STORY:
Small Business Far From Y2K Compliance

According to a new bulletin from International Data Corporation (IDC), small businesses' Y2K preparations are far from finished. Survey research just completed indicates that the majority of small firms have yet to undertake a formal assessment of their Y2K compliance. While small businesses with the biggest investment in technology are furthest along in their preparations, IDC estimates that 3.3 million firms have waited until the last minute to prepare for the millennium.

Total Small Business Spending on Y2K Preparation: $10.6 Billion Already, $6.9 Billion to Go, says IDC. IDC's Vice President of Small Business Research Raymond Boggs noted that a growing number of small firms are finally starting to move on Y2K: "Many small business Cinderellas now realize that it's getting toward midnight and it's time to take steps to avoid trouble." Small businesses have already spent an estimated $10.6 billion on hardware and software upgrades that will help avoid Y2K problems. With the countdown already started, IDC estimates that small firms will spend an additional $6.9 billion before the ball drops on New Year's Eve.

The largest share of small businesses have little to worry about in the year 2000 because they rely on standard software packages with upgrades and "software patches" readily available over the Internet. Of course, firms still have to examine the programs that they use and decide to upgrade.

The "Y2K inactives" that have only just started looking at the problem have spent some money on upgrades, but most of their spending is still to come, notes IDC. In contrast, the "Y2K actives" are further along in the upgrade process, although their total spending and their potential problems are greater because of greater reliance on customized software and proprietary solutions.

"Y2K Actives" These 2.9 million small businesses with PCs have already reviewed their hardware and software formally to ensure Y2K compliance. Although a minority of PC-owning small firms, they will account for about 57% of all small business Y2K spending.

"Y2K Inactives" These 3.3 million small businesses are beginning to realize they must take formal steps to evaluate how ready they really are for the millennium. Although many of these firms have invested in new hardware and software in the past 12 months that will contribute to their Y2K readiness, they have not yet made a formal assessment of what steps they need to complete in order to be truly Y2K compliant.

Source: Business Wire

DATE: 5/24/99

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