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Volume 2, Issue 16: Wednesday, February 9, 2000
- "Several Web Sites Attacked Following Assault on Yahoo"
New York Times (02/09/00) P. A1; Richtel, Matt; Robinson, Sara
At least four of the world's top e-commerce sites were attacked by hackers yesterday, one day after a similar attack on Yahoo!, in what experts believe is an organized assault on leading sites. Yesterday's attacks targeted Amazon, eBay, Buy.com, and CNN.com, and like the Yahoo! incident, involved the distributed denial of service technique. Hackers took over many computers connected to the Internet, instructing the systems to send random data to the target site, thereby overwhelming the site's server and leaving the site unable to respond to actual customers. Distributed denial of service attacks are costly for victims, but do not corrupt systems or put sensitive data at risk. Such attacks are relatively common, but the recent attacks on some of the Internet's most secure sites would likely have required considerable computing resources. The computing power that would be required to carry out the attacks as well as the timing of the incidents leads security experts to believe the attacks were perpetrated by the same individual or group. The targeted sites reported that customers had trouble accessing their sites during the attacks, and Buy.com was especially disturbed by the attack, which occurred on the same day as its IPO.
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- "Novell Drops Fight With Microsoft"
Financial Times (02/09/00) P. 20; Price, Christopher
Novell yesterday announced products based on its directory services software that target the business-to-business e-commerce market, signaling a shift away from competing with Microsoft for the operating system market. Novell's new offerings target companies that have established Web sites but lack the back-end infrastructure to support customer demand. In the past few years Novell has been moving away from its NetWare operating system as Microsoft's Windows NT increasingly sapped NetWare revenue. Microsoft's Windows 2000, slated for release next week, poses a new threat to NetWare. NetWare contributed about 75 percent of Novell's revenue last year, down from three years ago when the OS accounted for almost all of the company's revenue, Novell estimates. On top of competition with Windows, NetWare is threatened by Linux, which is expected to outsell NetWare by 2003, according to International Data.
- "How Many Service Companies Can the Linux Market Support?"
Business Week Online (02/07/00); Jaffe, Sam
Linux vendors are turning to services as a way to offset the lack of revenue from software licenses. As an open source technology, the Linux operating system is freely available, which means that Linux vendors gain little profit from the software. In response, Linux vendors such as Red Hat, VA Linux, and LinuxCare are beginning to offer services to make a profit. Even in terms of proprietary software, service revenues are more valuable than licensing revenues because they are consistent and give rise to other sales, writes Sam Jaffe. Yet it is unclear whether Linux vendors can sustain the success they have gained thus far, says Jaffe. Investors are generally wary of firms that are based on free products. Furthermore, says Jaffe, Linux vendors could be obliterated once major industry players enter the Linux support market.
- "New Era Approaches: Gigahertz Chips"
New York Times (02/07/00) P. C8; Fisher, Lawrence M.
Intel and IBM have both written papers describing chips that run at 1 GHz--a speed considered impossible not long ago--and the companies plan to start producing the chips in the second half of this year. Both companies were scheduled to present their papers on Monday at the International Solid State Circuits Conference in San Francisco. The Internet and e-commerce are driving the market for powerful chips, and GHz processors are likely to move quickly into Web servers. Gigahertz speeds will enable the development of applications that are not viable with today's chips, such as highly interactive voice recognition and video. Although experts predicted that chip capacity would reach its limits well before GHz clock rates, IBM's Randall Isaac now says, "It looks like we have room to move up to the 3 or 4 GHz range very rapidly." IBM plans to introduce GHz versions of its PowerPC and its System 390 processors, while Intel plans to release a GHz version of its Pentium III processor. In addition, Intel's Itanium might launch at 1 GHz. Meanwhile, Advanced Micro Devices plans to launch a GHz version of its Athlon later this year.
