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To: Rick Voteau who wrote (2209)	1/18/1998 11:44:00 PM
From: tech	Respond to of 3391

Rick, _____________________________ (reply to post #2209) Originally, most conversion were done manually and the price per line was dramatically higher. I believe that VIAS, initially, was selling an automated search tool to find the date occurrences and then had to outsource to find programmers and converted the code manually. The price per line was in excess of $1.50. Furthermore, there weren't that many y2k companies around. Once some automated tools were developed that not only assisted in finding the date occurrences, but also changing them, the price per line started to drop. Now, keep in mind that the vast majority of business hasn't come in yet and that we have seen all these different y2k companies pop up in the last year. However, we are starting to see article, after article, that is pointing out that resources (programmers and qualified staff) are drying up at a record pace. Furthermore, once the bulk of the business rolls in the price per line, in my opinion, will shoot up dramatically. Now the "work station" mentioned in the article seems to refer to companies who buy toolsets. ConSyGen does NOT license their toolset. I have also mentioned on several occasions that if you can't find the staff to use the toolsets, then you won't be able to do your projects in-house. Therefore, you would not go out and buy a toolset. I think that the idea of in-house projects is going to be an idea of the past once the flood gates open. Qualified staff will become non-existent. Furthermore, those that already have the staff and are already progressing with a in-house project, will see their payroll costs shoot up and it will be very hard for them to keep their programmers and projects on budget. I believe that the wave of demand will force many companies to turn to the automated conversion factories such as CSGI. If the article is trying to say the price per line has come down from when it was originally $1.00+ per line, then it is true. However, the main reason for this, in my opinion, has been the development of automated tools to not only find, but convert code and the delays in companies budgeting and spending on y2k. THIS WILL NOT LAST, as the bulk of the business flows in the huge demand will negate the resources and the price per line, as well as the payrolls for qualified staff, will rise dramatically. I feel that companies, such as Merril Lynch, who think they have their project under control, will see their project costs sky rocket once the flood gates open. They may have to quit in mid stride and start using a conversion house to convert code instead of having to keep dishing out the funds to match the increasing costs of keeping their staff. This is what you call an inelastic supply curve. Throwing more money at it won't create more supply, it will only make the existing supply cost more. Companies who decide to go this route will have a rude awaking. The more money they throw at it, the more they will have to keep throwing. It is my opinion that the true solution is to convert code in a manner that won't keep increasing your costs. I believe that he automated factory approach is the best way.

To: Rick Voteau who wrote (2209)	1/19/1998 2:54:00 AM
From: tech	Read Replies (2) \| Respond to of 3391

Rick, here are some more interesting things from the article I linked in my last post link: www2.computerworld.com "Corporate America is disturbingly behind schedule in dealing with the year 2000," Woodward said last month. "After nearly three years of tracking corporate response to the year 2000 problem, we would have expected to see significantly more firms with detailed plans in place by now." Martin, president of Data Dimensions, Inc., estimates that Fortune 500 organizations will each have to spend about 35 cents to 40 cents per line of code to convert all of their existing systems to accept the change from the year 1999 to 2000. "This translates into about $50 million to $100 million for each company...." July 1997: Estimated cost per line of code (from Technology Management Reports, a San Diego-based research firm) based on when a company begins its date-change conversion work: 1st half of 1998: $1.75 2nd half of 1998: $2.35 1st half of 1999: $2.95 2nd half of 1999: $3.65 1st half of 2000: $4 So, what could go wrong? Here's a short list of things that could break down come Jan. 1, 2000, if warnings aren't heeded: Microwave ovens City lighting systems Air traffic control The world's telephone systems Delivery of goods Delivery of bills Delivery of government checks Automated teller machines Other predictions include... Deaths in hospitals (Mike Smith, a doctor/computer expert in England, last month told The London Times that a 10% compliance failure rate will result in 600 to 1,500 deaths.) Elevators will drop to the bottoms of buildings Computerized sprinkler systems could ice your lawn in midwinter And last but certainly not least: A worldwide recession ----------------------------------------------- More than three-quarters of surveyed companies have changed their approach to the problem since they started. Changed 77% Not changed 23% ----------------------------------------------- Four out of five companies have been underestimating their year 2000 costs. Estimates are too low 82% Estimates are too high 12% Estimates are on target 2% Don't know 4% -------------------------------------------------- During 1997, firms increasingly perceived a need for more staff. (Percent indicating "yes" to various staffing issues) April 1997 45% August 1997 60% December 1997 72% ------------------------------------------------------