Busting the bug: Not rocket science

The Y2K consulting business is good--driven mainly by a robust technology market in general--but not the boondoggle once envisioned.

5 min read
It wasn't a vision of computer meltdowns that drew Bill Schlondorn to Y2K consulting. His imagery had more to do with long, lazy days spent on the beaches of Maui as he tallied his riches from lucrative Y2K consulting deals.

But Schlondorn, like millions of other disappointed consultants, has had to settle for a more pedestrian lifestyle. His business is good--driven mainly Year 2000: The cost of fear by a robust technology market--but hardly the gold mine he envisioned. Now, at best, he hopes for an early retirement.

Like many in the technology industry, Schlondorn believed that the Y2K glitch would greatly increase demand among large and small companies for consultants and programmers to revamp old software and stamp out any Y2K-related bugs.

For several years, respected experts and government leaders alike have been sounding the alarm that too few programmers were available to fix scores of software programs running in big businesses, government agencies, and schools.

The near-pandemonium over programmer scarcity quietly subsided this year as surveys by computer industry analysts showed that the expected shortage never materialized.

"It didn't happen," said Schlondorn, the founder and chief executive of Blue Moon Consulting. "The Y2K forecasts were a lot of hyperbole. A lot of companies were able to handle the problem internally. We just didn't see the business we originally thought would come. We got just 20 percent of the business we thought we would originally."

CNET News.com TV interviews Bruce McConnell, of the International Y2K Cooperation Center, about business systems 
Bruce McConnell
Because many companies are still finishing repairs, hard numbers on Y2K hiring trends have yet to be assembled. But observers say businesses haven't sought outside consulting or code-crunchers anywhere near as much as originally expected. In fact, both analysts and industry watchers report that overall, big business has rarely strayed outside of its internal labor pools for Y2K help.

"On the whole, the majority of corporate brass decided against expanding their information technology budgets for Y2K," said Lou Marcoccio, an analyst with Gartner Group. When information technology managers realized this, they handled their Year 2000 conversion themselves, he said.

John Giordano found out the hard way how quickly Y2K work evaporated. "Analysts, businesses, including us, thought this was going to be a billion- or even trillion-dollar business," said the chief executive of Peritus Software Services, a Westborough, Massachusetts-based provider of tools and services for fixing Y2K problems. "Overall, we saw quite a bit of business, but nothing like we thought. It wasn't at all what we expected."

In addition, companies didn't shell out the extra cash for outside help mainly because the people who knew the most about their complex business software were already on staff.


"So, as companies move into the implementation phase of Year 2000 projects, it will become increasingly important as well as increasingly difficult for IT managers to retain internal programming staff and project managers," said Giga Information Group analyst Stephanie Moore. -November 19, 1997
Companies "are definitely not neglecting the entry-level people. There are many different sources, like retirees and even the homeless. Companies are leaving no stone unturned," said Bill Martorelli, of Giga Information Group. -November 19, 1997
"Just the IT (information technology) section alone in Sunday's Washington Post had 84 pages of ads," said Mark Uncapher, an adviser to the Information Technology Association of America. "That was as thick as I've ever seen it." ?January 26, 1998
"You will not be able to get an outsourcing contract this time next year with a high-level contractor," said George Colony, president of research firm Forrester Research. ?January 26, 1998
"I call it the Pearl Harbor problem. There is not enough time. There are not enough people. It's now the time to call out the reserves and see what needs to be done." -Bill Payson, chief executive of Senior Staff 2000, a company that maintains a database of retired Cobol specialists. "All of us are recruiting on the Internet. It's the only way we can roll all of this out fast enough." ?September 16, 1998
The increased demand for information technology consultants and other services to fix Y2K problems "never happened," said Lou Marcoccio, an analyst at Gartner Group. "Many companies ended up doing the work internally. In fact, we found that only 3 percent of Y2K work was done by outside consultants." ?August 13, 1999
"We've seen many companies do much more work on this issue with internal staff than [was] originally thought earlier on," said Bob Cohen, vice president of communications at the Information Technology Association of America, a trade association representing the technology industry. ?August 13, 1999
"Y2K has been a disappointment," said Senior Staff's CEO William Payson. ?August 13, 1999
"Most of the expertise on business processes and applications existed inside of the company," Marcoccio said.

Giordano agrees. "A lot of companies stopped work on other information technology projects and transferred resources and manpower to Y2K, working on the problem themselves instead of going outside for help," he said. "Another reason is many decided to upgrade their systems rather than spend time and money renovating old computers. For those reasons, it was less business for us, all in all."

In 1996 and 1997 many information technology consultants and toolmakers thought Y2K would bring a high demand for their services, but "this never happened," Marcoccio said. "In fact, we found that only 3 percent to 7 percent of large companies went to outside consultants for Y2K work."

For programmers, fixing Y2K problems in software is more tedious than challenging. Two basic techniques are used: extending a software program's ability to recognize dates within a certain range, a technique called "windowing"; and expanding the date fields in software from two digits to four digits so that entire year dates are recognized.

An example of a windowing fix is the Y2K update done by Microsoft to its Office 95 software applications. In Microsoft Word 95, Word assumes which century you mean when you enter a two-digit year in a date. Years entered as 00-29 are assumed to be in the range 2000 through 2029. Years entered as 30-99 are assumed to be in the range 1930 through 1999. Windowing has been used in the majority of Y2K software fixes.

Many companies realized that most fixes were relatively straightforward and decided to fix code themselves and by hand instead of using automated tools. That also led to less demand for Y2K tools, said Robert Austrian, an analyst with Bank of America Securities who follows software makers.

Austrian said he long ago downgraded the stocks of companies selling Y2K fix software. "People seemed to replace systems or fix them by hand more than the Y2K tools vendors expected. And the Y2K tools players generally didn't emerge as trusted vendors to their customers, meaning that customers did not go back to them after fixes were done," he said.

"When pipes burst and you call the emergency plumber, that's an opportunity for him to be your regular contractor. Y2K software companies and consultants had that opportunity, but they didn't take advantage of it. Once fixes were done, they were out of the picture," Austrian added.

Still, Schlondorn said he doesn't regret leaving the Valley to launch a start-up, hoping to cash in on dreams rather than reality.

"It was profitable for us to get into the business," he said. "There was enough to make a living but not enough for beachfront property on Maui."  

Go to: Wall Street holds its breath