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Technology Stocks : INFORMATION ANALYSIS (IAIC) - YEAR 2000 Date Remediation -- Ignore unavailable to you. Want to Upgrade?

To: Ty R who wrote (1203)	1/13/1998 10:23:00 AM
From: the dodger	Read Replies (1) \| Respond to of 2011

1/8/98 Analyst Downplays Impact Of Year 2000 Bug On Software Sales NEW YORK -(Dow Jones)- Although Goldman Sachs & Co. analyst Rick Sherlund sees a slightly tougher environment for capital spending on technology this year, he doesn't think spending to fix the so-called year 2000 computer problem will hurt 1998 sales of business software systems. Sherlund sees earnings growth for technology companies again oupacing the S&P 500 benchmark this year but he expects fewer positive earnings surprises than the technology industry has seen over the past couple of years. Sherlund also said that while the economic crisis in Asia could have both direct and indirect effects on the technology industry, the European market continues to strengthen. In the booming market for big business, or enterprise, software, Sherlund expects robust growth in the fourth quarter and slower-but-still-strong growth in 1998. He believes the economic climate in Asia will not be a big problem for the enterprise software companies in the fourth quarter, but noted that they could see "a tougher year ahead." Sherlund's somewhat optimistic forecast is noteworthy because disapponting fourth-quarter results from database-software developers Oracle Corp. and Sybase Inc. have heightened fears about the health of the market for database and other types of business software. There is some suspicion that many corporations have as much big programs as they need or are reluctant to upgrade to new products. And sales in troubled Asia are tailing off in some key segments. There has also been talk among experts that spending on the year 2000 computer problem is causing companies to scale back spending on things like new installations of database and messaging systems. The argument is that many big companies are content with their current systems but are scared to death of the year 2000 issue. The year 2000 problem, sometimes called the millennium bug, stems from the inability of many older computer systems to read dates beyond 1999. Because many older systems treat years as two-digit numbers, they can't distinguish between centuries and will cause businesses, governments, banks and other organizations major problems in the year 2000. Without specialized reprogramming, many systems will think the year 2000 - or 00 - is 1900. Market-research firm Gartner Group has estimated between $200 billion and $600 billion will be spent world-wide to rewrite an estimated 250 billion lines of software code. Although some computer experts say the gloomiest of predictions have been overblown, others aren't so sure. Gartner thinks more than 20% of all information-technology spending is being aimed at fixing the year 2000 bug. If that worsens, it could become a major factor because half of all capital spending in the U.S. is tied to information technology. And it accounts for more than a quarter of growth in gross domestic product. Some other market watchers have raised their estimates for fixing THE PROBLEM, BECAUSE IT IS MOSTLY A LABOR ISSUE, and labor costs are soaring. The rush to address the year 2000 situation has resulted in severe labor shortages for computer-services providers. Fixing the bug is NOT THAT DIFFICULT...IT IS JUST VERY LABOR INTENSIVE. TSR Inc., a small player in the year 2000 software market, in October raised prices 20% for its services and hinted another increase may be in store in the beginning of 1998. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved. 1:53 PM Copied from the PRODIGY(R) service 01/13/98 10:02