NCPA - National Center for Policy Analysis

Spending On Y2K To Soar Next Year

August 5, 1998

Businesses will devote massive sums next year to solve their Year 2000 computer problems, according to a report from the Gartner Group. Gartner predicts that the amounts involved will be withheld from budgets normally devoted to purchases of new computers and software -- putting a squeeze on those industries, which are already grappling with slowdowns in sales.

  • Gartner predicts that businesses will devote 44 percent of their information technology budgets next year to fixing the Year 2000 problem.
  • That compares to just 5 percent of information technology budgets last year and 30 percent this year.
  • The report says that businesses are already cutting back on software purchases, since companies are concentrating on the 2000 bug and "there's nobody left to install the software."
  • The Year 2000 drain will also siphon off money for computer training, for equipment needed to maintain large data warehouses and for systems support -- again, because technicians will be toiling on the 2000 glitch.

But businesses don't intend to scrimp on computer systems for company-wide tasks such as purchasing, since they often must be upgraded to be Year 2000 compliant.

Source: Paul Davidson, "Budgets Feel Sting of Year 2000 Bug," USA Today, August 5, 1998.


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