Why Y2k renovation company stocks are doing so badly

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Why havn't the Y2K companies made bigger inroads into the renovation market? Their stocks are continually slumping.

-- T Lion (tlion@wizard.net), July 30, 1998


Because they are not making as much money as they thought they would. Corporations have not allocated as much money as the renovation companies expected - the corporate DP departments don't have the bdugets to buy software tools or enough consultants and are trying to do it on their own, and a lot of would-be renovators are working at 50% capacity, or have gone out of business. This does not bode well for what is going to happen Jan 1, 2000.

In addition, most of the Y2K companies are small cottage industires, with the usual management problems - not Wall Street's favorites.

-- drudge (anon@anon.net), July 30, 1998.

Here's an excellent (if somewhat disturbing) quote from Cory Hamasaki. He posts a weekly "Y2K Weather Report" column in comp.software.year-2000 with news & views from a "supergeek" point of view.

This link will get you a list of all the columns since July 15, 1998.

Anyway, here's an extract from his latest:

Instead of Y2K'ing, a very large computer services vendor is kicking back, sure, they'll do some work for a select group of loyal old clients but new clients? Nah, they're.... as they say, fully engaged. Then in 520 days when the failures occur and the clients start screaming "We're doomed! We're doomed!" This very large computer services vendor will stroll in and help out... but not for $100/hour... not for $200/hour, for significantly more. They'll be calm, professional, and will have "take it or leave it" contracts, contracts with large boxes for the amounts. This strategy gets solves the legal liability issues because ... the systems will already be broken. ...this is a strong reason that the work is *not* being done now... why fix code for $100/hour when you can wait a few months and do the same work for much, much more. Wait a few months and not have any liability. So the smart players are sitting this game out, liability, low rates, sit this game out and let the lightweights debate the morality of scaremongering... Let the nubies, who don't even know what the game is, have their day, and in 520 days, they'll bring in the big-guns. In 520 days, they'll say, you're mine, punk. ....sign over the firm.

I suspect that Y2K stocks will start to skyrocket in 1999, when the failures get frequent enough to notice. After 1/1/2000, assuming there's anything left worth fixing, the fix-on-failure rates will give lots of programmers a comfy retirement.

-- Larry Kollar (lekollar@nyx.net), July 31, 1998.

I have no wqay of knowing whether or not there is a significant impact here or not, but how may companies are choosing to solve Y2K problems by purchasing and installing new systems rather than remediate old ones? If that number is higher than the Y2K consultants expected, that could account for lower than expected revenues at those companies.

As for any publicly held companies doing well, Wall Street traditionally takes a dim view of a company whose principal product has a known shelf life. If such a company has no prosepct for a viable product to sell in 24 months, it makes a lousy investment. For those that do and will have other products to sell, you have to look at their overall performance.

-- Paul Neuhardt (neuhardt@ultranet.com), July 31, 1998.

This is not about a large company,but about a small company that I inquired into, a small mortgage company, I ask the question of them and their reply was that they would be upgrading to new computers since they felt it was a good time. What I wonder is about the software side and interaction with other computers. This company seemed very smug with upgrading hardware and that that would solve all their problems here. Yet when you talk with the biggist majority of people, They don't know squat about computers, i have been working with computers since the cpm and cobol days back when, I saw the 2000 problem back around '85. What shocks me the most is all the old computers and software still in abundance in the commercial section. Amazing ! I never thought then that these complex machines would still be operating dependbly today. I used to be afraid that every time I turned the thing on that it would go quit on me. Back then computers were expensive. I saved 30 days, worked without lunch to buy my first IBM PC, and that was without a monitor. Luck.

-- Darrel B. (river@cport.com), August 05, 1998.

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