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Strategies & Market Trends : Roger's 1998 Short Picks
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To: Caroline who wrote (14840)10/27/1998 3:45:00 PM
From: BelowTheCrowd   of 18691
 
Caroline,

I don't think Y2K is a hoax. Lots of effort is going into correcting the problem. I have seen it all around me, and have been on the fringes of some Y2K projects.

The hoax -- for the most part -- lies in the claims of those companies who pretend to have some sort of magic solution to the problem which is going to provide huge revenues from a client base which is so desperate that they'll pay any amount for it.

Bottom line is that the "proprietary tools and methodologies" provided by most consulting firms (and I'm including the biggies like Andersen, as well as small players) aren't all that special or all that helpful in most cases. This should be nothing new to anybody in the information technology business. Consulting firms ALWAYS claim to have some unique tool or methodology, but for the most part the performance differences between them is minimal and usually can be traced to the quality of the people assigned to the project rather than to any specific tool they bring with them.

For the most part, these firms are able to provide high-quality, short-term labor, trained at identifying and fixing Y2K problems. It's not really a sustainable business and for the most part it's not all that lucrative unless practiced on a fairly massive scale.

Even the big guys who have much more diverse businesses are saying that they expect a major falloff (15-20%) in IT consulting after mid-1999 due to the Y2K falloff. If that's the case for them, it's likely to be absolutely devastating to many of the smaller players. Kind of hard to justify paying some high multiple of sales for a company with zero or minimal revenues and no clear future beyond the next 18 months.

mg
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