Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: Stanley L Brown who wrote (12641)	11/6/1997 12:51:00 AM
From: Mark Stevenson	Read Replies (6) \| Respond to of 18263

About the only thing the shorts have proved is that their average skull thickness is about 4 inches. Why do you people keep avoiding discussion of the 57 page Montgomery Securities report. Here's another to avoid, you sleazebags. By the way Mont. Sec. and OAO Corp. are in agreement on who will be among the handfull of major solution providers. Since firms are expected to spend about $300 billion to fix the Year 2000 problem, conventional wisdom has the computer industry partying all the way to the new millennium. But don't pop the corks just yet. Not everyone is invited. And for some, the millennium hangover could be brutal. Though corporations continue to pour big money into computer technology, $300 billion isn't chump change. Yes, the fix is needed. Most older computer systems read only the last two digits of years and can't tell one century from the next. However, the high expense of getting computers to read the year as 2000 could divert spending from other industry sectors. Many firms will have excess processor and storage capacity down the road after having loaded up on computer hardware required to test new Year 2000 code. At the same time, many corporate users with huge Year 2000 costs will cut spending elsewhere in their computer budgets. The most likely victim of such spending cuts? Personal computers. Technology consultant Paul Strassmann recently advised a major bank client with a huge Year 2000 problem to buy fewer PCs. Largely because of Year 2000 spending, the bank's information-technology department was seeking a 15% budget increase. ''I'm advising them that they can't afford it,'' said Strassmann. ''They ought to cut spending on PCs. The total cost of ownership in PCs is obscene.'' Year 2000 work will mean that a greater-than-usual share of technology budgets will go toward large computers, says Dick Heiman, an analyst at market researcher International Data Corp. in Framingham, Mass. Only high-power machines can handle Year 2000 fixes, which often require the testing of millions of lines of rewritten software code. Firms ''aren't going to spend a lot more on hardware,'' Heiman said. ''They're buying more capacity on the mainframe.'' Indeed, IDC recently found that almost two-thirds of 275 firms surveyed expect Year 2000 spending to have a moderate to very heavy impact on other technology initiatives. Heiman says IDC is trying to learn just where the cuts will take place. One likely outcome: Many firms will delay upgrading their PCs, Heiman says. And reduced spending on networking gear is likely. Deployment of corporate business applications like those sold by Germany's SAP AG, the Netherlands' Baan Co. and others also could be slowed, notes Julie Horkan Meringer, an analyst with Forrester Research Inc. in Cambridge, Mass. At Boston Mutual Life Insurance in Canton, Mass., Year 2000 work will cut into other software projects. ''We did put aside a lot of resources (to make the Year 2000 fix) that would have been directed at other systems-development efforts,'' noted Bill Dillon, director of management systems. Boston Mutual has delayed its move to a new life insurance software system. Meanwhile, Dillon learned what other technology executives have learned: Testing new Year 2000 code requires lots of systems storage. When Michael Ruettgers - chief executive of storage kingpin EMC Corp. in Hopkinton, Mass. - was recently asked to list the factors in EMC's torrid sales growth, he named Year 2000 first. Other makers of large computer systems processors and storage products also are getting a kick from Year 2000 work. Analyst John Jones at Salomon Bros. names IBM Corp., Sun Microsystems Inc., Hewlett-Packard Co. and Digital Equipment Corp. as beneficiaries. But some observers believe that today's boom in hardware sales could be tomorrow's bust. Firms that have added processors and storage for Year 2000 work could have excess capacity by the end of next year. And there's reason to fear that the Year 2000 will suck up even more resources than currently feared. The most prevalent cost estimate -$300 billion - won't get the job done, says Strassmann. He warned, ''$300 billion is a down payment on a house with a leaking roof.'' That huge sum may be needed just to make the most urgently needed patches. Well after the millennium's turn, corporations will need specialists to be on call to patch Year 2000 software code as processing errors arise. ''You just can't find it all'' with the original fix, said Strassmann. Meanwhile, salaries of programmers and other computer specialists are being driven up by Year 2000 demand. At Keane Inc., a Boston-based software firm that does Year 2000 work, rising payroll costs have been passed on to customers. ''Our billable rate across the company has increased at a rate higher than our average billable salary,'' noted Co-President Brian Keane. Growing concerns about liability for Year 2000 work also could swell the costs of such projects. That's because some major services providers are being very selective about taking on Year 2000 projects. Unisys Corp. Chairman Lawrence Weinbach recently told IBD he'd be cautious in seeking Year 2000 work. IBM executives also have expressed wariness. The chief concern: What happens if all the bugs aren't found? Who is liable if a customer's credit card, insurance or trading system goes haywire as a result of lurking code errors? If large firms like IBM and Unisys steer clear, other Year 2000 shops will have greater leverage on pricing and greater ability to pass on their own rising labor costs. All this suggests that the tab for Year 2000 work could exceed current estimates. So long before the new millennium, many technology firms must wrestle with this question: Do the legal risks of doing Year 2000 work outweigh the financial risks of not doing it? //////////////////////////////////////////////////////////// Copyright (c) 1997 Investors Business Daily, All rights reserved. Investor's Business Daily - Computers & Technology (11/06/97) Will Pricey Year 2000 Fix Cut Into Hardware Sales? By Norm Alster

To: Stanley L Brown who wrote (12641)	11/6/1997 12:22:00 PM
From: doug doan	Read Replies (4) \| Respond to of 18263

I agree with you. I must confess that Watching Zitl implode is like watching a train wreck. The real story with Zitl is not that it has little or no value, or that the bottom is falling out from the stock. But rather, why there are still people that persist in the belief that it will somehow miraculously phoenix. I find it far more interesting watching BG and the others continue to flag the fortunes of Zitl in the face of such overwhelming evidence that the company will not achieve the hoped for earnings. Fascinating. If we could understand why these folks can maintain these delusions we could learn lesssons that would be of much greater value than what any of us will earn from shorting the stock and waiting for the inevitable. It is this bizarre persistence that has kept the stock so high. Give credit to BG and the others, they have, by the force of their irrational passion kept the stock price of Zitl so high for so long. I for one hope they continue to post as reality starts to set in. I cant help enjoying the show.