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Resellers refute Y2K spending freeze claim

Resellers refute Y2K spending freeze claim

Australian resellers expect to defy industry Y2K perceptions, predicting sales growth will continue until the new millennium.

Resellers contacted by ARN last week agreed with IDC predictions that only 10 per cent of IT spending will be frozen as organisations rush to complete Y2K compliance testing this year. IDC made the prediction at its Directions '99 conference in Sydney recently based on figures received from its March Global IT Survey.

In contrast, a rival analyst pictured a completely different year 2000 buying scenario. Ian Bertram, principal analyst at GartnerGroup, is typical of many industry commentators who believe IT spending will decline - particularly on hardware - between September and December this year.

"A lot of corporates have already finished upgrades and most of the spending will be on contingency and disaster recovery," he said.

He did concede, however, that "estimates for overall IT spending will go up towards the end of this year".

Henry Craven, managing director of CI Computers, said it's "business as usual" despite the Y2K threat.

"Everyone is aware of the compliancy issue, so they're not baulking or holding their breath to see what happens," he said.

"You'd expect to see some people baulking on spending, so the 10 per cent figure sounds about right," Craven added.

He said the Y2K issue continues to serve as the catalyst to throw out old hardware.

"Companies are using it as an excuse to say 'those old 486s aren't worth the effort, lets get in new [Y2K compliant] equipment'," Craven said.

CI Computers is expecting to achieve higher sales between September and December right now, he said.

Ian Gillard, manager of Bendigo-based reseller Scientific Business Software Service, also agreed with IDC's predictions, describing the rise in IT spending as a Y2K-inspired "run-on effect".

But Gillard explained the difficulty he has in interpreting sales figures is how to separate specific Y2K spending from "Y2K precipitated" spending.

Hugh Smith, managing director of WA reseller Computercorp, said his company has not yet witnessed an increase in spending despite $2.5 million in back orders for May.

"We might see a last minute rush, not just on PCs and servers but on switches and routers as enterprises look at options to handle hardware and software issues relating to the date change," he said.

Tony Iannuzzelli, managing director of Sydney-based IBM reseller Vertex Technology, agreed Y2K is stimulating investment in technology.

He also believes Y2K is forcing many organisations to move from host-centric to client/server technology.

"Small-to-medium enterprises have lagged behind in client/server compared to big corporates. They're making the investments in IT, and we're going to see more expenditure as these companies recognise how important it is to align their IT strategies with their business strategies."

Mitch Radomir, NetStar's marketing and business development manager, said the company is counting on long-term integration tenders and contracts to carry it over any possible downturn later this year.

"A few years ago the organisation made a concerted effort to grow its SME business considerably," he explained.

"Having done that we think our SME business will help get NetStar over the line between September and December this year," Radomir predicted.


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