Firms to fork out for Y2000 fixes

Worldwide customers will be forced to fork out $360 billion over the next five years on millennium and European currency conversion kits and internet/intranet tools, with the year 2000 problem costing the most.

According to a survey of global IT spend by US analyst Killen & Associates, about $280 billion of the total of $360 billion will be spent on year 2000 conversions. The total bill for the millennium reaches $440 billion when internal IT department services are taken into consideration.

The biggest spenders will be US firms, accounting for as much as 60 per cent of the total IT market, with Europe following with 29 per cent.

The projected spend on internet/intranet services and Euro conversion kits, will account for $45 billion and $35 billion respectively.

Most of the $280 billion investment in millennium kits will be spent in the next two- and-a-half years. A further $160 billion will be spent internally by IT departments to manage year 2000 projects.

Killen & Associates also quoted figures from a US trade association, which estimated the conversion cost per line of code to be $1. This means that for an average sized business, with 30 million lines of code, the cost of conversion could amount to between $3 million and $4 million.

In Europe, organisations will have to set aside a further $115 billion for internal management of Euro conversion projects internally.

Two months ago, the Computer Services & Software Association joined forces with the World Information Technology & Services Alliance to draw up a plan to solve the millennium problem (PC Dealer, 9 June).