MICROSOFT came to the rescue of the ailing technology sector last week, reporting a 58 per cent improvement in September quarter profits to US$499 million, boosted by Windows 95 sales. The company said it had sold about seven million copies of the new program, worth more than half a billion dollars, between its launch date of August 24 and the end of the quarter. Microsoft's improved performance and better results from other big US technology companies came as a relief to investors, who had been hammered in preceding weeks as Wall Street's love affair with technology stocks appeared to be waning. Other results in the sector were equally impressive. Chip maker Intel reported a 41 per cent rise in profit to $931 million on sales of $4.17 billion. The company's Pentium chip is well placed to benefit from the seemingly insatiable appetite for more power. Compaq's net income for the quarter was up 21.9 per cent, to $245 million, despite a delay in releasing the company's new LTE 5000 notebook. One disappointment was IBM, which posted a net loss of $538 million, after a $1.8 billion charge for the acquisition of Lotus. Another was Apple, which earned $60 million in the quarter on sales of $3 billion, against $115 million and $2.49 billion. The next quarter is a traditionally strong one for computer companies. Dataquest is forecasting a bumper Christmas season, with 30 per cent sales growth. Investors in Hong Kong might feel insulated from the ups and downs of the technology sector - we have no technology sector to speak of. But as Hong Kong tends to follow the general trend in US stocks, the sector's recovery is to be welcomed. In any case, technology is developing so fast that it quickly outpaces the movement in so-called technology stocks and indices. Over the past decade, companies which once ran their businesses with the help of computers have begun to run them from within their computer networks. The computer has evolved from a tool to a manager. This growth shows up in hardware sales and is reflected in hardware companies' bottom lines but the massive efficiency gains gear the whole machine up several cogs and set the stage for future massive expansion and development. Then there is the phenomenon known as convergence, the blurring of the boundaries between the computer, telecommunications and media businesses. According to many experts, the growth of the Internet and the expansion of both its content and the ways it can be delivered are going to cut costs in many businesses and revolutionise the way we learn, shop and do business. If it ends up being the local telephone company which provides the basic service and the local retailer which provides the product, the profits derived are unlikely to show up in any technology index, but they will be real enough. Technology guru James Martin told a seminar of blue chip clients last week that the dawn of the Information Age would sound the death knell for many big companies which were slow to react to new business conditions. He said it was a time for companies to reassess their basic activities and then ensure they had the systems to support them. Some companies would need to undergo a re-engineering process of the type which transformed Nokia from a pulp and paper company to the world's second biggest mobile phone manufacturer. Nokia last week reported earnings of $837 million for the eight months to the end of August.