- "Net Firm Rises From Boutique to Web Player"
Investor's Business Daily (02/09/00) P. A10; Lacoursiere, Catherine
Razorfish has become a major force in the expanding Internet consulting market, growing from a small Web page maker into a total systems integrator. The electronic consulting market will average 71 percent revenue growth in the next five years, reaching $28 billion in revenue by 2003, Kennedy Information Systems estimates. Razorfish owes its success to its ability to provide end-to-end solutions that help companies move online, says Morgan Stanley Sean Witter's Mike Sherrick. Strategy consulting and interactive marketing design and branding are the foundation of Razorfish's business. Razorfish has used its expertise to help companies such as Charles Schwab, Ericcson, and Nissan market their brands online. Last year Razorfish expanded its skills portfolio by acquiring ICube, a systems integrator that ties together business applications such as inventory and manufacturing systems. Razorfish has a strong presence in Europe, and catches on quickly to major business trends such as wireless technology. Internet consulting is growing as companies increasingly move all business processes online. Companies this year will spend an estimated $120 billion on Internet infrastructures this year, marking a 39 percent jump from last year, according to International Data.
- "CIOs Turning Attention to E-Commerce"
E-Commerce Times (02/07/00); Hillebrand, Mary
E-commerce is the leading technology issue, according to 65 percent of CIOs at U.S.-based companies in a recent survey by CIO Magazine. Furthermore, 62 percent think that President Clinton should appoint someone to look after technology-related national security, and 52 percent support the President's "digital divide" initiative. CIOs are concerned about computer security, but just 18 percent reported problems with external computer crime. But 85 percent support the President's $2 billion plan to fight cyber-terrorism and strengthen the government's computer systems against attack. Less enthusiasm surrounds the digital divide project, which means that few companies are likely to donate money, training and support, or equipment to needy areas, although Microsoft, AT&T, and 3Com have already partnered with urban organizations to help. Many CIOs say their e-commerce plans depend on finding qualified information services personnel, but 77 percent say they are having problems filling open positions.
- "Do Viewers Even Want To Interact With TV?"
New York Times (02/07/00) P. C5; Brinkley, Joel
At an interactive-television conference in New York City last week, attendees seemed to agree that no one knows what the public desires. And James M. Moroney of Belo, a company that owns 16 U.S. TV stations, doubted that anything that interrupts people's enjoyment of entertainment programming would succeed. Despite decades of missteps, interactive TV will get another shot in coming months with new digital services from cable networks. The offerings of these services vary, but ICTV senior vice president Michael Collette said any of them will need "a big, mass market" to succeed. With several quite different digital boxes entering the U.S. market, it appears marketing is already fractured, he said. Consultant John Carey said the problem in the past has been bad marketing or implementation rather than a lack of customer desire. Services that do not take readers away from their programming have met with the most success. An example is the on-screen program guide, allowing viewers to choose the program they want to see. Video on demand is also generating great interest. But some companies at the conference go further, such as Wink, which allows customers to get more information on the program they are watching or order samples or product information as commercials run. Intertainer is currently offering movies, news, games, and other content through high-speed broadband Internet connections, although company officer Brendan Carney said the "big play is traditional TV." Investor Gary Lauder said the interactive TV industry has lost credibility due to too-great promises in the past.
- "Chip, Software Vendors Rush to Boost E-Commerce Security"
Broadband Week Online (01/31/00); Dawson, Fred
Internet firms and cable vendors are scrambling to develop efficient public-key infrastructures (PKI) and other means of protecting Web transactions to allay the fears of security-wary consumers. PKI allows users with encrypted "session keys" to access secured data through a third-party authentication service. Companies such as Broadcom, Intel, Royal Philips Electronics, Microsoft, and Cisco Systems have begun intensifying their efforts to develop PKI, but no clear leader has emerged. "We don't see a lot of major PKI deployments," says K.S. Shankar, a security strategist at IBM. PKI is held back by strategic-planning errors, lack of uniform approaches, and inadequate definition of security needs. "There are a lot of RFP's on the street for PKI implementation," Shankar says, "but most don't state what the problem is." The assumption of PKI developers is that the wide-scale availability of computers capable of downloading security systems will make implementation of PKI easier. Recent developments include directory-based security, Simple Certificate Enrollment Protocol, Differentiated Services Protocol, and PKI enabled smart cards.
