http://www.sun-sentinel.com/money/daily/detail/0,1136,25000000000106632,00.html

Y2K bug to cost world $311 billion

By GREG CHANG Bloomberg News

Web-posted: 9:10 p.m. Nov. 30, 1999

SAN FRANCISCO -- Companies and governments around the world will spend an estimated $311 billion to fix the Year 2000 computer bug, an International Data Corp. report says.

Spending this year alone is estimated at $97 billion. An estimated $184 billion was spent from 1995 to 1998, and a projected $30 billion will be spent in 2000 and 2001, the market-research firm says in a report expected to be released Thursday.

The investment has reduced the risk of widespread computer failures caused by older computer programs unable to differentiate between the year 2000 and 1900, experts said.

"We're not looking for a global recession or for the world to stop spinning on its axis," said John Gantz, International Data's chief research officer.

When the Year 2000 bug was first widely publicized in the mid-1990s, computer consultants and economists warned it could disrupt vital transportation, power and communications systems. While worries linger, particularly for less-developed countries, fears of a global catastrophe have faded as companies pour money into rewriting or replacing old programs.

"There is a massive amount of spending going on," said Rob Enderle, an analyst with Giga Information Group. "Firms are willing to spend money now vs. having to spend it later to avoid more spending or litigation."

Deutsche Bank Chief U.S. Economist Edward Yardeni, who earlier forecast that the Year 2000 problem would cause a "severe" recession, told clients he's feeling more "optimistic and bullish," The Wall Street Journal reported Tuesday.

Public concern about the problem also is diminishing. In a Time/CNN poll conducted last week, 58 percent of Americans said they aren't worried about the problem, while 41 percent said they are. The results were a reversal of a similar poll conducted in January.

International Data estimates that global lost business revenue from computer failures should be about $24 billion next year, and possibly as much as $80 billion. That still represents less than 1 percent of the 1998 total gross domestic product of $22.4 trillion for 29 of the world's largest economies.

International Data, in the report from its Project Magellan team, expects $129 billion will be spent in the United States from 1995 to 2001 to correct the Y2K problem. Some $102 billion will be spent in Western Europe, $64 billion in Asia-Pacific and $16.5 billion in the rest of the world.

International Data's estimates, compiled from a survey of 20,000 technology officers, includes spending on staff, services, hardware and software for fixing the computer bug. The estimates don't include legal costs or normal computer upgrades.

-- Uncle Bob (UNCLB0B@Tminus29&counting.down), December 02, 1999

Answers

Thanks for the post Uncle Bob. The title is a bit spurious though: I thought the post would be about predicted losses after rollover. Remediation money HAS cost $311 billion. After all, everyone keeps telling us they've finished. ;)

Thanks again.

-- Colin MacDonald (roborogerborg@yahoo.com), December 02, 1999.

It has always been my concern that the cost of remediation alone would place a drag on the economy. The given is that the cost will be passed on to the consumer, thus contributing to inflation.

Another angle to consider is the cost to the environment in terms of waste computers. A Computech article states:

"Do you know that Y2K does have a significant hidden cost: the dumping in our environment of all these useless computers and peripherals, full of lead and mercury. If manufacturers had to absorb the recycling costs of their finished products, they would have a real incentive to offer better and more durable equipment."

Yet another concern.

-- Rachel Gibson (rgibson@hotmail.com), December 02, 1999.

Proof positive that Y2K is all hype. Those hypesters talked the CEOs and gov't agencies into this boondagle to the toon of $218 Billion.. and counting. Does that count the bunkers/information centers? Or the bullet-proof vests and tank my Mayberry RFD sheriff ordered? Or the training for "urban warfare"? Or the "Community Conversations"? Or all the back-up generators ordered? Or the lawyers fees to right up all those "ready" statements? Or the ABA sermon? (What DID they pay for that gem?).

Pretty good hoax!

-- Linda (lwmb@psln.com), December 02, 1999.

Thanks Uncle Bob. No matter what the outcome of this event now, it will go down in the history books and will have forever effected the way we in the I.T. do business. This is evidence that this has been more than a BITR. I think we owe a debt of thanks to those who awakend us early enough to address this. If you think of it, and I know this is a simplification but, if the cost of 1 I.T. person is, say $50,000 for a year on average. Then 1,000,000,000 (billion) divided by that 50,000 is 20,000 or twenty thousand people for 1 year per billion. Multiplied by the $311 billion is 6,220,000 person years. Now it's true, an unquantifiable amount of that was for equipment, however I think it's apparent that this should prove that those who worried, worried justifably.

-- slammer (billslammer@yahoo.com), December 02, 1999.

It will much more than $300 billion before were done!!!!!!!

According to Capers Jones we are looking $1 trillion now and $4 trillion within 50 years!(Dale Way from the IEEE has support for his statement that the remediation cost up til now is phase one!)

This is from Capers Jones. http://www.comlinks.com/mag/ddates.htm

"The cumulative costs of expanding numeric fields as their capacity is exceeded will erode many of the economic advantages of the use of computers and software. It is obvious that a more permanent general schema must be developed before the maintenance expenses trigger bankruptcy and litigation for hundreds of corporations and even for some governments."

"It is a shocking to consider that many of the economic advantages of the most powerful tools ever created by the human species for holding information will be lost due something as trivial as not setting aside enough room to hold dates or numeric information."

"Nonetheless the future of computing and software over the next 50-year period will be severely disrupted by a series of massive maintenance updates due to inadequate field sizes for dates and numeric information. One by one, current date representation methods will fail, and other numeric data will encounter field size problems as well."

-- earl (ejrobill@pcpostal.com), December 02, 1999.