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Volume 2, Issue 3: Friday, January 07, 2000
- "Businesses to Boost Computer Funds"
Associated Press (01/07/00)
IT spending is set to explode this year as companies invest the money they saved in preparation for the effects of Y2K. In an IDC survey, 37 percent of 2,100 North American companies reported freezing spending in 1999 on non-essential IT products not related to Y2K. "We're talking about billions of dollars of spending that was withheld," says IDC analyst John Gantz. Now, as the world has transitioned successfully into the new millennium, IT spending is expected to thrive. Already, companies are lifting freezes in buying new technology, launching projects to bolster IT infrastructures and implement e-business. This renewed interest in IT projects comes as good news to many tech companies, which had seen slow growth in the late months of 1999. This year, overall U.S. technology spending is expected to rise by a strong 8.3 percent to reach $417 billion.
- "Computer Glitch Halts Flights"
Washington Post (01/07/00) P. B1; Sipress, Alan
An air-traffic control computer failed yesterday as a result of a computer glitch that experts say was not related to Y2K, causing hundreds of East Coast flights to be delayed. The failure occurred in the FAA's regional center in Leesburg, Va., which controls airspace in Delaware, Maryland, New Jersey, North Carolina, Virginia, and West Virginia. The cause of the glitch has not yet been determined, but FAA officials believe that a flawed file caused a software system for managing flight plans to fail, which then caused a new air-traffic control computer to fail. The computer that failed provides controllers with the identity and location of planes, but FAA and union officials say controllers never lost track of planes during the incident. However, controllers were forced to switch over to a slower backup system that does not automatically update information that helps controllers identify and guide planes. The controllers put a halt to takeoffs along a large part of the Eastern Seaboard for almost two hours, and called for increased distance between planes already in the air. A union official representing the FAA's Leesburg facility says the glitch was a threat to planes and passengers because although controllers could see planes on the screen, they could not identify which flight the plane was. The FAA will investigate to determine the exact cause of the failure. FAA officials say the Leesburg failure is not related to the computer malfunction a few days ago at an FAA regional air-traffic center in Nashua, N.H.
- "Y2K Glitch Causes Double Recording of Card Purchases"
Wall Street Journal (01/07/00) P. A6
A Y2K-related error in CyberCash credit-card verification software is causing some transactions to be duplicated, but credit-card companies believe they have found all the double recordings so consumers will not be billed twice. About 50 retailers this week informed CyberCash that they had not updated the software to repair a Y2K problem, although the company has been encouraging merchants since last spring to update the software, a CyberCash spokesperson says. CyberCash is the largest verification software maker, and about 100,000 retailers use the company's products. The company does not know how many other retailers now have software with the glitch, the spokesperson says. Visa and MasterCard say the problem is minor and consumers should see little impact, if any.
- "IDC Predicts Increase in Web Hosting Revenues"
ENT Magazine Online (01/04/00); Slepner, Isaac
The hosting services market is now one of the fastest growing markets in the IT industry, as companies look to third parties to manage Web sites, which are becoming more complicated and more integral to business, according to an International Data (IDC) study. Revenues of Web hosting companies based in the U.S. will rise by nearly $1 billion in 1999, boosting total revenue to more than $1.8 billion, IDC says. By 2003, the Web-hosting market will reach $18.9 billion, according to IDC. Although the U.S. is the most profitable market for Web hosting, international sales will account for a large part of the market by 2003, IDC predicts.
- "Online Holiday Shopping Was Hardly Fulfilling"
TechWeb (01/05/00); Krochmal, Mo
Internet retailers spent about $3 billion on offline advertising this holiday season. But Stu Feldman, director of IBM's E-Commerce Institute, says it is not working. He says research shows that advertising heavily is not enough to encourage consumers to buy from a Web site. "The learning is that having a Web site unavailable is not good and not being able to handle orders efficiently is fatal," he says. Feldman says companies have no choice but to direct more attention and funding toward back-office processes such as customer relationship management and supply chain management. Ernst & Young estimates the holiday online retail market reached $10 billion to $13 billion this year. The lesson to be learned by e-retailers, according to an Ernst & Young survey of 1,200 Internet users, is that consumers want "to get the stuff they ordered on time and in good condition," says analyst Pamela Stuebing. "Fulfillment is the issue."
