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Dateline: 08/18/1999___Some GPS Users To Face Y2K Problems This Weekend___

Most users of global positioning systems should be blissfully unaware of the service's Y2K-type date glitch-- but some could become painfully familiar with it Saturday. That's when the date field for GPS navigational and communications devices rolls over to zero following a 1,024- week cycle that started in 1980.

Users were first warned of the glitch in November. Some service providers were unaware of the problem. U.K. telecom carrier BT launched a service in October for transport companies to track and communicate with their vehicles, but had not heard of the date change. Luckily, it was using new software from Trimble--the largest manufacturer of GPS devices--and it was protected.

But recently, experts said some companies and individuals with older systems had not paid attention to advice on upgrading their equipment and might be in for a hard lesson very soon. Robin Lovelock, owner of GPS software supplier Sunninghill Systems of Berkshire, England, says the problem would impact systems 2 or more years old and he knew of cases where users had been warned to upgrade and had not followed the advice. But, he added, the problems would not be life-threatening. The problem does not affect major aircraft, for example.

The U.S. Navy's Web site says some GPS receivers might "display inaccurate date information, some may also calculate incorrect navigation solutions."

- Madeleine Acey, TechWeb

For more IT news, see InformationWeek Online at http://www.informationweek.com

Dateline: 07/27/1999___Study: Y2K Budgets Climb Due To Management Underestimates___

Year 2000 budgets at many large corporations increased dramatically in the first quarter of this year because managers may have underestimated the extent of millennium- related problems, according to a study released yesterday by Weiss Ratings, a firm that rates companies' financial stability.

Weiss also reported that despite the increased dollars spent on year 2000 among the 23 Fortune 1,000 firms it gauges, only a handful even rate average when it comes to actual remediation progress--and technology companies aren't among them. America Online's year 2000 budget grew 150% in the first three months of 1999 but was still rated "low." Both Computer Sciences Corp. and US West efforts were classified as below average. For US West this is actually a downgrade.

Three companies, including Computer Associates, did not provide sufficient data for the rating firm to make an accurate assessment--a problem, said Martin Weiss, chairman of Weiss Ratings, that could hurt investor relations. "Investors can usually absorb just about any bad news on Y2K, provided it's reported promptly and in small doses," Weiss said in a statement. "It's the sudden surprises, typically the result of inadequate or late disclosure, that have the potential to cause the most damage to investor sentiment."

- Ramin P. Jaleshgari

For more on the year 2000, see the InformationWeek Resource Center at www.informationweek.com/center/year2k.htm

Dateline: 06/16/1999___Senate Passes Y2K Liability Bill___

The U.S. Senate yesterday passed the Year 2000 Remediation Encouragement Act, a bill aimed at heading off a flood of lawsuits over year 2000 problems. The Senate and House of Representatives must now work out their differences before the final bill can be presented to the president for signing, possibly in mid-July.

Highlights of the bill include a 30-day notice of a year 2000 problem, as well as a 60-day period to fix the problem before a lawsuit can be filed; requirements for actual economic loss, rather than just potential loss, in the legal complaint; and proportionate sharing of blame. The bill exempts government organizations from punitive damages-- monetary awards in excess of actual losses--and sets a cap on punitive damages of $250,000, or three times' actual damages, whichever is less, for companies with 50 employees or less. There are no liability caps for larger companies and for directors and officers of companies, as proposed earlier in the legislative process. However, the bill does make it difficult to sue for punitive damages when a contract is involved.

The Senate bill is similar to a bill approved earlier by the House, but lobbyists say there are still differences that will have to be worked out--and possibly more concessions made to the White House, which has said it will veto the bill if consumer rights to sue are not protected.

- Bruce Caldwell, Information Week

For more on year 2000, see "Securities Group Advises On Y2K Contingency Plans"

Dateline: 05/10/1999___Microsoft Discloses More Of Its Y2K Strategy___

Microsoft revealed more of its year 2000 plans yesterday, including an updated resource CD that makes it easier to install product patches, and a simplified definition of whether its products are Y2K-compliant or not.

In response to pressure from Latin American governments that told Microsoft it had to simplify its system for designating whether its applications are ready for the year 2000 date change, Microsoft has dropped its three-tier designation system of classification, according to Don Jones, Microsoft Y2K product manager. Previously, Microsoft listed its products as compliant, compliant with minor issues, or noncompliant. Instead, Microsoft will now designate its products as compliant or noncompliant. Those products that were formerly listed as compliant with minor issues will now be classified as "compliant#"--a symbol that is consistent with the rest of the industry, according to Microsoft officials and analysts.