- "The Credibility Factor: Giants Get Linux Religion"
InternetWeek (02/07/00) No. 799, P. 1; Wagner, Mitch
Each of the top five computer manufacturers detailed plans last week to release new Linux products and services, a development that lends credibility to the open source operating system. "Administrators who are interested in deploying Linux now find it easier because the big names are now showing support for it," said Robb Waterman, CEO of E-Cards.com, a greeting card service that relies on Linux-based servers. At last week's LinuxWorld conference, IBM offered a preview of a version of Linux for its System 390 mainframe and unveiled Linux support on its thin client servers. Meanwhile, the Trillian Project, a consortium composed of IBM, Hewlett-Packard, Intel, and the major Linux distributors, released the source code for a version of Linux designed to run on Intel's much anticipated IA-64 processor. Also at the show, Hewlett-Packard bolstered its Linux consulting services and Dell announced plans to offer Linux-enabled PCs and notebooks, while Compaq released free Linux development tools and Sun introduced a new Java 2 Virtual Machine for Linux. The strong support for Linux indicates its growing acceptance in the marketplace. By the end of this year 37 percent of enterprises will be running Linux systems, according to a recent InformationWeek survey of 300 IT managers.
- "State Alliance a Boon to E-Buying, Vendors"
Washington Technology (01/24/00) Vol. 14, No. 20, P. 44; LeSueur, Steve
The Western States Contracting Alliance has signed a contract with Compaq, CompUSA, Dell, Gateway, and IBM to purchase computer equipment, software, and services collectively at reduced rates, in a deal made possible by the Internet. WSCA was formed in 1993 to allow the 15 member states to aggregate their purchasing power. With this new deal, the alliance used the Internet to solicit bids from vendors and negotiate prices. New Mexico information systems procurement specialist Terry Davenport says, "This type of procurement wouldn't have happened without the Internet." In New Mexico, agencies purchasing services through the contract are saving 5 percent. Eventually, the contract should generate about 10 percent savings for the state, according to Davenport. Though not all WSCA member states have signed on to this particular deal, the alliance has opened up participation to non-members, with the goal of having a total of 30 states making $1 billion in annual IT purchases. Governments are not obligated to buy from the contracted vendors, but are finding it more affordable. Although most purchases will be made online, some government agencies still require paper documentation to complete transactions.
- "The Debut of Pay-Per-Use Data Services"
Interactive Week (01/31/00) Vol. 7, No. 4, P. 16; McGarvey, Joe
Carriers are now beginning to offer usage-based billing rather than flat-rate pricing. MCI WorldCom and WarpSpeed are among the ISPs offering usage-based data service. The WarpSpeed service can be turned on and off according to need, says WarpSpeed's Mil Ovan. Usage-based pricing will not only lower total telecom costs but will also significantly affect companies' business dealings, according to Ovan. MCI offers Intelligent Bandwidth services, enabling companies to buy data pipes for temporary downloads, says MCI's Roland Zalite. WarpSpeed offers T1 circuit usage for $1 per minute. The company charges an additional monthly fee of roughly $500 for a T1 circuit into WarpSpeed's local network. MCI WorldCom requires that users spend at least $500 on its private line service, which is offered at about one tenth the price of an ordinary T1 connection. Technical limitations had prevented service providers from provisioning bandwidth in a timely fashion. But now, service providers store customer information on a centralized database for automated provisioning and subscriber management.