- "Wal-Mart Eyes Public Sale of Web Unit"
Wall Street Journal (01/07/00) P. A3; Nelson, Emily; Swisher, Kara
Wal-Mart has announced that it will establish its Web site as a separate company called Wal-Mart.com, to be jointly owned by Wal-Mart and venture capital firm Accel Partners. The companies are said to be making cash investments in Wal-Mart.com that total between $50 million and $100 million. By forming a separate company for the site, Wal-Mart might be able to get Wal-Mart.com to go public soon, and the new firm will be able to use stock as an acquisition currency. The move improves Wal-Mart.com's chances of drawing skilled executives that want stock options in online firms, which would make the site better able to compete with major players such as Amazon.com. Wal-Mart.com could help narrow the digital divide by bringing many new users to the Internet, Wal-Mart says. Many of the 100 million consumers who shop at Wal-Mart each week do not have Internet access. Accel could provide Wal-Mart.com with ties to other top Silicon Valley players and connections to other online ventures it supports. Wal-Mart says its retail network and ability to combine Internet and traditional shopping will give it an advantage in competing with rival Amazon. Wal-Mart recently formed an agreement with AOL through which the companies will develop a low-cost, cobranded Internet-access service.
- "Serving Up Java Pages"
Midrange Systems Online (12/29/99); Buchner, Mark
Java technologies have become an integral aspect of Web development as businesses seek to automate their processes. Some business-oriented transactions require JavaBeans and Servlets, which can now be integrated with a new technology called Java Server Pages (JSP). JSP, a hybrid of HTML and the Java programming language, can be used to deploy a variety of Java applications within an e-business. JSPs can be used to incorporate JavaBeans and Enterprise JavaBeans into the source code. JavaBeans enable users to employ reusable components. Interactive debugging of JSPs can be performed using various Java tools. Such tools enable users to insert breakpoints in the processing and view the results. This enables users to easily control the JSP's output and end results.
- "Red Hat to Buy Payment-Software Firm and Republish Content From Salon.com"
Wall Street Journal (01/06/00) P. B8; Corcoran, Cate T.
Linux distributor Red Hat has agreed to acquire Hell's Kitchen, which makes electronic payment-processing software, for about $102 million in stock. As a result of the acquisition, Red Hat will be able to provide ISPs and others with an integrated, Linux-based electronic payment system, says Red Hat CEO Matthew Szulik. In a separate deal, Red Hat has agreed to republish content from Salon.com, a site that offers Linux information. Although no money was exchanged, both Salon and Red Hat expect the deal to increase traffic to their sites. Red Hat says the deal will make its site a better resource for information on open-source software.
- "Bus-Tech Juices DB2 Access"
Network World Online (01/04/00); Songini, Marc
Bus-Tech has unveiled a new version of its EnterpriseExpress Adapter for DB2 Access, designed to easily connect Windows NT systems to IBM DB2 mainframe applications. Bus-Tech views EnterpriseExpress Adapter as a crucial offering because although an increasing number of ERP, business intelligence, and Web applications are being attached to legacy DB2 database applications, most NT users must employ complex and often expensive methods to connect to DB2. In contrast, EnterpriseExpress Adapter is much easier to use and costs just $15,000, says Bus-Tech. The product supports IBM's Multipath Channel+ protocol for high-speed access to the IBM DB2 Connect server software, as well as IP and other protocols used by IBM's Communications Server for NT.
