ITAA's Year 2000 Outlook April 9, 1999 Volume 4, No. 13 Published by the Information Technology Association of America, Arlington, VA Bob Cohen, Editor bcohen@itaa.org Read in over 80 countries around the world ITAA's Year 2000 Outlook is published every Friday to help all organizations deal more effectively with the Year 2000 software conversion. To create a subscription to this free publication, please visit ITAA on the web at https://www.itaa.org/transact/2ko utlooksub.htm. To cancel an existing subscription, visit https://www.itaa.org/transact/2kremove.htm. ITAA's Year 2000 Outlook is sponsored in part by CACI International Inc., DMR Consulting Group Inc and Y2Kplus. In this issue: · Vendors See Obstacles as Countries Awaken to Y2K · FCC Offers Mixed Signal on Y2K Readiness · Hospital Group Predicts Healthy Outcome on Y2K Treatment · Congressman Steamed over Nuclear Plant Testing · Closer to Home · Business to Business · ITAA Y2K Information Center · Sponsor Advertising Vendors See Obstacles as Countries Wake Up to Y2K This week the International Y2K Cooperation Center (IY2KCC) announced the creation of a Y2K Expert Service, otherwise known as the YES Corps, to help countries in need of technical assistance. Launched in springtime Washington, D.C. to head off a digital winter around the world, the grassroots humanitarian effort will focus on infrastructure repair issues. Still, countries behind schedule or just beginning to work on this eleventh hour issue will likely turn to the commercial marketplace for help, incl uding U.S. information technology companies. The question is whether these firms will be available to provide the necessary assistance. For at least one systems integrator, Y2K business is winding down with assessment engagements completed, renovation assignments finishing up and an almost exclusive focus on independent verification and validation. This firm's Y2K repair work force has l argely been stationed in northern Europe, where customers have responded to Y2K with an open mind and the money to match. Hong Kong and Singapore engagements have also proved fruitful. Elsewhere, this firm has found international clients unwilling to co mmit the necessary focus and financial resources to get the job done. Even when doors at the top swing open, strange things happen. This company was invited by a head of state to establish an in-country operation. The firm did so, along the way meeting with cabinet officials and making important contacts. Rather than the hoped for business boom, however, the firm found the country promoting its own Y2K contracting opportunities-not spending money to make internal repairs. For this systems integrator, Y2K is now a matter of supporting existing clients and steering clear of engagements in high risk locales such as Eastern Europe or Central America. Ability to pay is clearly a major market differentiator in the waning days of Y2K. "IT companies fear not getting paid," says the Gartner Group's Jim Cassell. "If Russia comes to you with a big problem, you understand and can help. But if it costs X, c an [the customer] pay? You don't want Vodka in return. Companies are not in the barter business." Perhaps a bottle or two of vodka would not hurt. Carlos Prima Braga, infoDev Program Manager at the World Bank, says that while developing countries are beginning to wake up to the Y2K risks they run, the amount of money being disbursed for repairs is no t significant. Last year, Braga says, countries defined projects and allocated resources. But they remain timid about actually disbursing the funds, in part because the decision about how to spend precious resources for Y2K fixes is not always clear. " It's not easy to spend money in a serious manner," the bank official says. Money or the lack thereof may not be the only factor keeping U.S. IT companies at bay. CCD Online Systems is an established player in Japan's Year 2000 market-one of the few. Rudolph Chow, vice president of the firm's Asia Pacific operations, indicates that even the Millennium bug fails to penetrate the country's cultural norms and business practices. While CCD Online Systems, a provider of independent verification and validation solutions, has many competitors in the U.S., it has virtually none in Jap an. "It's not easy to establish yourself in Japan," Chow says, "…You have to have connections in place or start the process early." Even though Japan has an enormous need, Chow says international Y2K firms are closing their doors. Again, part of the problem is culture clash. "In the U.S., we're more than happy to have someone from the outside come in and check our work. In Japan, this is a culture issue-an admission that someone is not successful. Mistakes are taken very personally." To save face and money, particularly in a recession-racked economy, Chow says many firms attempt to keep their Y2K projects in-house, often performing the work manually. According to the IT executive, the same issues reappear in China and other Asian cou ntries. Risky business to be sure. But the alternative may be even worse. Cassell claims that attempting repairs with a domestic workforce is a non-starter. "There's no hope," he says, pointing to the limited amount of time remaining, a dearth of skilled worke rs and the compounding factor of pirated software. As to the last, Cassell says that the installed base of software in what he calls "third tier" countries may be as high as 70 percent. That means that paid up versions of systems software must be acquir ed before work can start on applications. Such problems have forced some customers to cut to the chase. A professional services firm helping telecommunications clients in the Middle East, the Caribbean and East Asia leap the Y2K chasm is focused on contingency planning operations for essential s ervices, not Y2K remediation and 100 percent compliance. "Some don't realize how much is not going to get fixed," he says. Be that as it may, this vendor is seeing a more active Y2K marketplace beginning to shape up. He says his firm