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Technology Stocks : Discuss Year 2000 Issues

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To: J.L. Turner who wrote (3501)1/31/1999 10:53:00 AM
From: flatsville  Read Replies (1) of 9818
 
This first appeared on csy2k 01/27/99 @ 5:25 PM courtesy of DaShad0w@webtv.net under the post header 80% not enough? Within two days it was spun-off and appeared on GN's site. I have been trying to run down the author and publication origin to no avail as I frankly hate to site GN for any bit of information.

It is a thought provoking piece for those who have not pondered the global linkages issue much beyond "milk comes from the grocery store and gas comes from the gas station." Consider that half a million manufacturing jobs left the US for points abroad last year alone. Consider that the US is at a historic low for manufacturing positions.

A few years back Wal-Mart ran those "Buy American" commercials touting the company's efforts to purchase and stock US "made" (read finished) products for retail consumption. I don't see them anymore. I wonder why. Perhaps it is because the company found it harder and harder to actually "Buy American" and keep the margins where the stockholders and analysts wanted? There are some products this country stopped producing in any great quantity due to competitive pricing in a truly global economy.

(This is not a labor rant on my part, but an illustrative rant. I went through something like this with my young son last year who wanted to know why virtually every toy he picked up in Wally World had the stamp "Made in China." He had been in the toy section a half hour comparing country of manufacturing origin and had decided that China must be a wonderful place full of happy workers making cool toys and wanted to go there to see it all. We talked about cost of labor. Being the little capitalist that he is, he got the point immediately. It wasn't such a wonderful place for the low paid workers and their families. The toys were still cool, but he was a little less excited about the process. I was just happy he wasn't checking everything in the cart at that point. Oddly enough he understood the disruption potential of y2k quite readily when I explained a few weeks ago that there might be some delay in shipments of those cool toys from abroad.)


THE REAL Y2K QUESTION
[essay from Mike Goodin, editor]
I've been pondering the root Y2K problem for many years, searching for a
concise way to describe the true nature of the potential threat. This
week, aided by the phraseology of a scientist, I've constructed this
question:
"What is the fault tolerance of our globally-distributed specialization
network?"
This is the relevant Y2K question. Remember, it's not the compliance of
home appliances that matter (and why polls keep asking people about home
appliances is an unfortunate mystery...), and the likelihood of failures
somewhere on the planet are all but certain. Failures are going to
occur, without a doubt.
The question concerns the ability of our globally-distributed
specialization network to survive faults. If the global system is highly
fault tolerant, it will survive intact, with few disruptions. If the
global system has low fault tolerance, we're in for a very rough ride.
Perhaps even a multi-year shutdown of civilization as we know it.
FAULT TOLERANCE HAS NEVER BEEN TESTED
Recognize the fault tolerance of our "new" global community has never
been tested. In the days of World War II, America was relatively
isolated. We could build our own planes, trains and automobiles (tanks,
too). We had factories, we had relatively short, U.S.-based assembly
lines with skilled U.S.-based workers who possessed labor skills. The
network of specialization was much smaller, and therefore, more fault
tolerant. Everybody knows the fewer pieces you have in an engine, the
less likely it is to fail. Simplicity leads to reliability. Complexity
results in a low fault tolerance.
Today, the manufacturing base of America is nearly extinct, and the
supply lines for building products stretch across oceans, involving a
half-dozen countries for parts. This is the "globally-distributed"
specialization network to which I refer, and it is a relatively young
system.
It's been driven by economics, by specialization, by efficient
ocean-going transports and air deliveries. It's enabled by international
telecommunications: e-mails, faxes, phone calls, even video
conferencing. International banks allow the moving of funds from buyer
to seller, through trusted international clearinghouse networks. This
is, indeed, a "network" of a thousand parts, and each part of the
machine must work at near-perfect efficiency for the whole system
operate correctly.
WE ALREADY KNOW THE SYSTEM CAN HANDLE A 1% FAILURE RATE
So what is the fault tolerance of this system anyway? That's the debate,
that's the big question. Clearly, the people who say that systems fail
all the time -- with no big deal -- are missing the point. Yes, power
plants fail on a daily basis. Phone lines go down somewhere on the
planet on a daily basis. Banks mess up transactions with frightening
regularity. We understand that this global network has a fault tolerance
of at least 1%. But that's not the right question. Y2K isn't a local
hurricane. It isn't a local power outage or a local bank error. It's a
simultaneous, global slam-dunk event. It may raise the failure rate of
this network to 10%. And *that* is the big question: is our
globally-distributed specialization network able to withstand a
simultaneous failure of 10% of its parts?
See, isolated failures always rely on the non-failing services -- and an
excess of available resources -- to complete repairs. When a power plant
fails, all the power experts get called on the phone lines, and they
rush to the scene to fix this lone failing power plant. They use credit
cards to buy plane tickets, gas, food, you name it. And when they're
done, they go home and wait for the next power emergency. This
demonstrates the 1% fault tolerance of our current system.
But what if ten power plants go down? Suddenly you've got 1/10th of the
available resources for each power plant. Then what if the telecomm is
down? You can't reach the people qualified to repair the power. If the
telecomm is down, they can't use their credit cards to get there. Then
what if the airlines aren't flying? You've got delays, people have to
drive. So they depend on oil, but what if the oil tanker shipments are
delayed?
AT WHAT POINT IS THE FAILURE UNIVERSAL?
See, at some point, somewhere between 1% and 100%, you get a total
failure of the network. The real Y2K question, when you boil it down,
concerns this number. What percentage of simultaneous failure can the
network withstand without collapsing?
Clearly, it's something lower than 80%, something higher than 1%.
Perhaps the network could withstand a 5% failure; that's debatable.
Imagine if 5% of all financial transactions were bad. That would clobber
the financial institutions: busy signals forever. Imagine Wall Street
with a 5% transaction failure. The whole system would shut down due to
the 5% failures. A 10% failure would seemingly bring most networks down.
Imagine if 10% of the parts in a power plant didn't work correctly.
That's an off-line plant in short order. Imagine if 10% of the parts
didn't show up at the Chrysler plant. That's a sure-thing shutdown.
Imagine if 10% of the water treatment plants in the country failed. It
would be a Red Cross nightmare, just attempting to supply water to 10%
of the population.
In my opinion, the world probably can't withstand a 10% failure rate
without severe and long-term consequences. A 20% failure rate would be,
I think, a fatal economic event. It would thrust the world into a
depression with all the resulting costs in dollars and lives. At a 20%
failure rate, the efficiencies break down: the food production and
deliveries, the oil, power, banking, telecommunications, and so on.
80% ISN'T GOOD ENOUGH
This is why, when people tell you that 80% of the systems are going to
be ready, that's not nearly good enough. Technically, if you believe my
analysis, 80% of the systems working is still a disaster. 20% of the
systems failing could break the global network's back. In fact, a 95%
"working" ratio isn't good enough, either. Even a 5% failure could have
long-term, painful consequences. In order to avoid the worst effects of
the Millennium Bug, systems need to operate at 99% or better. We need to
have less than one failure per one hundred systems. At that rate, I'm
confident the fault tolerance ability is sufficient.
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