Y2K, the Bad: Fear, hype and the blame game

Tech-wise, Millennium Eve was so quiet, some started to wonder -- did IT overspend on Y2K?

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It wasn't until New Year's Eve itself, when it became clear that the world infrastructure wasn't going to collapse, that Ingevaldson and his team of about 30 IT people felt they could finally relax, at least somewhat.

"We had a conference room where we set up televisions," he remembers. A few minor issues came up that night, which the team fixed before morning. Ingevaldson checked in with the CEO after midnight and stayed at work a few hours longer to make sure everything was okay. "I got home at about 5:00 a.m.," he recalls.

Y2K got fixed. IT got kicked.

On Jan. 1, 2000, catastrophe reportedly loomed. Planes would fall from the sky. Power plants would shut down. Elevators would stop. Entire supply chains would freeze up. (For more, check out this video of Leonard Nimoy describing the myriad ways the world was supposed to grind to a halt.)

After hearing all this, top management watched nervously as midnight came and went without any major incidents in their organizations. At first they were relieved -- until they noticed that no one, anywhere, was having any major problems.

Then they became suspicious.

"It was a no-win situation," Ingevaldson says. "People said, 'You IT guys made this big deal about Y2K, and it was no big deal. You oversold this. You cried wolf.' "

Suddenly, management was questioning why all that money had been spent in the first place, says Israel. "After the event was done, the CFO said, 'I signed off on $20 million and I didn't hear one thing,'" he recalls. The CFO doubted that the problem was as big as he'd been led to believe. "No matter how much salesmanship you did, they kind of doubted you after that."

Some organizations faced more than just criticism and snide remarks. "The reputation of IT took a hit," sums up Dale Vecchio, an analyst at Gartner Inc. "A lot more outsourcing happened after that."

Some felt it most keenly in the pocketbook. "There was a backlash from the CEO and CFO. They felt that Y2K was overhyped, that it was just IT's way of getting a lot of money out of them," Hudson says.

While Hudson was able to defend to his management the value of the work his team had done and then move forward with other, long-delayed projects, many of his colleagues saw their capital budgets slashed as resentment mounted. "For a couple of years, they couldn't get squat. [Management] felt that they had been snookered by IT and the press," he says.

They had a point, says Bruce Schneier, currently chief security technology officer at enterprise security provider BT Global Services as well as a noted author of books on risk and security. "If it was really bad, you would think in some cases something would have gone wrong somewhere. But nothing went wrong," says Schneier, who has chronicled the ways in which people overreact to some risks while ignoring others. With Y2K, he asserts, the level of risk was overstated.

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