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Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: art slott who wrote (4513)	1/22/1999 12:14:00 AM
From: Dan Spillane	Respond to of 8218

Not exactly; as described by several customers, they are making larger outlays up-front and conversely planning on freezing general spending as Y2K approaches. Translation: period of boom...followed by bust. The freezing of spending has to due with the need to have solid systems, tested for some period as being Y2K compliant. Here is basically how preparation for Y2K works at many companies: Step 1: Analyze systems, upgrade as needed and as early as possible. Step 2: Begin testing of systems for a period, start rollout. Step 3: Complete rollouts. Freeze all spending once systems prove solid for Y2K. Cannot add new systems due to danger to tested, solid systems. So, there's an explanation for IBM's service revenue growth recently, even if not immediately apparent...the driving reason for system upgrades and associated services really is Y2K. ...since a portion of IBM's service revenue is tied to Y2K consulting and upgrades, at some point sequential comparisons and YOY comparisons could look real bad.