Y2K: The Clock Is Still Ticking

The end is creeping closer. Introducing TSC's series on the biggest computer glitch ever -- Y2K.
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SAN FRANCISCO -- About two years ago, I was sitting at my desk in the corner of

TheStreet.com's

first newsroom, when there was an unexpected explosion -- a handful of stocks no self-respecting financial journalist ever heard about went through the roof. I turned up the volume on

CNBC

as a coiffed

Joe Kernen

struggled to pronounce names like

Accelr8

(ACLY)

and

Zitel

(ZITL)

, trying to explain what these weird little companies did and why their stocks, new quantities all, were suddenly erupting for 50% and 100% gains day after day.

This

year 2000 crisis had all the makings of hokum -- the kind of stock speculation my colleagues in the financial press insisted was a sign of the end of a long bull market. After all, computers were designed by geniuses, not idiots. Computer problems were solved by

IBMs

(IBM) - Get Report

, not Accelr-whatevers. Technology, surely, was getting faster, more nimble and more able. I know bull?@%, and this, surely, had that offending smell.

But my interest was piqued again a few days later as I watched

CNBC's

Bill Griffeth

interview a sharp

Giga Information Group

analyst named Stephanie Moore. She was charming and convincing, and her coolheaded Y2K explanation seemed plausible. From her viewpoint, things looked dim. Just then, my editor,

Dave Kansas

, sent out a staff-wide email asking if anyone would step up to the plate and pick up this beat. Hey, why not, I thought. I'll either shoot a hole through this thing, or this Moore chick has found one hell of a story here.

After two years of covering this stuff, I can tell you that Moore did have a hell of a story. So does Accelr8. So does Zitel. So, it turned out, did IBM. We've told them all on this site, and, after some real strong skepticism, the rest of the financial press has come around on this issue as well. Corporate America, too, has been forced to wake up (indeed, according to a recent study by

Morgan Stanley Dean Witter

, a poll of

Fortune

500 chief information officers found that one in eight will spend more than a third of their budgets on the Y2K problem in 1999).

In the last two years, I've written dozens of Y2K stories, some I still

like, some that have proven especially

prescient and some that still stink (best forgotten). And, now, in my new role about 3,000 miles from that New York newsroom, I just helped

TSC

hire an experienced reporter to cover the Y2K crisis full time.

But one story still sticks in my mind: Just a few weeks after these stocks went nuts in the waning days of 1996, I went to a computer programmer's conference in Washington. Still very much a skeptic, I sat in the back of a crowded conference room, notebook in hand and eyebrow askew. Panelists from the

Internal Revenue Service

, the

Defense Department

and some research firms talked about massive Y2K remediation projects, but I wasn't buying it. Then a woman from the

Veterans Health Administration

ambled up to a microphone to ask a question.

As she spoke, she started to tear up. She described how she was skeptical when her boss asked her to begin to analyze the VHA's Y2K problem. But as she looked at it, she realized this was going to be a real problem. As she looked further, she began to see that critical hospital systems could fail, endangering the lives of patients. After checking and double-checking, she nervously went back to her supervisor to let him know the VHA was going to need a massive effort to

begin

to address this problem. Her boss did not have Y2K in the budget. But he said it was a big deal, and that she could now consider Y2K her full-time responsibility. She'd even get a part-timer to help her out.

So, as her eyes welled up, she asked the panelists just how she could convince her boss that Y2K was the real deal. "I just don't know how we're going to do this," she said. "I'm 75% of my department's Y2K office, and I don't even know what I'm doing."

I remembered that woman a few months ago, when the

TSC

editors got together to talk about Y2K. Are there, we wondered, companies, federal agencies and foreign governments that

still

don't know what they're doing?

We dispatched some of our best reporters to look into a variety of Y2K stories for a series that will run today through Thursday. Some are about Y2K stocks of yore, others look overseas and over time.

As the series unfolds, you'll all have a better idea of just where the Y2K preparation is. And isn't.

Monday, Dec. 21

It's a Small World After Y2K

Worldwide preparedness ratings range from "Sort of OK" to downright "Scary."