Dawn of new century holds niche for profit Preparing for 2000: Computer systems could be thrown into turmoil the moment that 1999 ends and 2000 begins. But the problem is providing an opportunity for a Rockville-based firm.

March 19, 1996|By Mark Guidera | Mark Guidera,SUN STAFF

In an article in Tuesday's editions of The Sun, the title for Intersolv executive Harold Daniels was reported incorrectly. Mr. Daniels is group vice president for enterprise client/server solutions.

The Sun regrets the errors.

Several years ago, Harold Daniels and his computer software wizards looked at the calendar and saw a huge problem was on the way for businesses the world over when the seemingly simple shift into the next millennium occurs on Jan. 1, 2000.

Of course, as any wise business operator knows, trouble breeds opportunity.

So today, Mr. Daniels and the folks at the publicly held software company he heads, Rockville-based Intersolv, are thick in the race to capture a share of the estimated $600 billion global market for solutions to the vexing computer system problems the transmillennium is expected to cause if left unattended.


In a nutshell, the problem is this:

When the calendar shifts to the next millennium just after midnight on Jan. 1, 2000, computer systems the world over could be thrown into turmoil because computer programs that handle many business calculations, from tracking phone calls for billing to employee pension and annuity payments, have been programmed to read year dates as just two numbers, not four.

For example, "01" stands for 1901 and "96" stands for 1996. So, when 2000 arrives, computer systems that aren't "repaired" for the date change will interpret the "00" as 1900, not 2000.

And that, says Mr. Daniels and other experts, could create havoc in a million ways from botched Social Security and medical records to mistaken charges on telephone bills.

For example, a 15-minute long-distance phone call made just before midnight on Dec. 31, 1999, and lasting into Jan. 1, 2000, might be read by a computer tracking the call for billing as 15 minutes plus 99 years. Ouch.

Or, physician office computers might miss notifying a patient when he should report in for important follow-up medical tests for conditions such as heart murmurs or diabetes.

A year ago, not many people were talking about such doomsday scenarios. Today, corporate executives from Baltimore to Hong Kong are fretting over it.

"Already, computer systems that do projections five years out are suffering," said Mr. Daniels, Intersolv's chief executive officer.

That's why computer software companies such as Intersolv, which had 1995 sales of $115 million, are hoping to profit by putting these worries to rest.

To develop software to "repair" the lines of codes that control dates and date changes, computer software engineers at Intersolv and other companies had to develop highly sophisticated programs that could search through mazes of millions of lines of coding to locate dates and how they fit with other dates and information in computer system databases, and then make the necessary conversions to prevent systems from being crippled come Jan. 1, 2000.

Products the company has developed include programs that can make necessary year 2000 date adjustments in a system and that add computer system storage space needed as a result of the additional lines of code.

During the past year, the company, which employs about 800 worldwide, has added 150 jobs in its once 50-person services group to handle the added work load from businesses needing date change repairs and advice.

Mr. Daniels said he expects Intersolv's service group to grow to at least 400 people by the summer of 1997.

The payoff? The executive believes that sales of Intersolv's software tools, as well as revenues from providing experts to tackle the repairs for businesses, could generate 10 percent sales growth about $12 million annually for the next several years.

Meanwhile, no one is certain what it will cost the average mid-size company to have its computer systems brought up to snuff for the transmillennium. But "millions" is the estimate heard most often from experts.

One example given by Mr. Daniels: The average mid-size business with a computer system that has 8,000 programs and 12 million lines of code will have to spend about $7 million to ensure that all the necessary year 2000 date adjustments are in place.

Kevin Schick, Chicago-based research director for the Gartner Group, a business consulting outfit, says software companies like Intersolv face increased competition in the year 2000 date change market.

Computer companies as large and well-known as IBM and CapGemini to one-man home-based consultants have jumped into the fray, said Mr. Schick.

"IBM alone probably has a couple thousand feet out on the street chasing this market," said Mr. Schick.

Competition is even coming from outside the software industry, Mr. Schick notes.

Business accounting and consulting outfits such as Arthur Anderson LLP and Ernst & Young LLP have added year 2000 date-change divisions.

The key for small to mid-size companies such as Intersolv angling for a share of the market, says Mr. Schick, is to find a niche and plumb it.

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