- "Agencies Add Mainframes for Web Apps"
InternetWeek Online (12/27/99); Koller, Mike
The trend of developing applications on low-end systems is waning as many companies and government agencies rediscover the mainframe as an option for e-business. Three governmental agencies, the USDA National Finance Center, the Texas Workforce Commission, and the state of Wisconsin have each decided add IBM's System 390 mainframes to run their retirement, employment, and benefits programs, respectively. "They can write applications anywhere and do some testing," says IBM's Rob Vrablik, "and the S/390 is versatile enough to run it without having to modify it." Giga Information Group analyst Charlie Burns suggests that companies currently using mainframes for storage consider running new applications such as Internet traffic on these old workhorses as a thrifty alternative to a buying a Web server.
- "The Net Will Be the Driving Force"
PC Week (01/03/00) Vol. 17, No. 1, P. 39; Neil, Stephanie; Chen, Anne; Vaas, Lisa
Major companies are increasingly embracing the Internet and releasing products that will allow consumers to access online information from anywhere and at any time. For example, General Motors is adding Internet access to its automobiles, and is planning a portal called TradeXchange that will connect it to its business partners. In addition, GM is designing a vehicle called the GenX SUV, which consumers will be able to design to their specifications by working with engineers over the Web. The GenX SUV might be able to receive satellite television signals or download information that will alter the car's driving and handling characteristics. Like GM, many traditional companies are reinventing themselves as e-businesses. In order to make the Web-based technologies of the future possible, companies in the next five to 10 years will push the adoption of fixed broadband, wireless broadband, voice recognition software, organic self-healing networks and clients, XML, Wireless Markup Language, and WAP. Wireless technology will play a large role in future technologies, and Starbucks is already using wireless registers. Cell phones and handhelds will become more widespread and more advanced, while the PC will transform into a "WebTop" controlled by a back-end server. Many cell phones will have an LCD screen with 256 colors by 2001, and the phones will be able to display about six lines of text. By 2005, wireless connections will hit 1 Mbps, up from the current 14.4 Kbps. As mobile devices proliferate, many companies will be forced to outsource network management because of a critical labor shortage as well as the expense and difficulty of managing a network.
- "IT Agenda 2000: Save Money With Server Consolidation"
Computerworld (01/03/00) Vol. 34, No. 1, P. S44; Vijayan, Jaikumar
Server sprawl has prompted many companies to reduce the number of servers they maintain, in some cases dramatically. Corporate Express reduced its number of supported Unix servers from 48 to 2, saving $10,000 a day. The Canada Life Assurance Co. expects to save $750,000 annually by eliminating 70 servers from the 162 midrange systems it now maintains. IBM assisted Manulife Financial and Canada Mutual in their efforts to reduce the number of servers in use in order to save money and other resources. Manulife's server platform director, James Fralick, says the project was a "tall task" and required the approval of Manulife's top executives. He added that "I had to demonstrate that I can save money, reduce complexity, reduce head count, add flexibility, and maximize the capabilities of the infrastructure to my customers--all without jeopardizing their projects or server stability and availability." Before consolidation, Manulife was employing 325 Intel servers running NetWare, Windows NT, and OS/2, in addition to 125 Unix servers running a variety of Unix operating systems. Aside from getting high-level executive support for a server consolidation, companies also need to make sure a complete asset inventory is taken and that service levels do not suffer in the transition. Also, finding a partner that is familiar with the operation is advantageous.
- "B2B E-Commerce: the Quiet Giant"
E-Commerce Times (01/04/00); Greenberg, Paul A.
Although the online shopping market was the hot topic in headlines in 1999, the business-to-business (B2B) sector is showing that it has more potential for stronger profit margins. Analysts have already estimated that transactions over the Internet between businesses accounted for 84 percent of the $43 billion that was spent online in the U.S. in 1998. Looking ahead, Forrester Research sees B2B revenues over the Internet rising to $1.3 trillion in three years, compared to $108 billion in revenues from consumer online spending. One strategy that sets B2B firms apart from business-to-consumers (B2C) firms is that profits are important to them right now. In contrast, many B2C firms are more concerned with increasing volume and sales per customer. B2B firms also benefit from high volume of "big kill" transactions and long-lasting business relationships. By 2003, 25 percent of all B2B transactions will occur online, predicts the Boston Consulting Group. Retail, motor vehicles, shipping, industrial equipment, high tech, and government are expected to be the leading industries for online B2B transactions.
