oh my...oh my.... OH MY!!!......
Monday September 13, 3:17 pm Eastern Time
Computer Associates sees business boom soon
By Nicole Volpe
BOSTON, Sept 13 (Reuters) - A year-long slump in the business software industry should soon give way to the next boom, barring widespread year 2000-related catastrophes, a top Computer Associates International Inc. executive said on Monday.
''If we get by the millennium, there is a downright boom,'' said Computer Associates President Sanjay Kumar, speaking at an SG Cowen technology conference here.
Computer Associates was among the very first companies to warn last summer that there would be a slowdown in the industry due to its customers' allocation of their budgets to make their systems Y2K compliant.
SG Cowen analyst Drew Brosseau said that historically Computer Associates had year-to-year growth rates in the high teens, compared with 10 to 12 percent growth rates over the past four quarters.
''They want to be getting back to 18 percent growth rates or so,'' he said, adding that internal growth, not including the company's recent acquisition of rival Platinum Technologies, will add incremental revenues.
A ''boom'' would be comparable to 1997 levels, Kumar told Reuters. Kumar said Computer Associates already has a strong lineup of orders, although he would not comment on the size of the deals or comment on reports by analysts who said Computer Associates had landed one as big as $200 million.
''Business is good, the pipeline is very strong,'' said Kumar. ''The deals are there; the real issue now is closure rates.''
He said Computer Associates could benefit if overly-conservative Y2K budgets got freed up once the end of the year had passed. He also expressed confidence that most corporations would make the jump into the year 2000 without incident.
''Y2K continues to be a non-issue,'' he said. ''There may be a couple of minor disasters, but nothing that a couple of days can't fix. Even now, most large customers are not stopping deploying things that are Y2K certified.''
Brosseau said he was not changing his guidance on the stock, which SG Cowen lists with a buy rating.
''Sanjay (Kumar) does not tell you things are accelerating when they are not accelerating,'' he said. ''But it is in a kind of 'show me' status. If they can deliver on it, we expect some movement on the stock.''
Industry-wide, Year 2000 issues are still a challenge in the fourth quarter, according to an SG Cowen survey released Monday. About 39 percent of sites plan some spending lockdown in the fourth quarter, with over two-thirds of those locking down cutting spending on business application software and other software development.
Kumar said network management, security and data storage were the hottest areas for Computer Associates now, with much of the business coupled with a frenetic electronic commerce market. |