The new release of the year 2000 resource CD provides simple installation of updates to bring customers' Microsoft products into compliance quickly, including Windows 95 and 98, Windows NT 4.0, and Office 97. Additionally, by June 1, Microsoft will set up a new consumer Web site for Y2K- compliance issues. The site will feature less technical explanations of the issues involved and provide single-click installation of patches.

--Stuart J. Johnston, Information Week

Dateline: 04/13/1999______Securities Industry Passes Y2K Testing Milestone______

The Securities Industry Association has passed its latest in a series of industrywide year 2000 tests. Clocks were advanced to Jan. 3, 2000, this past weekend to settle simulated trades entered earlier in the testing series. Contingency plans, however, did have to come into play when a communications hardware failure prior to the test affected the data circuits that a small number of test participants had planned to use. Alternate communications routes were established and all affected participants were able to carry out their tests.

For one of the participants, the Nasdaq Stock Market, the tests concluded its role in the industrywide event. The result, for itself and 144 other companies that interface with Nasdaq and were also participating, is that "we had no year 2000 problems," says Gregor Bailar, CIO at the National Association of Securities Dealers, the parent organization of Nasdaq. Bailar says the year 2000 program at Nasdaq will now focus on contingency planning, such as how to cope with telecommunications or utility outages. He added, however, that he doesn't expect problems there either. Nasdaq's year 2000 program has cost $55 million and addressed 300 applications and 11 million lines of code on mainframe, midrange, and PC platforms.

Since the beginning of the SIA test on March 6, more than 170,000 transactions that simulated trading activities were conducted by more than 400 securities firms and other participants. Testing of mutual funds and options will be completed over the next two weekends, and a final report on the test will be released on April 29.

-- Bruce Caldwell, Information Week

Dateline: 04/01/1999________Feds Say Government Is Y2K-OK________

The federal government's computers are ready for the millennium, says the president's czar overseeing compliance for the year 2000. "Over 90% of critical systems are Y2K- compliant a full nine months before the end of the year," John Koskinen, chair of the president's Council on Year 2000 Conversion, said yesterday. Federal agencies had a March 31 deadline to ready their critical systems for the century date rollover.

Of the 24 major federal agencies, 13 are 100% compliant, meaning they have assessed problems, fixed and tested them, and returned systems to use able to handle the year 2000 date. The remaining agencies are at least 85% ready. The Federal Aviation Administration will be ready in June; the Defense Department in July; and Health and Human Services, which issues welfare benefits, and its related Health Care Financing Administration, which administers Medicare, will be compliant during the summer, Koskinen said. The Social Security Administration has long been ready, and said it expects no interruption in delivery of retirement benefits. The government has relied upon an outside tester to review the systems to make sure readiness assumptions have not been overstated, Koskinen said.

The focus now shifts to contingency plans, which are due by June 30, and interoperability tests with private industry and state and local partners, says G. Edward DeSeve, management deputy director at the Office of Management and Budget.

-- Mary Mosquera, TechWeb

Dateline: 01/08/1999_______Microsoft Offers Fixes To Its Y2K Problems_______

Microsoft yesterday unveiled a long-expected comprehensive initiative to help users find and fix year 2000 problems in its software. A key component of the initiative is a product-analyzer tool that examines users' hard disks and lets administrators know which Microsoft products that are in use are compliant and which need patches. It will be available this quarter.

The initiative includes a free CD subscription service for customers. CDs will contain the product analyzer when it becomes available, as well as quarterly updates on Microsoft product-compliance issues. The subscription service is available now.

Microsoft has made available three plug-ins for Excel that help users fix any year 2000 problems created by users who have built spreadsheets using two-digit years. Additionally, Systems Management Server 2.0, which is due early this year, will be able to inventory users' PCs and inform administrators which Microsoft software needs to be updated. Microsoft also has posted on its Web site free patches and hot fixes for many of its products, according to officials.

-- Stuart J. Johnston with Bruce Caldwell, Information Week

Dateline: 12/14/1998___Oracle To Offer Y2K-Ready Apps For Local Governments____

Oracle will offer a version of its financial software and services package for state and local governments with small budgets that are lagging in year 2000 compliance. Available Jan. 4 through May 15 of next year, the company's FastForward Public Sector Y2K software package promises to get midsize state and local government agencies running on custom accounting systems, and fully year-2000 compliant, in 60 days or less. The package, which has a fixed price of $400,000, includes implementation, consulting, and training. It runs on Unix or NT.

One analyst notes that smaller governments are severely behind in getting their systems compliant, and that fixed- price offerings such as Oracle's are needed as the sector shifts its attention to this issue. "Rather than embarking on new systems and products, the state and local governments are declaring that year 2000 compliance is the top priority for the time being," says Rishi Sood, an analyst at G2R Inc.

