INVESTIGATING THE IMPACT OF THE YEAR 2000 PROBLEM who use technology and those who rect a range of accumulated errors create it. On a worldwide scale, while searching for the source of the leaders of corporations and countries problem. are struggling to understand the Y2K problem. In the process, they are Why is two digit notation defec- receiving a crash course in the frag- tive? ile mechanics of information technology. To save memory in the early days of computing, programmers repre- The Committee feels strongly that sented four-digit years with only two Y2K, as the first widespread chal- digits. For instance, 1968 or 1974 lenge of the information age, must would be stored and processed as leave a legacy of increased aware- 68 and 74, respectively. The num- ness and appreciation of information ber 19, indicating years in the 1900s, technology’s role in social and eco- was implied, much as personal nomic advancement. checks once had the number 19 preprinted on the dateline.

UNDERSTANDING THE This worked smoothly until users PROBLEM started to input dates occurring after December 31, 1999. Computers ran The goal of this section is to provide into problems when required to cal- background on the Y2K problem and culate a number based on the answer common Y2K questions. difference in two dates, such as the interest due on a mortgage loan. What is the Year 2000 computer Computers continued to assume that technology problem? the prefix 19 was implied, so dates such as 00 or 01 were treated as The phrases the “Year 2000 Com- 1900 or 1901. Consequently, com- puter Technology Problem,” the puters could not correctly calculate “Millennium Bug,” the “Century Date the difference between a year in the th st Change,” or simply, “Y2K”1 all refer 20 century and a year in the 21 to the same problem—a defect that century. exists in millions of computer pro- grams worldwide that causes For example, we know that the time erroneous handling of date (i.e., day, between July 1, 1998, and July 1, month and year) information if not 2005 is exactly 7 years. However, a corrected. The effect of the Y2K flaw computer with a Y2K problem could on computer systems is not easily calculate an answer of either 93 predictable. It may bring a computer years or -7 years, depending on the to a crashing halt. It may cause the specific program. Calculations that computer to generate obviously in- used either of these results would be correct outputs. Or alternatively, it in error and may themselves cause could allow the computer to produce subsequent problems. invalid data that will not be detected Another Y2K problem occurs in the until much later, forcing users to cor- storage of information. Many kinds

8 SENATE SPECIAL COMMITTEE ON THE YEAR 2000 TECHNOLOGY PROBLEM INVESTIGATING THE IMPACT OF THE YEAR 2000 PROBLEM of data are organized and processed private sector, loss of business sys- by date, such as driver’s license rec- tems means that a company may ords and credit card accounts. have difficulty managing its finances, Computers have had problems proc- making or receiving payments and essing credit cards that have tracking inventory, orders, production expiration dates after December or deliveries. In the public sector, 1999. Due to two-digit dating, com- government organizations may be puters have thought that cards severely hindered in performing ba- expiring in 2000 or later had expired sic functions such as paying almost a century ago. retirement and medical benefits, maintaining military readiness, re- What is the scope of Y2K prob- sponding to state and local lems? emergencies, controlling air traffic, collecting taxes and customs and The Y2K problem affects two general coordinating law enforcement efforts. classes of equipment. The first class comprises business systems or Y2K problems in embedded systems mainframe systems. These comput- have the potential to affect public ers perform a variety of data- health and safety. Problems that intensive calculations—balancing need to be fixed have already been accounts, making payments, tracking detected in medical treatment de- inventory, ordering goods, managing vices, water and electricity personnel, scheduling resources, distribution and control systems, air- etc. The second class of equipment port runway lighting and building has several common names, includ- security systems.2 Other suspect ing embedded chips, embedded areas are pipeline control systems processors and embedded control and chemical and pharmaceutical systems. Many aspects of modern manufacturing processes. society rely on microchip-enhanced technology to control or augment How was the Y2K mistake made? operations. Examples are ubiqui- tous. Automatic teller machines, toll Several factors explain the creation collection systems, security and fire of the Y2K problem. In the early detection systems, oil and gas pipe- days of computers, computer mem- lines, consumer electronics, ory was very expensive. In the IBM transportation vehicles, manufactur- 7094 of the early 1960s, core mem- ing process controllers, military ory cost around $1 per byte. systems, medical devices and tele- Today’s semiconductor memory communications equipment all costs around $1 per million bytes. depend on embedded chip- Thus, there was a very strong eco- technology. nomic incentive to minimize the amount of memory needed to store a Y2K related failures in business program and its data in the com- systems will generally cause an en- puter’s memory. terprise to lose partial or complete control of critical processes. In the

