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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (5461)	6/30/2001 10:53:30 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 74559

Hi elmatador - Perhaps y2k was the abra-ca-bubble? I ran a somewhat massive Y2K program for big-co between '96 & '99. A few tens of millions of mission critical LOC. Lotsa real bugs. Lotsa folks. Of course, industry all around us was gearing up big time, some sooner some later. Average was about '98. The reason we took almost 5 years to do the job though was not difficulty (actually it was pretty menial stuff)... but staff ramp. I could ramp up and do the job in a year, but I'd have to ramp 100% back down. Alternately, I could do the job over 5 years with maybe 15% of the incremental staff (not 20%.... it doesn't work that way). Much easier to ramp down and re-integrate in year 6. But thinking in retrospect, what about industry in aggregate? Starting on Y2K in earnest around '98. I recall we couldn't hire IT folks for all the competition from banks and financial institutions just soakin' up talent on Y2K stuff. So here we have industry cranking out widgets like usual with a usual complement of IT folks doing their usual thing automating the widget-making-machine for increased productivity that somehow materializes in a somewhat hedonistic way... but I digress... Then along comes y2k. They still have to keep the widget machine running, but now there's this additional "insurance policy" necessary. An IT manager's wet dream: unlimited budgetary approval for "Y2K" expenditure ('cause by '98 no corporate counsel would sanction axing the Y2K program!). Budgets bloom. Departments bloat. And we saw mass accelerated depreciation of capital like you wouldn't believe. Quite a few "old" platforms were deemed "below baseline" and scrapped. Of course, mass capex filled the void. A boon for the boxmakers. Ok. Now, Year 2000. Plus or minus. Everyone does their job and champagne everywhere pops without a bug report. IT managers everywhere have all these folks still on the payroll pretty much with little to do. Many impressively powerful cheeses survey their empires and suddenly face the recognition of imminent insignificance... and the corporate budgetary empire protecting rationalization machine turns on full boil. Coincidentally, corporate memories remain about 6 months or so, and temporarily everybody has forgotten how big the IT departments were relative to the real business of the company. Three years is a long time. So initially the x+15% budgetary mentality kicks in and "productivity" is the watchword. A lot of unplanned stuff got done by the "contingency" teams who didn't have any Y2K bugs to fix when Dec 31 rolled by... ... so we see six months of "productivity" materialize... Which lasts for 1H 2000... until some bright spark in the CFO's office begins analyzing a few ratios for the 2001 budget and ponders: "hmmm.... we've got a historically high ratio of folks steering the boat to rowing. We could improve 2001 EPS drasticly if we just got our ratios back in line!" Then all heck breaks loose. Devestation amongst the empires as the IT managers are told "reduce your budget by 20% or I will do it for you... oh, and plan on a further 30% by end of next year too, 'cause I I'm going to achieve that promised improved productivity I paid for, right?" And our IT managers squeal as they try to avoid being the grease on the gears of the big machine. And of course, because they try to protect their empires they don't comply immediately... and then the boardrooms just shut off the money tap, disempower these folks, and make slashing decisions of their own. So when we finally do get back to 15%/y growth, it will be on a baseline of '98 or so. Minus Y2K. Just random noodling for a Saturday morning. Perhaps the next abracadabra will be "job retraining" programs for software programmers. But I doubt it. John.

To: elmatador who wrote (5461)	6/30/2001 9:37:30 PM
From: TobagoJack	Respond to of 74559

Next abracadabra, maybe nano-technology, micro-machines and self-replicating carbon molecules machines of various sorts (as in making a xerox copy of a watch or bottle of Frappuccion using a replicating machine with programmable carbon molecules as 'toner'). Possibly. I am down to my very last precious bottle of Starbucks Mocca Frappuccino. The distributor got P.O. at all the Starbuck retail stores he does not have a share in, and so stopped distributing the bottled merchandise in the supermarkets. Need 'replicator' machine. Chugs, Jay