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To: Jeffrey S. Mitchell who wrote (8271)	10/13/1998 1:24:00 PM
From: Papillon	Respond to of 10786

Y2K Computer Fix To Eat Up Budgets-Survey By Eric Auchard ORLANDO, Fla. (Reuters) - Company spending to avert computer breakdowns resulting from the Year 2000 date change will consume a whopping 44 percent of information technology budgets in 1999, according to a survey. While corporate computer budgets are expected to stay relatively flat in 1998 vs. 1997, the portion spent on Year 2000 fixes will eat up 29 percent of the total this year, up from 5 percent in 1997, according to computer consultant Gartner Group Inc. The survey is the latest to suggest a corporate spending pullback has begun that will sap investments in new technology, slowing growth for many computer companies. Gartner Group Chief Executive Manny Fernandez said in a speech on Monday that Year 2000 spending will become the No. 1 technology priority for companies worldwide, beating out spending on nearly all other new computer technologies combined. "This year, 1998, that number is 29 percent," Fernandez told about 10,000 people at the opening day of Gartner's annual Symposium/IT Expo 98 in Orlando, Fla., "Our latest forecast is that that percentage will soar to 44 percent of IT (information technology) budgets in 1999." The statistics are based on a survey of technology managers at 15,000 small, medium and large companies in 87 countries. Gartner has estimated the worldwide cost of preventing potential Year 2000 computer failures will total $300 billion to $600 billion, with $150 billion to $225 billion of that amount to be spent by U.S. companies alone. That's funding robbed from new technology that companies otherwise might have installed in the coming years. Projects that could be delayed or cut back include new software to link key business operations, larger data storage networks, new computer-based customer service phone centers and electronic mail systems, Fernandez said. Overall, computer systems account for an average of between 5 percent and 8 percent of corporate budgets in the companies surveyed, depending on whether the business is an aggressive user of technology or not, according to Gartner. Gartner is the top information technology market research firm in the world, with more than 11,000 corporate clients. It has been a leading voice in popularizing the threat of Year 2000 computer failures. The Year 2000 crisis stems from a once-seemingly-innocent computer programming shortcut begun decades ago that used the last two digits of a year to substitute for the full year. A computer understands "69" to mean 1969 and "98" to represent 1998. But "00" may be interpreted as 1900 in many computers, throwing off other calculations, unless the software is upgraded in time. Many experts say the danger is that computers unprepared for the millennium rollover will fail, potentially causing everything from traffic lights to electric power grids to fail, sparking widespread economic and social dislocation. Lou Marcoccio, a Gartner analyst and Year 2000 expert, said the number of companies initiating computer millennium fixes peaked last January, which explains the sharp jump in spending this year. He said further spending has resulted from a realization that the problem is not confined merely to older mainframe computers used to run large businesses, but extends to a variety of smaller computer hardware, software and so-called embedded systems. Embedded systems include refrigerators, car brakes and elevator circuits.