9 SENATE SPECIAL COMMITTEE ON THE YEAR 2000 TECHNOLOGY PROBLEM INVESTIGATING THE IMPACT OF THE YEAR 2000 PROBLEM

Additionally, early computer pro- on data collected quarterly from over gramming was highly time- 15,000 firms and government or- consuming. Programs and data ganizations in 87 countries. Gartner were recorded and entered into estimates a rapid increase in prob- computers via 80 column punch lems in 1999 with a peak sometime cards. Each of the 80 columns could after January 1, 2000. Problem oc- contain exactly one byte of informa- currences will drop off after 2000, but tion, which corresponded to one of will still occur for another 3 to 5 years the four digits needed to represent a at a lower level. Finally, the Informa- year. The cumbersome nature of tion Technology Association of punched cards encouraged using as America has reported that about half few of them as possible. the major corporations in America have already experienced some form Although programmers and manag- of Y2K disruption as of March 25, ers knew they had built software with 1998.4 latent defects in it, no one thought that software written in the 60s and How can we fix Y2K and how long 70s would survive to the Year 2000. will it take? Compounding the problem, newer software had to interface and share It is beyond the scope of this report data with the older software. Al- to cover the technical nuances of though the new software could have these various solutions. However, handled dates internally in four digit various techniques are briefly de- formats and swapped data in two scribed in Appendix III. digit formats with the older software, to do so added complexity and How much are Y2K fixes going to hence added cost to new software. cost? The net result was that the two-digit standard for representing years con- There is no generally agreed upon tinued much longer than anyone answer to this question. The Gartner would have guessed. Group’s estimate of $600 billion worldwide is a frequently cited num- When will Y2K problems start? ber. Another number from a reputable source is that of Capers Y2K problems have already surfaced Jones, Software Productivity Re- in many places. Cap Gemini, a search, Inc. of Burlington, MA. technology consulting firm, reported Jones’ worldwide estimate is over that as of December 1997, 7% of a $1.6 trillion.5 Part of the difference is group of 128 large U.S. companies that Jones’ estimate includes over had experienced Y2K related prob- $300 billion for litigation and dam- lems.3 By March 1998, that number ages but Gartner’s does not. A leaped to 37%. The Gartner Group, sense of the scale of the cost can be an information technology research gained from looking at the Y2K costs company, has developed a model to of six multinational financial services predict the rate of occurrence of Y2K institutions; Citicorp, General Motors, problems. This prediction is based Bank America, Credit Suisse

10 SENATE SPECIAL COMMITTEE ON THE YEAR 2000 TECHNOLOGY PROBLEM INVESTIGATING THE IMPACT OF THE YEAR 2000 PROBLEM

Group, Chase Manhattan and J.P. grams7 is an enormous task difficult Morgan. These six institutions have to automate. collectively estimated their Y2K costs to be over $2.4 billion. Additionally, The embedded processors pose an- the estimated cost of Y2K repairs is other problem. Although the increasing, as shown in figure 2. percentage of embedded chips with a Y2K problem is estimated to be Figure 2. Y2K Repair Estimates6 relatively small, potentially millions of chips exist that may have to be re- Company Past Est. New Est. placed. Unfortunately, most of them (millions) (millions) are not readily accessible or easily Aetna $139 $195 modified. ATT $300 $900 Bankers Trust $180-$230 $220-$260 Where can I learn more about the Cendant $25 $53 Y2K problem? Chase Manhatt. $300 $363 General Motors $400-$500 $890 McDonald’s $8 $30 Many solid references can be found Merrill Lynch $375 $560 in the endnotes of this section and Sears $63 $143 elsewhere in this report. An enor- Xerox $116 $135 mous amount of Y2K information resides on the Internet. However, legitimate information is buried Can’t we develop an easy Y2K fix? among overstated rumors and half- truths. As with most other informa- Popular sentiment suggests that a tion derived from Internet sources, technological quick fix will appear Y2K information must be verified for just in time to kill the millennium bug. accuracy. So far, “quick fix” claims have proved to be claims for a particular product Additional information can be ob- that may show promise in one par- tained through the Committee’s ticular application, for example, website at www.senate.gov/~y2k and finding where the actual dates and the President’s Council on Year date processing routines are hidden 2000 Conversion’s website at in a program. www.y2k.gov. Software programs and computer hardware vary too greatly to be fixed CRITICAL by one solution. Currently, there are INFRASTRUCTURES over 500 programming languages in use. A universal or broadly applica- Critical infrastructures can include ble Y2K solution would have to be both computerized services and compatible with many or most of physical services essential to mini- these languages. Additionally, find- mum functioning of economy and ing all the dates and date processing government. More than abstract in an estimated 36,000,000 pro- systems, critical infrastructures en- able the average person to use an

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