The article below is taken from a 1997 issue of “Business in Yorkshire” magazine, when we were all led to believe that technical armageddon awaited us in the year 2000. I’ve re-read it, made a couple of very minor alterations (the only copy I could find was my pre-subbed one, so I hope I’d have made the same changes!) but essentially this is the story as it was published.

As well as the doom and gloom about the year 2000, reading a paragraph about struggling computer manufacturer Apple also made me smile. What a difference 15 years makes!

Fatal error

In the halcyon days of the fifties and sixties when computer technology was in its infancy, the year 2000 seemed a very long way off. The white-coated boffins impressed with their valve-driven room-sized number crunchers little suspected that one of their little shortcuts could lead to the collapse of the world’s industry. Millennium meltdown or media hype? ROSS BROWN reports.

Think of the worst single catastrophe that British industry has ever faced. Whether you think it was the three day week, the depression or Black Wednesday, all three pale into insignificance with the disaster that will greet everybody waking up with a fuzzy head on January 1 2000.

It is estimated that on this day, around twenty per cent of the region’s businesses will go bust overnight because of our increasing reliance on that modern miracle of the late twentieth century – the microchip. According to experts, we will soon be reaching a cul-de-sac on the information superhighway when computers across the world go into terminal meltdown.

The problem is simple and has its roots in the way computers were first constructed in the late fifties and early sixties. Unlike today’s average PC, which comes with a memory capacity measurable in gigabytes, these early lumbering number-crunchers were perilously short of memory – so all possible short-cuts were taken to preserve it.

This meant that the date within the bowels of the system was stored as two digits, 1977 was 77,1988 was 88 and 1999 will be 99. So, when Friday December 31 1999 (12/12/99) rolls over to become Saturday January 1 2000 (01/01/00), we have no major problem because we can handle the abstract concept of 00 being the number after 99. Unfortunately, computers – like Mr Spock – prefer logic, so they quickly get confused. And when computers get confused, they stop working.

To date, nobody has come up with a silver bullet panacea to solve this ill, and the latest estimates are that the global spend to try and fix this “simple” problem will be in the region of $1.2 trillion – or three times the annual global spend on IT.

Dave Allen of computer giant Logica, has been working on year 2000 preparations for several years – but is still very, very worried about the effects. He says: “People must remember that anything with a computer chip could be affected. I would not fly around the year 2000, the risks to computers are too high from the date change. I wouldn’t get in an office lift either – but at least a lift is attached to a wire.”

And that’s the extent of the problem, it’s not just computers that are controlled by microchips. Name any electronic gadget and I’ll show you a product that probably has a chip in it somewhere.

In a move that would surely cheer our American cousins, the first thing that many a board of directors is likely to say is: “Who can we sue?” Before you get your legal department to dash off letters to your hardware manufacturer, be aware that the law has extremely mixed feelings on this subject.

The main problem with computer hardware is likely to be in the non-PC systems, the large lumbering servers originally installed more than a decade ago. They may have been constantly revised and updated but they still contain lines of code from the time of their original build. It could be argued that these systems were not meant to have survived for twenty five years, and because this was not a reasonable expectation it would be hard to prove liability.

With no recourse to law, many companies may be tempted to turn to their insurers for a big fat pay-out. Phil Ward of the Association of British Insurers has made the industry’s views on the subject abundantly clear: “Firms are not going to be able to put this on their insurance. They have known about this problem for decades, and they should have considered it long ago.”

Companies concerned about the effects of the largest single problem ever to effect industry could be excused for feeling alone in solving this problem. The legal world wants little to do with it, insurance companies won’t consider claims and even auditors are covering their backs.

Chris Relleen, general audit partner in the retail and multinational division of Coppers & Lybrand, says: “It seems like such a ridiculous problem, but a number of my companies are saying to me that they are going to have to spend large sums of money and this and they need to explain it to their shareholders. There is not much future benefit from this and criticism may come when people can see the size of the figures.”