- "Industrial-Strength E-Commerce"
Global Technology Business (01/00) Vol. 3, No. 1, P. 44
E-commerce ventures are turning to mainframes as a way to handle drastically increasing volumes of site traffic. Mainframes, long viewed as an antiquated technology, have attracted renewed interest in the era of e-commerce because they offer unmatched reliability and scalability. Additionally, mainframes provide centralized manageability and enable companies to leverage existing hardware investments. Online brokerage Charles Schwab relies on the IBM System/390 mainframe to handle its IT operations. The company maintains that while the S/390 is not the newest technology on the market, it provides the reliability crucial to good online service. "At Schwab, innovation has never been just about technology," says Charles Schwab CIO Dawn Lepore. "Our focus has always been on the customer and ensuring that their online experience is exceptional." The scalability and reliability provided by mainframes are particularly important because it has become increasingly critical for e-commerce sites to avoid site crashes. The Standish Group reports that some e-commerce-intensive sites can lose as much as $10,000 in one minute of server downtime. Yet at the same time, large and unpredictable traffic loads have made avoiding downtime more difficult for less scalable systems. Scalability is expected to become even more necessary in time: IDC estimates that the population of online consumers will expand from 31 million in 1998 to more than 183 million in 2003.
- "CE Execs Discuss E-Commerce"
Discount Store News (01/24/00) Vol. 39, No. 2, P. 4; Scally, Robert
Now that the Dark Ages of the Internet are behind us, market observers foresee less of an emphasis on the "land grab" stage of development and more of a focus on consolidation for this year, according to Desmond Varady, vice president and co-COO of Internet consulting firm Sapient. The need for Internet-based retailers to finally make some money was a crucial topic during January's Consumer Electronics Show, which featured Varady, among others. A panel of experts at the gathering said that they expect Web-only retailers to falter with profits during the next year and as a result, this could force these companies to partner with others, particularly brick-and-mortar retailers such as department stores that would like to have a better footing in e-commerce. Retailers of consumer electronics are also expected to become more active in e-commerce. BestBuy announced during the event that it would be revamping its e-commerce Web Site, that it is in an alliance with Microsoft, and that it has invested $10 million in the Web-based consumer electronics retailer etown.com. The company is in the process of trying to integrate facets of the in-store-shopping experience with its Web site. Radio Shack is another aggressive consumer electronics retailer. With its RadioShack.com Web site, the retailer has embraced the strategy of having customers use its stores for exchanges, returns, and price adjustments, says Web site executive vice president Henry Chiarelli.
- "Companies Lag in Strategic Vision, Survey Shows"
Global Business (01/00) P. 18
Most companies believe that e-commerce is a key part of their future success, but they are not tying e-commerce into corporate strategy, according to a recent KPMG study. Although 65 percent of the respondents say e-commerce is one of their most critical initiatives, only 26 percent have a centralized group responsible for e-commerce decisions. E-commerce activities are dispersed throughout the company with participation from diverse groups such as sales and marketing, since e-commerce tends to be driven by customers and revenue rather than internal operations and cost reduction, says Debra Hofman of Benchmarking Partners, which conducted the survey for KPMG. Less than half of the respondents have an official with an e-commerce title, and of the executives that have such a title, only 40 percent manage the e-commerce budget. In addition, only 50 percent of respondents could identify total e-commerce spending across the enterprise, and just 21 percent could identify spending by initiative.
- "Reach Out and Sell Someone"
Business Week (02/07/00) No. 3667, P. EB50; Baker, Stephen
Europeans will habitually use their cell phones to access the Internet in the not-so-distant future, paying for Web access through their phone bills. Although this new mobile Internet is likely at first to be troubled by poor connections, some companies will develop superior products that allow this form of technology to take hold. Through cellular phones with Internet access, businesses and consumers will be able to make purchases online while on the go. Technology will also locate various destinations and businesses and display them on phone screens. Some Internet activities are already being conducted using cellular phones. For example, banking and stock trading online are commonplace in Finland. Numerous corporations are ready to join cellular phone manufacturers. Intel and Oracle are teaming with Scandinavian mobile phone companies, while Vodafone has partnered with IBM, Nokia, Ericsson, and Sun Microsystems. Charles Schwab recently signed with Vodafone to advertise on its portal, which could allow the financial services company to reach 48 million people.