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Tech Industry

Bug of the century

One of the greatest challenges to the technology industry stems from a simple computer software trick intended to save memory.

    With fewer than 490 days until the new century, industry experts, international officials, and Wall Street analysts are warning of dire consequences should governments and companies neglect to make their computers immune to the widespread software glitch known as the millennium bug.



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    Who would have thought that one of the greatest challenges to modern technology would stem from a simple software trick intended to save memory?

    The Year 2000 bug is not a virus mischievously planted to wreak havoc, but rather the result of a simple short-cut used to denote the year in computer code. Nevertheless, the result is the same: the possible malfunction of --Ann Coffou, Giga Information Group entire systems that threatens to paralyze government agencies and multinational corporations.

    Ann Coffou, director of Year 2000 research at Giga Information Group, says no time is left to waste.

    "Don't be complacent," she warns. "I've seen people in the press saying 'Don't worry. It won't be a problem.' I think we're still suffering from a lack of understanding that this is a risk. It is a business problem and a consumer problem. We have to realize that."

    Known colloquially as the Y2K bug, the phenomenon is the result of software written to recognize years in only two digits--a space-saving trick devised in the days of limited memory capacity and expensive mainframe computers. The problem is that software using two digits to track dates will not be able to differentiate between the years 2000 and 1900. Both will be recognized as "00."

    Experts warn that, unless software using two-digit date fields is retrofitted to recognize four digits, system failures could cause oil rigs to stop pumping, power grids to shut down, banks to inaccurately process money, telecommunications to fail, and military warning systems to inaccurately warn of enemy attack.

    In truth, no one knows what will happen on January 1, 2000. But that hasn't deterred repeated doomsday predictions, political wrangling, and consultant-driven spending.

    Billions of dollars have been directed at the technology problem by most of --Bob Bennett, Special Committee on the Y2K Problem the industrialized world, and some estimates have put the global cost at more than $1 trillion.

    Edward Yardeni, chief economist at Deutsche Bank Securities, warns that the probability of a recession triggered by the Y2K problem has increased to 70 percent from his previous forecast and that inaction on the part of global leaders and slow progress by the U.S. government has raised the likelihood of a crisis. The downturn could be accompanied by deflation or a cycle of falling prices, he adds.

    Yardeni, who was named by the Wall Street Journal the top U.S. economic forecaster in 1997, focuses much of his criticism on private companies that are not disclosing their Y2K status and on the federal government for not requiring them to do so.

    "The Securities and Exchange Commission is still too passive with making companies disclose Y2K compliance status," says Yardeni, who is building a database of corporations' Y2K efforts for future reports on compliance.

    But not all analysts perceive the private sector's efforts as negligent, and thus many have a more optimistic view than Yardeni.

    In July, Merrill Lynch conducted a worldwide survey of thousands of corporations to gauge how prepared they are and to assess the effects of these efforts on investors. The survey concluded that corporations across the world are making aggressive efforts to tackle the Year 2000 technology problem and that most are making progress.

    Yardeni and other analysts do agree that the the global impact of the Y2K glitch will have some effect on U.S. corporations and the economy. Reports from other countries and economic sectors are disconcerting, if not downright alarming.

    In Scotland, for instance, offshore North Sea oil industry experts met last fall to assess the problem. In a worst-case scenario, oil platforms would be shut down in about two years simply because automated systems would fail to recognize the year 2000, experts warned. Companies such as Royal Dutch/Shell and British Petroleum said they are racing against the clock to check millions of date-sensitive microprocessors.

    The U.S. power grid, a patchwork of companies deregulated and dependent on one another to keep pumping electricity into our homes is just as prone to fail. The Special Committee on the Year 2000 Technology Problem released a survey in June finding that, out of the ten largest electric and gas utility firms contacted in the United States, only two had completed an assessment of their automated systems. One firm did not even know how many lines of computer code it had.

    "Based on the results of this survey, I am genuinely concerned about the --Edward Yardeni, Deutsche Bank Securities very real prospects of power shortages as a consequence of the millennial date change," said Bob Bennett, the chairman of the committee.

    However, computer systems that process taxes and bank accounts are most susceptible, according to analysts.

    Calling his agency's Y2K problem a "dangerous and Back to Year 2000 Index Page risky situation," IRS commissioner Charles O. Rossotti told the House Ways and Means Committee's Subcommittee on Oversight recently that "failure to identify, renovate, and test each of these system calculations could result in catastrophic disruption to taxpayers and the government."

    The economy aside, one of the most disastrous possible strikes by the Y2K bug on computer systems is the impact it may have on the software responsible for managing the world's military institutions.

    The Defense Department's efforts to fix its computer systems are moving at a snail's pace, making failure of "at least some mission-critical systems and the operations they support almost certain," according to a government report released this summer.

    Pentagon officials later said they are drawing plans to keep Russia and others from being spooked into millennium bug-related "nightmare" military scenarios.

    Analysts also say international strategic threats are increasing, according to reports from the Center for Strategic and International Studies. Senior advisers at the center have warned that cyberattacks from foreign nations may start coming under the guise of Year 2000 fixes.

    Amid all the dark predictions, there are still some experts who believe that the impact of the bug will be minimal. But most agree that, when the new century dawns, computer code that can't recognize the new date will cause computers to fail. What's unknown is the scale of those failures, how quickly those systems can be restored, and the damage that may result.  

    Go to: Y2K's rear guard