Ravi's analysis of the Gartner Group numbers is interesting. He feels that a great deal of the oft-quoted $600 billion will actually be spent internally. As a result, he feels, only :-) some $100 billion will actually be available to companies offering y2k solution sets. As I noted yesterday, he estimates that tool companies (like SEEC) will be the benefactors of some $10 billion of that. (I asked rhetorically yesterday how much of that $10
B SEEC might get. Ravi has not estimated that yet but would feel that 10% would be a very aggressive estimate. At this point he has only stated that he is very comfortable with the current analysts' estimates.)
In any event, I subscribe to Ravi's broad analytical approach to the Gartner Group numbers. If he is right, many IT organizations are going to be faced with budget
re-allocations to ---- you guessed it ---- the y2k fix. Tick, tick,tick. New York State last week took that kind of action (I'll post when I find it. Anyone else?) The Federal Government has just announced that four federal agencies have been barred from buying new computer equipment "until they have fixed all mission critical systems plagued by the 'year 2000' bug." Will these folks need some good tools to help them? IMHO, YES!! Will they
use SEEC tools? Probably just the smart ones. :-)
The following post from the Zitel board:
Subject: Correct Millennium Bug Before Buying New Systems
Date: 16 Sep 1997 07:49:11 EDT
From: SMKCPA
Message-id: <19970916114901.HAA02054@ladder02.news.aol.com>
From Westergaard Online:
September 16, 1997
OMB Says: Fix, Then Spend
Instructs Four Y2K-Lagging Government Agencies to Correct Millennium Bug Before Buying New Systems
On page A10 of its Sunday, September 14, 1997 edition, The Washington Post reported that "the Clinton Administration this week will bar four federal agencies from buying new computer equipment until they have fixed all mission critical systems plagued by the 'year 2000' bug." According to the article, the Departments to be affected are Agriculture, Transportation, Education, and Treasury. 12 other agencies are next in line for the restriction.
Westergaard Year 2000 believes that this development is important on two fronts. One, this bold directive on the part of OMB could very well represent a dramatic change for the Agency in its leadership role with respect to the Y2K Crisis in the Federal Government. As we have reported, despite the repeated admonishments of the Congress and Senator Moynihan. Until this point, the OMB has largely played down the Y2K issue. Could it be that OMB is
finally waking up to the need to take action, leadership and control, something that we have been advocating for 18 months now?
The second reason this story is important is in lieu of the findings that underlie it. Two revised OMB estimates from their latest quarterly progress report on the Federal Government Agencies' Y2K effort are particularly worth mentioning: One, that are there are now an estimated 8,562 government-agency based mission critical systems affected by Y2K, a substantial increase (12%) over the previous estimate of 7,649 systems; and two that the
estimate for the total cost of government agency-wide Year 2000 expenditures is now estimated at $3.8 Billion, a whopping 36% increase over the previous estimate of $2.8 Billion.
We predict that both estimates - Mission Critical Systems and Total Cost for Remediation - are even likely to rise significantly in the future. The number of Mission Critical Systems will rise as more agencies conclude a full assessment of their internal systems and subsequently offer a more accurate estimate of the scope of their Y2K problem. The increase in the number of agency assessments will certainly also raise the remediation cost
estimate. In addition, this number is likely to rise even further with Year 2000 labor costs rising and the global shortage of computer programmers.
Finally, it is important to note that the Department of Treasury is included in OMB's blacklist largely because it is the "parent" agency of the IRS. Out of the 913 new Mission Critical Systems announced, the IRS is responsible for 200 (22%) of them, largely because of its latest, more detailed assessment of its own Y2K Problem. Huge numbers.
How bad are things at the IRS? We have long predicted that the IRS will be forced to go to a flat tax structure in the Year 2000. Some economists are even predicting a 35% chance of a Year 2000 recession.
In short, Westergaard Year 2000 hopes that OMB is indeed taking a stronger leadership role in Y2K matters. And that Agencies will get their act together. There is no time to lose.
Adam Kaplan
Editor
Westergaard Year 2000
Westergaard Year 2000--Washington--White Hous...
Steven M. Kaplan, CPA, P.C. (SMKCPA) |