It has even been mooted that soon auditors will be required to give a probability of survival rating in company accounts because of fears of litigation from aggrieved shareholders if the auditors have failed to warn them of a serious business danger which, with hindsight, has been known about for 25 years.

Hindsight is a wonderful invention, and although the rumours are that many people in the computer industry became aware of this problem a great number of years ago, how many members of the general public were aware of it until the last twelve months? Conspiracy theories abound throughout the computer world, with talk of nest feathering and making swift bucks as companies panic as the year 2000 draws closer.

FirstDirect is one company that relies on the power and reliability of its computer systems; all its transactions take place over the telephone, with little paper back-up involved. Laurie Wilson is head of application development at First Direct in Leeds, a man well placed to comment on ensuring business success at the end of the century.

When was FirstDirect first made aware of the potential for problems in the 2000? “Forward dating of things like TESSA’s initially gave it away. There weren’t any problems, but it was the potential for problems which made us aware. But as FirstDirect is a relatively new financial institution, the systems are a lot newer and less prone.”

Wilson is confident that FirstDirect will be one hundred per cent year 2000 compliant at the beginning of next year and that the majority of industry will not be far behind.

He says: “Large organisations are going to be fine, they realise they have to do it and can afford to do it properly – but smaller companies are less likely to have the skills in-house or the necessary capital to calculate a complete solution.”

But what is this complete solution? After performing an audit, looking at anything that had a timing mechanism in it, the team then created a standard century marker mechanism to be incorporated into all the software. In English, a short statement in every program to add the missing initial digits from all the dates.

He concludes: “It hasn’t been cheap, but because the hardware is relatively new the cost hasn’t been anywhere near as high as it could have been.”

FirstDirect had no choice in completing the work on time for, as Wilson says: “We would have ceased to be a bank!”

Using FirstDirect’s example, the first step towards year 2000 compliance must be to perform an audit on all of a company’s computer systems; identifying possible problems and providing solutions to ensure that the date change passes as smoothly as possible. This should start with an assessment of the potential risk and run through to solutions, whether they be hardware- or software-based.

The millennium may still seem a long way off but any changes to an existing computer system must be allowed to run for at least eighteen months to iron out any bugs resident in the amended system. Would you rather discover in the next six months the scale of any catastrophe, whilst there is still time to create a fix – or wait two and a half years until the big day itself?

Many blue chip companies, such as BT, are already refusing to deal with any supplier who has not made adequate plans for the year 2000. It may have sorted out its internal systems but with the world of computers increasingly a networked one – either via the Internet or other communications systems – think of the catastrophe that a rogue computer connecting to BT could do to the UK’s telecommunications network.

In a perverse twist of fate, it has been suggested that the ailing Apple company could see an upturn in its fortune over the next two years. As producer of the Macintosh computers, Apple Mac’s work in a totally different way to PCs, whether they use Windows or the vast majority of other operating systems.

Since the first Apple Mac rolled off the assembly line in 1984, the internal clock was set-up to handle time from 12:00:00am on January 1 1904 right through to 6:28:15am on February 6 2040. Why 2040? I’ve no idea but it gives the vast majority of Apple Macs a shelf life 40 years longer than the average PC.

For a manufacturer increasingly losing market share to Windows-based systems such a coup is likely to have a significant effect on the future of the company. As faith is lost in PCs, many may make the move across to Apple.

However, all is not doom and gloom; there is a theory that a shining knight may appear on the scene with a simple solution that will retail for only a few pounds (who needs to charge a fortune when people across the globe will need to buy it). But anybody hanging on to this hope may find themselves with an even more serious panic as January 1 2000 draws nearer with no sign of armour on the horizon.

Alternatively, goes another view, computers may not be as bad as predicted and the year 2000 may not prove to be a problem after all.

Do you want to forward your computer’s internal clock to 23:59 on December 31 1999 and wait sixty seconds to find out? Oh and did I mention that the year 2000 is also a leap year?