Millennium Meltdown

The origin of the Y2K bug is no mystery. In the Information Age's infancy, when large corporations and government agencies began using mainframe computers to automate tasks, the memory used to store programming instructions was scarce and expensive. Programmers writing the code for business applications were encouraged to conserve space whenever they could; one way was to use abbreviated date codes, with only two digits to indicate the year. Assuming their programs would no longer be in use by the turn of the century, programmers ignored the fact that come 2000, these computers would interpret the date codes with a two-digit year field of "00" as being 1900, and then incorporate this corrupt data into a wide range of date-dependent calculations.

Forty years later, this mistaken assumption is coming back to haunt a world far more dependent on computers than these early programmers could have imagined. And far from being corrected, the problem has been compounded by the millions of lines of code (studded with the problematic two-digit date fields) that were added to the original pro-gramming over the years, making the correction process tedious, time consuming and very costly.

Embedded chips, tiny micro-processors that control everything from VCRs to computerized switching units at nuclear power plants, may also be infected with the Y2K bug-but their programming is hardwired into the chip and cannot be audited or corrected. Instead, each and every embedded chip that is suspected to be non-Y2K-compliant must be inspected and, if necessary, replaced.

This faulty programming has also made its way into PC hardware and software, says John Grover, president and CEO of Duluth, Georgia, MillenniumPlus Consulting and author of Your Company's PCs and the Year 2000 (self-published). "A lot of people don't realize how vulnerable PC-based systems are to the bug," says Grover, "especially PCs built before late 1996. If you're running applications that rely on DOS for the correct date, you may have some problems with those applications after the year 2000."

In a small business equipped with a handful of desktop PCs, repairing or replacing non-Y2K-compliant equipment is relatively simple. The real source of most post-millennial business interruptions will come from outside your business, as a re-sult of the Y2K bug's potential effects on infrastructure: power, telephone communications and other services.

When a special panel under the Senate Banking Subcommitte on Financial Services and Technology convened recently to check the utility companies' progress on the Y2K problem, industry experts called the chances of Y2K-related outages "extremely low, but conceivable." But when subcommittee chair Bob Bennett (R-UT) polled 10 power utilities and asked how many of their most important computers had been fixed, he was given answers ranging from 5 to 54 percent.

Blessed with big budgets for modernizing and enlarging their computerized switching systems, telecommunications giants AT&T, MCI and Sprint have tackled the Y2K problem head-on; each will spend more than $200 million this year on their respective Y2K-compliance projects. Smaller regional telecom providers, however, don't have the same resources to battle the problem, and no one is quite sure what collective impact this may have on telecommunications as a whole.

This article was originally published in the January 1999 print edition of Entrepreneur with the headline: Millennium Meltdown.