Here's somemore FHT info. This comes from Information Week, as very well distributed publication for software professionals and engineers.
This article is 2750 words long, as such I've only posted parts of it relating to FHT and the nature of the article
Copyright 1999 CMP Media Inc.
InformationWeek
January 4, 1999
LENGTH: 2750 words
HEADLINE: Outlook '99 -- IT organizations will resist making changes as the year 2000 looms-but look for budgets to keep growing anyway
BYLINE: Justin Hibbard
BODY:
After years of hard-fought year 2000 remediation, many IT organizations this year will lock down systems and resist making changes as the most notorious date in computing history approaches. But because business won't stop, IT budgets will keep growing and companies will keep buying and deploying new technology-albeit with more caution than in previous years.
An InformationWeek Research survey finds that more than three times as many organizations will increase rather than decrease IT spending in 1999 over 1998 levels. But the 54% that will boost spending is down from 65% last year- and the 16% that will cut spending is up from 9%. The rest will keep spending at about the same level.
On average, IT budgets will represent 6.8% of companies' total revenue, and three-quarters of IT executives expect 1999 revenue will grow more than last year's revenue. "The business outlook is relatively positive," says Hank Leingang, CIO at Bechtel Group Inc., an $11 billion engineering and construction company in San Francisco.
Ironically, the most strategic technology investment companies will make in 1999-year 2000 conversion and testing-is also a major reason analysts cite for slower growth in IT spending this year. Slightly more companies will increase rather than decrease year 2000 spending in 1999. But once they've achieved compliance, many will balk at deploying new technology that could destabilize systems. "There's going to be a lot of clamping down on projects by the second quarter," says Dale Kutnick, CEO and research director of Meta Group Inc.
Bechtel will instate a lock down during the fourth quarter of next year, during which it will permit only emergency changes. But Bechtel is also minimizing new technology deployments throughout 1999. "This is not a year to be disrupting the portfolio in any major ways," Leingang says.
As a result, Bechtel's IT spending is likely to stay the same or decrease slightly this year. During the past two years, the company invested heavily in developing an intranet and Web-based applications. This year, it expects to reap returns from those investments and spend less on building new systems.
But companies whose core business hinges on IT will have a hard time keeping their hands off software. Equifax Inc., a $1.4 billion credit- reporting agency that provides outsourced data mining and other IT services to its customers, aims to finish all system changes for customers by Sept. 1. But it must remain flexible. "I'm not going to tell you that if some big business comes in and requires us to make changes to our systems, we're not going to do it," says Rich Crutchfield, corporate VP and chief technology officer at Equifax, in Atlanta. "But to do it would require approval from the highest level of this company."
Indeed, few companies say they can stop introducing new technology for several months and remain competitive. That's one reason customization and deployment of packaged software still ranks high on IT executives' checklists this year. Enterprise resource planning software is the second most strategic technology investment companies will make in 1999, according to InformationWeek Research. Other high priorities are data warehousing, Web development, and electronic commerce.
Many companies will try to cope with new software installations by running extra-stringent tests. Fingerhut Cos., a $1.5 billion retailer in Minnetonka, Minn., will subject new software to a series of so-called regressive tests, which make sure new code doesn't affect repairs already made to installed code. Fingerhut's total IT spending will likely match last year's level because of tighter cost control. But even after the company completes year 2000 remediation this quarter, it will free up funds as needed throughout the year for strategic IT investments, especially in E-commerce. "It's very important we don't disable the business or limit our ability to take advantage of new market opportunities," says CIO Alan Bignall.
Nevertheless, Fingerhut will not change its infrastructure software, such as operating systems and databases, unless absolutely necessary. The IT department will exercise extremely tight control procedures, says Bignall.
No Upgrades, Please
Other retailers are more adamant. Last June, several of them joined with the National Retail Federation in asking IT vendors not to release upgrades in 1999 other than minor year 2000 patches. "We've already
seen some violations," says Don Gilbert, VP of IT at the federation. "Most of the software and hardware suppliers understand that large companies are going to lock up their code after they've tested their systems." And that means IT vendors will experience a suspension of revenue, he adds.
PeopleSoft Inc. put off releasing version 8.0 of its namesake ERP package until the first half of 2000 partly because customers requested it. "Our existing customers would not want to receive a major release in the second half of 1999 because they'd be too busy focusing on year 2000 issues," says Rob McKelligan, PeopleSoft's VP of product strategy. PeopleSoft at first expected the ERP market to grow by 40% in 1999 but revised the estimate to 20% based on customers' year 2000 plans. PeopleSoft hopes to offset the dip in demand with sales of its new E-commerce and data mining software.
Other software companies are forging ahead with product releases in 1999. Microsoft says it will ship its long-awaited Windows 2000 (formerly known as NT 5.0) this year despite many critics' doubts. Microsoft doesn't expect year 2000 issues to hurt sales of the product, though customers may not deploy it immediately. "Even in a normal product release cycle, our customers are going to take six months or so before deployment," says Jonathan Murray, general manager of worldwide enterprise technical marketing at Microsoft.
The millennium bug isn't the only reason IT budgets will grow slightly less this year than in the past. Despite most IT executives' optimism about revenue growth, various global economic crises will put a crimp in technology spending in certain industries. The most likely outside event that could affect IT spending in 1999 is an economic slowdown in the United States, InformationWeek Research finds. Large companies are particularly concerned about ongoing economic trouble in Asia, though its effect on the U.S. economy is still uncertain.
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