TO ALL - These are the main reasons why I am still long this stock... read carefully. We tend to loose the sight on the most important reason to invest in a company specialised in embedded y2k remediation. Just MHO of course.
PR for companies solving the most pressing and most underestimed aspect of the Y2k problem in the years to come will follow... by the national newspapers and TV channels...
John
_______
'http://www.house.gov/reform/gmit/hearings/testimony/990120lg.htm
Statement by
LAWRENCE K. GERSHWIN
NATIONAL INTELLIGENCE OFFICER
FOR SCIENCE AND TECHNOLOGY
NATIONAL INTELLIGENCE COUNCIL
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TEHCNOLOGY
of the
COMMITTEE ON
GOVERNMENT REFORM AND OVERSIGHT
U.S. HOUSE OF REPRESENTATIVES
January 20, 1999
...
Foreign countries trail the United States in addressing Y2K
problems by at least several months, and in many cases much
longer. Y2K remediation is underfunded in most countries:
...
The largest institutions, particularly those in the financial
sectors, are the most advanced in Y2K remediation. Small and
medium-size entities trail in every sector worldwide.
Most countries have failed to address aggressively the issue of
embedded processors. While recent understanding is that failures
here will be less than previously estimated, it is nevertheless
the case that failure to address this issue will still cause some
highly dependent sectors with complex sensor and processing
systems to have problems, centered right on the January 1 date.
The lowest level of Y2K preparedness is evident in Eastern
Europe, Russia, Latin America, the Middle East, Africa, and
several Asian countries, including China.
Global linkages in telecommunications, financial systems, air
transportation, the manufacturing supply chain, oil supplies, and
trade mean that Y2K problems will not be isolated to individual
countries, and no country will be immune from failures in these
sectors.
The coincidence of widespread Y2K-related failures in the winter
of 1999-2000 in Russia and Ukraine, with continuing economic
problems, food shortages, and already difficult conditions for
the population could have major humanitarian consequences for
these countries. While the Russian government initiated
centralized guidance to ministries and agencies in May of 1998,
the State Committee responsible for initiating overall guidance
has stated that there is not enough time or money to resolve the
Y2K problem. We think they're right. Russian estimates of the
cost of remediation of their government systems seem considerably
less than Western estimates for comparable systems in other
countries. Thus far both Russia and the Ukraine have exhibited a
low level of Y2K awareness and remediation activity. While Russia
possesses a talented pool of programmers, they seem to lack the
time, organization, and funding to adequately confront the Y2K
problem. Concerns include problems with computer-controlled
systems and subsystems within power distribution systems and
nuclear power generating stations leading to reactor shutdowns,
or improper power distribution resulting in loss of heat for
indeterminate periods in the dead of winter in Russia.
Indications point towards a slow, reactive mode of operations on
the part of the Russian Atomic Energy Ministry.
Although Western Europe is in relatively better shape than some
of the regions I have cited earlier, European awareness of and
concern about the Y2K problem is uneven, and they do lag the
United States in fixing their problems. European attention was
focused on modifying computer systems for the European Monetary
Union conversion, which was implemented successfully on 1
January, but this was done by, in many cases, postponing coming
to grips with Y2K problems. For example, the Netherlands has
expressed concern that the EU members are not working together to
solve Y2K problems, and has threatened to cut off its power grid
from the rest of Europe in order to protect domestic power
distribution from external problems.
The Asian economic crisis has hampered the Y2K remediation
efforts of all of the Asia-Pacific countries except Australia.
While the lines of authority for China's Y2K effort have been
established, its late start in addressing Y2K issues suggests
Beijing will fail to solve many of its Y2K problems in the
limited time remaining, and will probably experience failures in
key sectors such as telecommunications, electric power, and
banking.
We are focusing increasingly in our study of foreign Y2K problems
on those critical sectors that directly affect US interests.
These include, among others, foreign military systems, trade, and
oil production and distribution, all of which I will elaborate
on.
Military systems and their command and control are particularly
information-technology dependent, and thus potentially vulnerable
to disruption if Y2K problems are not adequately addressed. We
have been especially attentive to the issue of foreign strategic
missile systems, in particular those in Russia and China, to
experience Y2K-related problems. US and Russian officials have
been discussing these issues for some time now, and we do not see
a problem in terms of Russian or Chinese missiles automatically
being launched, or nuclear weapons going off, because of computer
problems arising from Y2K failures.
The problem we are more focused on is whether the Russians will
manage to locate and fix problems in their early warning systems
that they use to monitor foreign missile launches, and how their
leadership is preparing to deal either with the prospect of
incorrect information being provided by such systems, or with
system outages. The level of concern in Russia is growing as
awareness of the nature of the Y2K problem grows.
Regarding world trade and oil: some of our most important trading
partners have been documented by, among others, the Gartner
Group, as behind the US in fixing their Y2K problems (China and
Japan, for example). Significant oil exporters to the United
States and the global market include a number of
countries--Venezuela, Saudi Arabia, Mexico, Nigeria, Angola, and
Gabon--that are lagging in their Y2K remediation efforts. Oil
production is largely in the hands of multi-national corporations
in the oil-producing countries, but this sector is highly
intensive in the use of information technology and complex
systems using embedded processors, and is highly dependent on
ports, ocean shipping, and domestic infrastructures.
The industry is fraught with potential Y2K problems. Embedded
microprocessors are found throughout in the oil industry in
drilling, pumping, transportation, processing, and refining
operations. A typical offshore platform or onshore gas plant
reportedly uses 50-100 embedded systems, each containing up to
10,000 individual microchips. While the industry has been
actively involved in remediation, planning for remediation of a
single offshore platform can reportedly involve up to 60
different vendors. We are concerned about the shipping of oil
products, because ocean shipping and foreign ports have both been
flagged as among the least prepared sectors.
One additional issue I want to raise is that many foreign
officials and companies who are aware of Y2K problems are looking
to the West, and particularly the United States, for help, and to
Western suppliers for technical solutions. In some cases, foreign
companies or governments may blame the United States and other
foreign vendors for problems in equipment and thus seek legal
redress for their failures. Worldwide litigation issues are
quickly becoming a part of the Y2K scene.
In closing, let me note that today we can list all the issues
that concern us worldwide, in terms of the impact of Y2K failures
on infrastructures, economies, countries and regions, national
security, trade, and so on. But today we cannot yet provide good
answers or predictions that would be meaningful on the
consequences. We have cast a wide net for information on Y2K
developments and are working very closely, through the
President's Council on Year 2000 Conversion, with the rest of the
federal government. As the time for greater likelihood of
failures comes nearer, awareness of, and reporting on Y2K
problems abroad should increase dramatically, and we thus expect
to have a better handle on the type and extent of failures we are
likely to see around the world.
...
--------------------------------------------------------------------------
Roleigh Martin ourworld.compuserve.com
( easy to remember alias is: webalias.com )
(A Web Site that focuses on Y2k threat to Utilities, Banks & more)
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