A version of the product for the commercial sector, FastForward Financials Y2K, has been available since September, and Oracle has extended the last day of availability from Dec. 31 to March 31, 1999. That package has a fixed price of $300,000.

-- Eileen Colkin, Information Week

Dateline: 12/01/1998___Twelve Multinationals Sign Y2K Dispute-Resolution Pact___

A dozen major companies have signed a pledge to enter into nonbinding negotiation and mediation of year 2000 disputes, according to an announcement yesterday by the CPR Institute for Dispute Resolution in New York.

The pledge is intended to help companies avoid lawsuits -- but does not prohibit legal action -- in settling disputes with software and hardware vendors, year 2000 remediation services firms, suppliers, and insurers. The companies that have committed to the pledge are American Contractors Insurance, American Standard, Bank of America, Bechtel Group, Cigna, Darden Restaurants (Olive Garden, Red Lobster), Eaton, General Mills, McDonald's, Philip Morris, PPG Industries, and TRW. DuPont is also expected to sign.

In addition to avoiding costly litigation that can sour business relationships, mediation can be scheduled within weeks and completed in a matter of hours or days, notes James Henry, president of the CPR Institute, a nonprofit organization. In general, he says, 85% of all mediations are successful in resolving the issue and avoiding the courts.

The CPR Institute is encouraging its 2,000 members to sign the pledge, and has enlisted several trade associations in the pledge drive, including the Information Technology Association of America and the National Association of Manufacturers.

-- Bruce Caldwell, Information Week

Dateline: 11/24/1998___Federal Government Lagging On Y2K, Subcommittee Finds___

The federal government is still drastically behind in its Year 2000 compliance work, according to a new report card released yesterday by the House Subcommittee on Government Management, Information and Technology. The report card is based on information provided to the subcommittee on Nov. 13 by the federal government's various agencies and departments about the status of their compliance work.

Based on the information, the subcommittee rates the federal government's overall year 2000 progress as a "D" grade, only slightly better than the D-minus grade received last quarter. This means that less than 60% of federal systems are currently year 2000 compliant. And at that rate, the subcommittee estimates, nearly one-third of critical systems will not be compliant by the March 30, 1999, deadline set by President Clinton, says a subcommittee spokesman.

According to the spokesman, the executive branch and the Department of Transportation were among the areas of government that received a D grade. Those that received F grades included Energy, Health and Human Services, Justice, and State. The only A grades went to the Small Business Administration, the Social Security Administration, and the National Science Foundation.

-- Marianne Kolbasuk McGee, Information Week

Dateline: 11/10/1998____Y2K Spending Up 20% To $858 Billion, Says Study_____

Spending on year 2000 date-field conversion projects is up by 20%, to $858 billion, from $719 billion six months ago, according to Cap Gemini's latest Millennium Index study. The findings are based on responses from 1,680 companies in Europe and the United States, and cover spending on hardware, software, and labor.

Most respondents have already spent more than 40% of their total projected year 2000 budgets, with the United States having spent the largest percentage (61%), and Spain the smallest (37%). In the United States, labor accounts for 59% of the spending, followed by software (22%), hardware (17%), and embedded systems (2%).

According to the study, 95% of Europeans say they're confident that their critical systems will not be affected by the year 2000 problem, while only 83% of the U.S. respondents express confidence. Perhaps because of that lower level of confidence, 98% of the 251 U.S. respondents have adopted year 2000 contingency plans, while only 60% of the European respondents have done so.

Meanwhile, failure of a company's own IT systems isn't the only contingency for which plans are being made. In the United States, 65% of respondents say they perceive a risk of failure among trading partners and 67% see potential failure of essential services. To prepare for those potential failures, more than two-thirds of the respondents have identified alternative trading partners and 38% are stockpiling inventories.

-- Bruce Caldwell, Information Week

Dateline: 10/20/1998________Clinton Signs "Good Samaritan" Bill_________

President Clinton signed into law yesterday a bill he had proposed in July as a means to encourage a greater flow of information about the year 2000 computer issue. The so- called Good Samaritan bill (S.2392) offers companies liability protection when disclosing information regarding the status of year 2000 projects.

"Many organizations have been reluctant to share valuable information about their experiences in dealing with the Y2K problem or the status of their Y2K efforts for fear of lawsuits," the President said in a statement released by the White House. "The Act's limited liability protections will promote and encourage greater information sharing about both experiences and solutions, which will significantly enhance public- and private-sector efforts to prepare the nation's computer systems for the new millennium."

-- Bruce Caldwell, Information Week

Bill S.2392 can be viewed at http://thomas.loc.gov/.