just recently began to resell its niche oriented service overseas, in part because it finally feels the "pull" of foreign markets for U.S. prov iders. As to the dwindling timeframe, he says "the Year 2000 marketplace is like the Energizer bunny. It keeps going and going. We thought we'd see orders and sales fall off in 1999. Then we thought 2000. Then 2001." FCC Offers Mixed Signal on Y2K Readiness A recent report from the Federal Communications Commission (FCC) in conjunction with the Network Reliability & Interoperability Council indicates that the vast majority of Americans will enjoy uninterrupted wireline telephone service as the century turns. The FCC expects the nation's largest local and long distance carriers to be 100 percent ready to ring in the new year, although a large portion of medium and small carriers may not be taking adequate precautions. Moreover, having a good to go public ne twork may not be synonymous with making phone calls. The report notes that telephone company preparations do not cover customer equipment or internal networks. The report, available at http://www.fcc.gov/year2000/y2kcsr.html, also covers wireless, broadcast television and radio, cable television, satellite, international and emergency services. The wireless world, according to the FCC report, features a large g ap between very large and smaller companies wireless companies, with roughly 50 percent of operators serving less than 500,000 customers actually implementing a remediation plan or process. The FCC noted disappointing survey results, with less than a thi rd of firms responding. Wireless handsets, the report notes, are expected to experience very few Y2K problems. An assessment of broadcast television and radio stations finds a majority aware of the issue and taking steps to correct it, although some broadcasters lack a formal remediation plan. Likewise, the cable industry appears poised to dodge the Y2K bullet, a ccording to the report. The multiplicity of cable channels stands viewers in good stead, the report notes. Sixty percent of FCC survey respondents say they have implemented a formal Y2K plan; the balance are approaching the problem as it arises or throu gh regular monitoring and upgrades. The FCC apparently lost its survey signal with satellite companies, calling their response "mediocre" and, because of a lack of information, assigning "a certain amount of risk to this industry." The international picture is also snowy, the FCC suggests, with agency concerned about "whether enough is being done on a global basis…" Citing an NRIC survey, the FCC reports countries with lower "teledensity" appear to face a higher risk of Y2K related network problems. These include Central and South America, the India Sub-Continent and Sub-Sahara Africa. The FCC study says a Telco Year 2000 Forum test of 911 systems found no failures or anomalies within the systems of telephone companies. Local communities operate their own 911 equipment for emergency call processing. Hospital Group Predicts Healthy Outcome on Y2K Treatment With only 5.7 percent of hospitals reporting that their medical devices are Y2K compliant, these institutions still expect their equipment to make a full recovery. In survey results released recently by the American Hospital Association (AHA), over 52 pe rcent of respondents predicted full Y2K compliance by December 31. Less than 1 percent said their non-compliant devices will have "possible adverse effect on critical operations." Over thirty eight percent told AHA that they do not expect devices to be totally compliant. Congressman Steamed over Nuclear Plant Testing Coming on the heals of a back-up generator failure at the Seabrook nuclear power plant, Rep. Edward Market (D-MA) has called for the inclusion of diesel generator testing in Y2K inspections. As first reported by States News Service, Markey said "Complace ncy at Seabrook about the interoperability of its emergency backup generators is symptomatic of a broader pathology that may have spread to the nuclear industry's federal regulators." Markey also called on the Nuclear Regulatory Commission to require tha t all backup electricity sources and adequate fuel supplies are available at plants for the century rollover and other key dates. An NRC spokesman said the agency has "no concern about the reliability of emergency diesel generators." Closer to Home ITAA announced AdWare Systems, Inc. of Louisville, Kentucky received ITAA*2000 Certification. ITAA*2000 is the industry's century date change certification program. The program examines processes and methods used by companies to perform their Year 2000 software conversions. AdWare Systems, Inc. participated in a rigorous evaluation of its approach to date conversion, with extensive analysis in eleven discrete process areas deemed necessary to a successful Year 2000 conversion. Business to Business MigraTEC Inc. has announced an agreement to license MigraTEC 2000 to EDS. Amdahl Global Solutions announced the availability of TDMF/Express Version 1.3 via web download. The product supports point-in-time copies for Y2K and euro-conversion. Prince Software has released version 6.0 of COVERAGE 2000, a coverage analysis tool for COBOL programs. Clicknet Software has added Vince Rossi and Jacob "Koby" Avital to its executive team. ITAA Y2K Information Center Solution Providers Directory http://www.itaa.org/script/2000vend.cfm ITAA*2000 Certification Program http://www.itaa.org/2000cert.htm Outlook Archive http://www.itaa.org/script/get2klet.cfm Legislative and Litigation Table http://www.itaa.org/year2000/legis.htm Calendar http://www.itaa.org/y2kcal.htm Vendor/User Status Questionnaires http://www.itaa.org/questmain1.htm Alternate Dispute Resolution (ADR) http://www.itaa.org/year2000/adr.htm Statement of Intention to Use ADR http://www.itaa.org/year2000/soi.htm, Y2K Mediators Seminar http://www.technologymediation.com/Y2K_seminar.htm Copyright ITAA 1999. All rights reserved. The Information Technology Association of America, 1616 N. Fort Myer Drive, Suite 1300