Jim and Intel investors, I caught an interesting and timely bit (exactly one year to go) on the Y2K problem on CNBC this morning. Mark Haines interviewed basically two "experts":
Lou Marcocchio, Gartner Group, Boston, and Craig Smith of Y2K.net. I have over 20 years experience reading Gartner Group, who has been the best computer analyst firm, IMO, from when there were only mainframes to now. The .net guy was an alarmist on the subject, quoting Yardeni who's predicting a recession like '72 - '74 and 30% drop in the markets. But, who knows, maybe they're right? Their premise is that, even if most government and companies in this country fix their computer systems for compliance, and they doubt that, the rest of the world most certainly won't. They see the resulting information flow around the world being stifled having an effect like the flow of oil did back then.
Some numbers estimates, mostly from Marcocchio:
1. There are about 100,000 mainframes around the world, handling most of the world's critical information and data (Mary), that have the best chance of being fixed. In fact, he estimated that more than 50% of the effort has been expended already, resulting in a bubble of software consulting business and mainframe sales. He thinks that there will actually be a slowdown in the mainframe area in the last half of 1999.
2. He estimated that there are about 80 million PC's (maybe including workstations and servers, my ed.) that are doing critical control work in power, water, rails, etc., and your basic cyclical industries like chemicals, metals, autos, etc. These of course can be a big problem. He said that in a lot of countries, the mentality is to just replace (upgrade) them. He mentioned Indonesia in that light. He said further that Gartner does conclude that this upgrade process has begun and will continue. It has been and will continue to be a noticeable bubble to the PC market (can't hurt Intel either, duh). He went on to say that failures due to the Y2K bug would need to continue to be fixed throughout 2000 and to 2002, etc. as they are found. He also said that computer storage was seeing addition sales due to Y2K (about the 10th reason in the last five years I've seen for me to buy EMC stock).
3. The third category that they both spoke to was embedded microcontrollers. They agreed in their estimate that there may be 50 to 80 billion of these out there in everything from cars to microwaves to industrial controllers to cameras. The .net guy lost more credibility saying there may be several hundred of these in each of CNBC's cameras. What? Anyway, the guy went on to say that there is no practical way to really test in advance which of these microcontrollers may cause problems, and it may be a small percent. He said that what would probably happen is that companies having equipment with them would do a wait and see thing, and then just fix the ones that failed. Scary.
One last note. Gartner guy said that in this country, power companies, etc. in the bigger metropolitan areas are doing more to get Y2K compliant than those in smaller cities. So when you wake up one year from today, look at an electronic clock first to see if it's flashing (or dead).
It may help tell you where you are!
Tony
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