Profiting from the Year 2000

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Opportunity Abounds for Resellers Delivering Year 2000 Solutions

by David S. Linthicum

Originally published in the August 1998 issue

As a reseller, your business is about turning your customers' problems and needs into sales opportunities. Over the next 17 months, one of the biggest problem areas for customers--and opportunities for you--is the now-notorious year 2000 (Y2K) issue.

Just how big an impact could Y2K have on your bottom line? Consider that the Gartner Group, a research and consulting firm, estimates that businesses worldwide will spend $300 billion to $600 billion to test, upgrade, and in some cases replace software to ensure Y2K compliance, with $150 billion to $200 billion of that being spent in the United States. And Federal Reserve Board governor Edward Kelley told Congress in April that the Y2K quandary could create enough problems to slow U.S. economic growth during the next two years.

That's quite a legacy for a problem that originated decades ago, when mainframe programmers determined that year dates should be recorded using 2-byte fields to conserve memory and disk space--scarce and expensive commodities at the time. Using this 2-byte approach, a system represents the year 1988, for instance, as "88." Trouble arises when you consider dates past 2000--the "01" of 2001, for instance, leads a non-Y2K-compliant system to think it's 1901.

Because this way of handling dates began on mainframes, many people think that the problem is limited to the world of big iron. But PC hardware and software is at risk as well. Macintosh owners are the only ones with little or nothing to worry about. All Macintoshes have been built Y2K-compliant since the line debuted in 1984, and Macintosh Toolbox calls, which are built into ROM, should ensure that virtually all applications are Y2K-compliant.

Most PCs and software introduced in the last several years will take you into 2000 without a hitch, as will many older systems and applications. But there are no guarantees. For example, some Pentium PCs built by Micron Electronics as recently as August 1996 require a patch to be compliant.

Because businesses can't assume that their equipment is ready for 2000--and because the penalty for noncompliance could be the disruption of essential business systems due to corrupted data or malfunctioning hardware--Y2K presents a tremendous sales opportunity for resellers. At the service level, business and government clients need experts who can audit systems and software for Y2K problems; if problems exist, these organizations will also require remediation services. And at the sales level, many organizations will need to replace noncompliant hardware and software--which is a bonanza for resellers offering the latest Y2K-compliant products.

Understanding The Problem

The Y2K problem exists on four levels: applications, databases, operating systems, and hardware. Each level presents its own opportunities for resellers, so it's important to understand the basics of each.

At the application level, problems can exist on host computers or on stand-alone PCs. In the host world--whether on servers, mainframes, or minicomputers--some organizations face mammoth tasks to verify compliance. Thousands and sometimes millions of lines of code need to be examined to determine if there is a problem. A typical inventory application, for example, might require 10,000 working hours to scrutinize and fix.

With stand-alone PCs, some applications will need recoding, but most will already be Y2K-compliant or will need only a simple software upgrade. Common problem areas include spreadsheets that use only two-digit dates, as well as Visual Basic applications that cull data from larger systems or non-Y2K-compliant databases.

In terms of job size, fixing PC application problems is typically a small task. The number of PCs at a given site often multiplies the verification process into a massive undertaking, however. At the mainframe level, many users share application code; change the code in one place, and it's fixed for everyone. With PCs, applications are usually located on each PC, even in networked settings. Someone needs to track down and fix every affected application.

Databases are another common area for Y2K problems. Most databases are Y2K-compliant, but some older or poorly supported databases aren't. What's more, custom databases created within organizations might not have been designed to handle post-1999 dates. Those databases, along with the applications that access them, must be tested. In many cases, minor fixes will be required; in others, the entire database must undergo change.

While not as common, Y2K issues can arise within operating systems. Microsoft Windows 95 and 98 are Y2K-compliant, but both Windows NT Server 4.0 and Workstation 4.0 require a series of patches. (According to Microsoft, NT 5.0, expected late this year or early in 1999, will handle the switch from 1999 to 2000 without a hitch.) To make NT 4.0 Y2K-compliant, the first step is to install the Windows NT Service Pack 3, then Microsoft Site Server Express 3.0 (in beta at press time, and not required for NT Workstation), and finally Windows NT Year 2000 QFE Fixes. If you think that sounds like a lot of work, you're right.

Networks running Novell NetWare might need upgrading as well. Versions 2.13 and 4.11 require software patches to fix minor issues related to how a few utilities display and print two-digit years. Novell's and Microsoft's fixes for these problems are available at the companies' respective Web sites.

Hardware Time Bombs

Though most of the work to fix Y2K issues lies on the software side, there are hardware issues to consider as well.