- "Outlook 2000"
InformationWeek (01/03/00) No. 767, P. 34; McGee, Marianne Kolbasuk
IT organizations say their IT spending will increase, their businesses will expand, and the skills shortage will ease up in 2000, according to InformationWeek Research's Outlook 2000 survey. Y2K has slipped from the No. 4 priority in 1999 to No. 9 in 2000, the survey shows, and IT managers are shifting their focus to e-business. In line with the increased interest in e-business, IT managers responding to the survey placed great importance on Web-development tools, Web server software, security products, and increase network bandwidth. IT is viewed as the way to transform a business, so companies plan to provide IT departments with generous budgets this year, which will go mostly toward e-business solutions and new product development. Many firms say standardizing PCs and establishing network infrastructures are high priorities for the year. Meanwhile, steel-wire maker Contours is moving into e-business by adopting an EDI format for ANX, a value-added network for the automotive manufacturing industry that will let Contours avoid paying transaction EDI fees. E-business projects will require the development of middleware and Java applications. Web-server technologies such as development tools and server software are the fourth-ranked priority for IT managers in 2000. As companies increase server performance, they will have a corresponding need for increased network security, which was the third highest priority among respondents. Meanwhile, voice over IP as well as converged voice and data networks are among the lowest priorities. In terms of services, only 24 percent of respondents say they rent or lease applications from ASPs, although experts say the ASP market will grow significantly this year.
- "Everything Old Is New Again"
CIO (01/01/00) Vol. 13, No. 6, P. 186; Baldwin, Howard
Some technologies become more refined as they age and have more to offer the market years after their initial debut. High-tech ideas that now look more promising in their second round include handheld computing, CRM, outsourcing, and peripheral computing. Handheld computing emerged about eight years ago, when companies such as NCR and Grid Systems released pen-based computers to free users from the keyboard. Around the same time, Apple, Casio, and others began offering handhelds and PDAs. However, these early moves into handheld computing failed for several reasons, partly because the devices were too slow or complicated. Years later, former Grid Systems employee and Palm Computing founder Jeff Hawkins remade handheld computers into a device that integrated software and hardware, says Mobile Insights CEO J. Gerry Purdy. Before the PalmPilot, handhelds were "self-contained products that didn't connect to the desktop," Purdy says. Hawkins realized that people wanted handhelds to work with PCs rather than replace PCs. By the end of this year at least 5.5 million handhelds based on the Palm OS will have shipped since 1996, according to International Data. CRM software has also evolved beyond its origins, and now allows users not only to gather customer data, but to interact with customers and use data to build customer loyalty. Outsourcing, which began with time sharing, has also transformed into something more significant than its origins and is now also evolving into today's ASPs. Meanwhile, peripheral connectivity has also matured since the days when every computer had its own plug-compatible peripherals. Companies such as Hewlett-Packard and Sun are working to allow peripherals to connect automatically without device drivers.
- "Looking Ahead to Tomorrow's Multimedia Technology"
Electronic News (01/03/00) Vol. 46, No. 1, P. 14; Glaskowsky, Peter N.
The PC market is almost saturated, but the next several years will be a time of unprecedented market growth. During the next decade over a billion people will go online through low-cost, easy-to-use computing appliances, rather than PCs. The new devices will be sturdier than PCs but will not have as much multimedia support, though they will offer the features that customers need. They will be better than PCs for real-time activities such as digital recording and videoconferencing, and they will be multifunctional; they will eventually add functions useful in the home, replacing FM tuners and cable TV set-top boxes. Digital speaker systems will replace hi-fi stereo. The market for these appliances is much larger than the PC market, and their value will eventually surpass that of the TV market. Components will become less expensive and chips will have more memory. Some devices may even end up being free with a plan similar to cell phones. Information will become available to anyone with access, and education, health care, and other essentials will improve.