Ten years ago this week, the much-hyped Y2K crisis -- which had come in with a long, sustained roar -- went out with a whimper.
In the years and months leading up to the new millennium, IT organizations spent billions patching systems and replacing hardware and software that had infamously been designed to support only a two-digit year -- a problem dubbed the Year 2000 bug, the Millennium bug, or simply Y2K.
While the world pondered dire predictions of massive global infrastructure failures -- everything from elevators to air traffic control systems was rumored to be vulnerable -- the specter of a total paralysis of business operations resulting from cascading Y2K failures galvanized organizations into a frenzy of activity. For many CIOs, the unprecedented size and scope of addressing Y2K problems was the biggest project of their careers.
And then it was over. On Dec. 31, 1999, the world held its breath -- and nothing happened. Jan. 1, 2000 came in just like any other day. There were no major failures to report anywhere.
In the aftermath, or non-aftermath, some pundits said all the preparation had been overkill. Others maintained that only the hard work of IT pros, many of whom did not sleep that night, kept the information systems of the world on track.
Many of the IT professionals and CIOs who lived through that ordeal still carry those experiences, and painful lessons learned, with them to this day. On the eve of Y2K’s 10-year anniversary, Computerworld asked a few veterans to recall the good and bad that came from the whole Year 2000 experience, and to share some of the crazy things that happened as the hype built up and the millennium closed in.
Today, we start with “Y2K: The good” -- read on for veterans’ opinions on the ways Y2K changed IT for the better. Then check back tomorrow for “Y2K: The bad” (and there was lots of bad) and the day after for the thrilling conclusion, “Y2K: The crazy” (there was plenty of crazy, too). In the meantime, take a moment to share stories of how you spent Millennium Eve.
But first, the good.
IT became a player
“Y2K put IT on the map,” says Paul Ingevaldson, who, as senior vice president of technology, oversaw Y2K preparations for Ace Hardware Corp.’s global operations. There was no way [management] could not understand how important IT was to the company.
For the first time, companies realized just how critical IT was to business operations. At retailers such as Ace Hardware, for example, the rise of e-commerce had forged a direct link between downtime and lost revenue. “There was no way they could not understand how important IT was to the company. That was the positive side,” says Ingevaldson, who has since retired and now writes a regular column for Computerworld.
Y2K was a wake-up call for executive management in particular, says Benny Lasiter, who was a senior data management analyst and lead database administrator for a real-time trading floor application at Texaco Natural Gas, a division of Texaco U.S., which is now part of Chevron Products Co.
Starting in 1998, when remediation work for Y2K began in earnest, “the importance of IT across the organization was better understood at the highest levels of the company,” says Lasiter, who is now an IT strategy consultant in Houston.
IT had top management’s full attention, so much so that some CEOs were interested in the CIO’s every step -- even on New Year’s Eve. “One of my roles was to keep the president and board chairman apprised,” recalls Ingevaldson. “It was the only time I’ve received that kind of concern, that I would [be asked to] call them on New Year’s morning,” Ingevaldson says.
When it came to IT spending, the sky was the limit
It’s hard to say definitively how much Y2K cost the corporate world overall. In November of 1999, the U.S. Department of Commerce put the total cost of Y2K remediation at $100 billion.
By 2006, the number had climbed. IDC published a report that year calculating that the preparation and New Year’s Eve costs in the U.S. totaled $134 billion, with an additional $13 billion spent fixing minor problems in 2000 and 2001, according to analyst John Gantz. Worldwide, organizations were estimated to have spent $308 billion before the millennium on remediation efforts. That’s a lot of cash.
For IT, the millennium bug represented an unprecedented opportunity to modernize. “I don’t think we’ll ever again get that opportunity to say, ‘Hey, we need a blank check to get everything up to date.’ We put a lot of fear into the CEOs back then,” says Michael Israel, who, as chief operating officer at IT services provider AMC Computer Corp.oversaw the Y2K remediation work at Continuum Health Partners and its affiliated hospitals in and around New York City.
Before Y2K, an “if it ain’t broke, don’t fix it” mentality had kept outdated equipment, like the 285 original IBM PC AT computers at Continuum, in service. Now they finally had to go. “It was a once-in-a-lifetime opportunity to clean up and standardize,” Israel says.
Dick Hudson, CIO at offshore drilling company Global Marine Inc. in Houston in the late ‘90s, experienced a similar kind of windfall. “Systems were antiquated, but for cost reasons you could never get management to appropriate the money to clean them up,” he recalls. “[Y2K] scared the bejabbers out of CFOs and CEOs, so IT was able to clean up a lot of the garbage. It was a cathartic time, one of the best things that ever happened to IT.”
