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Gartner Group: Expect major Y2K failures in second half

By John Madden, PC Week Online March 22, 1999 3:22 PM ET

SAN DIEGO -- The gulf between companies and countries ready for the year 2000 and those that lag behind continues to widen, according to Gartner Group Inc.'s latest Y2K research.

During a press conference here at Gartner Group's Spring Symposium/ITxpo, Lou Marcoccio, Gartner's director of Y2K research, said less-developed countries have made little progress in remediation and testing in the past year. Those countries deemed by Gartner at high risk include Russia, Afghanistan, and several South American and African nations.

The World Bank recently testified to Congress that although it has raised awareness on Y2K worldwide, it has made only modest progress on motivating less-developed nations to do something about it.

Marcoccio also identified industries where little progress has been made, including segments of the transportation industry, health care, agriculture, small and midsize retail companies, government services in many countries and local town governments. The U.S. and Canada combined are 50 percent more prepared than all other governments in the world, he said.

Many utilities such as large power and gas companies are in good shape, while those utilities owned by cities or municipalities are behind in their remediation, he said.

Areas where major progress has been made since last year include Mexican and Hong Kong banks, the largest Japanese and French companies, and pharmaceutical and food-processing companies.

IT budgets

Spending on Y2K has also increased from 5 percent of all IT budget spending in 1997 to between 15 and 30 percent last year.

Marcoccio said 81 percent of all packaged software applications are still not compliant, compared to 88 percent two quarters ago. He also said 6 percent of installed software that has been deemed Y2K compliant has problems in newer versions.

The Y2K issue continues to make an impact in court. More than 80 cases nationwide, many class action lawsuits, have been filed as of this month, Marcoccio said, with almost 800 in a prefiling stage.

Marcoccio, who recently testified before Congress on the Y2K issue, said it is a misconception that all failures will occur on and around Jan. 1. He said only 8 to 10 percent of all failures related to Y2K will occur within two weeks of Jan. 1. Five percent of failures have already occurred and many will start this July as companies enter their next fiscal year. Marcoccio said 25 percent of all failures will occur in the second half of this year, 55 percent will occur throughout 2000 and 15 percent through 2001.

"Most companies in their contingency planning are not planning on those dates," he said. "This is not a Jan. 1 event."

Gartner Group, based in Stamford, Conn., can be reached at www.gartner.com.

-- Norm (nwo@hotmail.com), March 31, 1999

Answers

I can't deal with this! Norm and Y2K Pro posting stories like this! I'm going for a walk. A LONG walk! <:)=

Gee, maybe I shouldn't believe names and e-mail addresses...

-- Sysman (y2kboard@yahoo.com), March 31, 1999.

Sysman:

When you're taking that walk this evening, look up in the sky. Keep that there's a full moon 2night....2nd blue moon of the year, if I recall :-)

-- Tim (pixmo@pixelquest.com), March 31, 1999.

Argh. darn typos. Meant to say..."Keep in mind that there's a full moon..."

These 14 hr days are killin' me. :-P

-- Tim (pixmo@pixelquest.com), March 31, 1999.

the story DOES make a good story if you spin it right. If you ignore that these are our trading partners, sources for many of the components of our manufactured goods and markets for the finished goods.

Chuck

-- Chuck, a night driver (reinzoo@en.com), March 31, 1999.

Maybe these two woke from their coma!

-- SCOTTY (BLehman202@aol.com), March 31, 1999.

Norm:

Thanks for making the effort to present a less optimistic article.

My major concerns are with that 55% that will occur in the year 2000. My personal planning is based on a worry that the nation's/world's economic engine could grind down during the first two quarters of next year. Of course, we will not reach the level of "no activity".

I am quite concerned that we will see serious enough impacts overall to disrupt my nice, comfortable world and make me exert myself much harder than I do now to achieve a much reduced lifestyle.

-- Jon Williamson (pssomerville@sprintmail.com), March 31, 1999.

Although the title of this thread may turn out to be a true statement, the article never says it.

-- Bill Byars (billbyars@softwaresmith.com), April 01, 1999.

"Marcoccio said 81 percent of all packaged software applications are still not compliant, compared to 88 percent two quarters ago."

Why is this statement being ignored? 81%?! The implications of this statement boggle my mind. Can anyone "spin" this positively?

At least there's some improvement--the "mission-critical" applications must've been reclassified ;)

-- Steve Hartsman (hartsman@ticon.net), April 01, 1999.

Here's the quote from that article that bothers me most:

Spending on Y2K has also increased from 5 percent of all IT budget spending in 1997 to between 15 and 30 percent last year.

Why does that one little sentence bother me so much? Because of what Peter de Jager said in chapter five, pages 79-80 of his book "Managing 00: Surviving the Year 2000 Computing Crisis"...

[Capers] Jones also validates our estimation that an enterprise starting in 1997 is likely to get through only about 80 percent of its applications; if it waits until 1999, only 30 percent. And even conceding that only 30 percent of the applications may be critical to the business of the enterprise, that 30 percent is probably attached by data to another 40 percent of the other applications that won't make the transition in time. At best, the organization will be crippled; at the worst, it will no longer exist.

And of course, many countries in the world such as Italy waited until this year begin their Y2K work. It sounds as if, generally speaking, companies in the U.S. waited until 1998.

-- Kevin (mixesmusic@worldnet.att.net), April 01, 1999.

"Marcoccio said 81 percent of all packaged software applications are still not compliant, compared to 88 percent two quarters ago." Why is this statement being ignored? 81%?! The implications of this statement boggle my mind. Can anyone "spin" this positively?"

Hey Steve, no problemo with the spin here:

Pollyannas everywhere, there's been more than a 50% improvement in the number of software applications found to be compliant in only two quarters, and, as we approach the year 2000, the rate of progress is likely to accelerate even further!!

How's that? I feel better already.

-- Dr. Roger Altman (rogaltman@aol.com), April 01, 1999.

does any one have details on that 81% of noncompliant programs? like, does the number refer to number of different programs, or total number of packages out there, or what? the devil in statistics is in the deatils. i can't believe the press at the conference didn't dig for the details. does this 81% refer to number of copies of windows 95, and will the percentage magically go down when everyone buys windows 2000? questions, questions.

-- jocelyne slough (jonslough@tln.net), April 01, 1999.