Industry research firm Gartner Group today gave its final report on the Year 2000 technology problem, outlining the readiness of high-profile companies and industry sectors. The firm also gave its final figure for the total cost to combat the so-called millennium bug worldwide.
"Around Jan. 1 we do not expect to see any catastrophic events, only minor occurrences that may just last hours," Gartner analyst Matt Hotle said. "Many businesses will see an impact on Jan. 3 and 4 when businesses bring systems back up" and as people return to work following the New Year's holiday.
Yet amid most positive news about the state of Y2K preparedness, Ed Yardeni, an economist with Deutsche Bank and year 2000 expert, told CNET News.com that the confidence demonstrated by federal officials and research agencies is premature.
"It's a combination of complacency and arrogance," Yardeni said.
Yardeni, who earlier painted a worst-case economic scenario for the first six months of 2000, claimed that he is "still skeptical. It would really be the greatest miracle in human history if every system has been fixed. I don't think we've left enough time to properly test the systems that are fixed."
Over New Year's weekend Hotle said most companies plan to keep compliant systems up and running, but limit activity to non-essential business transactions or processes.
"Many are also closing their systems to outside data," he said, to prevent any Y2K-related viruses or malicious hackers from attacking computer systems.
As earlier reported, Gartner Group expects the Year 2000 problem to cause computer failures throughout 2000 and possibly into the following year.
"This is not a single event. In fact, 50 percent of Y2K failures will be spread out over the next year," Hotle said. Because of this, the overall effect of the Y2K bug on industry and business should be lessened, Gartner Group analyst Lou Marcoccio added.
Most system failures, if they occur, are expected during the fourth quarter of this year through the third quarter of 2000.Yet Marcoccio still expects sporadic problems in some cases from the third quarter of this year even through the first quarter of 2001.
Keeping with its original estimate, the research firm pins the total cost of the Year 2000 technology problem worldwide between $300 billion to $600 billion.
The industry for information technology internationally is worth an estimated $2 trillion. A majority of large organizations have spent at least 10 percent of their IT budgets in 1998 and 1999 on Y2K compliance efforts and testing.
Marcoccio said government services could be the highest-risk area. Yet most potential system failures should be isolated from the general public, solely affecting corporations' back-end systems.
"Only a small percentage of failures will be visible by the general public," Marcoccio said.
As far as industry is concerned, utilities have "been taken care of here in the U.S., although we expect to see small localities have some isolated failures," Marcoccio said.
The banking system in the United States is in very good shape, he said, although some isolated administrative and transaction system failures may occur following the New Year's weekend. These problems could be spread out over time, he added.
Marcoccio said small businesses have also made "tremendous" progress in preparing their computer systems for the Year 2000. More than half of small businesses around the world has tested newly compliant systems, while other firms have said they aren't concerned about the bug as they do not rely on automated systems for their business.
Outlining what he called the "global scenario," Marcoccio said countries furthest behind in their Y2K efforts include Russia, India, Pakistan, states in Central and West Africa, and a few countries in the South Pacific.
Those countries leading the pack in preparedness are the United States, the United Kingdom, Australia, Sweden and Chile.
"Failure in general in the countries who are furthest behind won't be catastrophic," he said. "They will be isolated significant problems," that may take hours to days to fix.
The Year 2000 problem, also known as the millennium bug, stems from an old programming shortcut that used only the last two digits of the year. Many computers now must be modified, or they may mistake the year 2000 for the year 1900, and may not be able to function at all.