Editorial: The Storm Before the Calm?

I recently attended a Unisys Job Fair, but only as an observer boss (although there were some tempting positions open). Aside from explaining to my 4-year-old daughter that she couldn’t come because there would be no Ferris wheel, pony rides or cotton candy, it was pretty straightforward.

Ponies notwithstanding, there was a fair-like atmosphere. Throughout the day, about 1,000 people buzzed from table to table exchanging business cards and leaving resumes. Some were granted interviews on the spot, while others were shuttled back to Unisys HQ to meet managers and a few others were even offered jobs.

Unisys was looking to fill positions from marketing to engineering. And these weren’t just entry-level slots. Some of the skills being sought included five-to-10 years LAN and WAN experience, UNIX and NT integration know-how and voice-over IP.

The anticipation about starting new careers and the excitement of investing in area expertise seemed to squelch any indication of the six-to-nine month lockdown beginning this month. "The Lockdown?" Oh, that’s the theory stating no new hardware or software purchases will be made from now to as far out as March 2000 as companies brace for the Year 2000 rollover.

Heed not the lockdown. For, as most soothsayers predict the dreaded 2H99 (that’s second half of 1999), I see savvy managers getting a jump start on an opportunity – and we all know you don’t get that too often in this business.

I say this with confidence, because most people don’t even care today – June 1999 – about Y2K. In fact, this time next month most of the headaches would have hit, and businesses will have moved on to their recovery.

Yeah, the Millennium survivalist prophecies still run rampant. However, as far as IT is concerned, most of you and your colleagues are beyond worrying about the Year 2000, and are advancing onto the bigger and better phases of the IT evolution – the e-phase. Call it e-Commerce, e-Business or e-Service; but for the majority of IS managers, it is and will be business as usual.

Gutsy IT managers will need to take advantage of any competitors who may be "playing it safe;" thereby gaining a full three-to-six month head start on e-commerce initiatives. And just because a system is purchased and installed does not mean it needs to go live. This could be the perfect window to finish cleaning house; purchase and align a new IT program; and then just wait to pull the trigger.

And although no one has the CPUs to come right out and say it, major vendors are hinting that they too see little indication of a lockdown. For example, Unisys improved its second-half forecast. Although, playing it close to the vest, Chairman and CEO Larry Weinbach indicated, "We’re beginning to see some order activity for ClearPath systems in the third quarter, but, frankly, it’s too early to call."

Admitting long-term predictions for hardware purchasing is difficult; still Weinbach believes some customers will buy in the latter part of 1999 and implement after January 2000. "Visibility in our technology business is much shorter [than in services]. We can typically see out only about 90 to 120 days on hardware orders. This makes planning a challenge this year, due to the Year 2000 transition," says Weinbach.

"Some clients are installing enterprise servers early to get ready for this transition. This clearly benefited us in the first quarter, and we see continued strong ClearPath demand in the second quarter also. In the second half of 1999, we look for ClearPath sales to be down year over year due to this acceleration of spending from the second half to the first half."

But at a meeting of investment analysts in New York City, Mr. Weinbach said that Unisys now has better visibility into early 2H99 orders and was more comfortable with previously stated earnings estimates for the year ($1.35 to 1.40 per share).

Now many will scoff and say that I read too much into this cautious optimism and all this is just the "Storm Before the Calm." However, I see those making such statements as merely aligning their pre-excuses for the expected shortcomings as a result of their own poor planning. So beware of vendor innuendo, warnings and rumors of lockdown. Don’t let others’ missed opportunities force you to delay projects and lose the advantage. And for the next six months, eat, drink and spend money. For tomorrow, our systems die.