Companies put IT spending on hold for Y2000

Millennium Resellers to be affected by freeze.

Buying freezes by big-spending users will cut into resellers' profits in the two-year period straddling the year 2000, as the millennium bug takes a hold on the industry.

John Hargreaves, managing director at Fprint, claimed that two of its largest clients, including a large building society, have banned IT spending for a two-year period covering the millennium.

He said: 'The building society is a good example of a large corporate that has approached the year 2000 as part of an ongoing strategy. 'It has done a lot of procurement this year, but from the end of the year it is not going to introduce any new technology and its research says it is going to benefit strongly.'

Hargreaves added other large companies had also signalled an intention to freeze their systems.

Fprint, which also does testing, has become intricately tied with clients who call it in to discover the contents of their own systems. This year, the company has already audited more than 50,000 PCs.

Hargreaves said close involvement with clients and their budgets showed resellers were in for tough times. 'The corporates have thought ahead and they have a strategy to deal with this. That is going to have an impact on resellers because they will be getting a spiked demand.'

When corporates return to buying, Hargreaves said it was possible hardware prices would rise as resellers struggled to cope with a sudden increased demand.

'The people who are going to suffer will be the pure box shifters and they will be knocked from pillar to post in the supply chain.'

A representative for Action Computer Supplies said no significant change was expected as the increase in users replacing old systems with compliant systems balanced out against those who had put a freeze on buying.

The move shows another trend developing to cope with the millennium bug.

Last week, it was revealed that finance companies were making a killing out of companies wary of spending money on systems (PC Dealer, 1 July).