A report carried out by analyst group Ovum into the implementation of European Monetary Union predicts a huge skill shortage in the short term – and massive job losses once the problems of EMU and Year 2000 compliance are out of the way. The report, carried out by Ovum associate Dennis Keeling, forecasts the industry is likely to face a major skills shortage as January 1, 1999 – the date when the EMU kicks off – approaches. Ovum says that 70% of organizations will either replace or upgrade their software to make it Year 2000 compliant, but believes the take up to make systems EMU compliant will be hindered by the complexity of the software required. At this time, there isn’t one solution equipped to deal with the problem, which involves designing a system that can cope with multi-currency issues, instead of the existing system which simply calculates cross currency rates. Keeling, however, doesn’t think the European commission will be able to enforce a multi-currency rate that draws on the Euro as its base rate, as things stand at the moment. The transfer to the Euro will not be as straight forward as the process of decimalization that took place in the UK in the early 1970’s, which happened practically overnight. A date was set and from that day forward UK currency took on its current decimalized state. With EMU, there is a three year period of transition relating to the dual currency balance which discounts the possibility of a ‘big bang’ date. Keeling says the only company to so far commit to a ‘big bang’ philosophy is Sage Group Plc with its business accountancy software. The software that is developed to cope with EMU is going to be very complex, as it will have to take into account the fact that not every country within the European Union will commit themselves to EMU at the same time.
Growing too fast
When it comes to financial packages generally, Ovum has found that SAP AG and its R/3 system is dominating the market and the gap between it and its nearest competitor is continuing to grow. Together with Baan Co NV, SAP dominates the Enterprise Resource Planning market. The reason, according to Keeling. is that both organizations are European and understand international and multi-currency issues. But Keeling has warned that Baan is unlikely to continue to ride the waves as it has done in recent times. He said: Baan has got character and direction problems. It’s growing too fast. One of the more surprising findings of the study was the uptake of Microsoft Corp’s SQL server, which will apparently outsell Oracle Corp this year in terms of units shipped. Keeling says Oracle’s databases continue to be popular, along with IBM Corp’s DB2, among larger organizations, while Informix Software Inc and Sybase Inc are quickly fading into the background. As Microsoft’s database soars in popularity, so does its operating system. Keeling says NT has overtaken Unix now, although it still lacks scalability and he recommends no more than 350 concurrent users. But he predicts NT will be the market leader by 2000. Keeling says that when it comes to scalability, the mainframe is still very much alive and kicking with IBM’s AS/400 ruling supreme over its competitors, with scalability powers that can enable 3,500 concurrent users. With all the activity within the industry at the moment and demand for new recruits increasing on a daily basis, Keeling believes a massive loss of jobs will occur when Year 2000 and EMU issues have been addressed and resolved. Keeling believes the software development industry will decrease by at least half, possibly two-thirds, by 2006.