Dateline: 10/05/1998___Congress Passes Bill Promoting Y2K Information Sharing___

Congress passed President Clinton's "Good Samaritan" bill on Friday, limiting the liability for IT user companies that share information about their year 2000 computer problems, solutions, test results, and general readiness.

The bill doesn't limit liability for companies that sell products that don't work. Instead, it's aimed at protecting companies that share information about the year 2000- readiness of the hardware and software they use.

The bill also establishes the Web site of the President's Council on Year 2000 Conversion located at http://www.y2k.gov as the official government site for year 2000 information.

-- Bruce Caldwell, Information Week

Dateline: 09/08/1998___Government Raises Year 2000 Cost Estimates Again___

The federal government released its latest quarterly report on its year 2000 progress Friday, raising the total estimated cost to $5.4 billion, up from last quarter's $5 billion estimate.

The federal government first estimated its year 2000 costs in February 1997, at $2.3 billion. The estimate has more than doubled since then, and there are concerns it could continue climbing. Last Thursday, President Clinton submitted a request to Congress to provide $3.25 billion in year 2000 emergency funding for fiscal year 1998.

The latest quarterly report asserts that federal agencies have made progress since the last report. Nine agencies now have 74% of their mission-critical systems year 2000 compliant. Overall, half of all the government's critical systems have been made compliant, compared with 40% last quarter, and 37% of those are now back into operation, compared with 27% last quarter. All agencies face a March 1999 deadline for completing their year 2000 projects.

--Bruce Caldwell, Information Week

Dateline: 08/13/1998___Companies Falling Behind On Year 2000, Study Says___

Only 15% of companies and government agencies expect to have their critical systems more than three-quarters year 2000- tested and -compliant by Jan. 1, 1999, according to a study released yesterday by IT services firm Cap Gemini America.

The survey of IT managers at 116 companies and 14 government agencies finds that 88% expect to have three-quarters of their systems compliant by Jan. 1, 2000. To meet that goal, however, organizations will have to aggressively ramp up their year 2000 work over the next 16 months.

The biggest laggards are in the government, health-care, utility, and transportation sectors. The furthest along are software developers, financial services companies, computer makers, other manufacturers, and telecom companies.

The top six priorities indicated by survey respondents were conversion and testing of critical systems; creating an operational environment; ensuring network and desktop integrity; assessing the year 2000 compliance of vendors and business partners; assessing and acting on supply-chain issues; and developing contingency plans.

Although contingency planning was cited, very few companies have actually developed those plans, says consultant Howard Rubin, who assisted in the survey. As for their relationships with partners, 55% of the survey respondents say they may discontinue business with suppliers of products and services that aren't compliant by key deadlines. "Anyone who can't be compliant by the first quarter of 1999 puts us at risk," says Charles Wiberley, manager of IS at The PMA Group, a Blue Bell, Pa., insurance company that participated in the survey.

-- Marianne Kolbasuk McGee, Information Week

Dateline: 08/05/1998____IS Won't Pony Up for Year 2000, Study Shows___

IT budgets were flat or reduced over the last year for 91% of 15,000 companies and government agencies, according to the latest worldwide year 2000 survey by Gartner Group, to be released today. But year 2000 spending was projected to increase from 5% of the budget in 1997 to 29% this year, with first-half spending projected at 18% of the budget.

That means year 2000 funds are coming at the expense of other IT projects, says Lou Marcoccio, research director at Gartner Group. Efforts to avoid providing additional funds for year 2000 projects are so extreme, Marcoccio says, that half of all the surveyed organizations "have decided not to test at all."

The tight budgets have resulted in far more reliance on existing IT staff for year 2000 projects than expected. Software factories expecting to get 50% of large corporations' Cobol code work are seeing instead less than 5%, Marcoccio says. As a result, he says, "labor rates won't go up as phenomenally as expected" for year 2000 programmers.

Peak demand for year 2000 services has already been passed by large corporations, while demand is currently peaking for midsize companies, and the peak for small companies will come later this year or early next year. According to the survey, large companies (more than 20,000 employees) used 68% internal labor for their year 2000 work, midsize companies (2,000 to 20,000 employees) used 59%, and small companies (2 to 2,000 employees) used 29%.

--Bruce Caldwell, Information Week

Dateline: 07/21/1998____Problems Multiply With Year 2000, Survey Says______

While America's large businesses are facing the year 2000 problem head-on, according to the most recent results of an ongoing Cap Gemini survey released yesterday, many are running into unexpected difficulties and delays. And many are turning to short-term contingency planning to deal with those difficulties, according to the survey of IT managers at 128 of the nation's largest businesses.

