Limerick firm has Y2K solution

It wasn't Limerick company Piercom's original plan to be in a market where 90 per cent of the world's businesses might need the type of product it offered, but all the same, it isn't a bad place to be.

"We are in the right place at the right time, but that came also from knowing in 1994 where the right place and the right time were going to be," notes Piercom founder, former managing director and current chief technical officer, Mr Charles Stanley-Smith.

From its modest position as a small, eight-person company a year ago, Piercom has undergone the kind of hothouse growth technology companies dream of. It has increased its employee count by nearly five times, to 38. It is readying itself for another major injection of investment capital, and another hiring drive to increase its employees to 60-100 employees next year. And all because most computers don't have the digital know-how to be able to recognise one important date: the year 2000.

Piercom's good fortune is to have specialised in exactly the kind of computer systems which need a major overhaul before the much-dreaded date of January 1st, 2000.

Known as the Year 2000, or Y2K problem, the upcoming crisis is the result of short-sightedness back in the early days of computing. Because memory was expensive and valuable, computer system designers decided to have the machines recognise dates by abbreviating years down to two digits - 97 for 1997 - but as a result, computers will think it's 1900 at the turn of the century.

All of which seems relatively minor, except that most systems will simply go into automatic shutdown or behave erratically when the date rolls over. With everything from the world's stock exchanges and air traffic control systems to stoplights and credit card validation systems dependent on that two-digit date - an estimated 90 per cent of the world's business systems - companies are beginning to scramble for a solution.

Which is where Piercom comes in. It came up with a software toolset to help resolve the problem on certain systems, which proved the all-round winner when Digital Equipment Corporation was looking for Year-2000 partners. Digital tested 28 tools, found Piercom's outperformed the rest, and asked Piercom to come on board.

But all of this started back in 1989 at the University of Limerick, where a small research group headed by research chemist Mr Stanley-Smith had received EU funding to pursue two projects. The goal was to develop tools which could analyse "legacy systems", the large, complex and outdated computer systems which held all the data at big companies like banks and insurance firms.

Stanley says that by 1990 he realised there was a commercial application to the work. Legacy systems often had been around so long that nobody in a company knew what was on the systems any longer, or how they ran, or especially, how to update or restructure them.

"There were 30-year-old systems owned by banks which were being run by 24-year-old programmers," says Mr Stanley-Smith. Piercom designed software which could go in and analyse the source code - the lines of computer code which tell a computer system how to operate - then chart the system and analyse the data. While subcontracting on a project for IBM in the mid-1990s, Piercom was analysing a large system used for aircraft maintenance. "While working on the system I suddenly realised it wasn't going to work in the year 2000," says Mr Stanley-Smith.

Although the problem was known, even information technology specialists seemed only halfaware of the consequences. Piercom's legacy systems tools served as the basis for a Year 2000 tool which could go in and analyse code to find dates. They waited for the phones to ring off the hook. No such luck - the alarming level of apathy which still affects companies about this global crisis was even worse then.

"I spent '94 to '96 crying in the wilderness," he says.

That's all changed now. Recognising that a small company would have a hard time getting a foot in the door of the large enterprise market, Piercom approached Digital in Ireland with its product just as Digital was approached by the Department of Social Welfare to do an evaluation of its Year 2000 readiness.

Digital teamed with Piercom for the Irish project, then went up against international competition to be chosen as one of Digital's worldwide partners providing Year 2000 tools. "The deal with Digital didn't surprise me because I knew we had the underlying technology right," says Mr Stanley-Smith.

Mr Cliff Murphy, manager of Digital's European Year 2000 Competency Centre in Dublin, says Digital liked Piercom's tool because it not only analysed and found code needing to be changed, but remedied, or changed it, as well. "The tool not only met our requirements for the Department of Social Welfare; we found it had capabilities that appealed on a worldwide basis," he says.

"Our tool works very like a spell-checker," explains Mr Stanley-Smith. "It goes through the code and if it finds a date, it makes a record of the necessary date change and allows the user to agree or disagree with a change." There's plenty of code needing checking. The average Irish bank has 30,000 programs on its computers, with 30 million lines of code; US banks have three times that amount.

A youthful Piercom with its Year 2000 product looked promising enough to bring John Cullinane, Tony Carter and Shaun Boyle in as investors; Boyle now serves as Piercom's chief executive officer. At present the company is trying to expand and maintain control of growth; not an easy task. "The growth pains continue," says Mr Stanley-Smith. They're mulling over a public offering in the future although they're not sure whether they'd choose to go public before or after the year 2000.

And what happens in the year 2001? Won't the market vanish? "Well, EMU is next," says Mr Stanley-Smith. "Just when everyone is working flat out and is very stretched with no resources working on the Year 2000 problem, the EMU needs to be done."