VARs who build their own systems are especially vulnerable to Y2K hardware issues because they have to verify the Y2K readiness of each component they use. The VARs with the most to worry about are those who bypass distributors who have certified their products as Y2K-compliant in favor of clone or gray-market parts that might have no such certification. Such parts might not have a Y2K-compliant BIOS, chip set, real-time clock, or drivers. The result could be systems that are ticking time bombs for your customers. If you're not paying attention to these issues, you could damage relationships with good customers and spend more money on the back end fixing such problems. And there is the issue of legal exposure, too. (See the sidebar "Limiting Your Legal Risks.")

Most Y2K issues relating to PC hardware involve the real-time clock. Gateway, for example, offers a patch for several models of its 486 systems that are not compliant. And with some manufacturers' systems, the real-time clock won't recognize 2000 automatically, but will handle post-2000 dates without trouble after a user manually resets the clock with the correct date. That's an easy fix, but there will be a lot of confusion at the start of business in 2000 if your customers haven't scoped out these problems in advance.

One quick, simple test for hardware compliance is the YMARK2000 utility from NSTL, a Division of the McGraw-Hill Cos. The utility can be downloaded for free from the NSTL Web site. (See the sidebar "Reseller Resources" for NTSL's Web address, as well as other useful sites devoted to Y2K.) Though the YMARK2000 utility is free for individual use, NSTL charges a licensing fee for those who want to distribute it, as well as for the corporate version of the software, which can be used in network environments. One popular commercial program that offers hardware-compliance testing and correction is Network Associates' Nuts & Bolts Deluxe, which lists for $59.

Delivering Y2K Services

Now that we know what the problems are, where they exist, and what the potential impact is, what Y2K service offerings can resellers provide? Potential services fall into four main categories: analysis, remediation, testing, and certification.

Analysis means that a client pays for your team to come in and evaluate whether or not the client has a Y2K problem, and if so, how widespread it is. This involves examining application code, databases, operating systems, and hardware. Typically, your team will deliver a report on what is compliant and where work needs to be done.

Remediation involves sifting through each line of code to solve year 2000 problems. This is a tedious process, made manageable by software that can locate lines of code that need updating. In some cases, such software can change the offending code automatically. You'll find such software tools from many of the same vendors that sell compilers and development environments.

Testing is the most important service, because it determines whether the remediation tools caught and repaired all of the problems. In the testing phase, a reseller runs the system through a number of Y2K-compliance tests to determine if the Y2K problems have been eliminated. You can find testing tools built to address the Y2K issue as well.

The final type of service, certification, is a riskier prospect. Here, your team not only determines whether all the Y2K bugs are fixed, but certifies that the system will pass into the year 2000 without a hitch. While this provides a sense of security for your customers, it's important that you--and your customers--understand that they have to remain vigilant about the software and hardware they install after the certification process is completed. If non-Y2K-compliant hardware or software is added later, all bets are off.

To guard against this, some testing tools continually monitor for new applications. In this respect, they act similar to virus-protection utilities that sweep all new files for potential viruses. One such program, WRQ's WRQ Express 2000, checks newly installed applications for potential compliance problems and notifies LAN administrators whenever new applications are installed.

When negotiating to perform any of these services, it's crucial that you fully measure the scope of the project before settling on a price. You could stumble across applications or hardware that require hundreds of hours of work to make them compliant. Most resellers bid their Y2K services by an hourly fee or by how many lines of code need fixing. Whatever fee structure you settle on, avoid agreeing to a fixed price for the whole job--there are too many potential land mines in supplying Y2K-compliance services to lock yourself into a set fee.

Selling Safe Products

Services aside, the opportunities for Y2K-related product sales are immense. In many cases, organizations are looking to upgrade their equipment as they resolve compliance issues, providing you with huge opportunities to sell new equipment. A computer with a Y2K problem can turn into a new PC sale easily; ditto for noncompliant application and database software. Service contracts are a natural follow-up, too.

An organization in the midst of a Y2K-remediation process--whether you're performing the remediation or not--is an especially ripe prospect for sales. To upgrade an application, an organization will need Y2K-compliant compilers and development environments. Moreover, you can sell tools and technology to make remediation services easier. These include code analyzers and software that can scan PCs to identify software with the Y2K bug. The key here is to educate your sales force in how to recognize Y2K-related sales opportunities and how to recommend effective solutions for customers.

As 2000 draws near, many organizations have no idea if Y2K problems exists in their systems. In fact, many companies won't be able to fix all the problems before the deadline. While this spells big trouble for business users, it means big sales for creative resellers. Businesses are screaming for competent computer professionals to fix their systems and software as soon as possible. There is a lot of low-hanging fruit on the Y2K tree--go grab it.