Eighty-six percent of the companies surveyed have launched a "full-fledged strategy" to deal with year 2000 issues, up from 20% last December. However, the number of companies focusing on contingency planning rose to 72% from only 3% in April, reflecting unexpected problems encountered in year 2000 work, according to Cap Gemini. The incidence of year 2000-related failures increased from 7% in December, to 37% in April, to 40% this month. Types of failures included processing disruptions (87%), financial miscalculation or loss (62%), logistics or supply-chain problems (44%), and customer-service problems (38%).

The percentage of firms that underestimated year 2000 costs increased from 82% to 87% since December, and only 2% described their cost estimates as "on target." And more firms are falling behind schedule. The percentage expecting to have more than half of their systems compliant by the end of this year declined from 85% in April to 81%. The percentage of firms missing year 2000 "milestones" rose from 78% to 84% over the same period.

The Cap Gemini year 2000 poll of IT directors and managers in 12 business sectors has been conducted since March 1995. The poll is conducted for Cap Gemini America by Rubin Systems Inc.

-- John Soat, Information Week

Dateline: 07/15/1998____Bill Would Provide Year 2000 Liability Protection____

President Clinton will send a "Good Samaritan" bill to Congress this week that would provide liability protection for companies that are "honestly and carefully" sharing information about their year 2000 readiness.

"The proposed Good Samaritan law will give companies the confidence they need to ensure that they keep their customers informed," Clinton told a group of year 2000 experts yesterday at the national Academy of Sciences. He told the group that "time is of the essence" for passing the legislation. After the speech, congressional year 2000 leaders said they thought the legislation would pass quickly.

Clinton also reiterated a Justice Department statement that companies sharing information about year 2000 don't have to worry about violating antitrust laws. "We need to get that message out there loud and clear," said Clinton. "No one should be afraid to help another company deal with this challenge."

Clinton said Washington is making progress with year 2000, citing the Social Security Administration, which already has more than 90% of its critical systems compliant. But government sources note that Social Security has largely solved its problems by transferring tapes for printing benefit checks to the Department of Treasury, which is "one of the areas in the worst shape" regarding year 2000 compliance.

-- Mary E. Thyfault, Information Week

Dateline: 07/10/1998____Merrill Lynch Report: Year 2000 Won't Be That Bad_____

Merrill Lynch, sounding a rare note of optimism about the year 2000 problem, says in a new report that most companies will have the date-field glitch under control in time for 2000.

The firm's Global Securities Research and Economics unit yesterday released its assessment of the year 2000 problem: "Y2K: Implications of Investors." In the 450-page volume, which draws from a survey of roughly 3,000 businesses, Merrill Lynch points out that most companies are two years into their year 2000 efforts and still have a year and a half to finish them. "Microsoft, Latin America and Communism all changed radically in a lot less time," the report states.

Most U.S. companies expect to be fully compliant by the end of 1998, according to the report, although Merrill Lynch spokespeople could not provide exact numbers. Those companies are less certain about their suppliers and customers, but Merrill Lynch analysts, running counter to conventional wisdom, say there's not likely to be a significant domino effect because of the natural disparity between connected systems. "The very complexity and dispersion of these systems is, in fact, insurance against a complete shutdown of commerce when the millennium starts," the report says.

Few of the companies surveyed expect earnings to suffer a significant impact, although the study says many of them may see a short-term revenue decrease if year 2000 problems affect key operations and companies can't resolve issues quickly. The study points out that current management practices such as just-in-time inventory management and outsourcing could exacerbate year 2000 glitches by increasing a company's vulnerability to outside factors.

-- Jeff Sweat, Information Week

Dateline: 06/12/1998___SEC Gets Strict On Year 2000 Reporting__

The Securities and Exchange Commission is ready to take action against public companies that aren't complying with SEC guidelines on disclosing information on their year 2000 costs and compliance.

SEC Commissioner Laura Unger told a Senate banking subcommittee yesterday that while 70% of 1,000 companies the agency has reviewed do disclose year 2000 project information in their annual reports, many are not following SEC disclosure guidelines set in January. As a result, the SEC will issue clarifications soon--and those clarifications "may form the basis of enforcement actions against companies," Unger said.

Clarification of the guidelines is needed because of an "apparent misconception" about what constitutes "material" year 2000 costs, Unger said. Whether the date-field problem is a "material" issue depends, Unger said, not just on the costs of fixing the problem, but also on the potential consequences if the company doesn't fix the problem in time.

Furthermore, she said, SEC chairman Arthur Levitt "will write to the CEOs of public companies to remind them of the significance of the year 2000 issue and the need to provide meaningful disclosure to their shareholders."

