EDT

A recovering U.S. economy will drive technology spending on mobile computing and the security that goes with that, as companies try to maximize efficiency and minimize the risks.

Enterprises typically spend as much or more than consumers do, and as conditions improve technology spending rises, noted Rich Parower, lead portfolio manager on the Seligman Global Technology fund. But in this cycle managers are going to be more cautious than they might have in the past.

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"Companies have to prove a return on investment. What are we going to buy that will drive revenue, how fast can we get our cash back and how quickly will it happen," Parower said. "When the economy slowed down, the brakes got hit pretty hard."

It's that focus on real returns that drives managers to mobile technology, such as smartphones and tablets. Karl Mills, president of independent investment advisory firm Jurika, Mills & Keifer which manages The Counterpoint Funds, sees mobility as a major boost to the economy as a whole.

"These kinds of devices allow you to improve productivity across a broad swath of the economy," Mills said. "They improve our productivity, connectivity and knowledge so dramatically, they are must own devices. Tech is at the heart of these devices from the manufacturers like Apple, chip makers like Qualcomm, companies that create the network like Cisco or those involved in storage like EMC."

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Qualcomm is the top holding in the $7.95 million Counterpoint Select fund. Cisco makes up 4.76% of the fund.

In addition, mobile computing opens the door for software developers to create applications. Mills uses the example of companies like Open Table and Fandango, who successfully created apps for the iPhone and iPad. "The apps are another way to exemplify how devices become more productive and more indispensable," he said.

Mobility brings with it the need for secure networks, which is why Parower's firm has also put substantial investments in software security firms.

"There are always new threats out there. Security software companies have reasonable stock prices with room for growth. Symantec and Check Point are two examples of that. As long as there attackers, there is a need for software prevention," Parower said. Check Point is 4.77% of Parower's $505 million fund, and Symantec is 3.47%.

Even with the attention to efficiency and return on investment, some network technologies are not a slam dunk. Cloud computing is one. "There are pros and cons to cloud computing. Using some of these services internally, it definitely is a management challenge. For a lot of them, the tools aren't there to manage an outsourced system and then integrate it with your own in house system," Parower said.

On the other hand, "You don't hear too many complaints about a salesforce.com." The company offers customer relationship management software run remotely.

This article is copyrighted by International Business Times, the business news leader