LPasko, there are all sorts of ways one can segment the Y2K marketplace. On the broadest level, you have the software shops vs. the hardware (embedded systems) shops. Since you posted to this thread, I assume you are asking about the software side of things. [For an in-depth look at Y2K and embedded systems, check out the numerous TPRO threads.]
Many people (like you) find it convenient to simply differentiate between the existing, experienced IT shops and the "pure" Y2K plays. Others prefer to lump them all together and sort by specialty (i.e. assessment, remediation, testing).
Furthermore, some like to break down the two aforementioned groups by platform (i.e. MVS, Unix) and language (i.e. COBOL, Assembler) supported. Still others find it useful to distinguish between the firms that depend primarily on people (body shops) vs. those that choose to rely on sophisticated software to do the work (tool vendors). To make matters even more complicated, there are all sorts of alliances between vendors and companies that span categories.
At this point, we have to ask ourselves if the "best" Y2K performers will also be the "best" market performers. That's a really difficult question. It's also a tricky question because there are no set definitions of either category. For example, is the best Y2K performer the one "Y2K" company that should make the most total profit, or the one "Y2K" company that should make the most on Y2K related work? And, is the best market performer the stock that will have the largest average percent gain in 1 year, 2 years, etc. or the one that will have shot up the highest at any given point?
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Personally, I think that you'll do fine with any of the stocks you mentioned, ALYD, and dozens of others that are discussed on the 2000 Date Change thread Subject 2448. But since this is the ALYD thread, I'll briefly explain why ALYD should be in the top tier of Y2K companies and stocks.
First of all, I agree with you that established IT shops are a "safer" investment than "pure" Y2K plays. However, I also think that the best pure plays will give you a much higher ROI than the best IT shops simply because I think it's human nature to choose a specialist over a general practitioner in a critical situation. ALYD falls squarely into the pure play category. Clients like 3M, McDonnel Douglas, Nabisco, RJ Reynolds, etc. are proof that pure plays can land the big ones.
Second, ALYD is a tool vendor. I think it's a no-brainer that tool vendors will surpass body shops in revenues. Third, ALYD's tool is quite sophisticated (they have or will shortly roll out SmartCode IV); it handles all sorts of popular languages. Since very few if any large programming jobs are pure COBOL, ALYD has a much better chance than most in making the short list of Fortune 500 companies. ALYD's alliance with CPWR is the icing on the cake as their fix-it test-it solution is unique in the industry.
Lastly, I don't subscribe to the theory that pure play Y2K companies will go "poof" on 1/1/2000. Let's not forget there will probably still be non-mission critical systems that need to be converted, the Euro conversion problem as well as the growing field of electronic commerce-- not to mention that Y2K companies should be rolling in cash and should easily be able, if need be, to acquire other companies to sustain growth. However, I do think that, from an investment point of view, Y2k companies will once again become grossly overvalued before finding a more reasonable trading range. Considering that many are trading at half what they did just a few months ago, now is a good time to shop around for dark horses.
And, speaking of horses (you knew Alydaar was named for a race horse, right?)... check out alydaar.com. (gg)
- Jeff |