--Bruce Caldwell, Information Week

Dateline: 06/10/1998_____Senate To Probe Corporate Year 2000 Disclosures_____

Sen. Bob Bennett (R-Utah), chairman of the recently created Senate Committee on the Year 2000 Technology Problem, will hold a hearing today to examine if stronger efforts are necessary to get companies to comply with year 2000 disclosure guidelines. A second hearing, set for Friday, will investigate how ready the nation's energy utilities are for the date-change problem.

Officials of the Securities and Exchange Commission, which has set rules for what corporations must disclose on year 2000 projects as part of their financial filings, will testify at today's hearing, as will Steven Hock, CEO of Triaxys Research in Missoula, Mont. Triaxys examined 250 corporate financial filings with the SEC and found that 15% provided no year 2000 information, while 32% used such vague language as to leave investors clueless about the status of their projects or the risks involved, according to Hock.

Friday's hearing into the state of preparedness among utilities addresses heightened concerns among year 2000 managers who have been unable to receive progress reports from their utilities. In calling for the hearing, Bennett estimated that the odds for a nationwide failure of the power grid are about 40%.

Officials from the Nuclear Regulatory Commission and the Energy Department are scheduled to testify at Friday's hearing, as is John Koskinen, chairman of the President's Council on Year 2000 Conversion.

-- Bruce Caldwell, Information Week

Dateline: 04/28/1998___Federal Reserve Projects Year 2000 Economic Impact___

Labor productivity and the U.S. gross domestic product may be reduced by a tenth of a percentage point or more over the next two years because of the year 2000 conversion problem, according to Edward Kelley Jr., a member of the Board of Governors of the Federal Reserve System, in testimony before a Senate Commerce Committee hearing yesterday.

"The year 2000 problem will touch more than just our financial systems and could temporarily have adverse effects on the performance of the overall U.S. economy as well as the economies of many, or all, other nations if it is not corrected," Kelley testified.

In a review of financial filings by about 95% of Fortune 500 companies, Kelley added, year 2000 cost disclosures added up to more than $11 billion, and "an educated guess" for year 2000 spending by all U.S. businesses would be $50 billion. But that excludes capital expenditures on software and hardware upgrades, so he says the total should increase as companies learn more about their year 2000 problems.

Kelley also noted that year 2000 is promoting "spectacular growth" in the IT industry now, but that may be growth that is "borrowed" from spending that would have normally occurred in the future. On top of that, Kelley expects some companies will "freeze" system spending after mid-1999, postponing new implementations until after 2000.

"While year 2000 remediation efforts may give a temporary boost to economic activity in some sectors, the net effect is probably negative," Kelley concluded.

-- Bruce Caldwell, Information Week

Dateline: 04/10/1998______Year 2000 Efforts: Big Problem, Slow Going_______

Two surveys released yesterday give mixed reviews to worldwide year 2000 efforts. The results of Cap Gemini's ongoing year 2000 survey of 128 companies show corporate America finally facing the magnitude of the year 2000 problem. But Gartner Group's year 2000 survey reveals that a sizable number of users and vendors are not taking the year 2000 problem as seriously as they should.

Since Cap Gemini's last survey, released in December, the number of companies with full-fledged year 2000 strategies jumped from 20% to 60%, according to the most recent survey. The majority of the IT managers polled said they grossly underestimated their year 2000 budgets; some said year 2000 spending will exceed $100 million. Also, 20% of the managers said their companies have deferred new IT development to re- allocate resources for year 2000 work.

On the other hand, one-quarter of the 6,000 companies and government agencies surveyed worldwide by Gartner Group have yet to start any year 2000 compliance efforts, according to survey results released yesterday at the Gartner Group Predicts conference in San Diego. Even more startling: Half of all survey respondents have no plans to test their year 2000 efforts after they've completed them.

Lou Marcoccio, a Gartner Group analyst, cited about 200 legal disputes involving year 2000 issues. He said 93% of those disputes involve end users complaining that vendors are not adhering to contracts and are going back on earlier promises to provide free year 2000 fixes. A year ago, Marcoccio adds, only 1% of all vendors charged for year 2000 fixes; today, 29% charge. The legal actions are not reaching the courts, but are being settled privately, according to Marcoccio, who says that two settlements were recently reached, one for $8.5 million, another for $2.2 million, both in favor of the end users.

-- Hakhi Alakhun El and Bruce Caldwell, Information Week

Dateline: 04/08/1998____IBM Beefs Up Year 2000 Suite____

IBM has expanded its suite of year 2000 tools. Among the new products in its VisualAge 2000 tool line are Millennium Language Extensions, which performs automated date corrections for the initial "find and fix" stages of year 2000 assessment and remediation. Another new product, Application Testing Collection, helps customers coordinate the scheduling, performance, and evaluation of Cobol, PL/1, and Assembler applications in the testing phase.

