Press Release: November 10, 1999

WR Hambrecht + Co Issues Report on the Impact of Y2K

Report shows confidence among IT executives, but points to Y2K impacts on ERP recovery and continued issues beyond January 1, 2000

San Francisco, CA, November 10, 1999—WR Hambrecht + Co, the online investment bank, today announced the release of a research report on the impact of Y2K. The report, based on research conducted by WR Hambrecht + Co analysts and Odyssey*, a San Francisco-based market research firm, can be accessed at www.wrhambrecht.com.

"While we do not see Y2K causing catastrophic events, we do think IT professionals will face some minor Y2K battles in the beginning of 2000," said WR Hambrecht + Co analyst Keith Bachman. "CTO’s will be leery of implementing major changes. In this environment, ERP investors looking for a quick turn-around may be sadly disappointed."

WR Hambrecht + Co and Odyssey surveyed 400 IT professionals to obtain a better understanding of the impact of Y2K. Generally, IT professionals expect Y2K IT problems to continue after January 1, 2000. Therefore, IT buyers may be reluctant to implement large infrastructure projects, which will likely limit the near-term recovery of Enterprise Resource Planning (ERP) software applications. Investors should not expect near-term recovery in the revenue growth rates of ERP vendors in the first or second quarter of 2000.

The report indicates that chief technology officers (CTO’s) feel their companies are prepared for Y2K, though many are less confident in the preparedness of their customers, vendors and suppliers. While 93 percent stated they were very confident in their own company’s Y2K plans, nearly 40 percent of those surveyed indicated a concern that problems may arise with various partner groups.

The report also indicates that many CTO’s see flat or declining IT budgets in the first part of 2000, demonstrating wide-scale pragmatism in dealing with Y2K. More than half in the survey indicated they would defer IT initiatives, at least in some degree, to deal with Y2K.

*William R. Hambrecht is a shareholder in Odyssey