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The first time Russell Welty heard about the Year 2000 Problem--also known as the Millennium Bug or, in programmer jargon, Y2K--it sounded simple. Too simple.
The problem, stripped down to its essentials, is this: Most computers on the planet are programmed to calculate dates in a two-digit format--for example, 02/14/98 represents February 14, 1998. As long as all the dates involved in such calculations are in the twentieth century, no problem. But come the year 2000, many computers will have trouble digesting the date 01/01/00.
Exactly what might happen depends on the programs involved. Some computers could assume that "00" means 1900 and start spitting out erroneous data, figuring 15-year notes as 85 years overdue, sending notices to centenarians to report to kindergarten and regarding the useful shelf life of new drugs and food products to have expired decades ago. Some may treat last year's files as ancient or nonexistent. Some may give up and crash.
The Y2K glitch has been talked about since the 1980s, but until recently, few people outside of elite computer circles had any inkling of the scope of the problem. When Welty began to seriously study the issue a little over two years ago, it was widely assumed that the trouble was confined to huge mainframe systems operated by major corporations and government agencies.
But Welty, vice president of equity research at the Denver investment banking firm Hanifen Imhoff, soon became convinced that the glitch would have an impact on far more computers than was generally believed--from mainframes running government missile systems or issuing payrolls to midrange systems tracking product shipments, networks shuttling office e-mail, even your neighborhood ATM. (Home computers won't be much affected; Apple's Macs should greet the new year without incident, while most PC users may just have to reset their clocks.) For many businesses, which have built highly customized computing programs on aging hardware, Y2K poses a host of headaches, from confusion over the day of the week--January 1, 2000, falls on a Saturday, but computers stuck in the twentieth century could treat it as a Monday, fouling up security systems and work orders--to the dreaded "99" problem (some programmers used to archive files they didn't want to expire by dating them 09/09/99, ignoring how rapidly that date was approaching).
Without some kind of intervention, Welty realized, corporate America could see its software party like it's 1899. A former computer consultant, Welty also knew that the fix would be more painful than just updating a few lines of computer code--or a few hundred million lines, for that matter.
"People have taken this two-digit code as a standard over decades, and there's a lot of code that needs to be changed," Welty says. "It looks simple, but it's very complicated. You can change one line of computer code, and it can take you six hours to debug what you just did."
In recent months, the Y2K issue has become more than an obscure concern of tech-heads. It has leapt from the pages of progammers' newsletters to the cover of Newsweek (headline: "The Day the World Shuts Down") and onto the Internet, where Y2K gurus push new software and books and make dire predictions about the coming apocalypse. It has spawned government task forces, Wall Street jitters, and an intricate, ongoing debate about the cost of exterminating the beast. For example, the Gartner Group, a high-tech research firm that has been pumping out Y2K studies like there's no tomorrow, estimates that fixing the problem worldwide will cost between $300 billion and $600 billion--a range that some experts believe is wildly overstated and that others consider too low.
Even within the programming community itself, some skeptics view the issue as so much hype, a cynical ploy to scare computer users into scrapping their software for all-new versions. The Y2K glitch "is not a huge problem of computer software, nor a unique problem, nor a difficult problem to solve, but it is the focus of a huge and unique racket," declares software consultant Nicholas Zvegintov in an article in American Programmer. "Solving the Year 2000 problem is an exercise for the software novice."
But Welty and other financial analysts disagree. If it's so simple, they say, why are major corporations and government agencies shelling out millions of dollars and countless employee hours to address the problem? US West plans to spend around $50 million on its Y2K fix; the State of Colorado, $40 million. The Social Security Administration, which has been working on the issue since 1989 and is wrestling with more than 30 million lines of code, figures it will cost at least $30 million to keep the benefit checks coming past the century mark.
"We're not trying to create a scare, but the more you dig into it, the more the possibilities open up," Welty says. "What happens if the supply chain is knocked down for a week or two? We've all become dependent on immediate delivery, and there were companies that went out of business during the UPS strike."
"Two years ago, when we first started telling money managers about this, we had a lot of people laughing at us," adds Barry Ollman, a Welty colleague at Hanifen Imhoff who deals primarily with institutional investors. "It sounded like this curious, faddish thing. People thought we were just nuts. But as the evidence came in, we've been more than vindicated."