A product to be marketed with Allstate is Millennium Date Compression, a tool IBM developed with the insurer to correct the date fields in policies of Allstate customers. A product developed with Bellcore, C/C++ Maintenance and Test Tool, is designed to test and debug applications written in C/C++.

-- Hakhi Alakhun El, Information Week

Dateline: 02/02/1998____Year 2000 Efforts Drain Value Of The IT Dollar____

IT dollars aren't producing as much as they used to. The average IT dollar spent last year by companies supported $38 in corporate revenue, down from $43 in 1996, according to a Meta Group survey of more than 600 companies.

The reasons? Nonproductive year 2000 work and increased salaries stemming from the IT labor shortage, says Howard Rubin, a research fellow at Meta and chairman of the computer science department at New York's Hunter College. "This is the first time we're seeing inflation of the IT dollar," Rubin says, adding that he expects the trend to continue.

The study, to be released this week, says average IT spending per employee rose from $6,160 in 1996 to $7,521 in 1997--but during the same period, revenue per employee declined from $296,000 to $289,000. The study also shows that demand for IT services is outpacing IS budget increases. Demand for systems increased 30% from 1996 to 1997 while budgets rose an average of 12%.

There is some good news in the report. Software productivity rose in 1997 following a decline of nearly 50% from 1994 to 1996. Rubin had attributed the sharp decreases to growing complexity of systems, and says the rebound indicates that workers are more proficient with software programs.

-- Bob Violino, Information Week

Dateline: 01/16/1998___Hitachi To Release Year 2000 Testing Tool____

Next Monday, Hitachi Data Systems Corp. will release HDS Test for Year 2000, a platform-independent year 2000 testing tool developed with Ascent Logic Corp. and Viasoft Inc. HDS Test combines Ascent's Year2000 Plus and Viasoft's Rochade with HDS's experience in providing products for large mainframe and storage systems.

Year2000 Plus from Ascent lets customers measure compliance of business applications and analyze potential business risks associated with year 2000 projects. Viasoft's Rochade creates a library for status information on year 2000 projects, and analyzes the impact of changes in an application.

Hitachi officials say they developed HDS Test in response to customers who asked year 2000 vendors to provide products that promote reuse of components and can manage changes made in an application during code remediation.

Analysts say that it's not yet clear how well HDS Test integrates technologies from its partners, or how it stacks up against competitive offerings from IBM and Amdahl. "The fact that they're offering a full-blown service is a plus," says John Markes, senior research analyst at Gartner Group in Stamford, Conn. He thinks it's too soon to talk about the market impact of HDS Test, which will be available for mainframe customers for $1 million.

-- Hakhi Alakhun El, Information Week

Dateline: 01/13/1998_____SEC Pushes Greater Y2K Disclosures_____

The Securities and Exchange Commission is encouraging -- and may require -- companies to more fully disclose the status of year 2000 challenges, readiness, and costs.

A revised legal bulletin from the SEC's Division of Corporation Finance and Investment Management recommends that public companies evaluate the need to disclose spending, potential problems, and other associated year 2000 challenges in their filings to the commission, since the SEC may require companies to do so. Disclosure is already required if a company is uncertain about adequately addressing the year 2000 problem or if results of a failed effort of resolving the problem will hurt its financial condition.

The commission is encouraging companies to disclose how the year 2000 issue will effect their financial condition and business cycles. Companies that aren't confident about year 2000 readiness should disclose plans for resolving the issue as it affects business partnerships and customers, and disclose cost estimates for remediation and the impact of these costs on operations.

The commission says that investment companies should disclose how the year 2000 problem could affect their performance as investment advisers as outlined in their registration statements, based on the Investment Company Act of 1940. The law states that companies should avoid providing misleading information, by not omitting pertinent facts from their registration statements with the commission.

-- Hakhi Alakhun El, Information Week

Dateline: 10/23/1997_____EDS Logs $60 Million In Year 2000 Chores_____

EDS announced yesterday that it has won $60 million in year 2000 projects with new and existing customers, including the Dallas Morning News, Del Monte, Herman Miller, Mobil, and Xerox. The contracts have a bottom-line impact equivalent to a 10-year, $600 million outsourcing contract, according to Stuart Reeves, executive VP with responsibility for CIO Services 2000, the EDS unit performing the year 2000 work.

Contracts in hand involve year 2000 work at all levels of IT infrastructure on a global basis. The Dallas Morning News, Herman Miller, and Mobil are new clients to EDS; Del Monte, like Xerox, has awarded year 2000 work to EDS as add-on business to an existing contract.