Continuum’s CFO didn’t hesitate to sign off on the $20 million tab for Y2K preparedness, says Israel, now senior vice president of information services at Six Flags Theme Parks Inc.
The two-year project occupied 37 full-time staffers and required updates to 37,000 systems, including 7,000 PCs and between 500 and 600 servers. And even that was a drop in the bucket compared with efforts at large corporations like General Motors, which spent hundreds of millions of dollars on remediation efforts.
Y2K put software and services markets on the map
Y2K wasn’t just an opportunity to modernize; it also drove a huge payday for IT product and services vendors, says Dale Vecchio, an analyst at Gartner Inc. who consulted with clients on Y2K issues and now works with its application strategy and governance team.
Y2K remediation, in tandem with the emerging dot-com boom, became “one of the single biggest drivers for packaged software,” Vecchio says. Venture-capital-driven dot-coms were on a buying spree, telecom companies were building out their networks to meet the demand for bandwidth, and IT organizations, as part of their Y2K remediation, were modernizing much of their software and hardware infrastructure and migrating many mainframe applications onto client/server systems. In that climate, third-party software and services were “an easy sell,” Vecchio says.
At AMC Computer, salespeople were suddenly making money hand over fist. The Y2K spending bubble made many people rich. “We made a lot of money on it. A lot of folks thought the gravy train would never end,” Israel says.
Portfolio management became the new mantra
To solve the Y2K problem, CIOs needed to know what applications they actually had. IT finally came to grips with the need to get its portfolio in order.
“The very reason why Y2K was a problem was that most CIOs couldn’t put their hands on the application portfolio in the first place,” says Stuart McGill, then VP of Y2K business at Micro Focus in Rockville, Md., which sold development environments used for client/server and mainframe Y2K remediation work. “They didn’t have any discipline around the application portfolio.”
“This was a time for [IT] to do discovery and documentation,” Israel agrees, and it was a lesson that he took to heart. “That became the foundation for how I manage an IT environment today.” From Y2K came a clearer understanding of the need to standardize workers’ roles and to thoroughly document systems, he says.
Going forward, Y2K also prompted IT to think more strategically. “It really raised awareness of how something as simple as a two-digit year can impact you down the road,” Lasiter says. That led to better planning. “It opened up that thinking of what might happen in the future that we can avert now.” After Y2K, he says, his staff was much more thorough in testing programs for every conceivable contingency before deploying them.
Y2K was a ‘Kumbaya’ moment
In tackling the millennium bug, many departments within distributed organizations worked together, sometimes for the first time, to face a common enemy. “Y2K was an interesting phenomenon, in that it knew no industry or global bounds,” says Vecchio.
The scope of the problem touched every part of the organization, in every country worldwide, Lasiter points out. That meant that in the run-up to Y2K, IT had a golden opportunity to build relationships with every part of the business, as well as with other areas of distributed IT organizations. And those connections would pay off later, during future projects.
Texaco had a distributed IT organization at the time. Initially, Lasiter didn’t know many people outside of his own group. “Y2K brought a lot of unity within the IT community. For this project, we were all one,” he says. After that, he says, cross-functional, cross-departmental projects became much easier to coordinate.
IT saved the day -- and Millennium Eve
When the millennium came, IT was ready. Many IT managers and staff had to forgo New Year’s parties, since they were either on call or standing by at work as the new year rolled in. But if the media, the public and even celebrities fretted over what might happen, most IT organizations were feeling good.
Y2K was an interesting phenomenon, in that it knew no industry or global bounds.
“We were confident that we wouldn’t have any major outages,” says Lasiter. And Texaco didn’t. “The fact that we didn’t have any major problems was a huge success.” Still, it wasn’t until later in the day on Jan. 1, after everything had been fully checked out, that IT began openly celebrating.
Tech support at Micro Focus stayed open but received no calls, remembers McGill, who is now chief technology officer for Micro Focus. In Stamford, Conn., Gartner analysts were on call. A few calls came in, says Vecchio, but most of the Y2K issues were minor inconveniences. “There was nobody who had a catastrophic failure,” he says.
In New York, Israel sat with his team in one of Continuum Health Partners’ facilities. “We sat in the data center eating lasagna and ziti and watched the clock,” he recalls. “Y2K was a quiet and anticlimactic event.”