http://www.news.com/News/Item/0,4,34864,00.html?tag=st.cn.4020tc2.newstkr.ne

relevant quote:

"Internet security stocks took a big hit this week thanks to revenue shortfalls, analyst downgrades, and worries about the diversion of corporate budgets toward Y2K spending.

Both Network Associates and Axent warned Wall Street that their quarterly revenues would fall short of expectations.

Investors are concerned that corporate computing budgets may be diverted to address looming Y2K problems faced by many companies, resulting in lower sales of security software for the rest of the year. Analysts say these worries have already hit companies in the enterprise resource planning sector, where stock prices are languishing.

Shares of SAP, the largest ERP software maker, have fallen since the German software giant last month warned analysts of sluggish first quarter sales, with Y2K taking part of the blame. Last week, PeopleSoft echoed SAP's experience, saying demand caused by the Y2K had dried up.

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This week, it was the security sector's turn to get hammered. "The paranoia surrounding Y2K is hurting all these stocks," said Todd Raker of ING Barings, who this week downgraded both Axent and firewall vendor Check Point Technologies.

Raker said Y2K worries about security stocks may be overblown but they're real, nonetheless. "I think it will have impact on revenue, but I don't think it'll be a disaster," he said.

"Y2K is putting a squeeze on a lot of these vendors," said David Breiner, who follows Axent and other security stocks for Volpe Brown Whelan. But he noted that different factors affect each company.

In the security sector, "There have been very few consistent success stories," said Breiner. Security Dynamics, parent of RSA Data Security, relies on a handful of products for its revenue, he said.

Although Check Point, with a relatively narrow product focus, hasn't been hit by a Y2K slowdown yet, Raker thinks one will come later this year.

Axent and Network Associates both attributed their woes in part to a Y2K slowdown, but they also had trouble closing orders by the end of the quarter. Secure Computing, another vendor with a broad line of security offerings, warned last week that first-quarter revenue would be 36 percent below the comparable 1998 period. "

-- Arlin H. Adams (ahadams@ix.netcom.com), April 09, 1999

Answers

Arlin,

Thanks for the post.

".....first-quarter revenue would be 36 percent below the comparable 1998 period. "

ouch.

"The paranoia surrounding Y2K is hurting all these stocks,"

I think I will nominate that as my y2k quote of the day. ;-)

-- Deborah (infowars@yahoo.com), April 10, 1999.

Many companies are freezing new projects until Y2K is resolved. While there is still some money to be made on compliant upgrades of existing products, I think many software companies will be hurting for new sales later this year. <:)=

-- Sysman (y2kboard@yahoo.com), April 10, 1999.