At Xerox, where EDS has a 10-year, $3.2 billion outsourcing contract, EDS will renovate the global billing system, as well as marketing, finance, and service order systems at Xerox locations in France and Great Britain and from the EDS Global Renovation Center in Austin, Texas. And EDS will provide Mobil with renovation and testing services on worldwide applications residing on mainframes, mid-range processors, and PC workstations.

More year 2000 projects are expected by EDS, which will ramp up for the workload by hiring 1,400 personnel around the world over the next two years.

In addition to third-party tools, EDS is using its own Cogen 2000 tool for automation of assessment and renovation. EDS, a $14 billion computer services company based in Plano, Texas, has stated that it expects to generate $1.3 billion in business from year 2000 projects, more than offsetting its internal year 2000 costs of about $144 million.

-- Bruce Caldwell, Information Week

Dateline: 09/19/1997_____Turnkey 2000 To Debut Date Compliance Tools_____

Turnkey 2000 will debut next week impact analysis tools that will let organizations find and plan for year 2000 date- conversion errors in Visual Basic and PowerBuilder applications.

The company, a spin-off of Ravel Software, will make the tools available at Oracle OpenWorld. They join the company's Unravel 2000 date-compliance tools, which include products for Cobol and client-server application environments such as C, C++, and Perl.

Turnkey says that companies need to be able to handle client- server languages when faced with a year 2000 conversion project. There can be date problems in a Visual Basic or PowerBuilder program depending upon who developed it, says Steve Bloom, VP of business development at the San Jose, Calif., company.

The Turnkey 2000 tool for PowerBuilder provides an impact analyzer and a project management component, while the Visual Basic tool has those features as well as an optional compliance editor. Both tools, available for a trial download at www.turnkey2000.com, sell for $2,495, with the compliance editor priced at $995.

-- Jeff Sweat, Information Week

Dateline: 09/16/1997___Government Y2K Estimates Bumped Up $1 Billion___

The Office of Management and Budget now estimates that it will cost the U.S. government $3.8 billion to make its computer systems year 2000 compliant -- $1 billion more than the OMB estimated in May.

The government is also further behind than it originally thought. As of Aug. 15, the OMB estimates, the government was 56% complete with its assessment of year 2000 problems and 12% complete with actual renovations. In the previous quarter, the OMB had estimated that the government was 65% done with assessment and 17% done with renovations.

The slippage is mainly because the scope of the project has ballooned: The number of mission-critical systems (excluding Social Security Administration systems) that need to be repaired, replaced, or retired has risen to 8,562, up 913 from the 7,649 identified in the May report. Of those systems, 62% are being repaired, 13% are being replaced, 5% are being retired, and 19% are already date-compliant. The percentages don't add to 100 because of rounding.

The revised estimates, disclosed yesterday, come from the most recent quarterly year 2000 compliance reports submitted to the OMB by 24 federal agencies. The new price tag includes previous expenditure estimates of $850 million for 1997 and $1.7 billion for 1998.

-- Jeff Sweat, Information Week

Dateline: 09/5/1997____Year 2000 Vendors Looking For Work, ITAA Survey Says____

IS organizations are not diverting funds from other IT services and products to pay for year 2000 date-field compliance efforts, a recent survey of year 2000 product and service vendors finds. While vendors believe year 2000 software conversion will be a major capacity concern for them, most IT companies can still provide more year 2000-specific consulting, software, utilities, and outsourcing without straining capacity. "IT customers are still responding in a manner which we believe is far too casual," says Harris Miller, president of the Information Technology Association of America, which conducted the survey.

The survey was conducted by ITAA's software division, a consortium of 11,000 members from companies such as Digital Equipment, IBM, Microsoft, Netscape Communications, Oracle, and Santa Cruz Operation. The survey was sent out via an E-mail poll to 375 software and service firms; there were 98 respondents. Targeted companies sold year 2000-specific consulting, methods, software tools and utilities, or outsourcing.

Most vendors polled aren't realizing significant sales revenue from year 2000 work: 53% of the 98 respondents said year 2000 projects account for less than 10% of total revenue, while 77% said they accounted for less than 25% of total revenue. Over 80% claimed they could handle more year 2000 business, while 62% said they don't expect to be turning away new year 2000 business by January 1998. And 39% said they're not meeting their projected year 2000 sales and revenue projections.

The Gartner Group, an IT research firm in Stamford, Conn., estimates that a medium-sized company will spend between $3.6 million and $4.2 million to convert its software. The cost per line of code has been estimated between $1 and $1.50.

--Jennifer Mateyaschuk, Information Week