PSFT - Fiscal 1998 - Discussion for the next year Message Board

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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year

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Oct 29 5:00 PM EST

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To: RetiredNow who wrote (2090)	9/3/1998 6:37:00 PM
From: growthvalue	Read Replies (1) of 4509

I agree with Melissa. Most of the Y2K related implementations have proabably already begun. Here's the Y2K slowdown argument. I think it is correct, but I'm willing to be convinced otherwise. Any company who is not compliant no longer can do so by implementing new systems. Therefore, companies need to fix their legacy applications. Also, many many companies are cutting it close and are way behind where they should be right now. So, you have a decline in the number of companies who are buying PSFT licenses to become Y2K compliant. And companies who are NOT compliant are both too busy fixing their legacy applications to consider new purchases. They are also not in the market to replace their in-house human resource, financial, etc, ERP applications, since they are fixing the ones they have. The final piece is that even if you are compliant, you don't know exactly what is going to happen once you get to the date and don't want to be in the middle of a huge implementation when the date hits. It's not an argument against the long-term health of PSFT or the ERP industry, just that Y2K could cause a speedbump. There are some statistics to support this as well. According to InformationWeek's Year 2000 issue, something 2/3 of companies over $1 billion in revenue are fixing legacy applications rather than replacing them. (This % would obviously increase as the date nears). Also, an estimated 25% of IT budgets are expected to be consumed by Y2K remediation. It indicates further that companies who are farther along in the process of remediation are finding that the problem is more costly and time-consuming to fix than anticipated. Finally 78% of organizations surveyed said that Y2K is having a "moderate" or "high" impact on other IT projects. This is in a bunch of different articles which you can all find from this link: informationweek.com Again, I love the company and its long-term prospects. In particular, I found it extremely promising how PSFT has rapidly gained market share versus SAP. But I'm very worried about Y2K and I'm not convinced by PSFT's answer in the conference call - I think they glossed over it and didn't address the concerns I just described. (The call is still going on - I'm typing as I listen). GV

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