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Volume 2, Issue 64: Monday, June 5, 2000
- "Database Legislation Spurs Fierce Lobbying"
New York Times (06/05/00) P. A14; Rosenbaum, David E.
One of the thornier issues facing the Internet today is database ownership and whether information in databases can be copied and distributed. A fight over the issue is brewing in Congress, and lobbyists are taking sides. Rep. Howard Coble (R-N.C.) introduced a bill last year calling for criminal penalties for the use of database information that is accessed without permission from the database owner. The legislation has already been approved by the House Judiciary Committee, but is unlikely to be passed this year. The National Association of Realtors is perhaps the most ardent supporter of the Coble bill. The New York Stock Exchange, the American Medical Association, and eBay are backing the bill. The Chamber of Commerce, Consumers Union, research librarians, and Yahoo! are opposing the bill. Chamber of Commerce lobbyist Rick Lane warns that limiting access to factual data will harm commerce.
- "Clinton Urges Spread of Internet In Poor Countries"
President Clinton on Saturday called on the world's wealthier countries to provide financial and technical support to help wire poor countries for Internet access. The Internet has great potential as a salve for economic, educational, and social woes in poor and developed countries alike, Clinton said. The combination of Internet access and printers could help the world's poorest areas learn about education and health issues, Clinton noted. Clinton also urged governments to place more of their services on the Internet.
- "Akamai Preps Faster Network Service as Rivals Lurk"
CNet (06/04/00); Borland, John
Akamai, a leader in network management, is planning to offer a new technology called FirstPoint that maps a network to find the fastest routes and then directs Web sites to use these paths. The service, developed in conjunction with Yahoo!, will help reduce network bottlenecks. Akamai agreed to use F5 Networks Web switches to direct network traffic efficiently. FirstPoint will cost a company $5,500 for every Web hosting server its site maintains. Akamai's new service comes at a time when startups such as Speedera Networks are beginning to threaten Akamai's edge. Although other content management firms such as Digital Island and iBeam host small Web components on servers that are close to end users, Akamai installs thousands of content servers in ISP networks worldwide, allowing users to download content from the server closest to them.
- "Malta Plans Internet Legislation"
With an eye toward becoming a major global player in the information economy, the Maltese government is preparing to introduce a trio of e-commerce bills. The first is a bill that protects the safety of e-commerce transactions while permitting transactions to occur freely. The second, a data protection bill, protects the privacy and security of Maltese citizens' personal data. The third piece of legislation is a computer misuse bill that provides added guarantees to the security of data and information systems. The government believes that the approval of these bills will provide Malta with added stature in the world of e-commerce and will make its e-government services more effective.
- "Berlin Summit to Ponder Technology, Globalization"
Reuters (06/01/00); Tanner, Adam
President Clinton and 13 other heads of state, including the leaders of Germany, Italy, and France will assemble in Berlin today to discuss ways to adapt to the rapid technological changes that are shaping the world. The leaders will release a draft text on Saturday that addresses the Internet and the role of government policy in the information age. The draft acknowledges that the role of governments is to help develop an environment conducive to the growth of the new economy. The draft also addresses potential solutions to help span the global digital divide.
- "Decide Quickly, and Then Move Fast"
Financial Times--Director (06/02/00) P. 4; Price, Christopher
E-business implementation requires businesses to take a holistic view of their enterprise, including its requirements, strengths, and weaknesses. "It is a complete transformation of the business, it involves everything," says Richard Lowry, principal of Business Innovation Services at IBM. Part of the process, in IBM's view, is to meet with a business' stakeholders--suppliers, staff, customers, analysts, shareholders, and partners--to get a firm understanding of the business' mission and needs. "Often, companies do not know the right questions to ask their IT supplier because they do not know what the drivers of the business are," says Derek Sayers, UK director of e-commerce for European IT services firm ICL. Once a business' needs are understood and a basic strategy is in place it is important to move fast, according to Andy Tobin of IT services firm Logica. "In this high pressure environment, speed to market is everything," he says. Businesses must also be prepared for how fast the scope of an e-business implementation can expand, especially once partners begin to see the value of e-business. Initial plans must be made with speed in mind. Similarly, businesses must always keep an eye on competitors and remain agile and responsive to market changes. Finally, businesses must be willing and able to decide whether Internet ventures should be handled in-house or by separate spin-off companies. Oftentimes e-business initiatives must be allowed to develop in an environment unlike the parent company's.
- "In Online Auction World, Hoaxes Aren't Easy to See"
New York Times (06/02/00) P. A1; Dobrzynski, Judith H.
The New York Times looked into the problem of shill bidding in online auctions, and on eBay in particular. Shill bidding is the practice of bidding on one's own auction offering. People also cross-bid on each other's items to raise the price. The newspaper researched one auction in particular and found that there were 33 Internet names who repeatedly bid on each other's offerings, and who posted testimonials to each other using eBay's feedback system. EBay says it intends to warn two of the names, and adds that it has already suspended 13 of them based on its own investigations. Critics say eBay's screening system is not good enough to detect all such ring-bidding, and the company acknowledges that it only reviews bids made within the last 30 days and that the shill circle could have altered its patterns within recent weeks, thanks to the publicity surrounding one auction. Meanwhile, the opportunity for shill bidding is growing as fast as the popularity of online auctions; eBay had 12.6 million registered users at last count. Company officials note that this means there will be at least a few cheaters in so large a community. Tracing possible bidding collusion is difficult and time-consuming work, and shill bidding involves activities that are normally perfectly permissible as long as the bids are sincere. Also, bidding for some items often involves a low number of bidders who keep coming back to the same section--so honest bidding can have the appearance of shilling. Consumer Reports financial editor Louis Richman says that eBay's business has grown beyond its capacity to monitor, and he believes that shill bidding and misrepresentation are common online.
- "Firms Battling for a Piece of Military Online Action"
Investor's Business Daily (06/02/00) P. A5; Coleman, Murray
The U.S. military has begun to utilize the Internet as an environment in which to bid for needed products and sell surplus inventory, opening an opportunity for smaller businesses that find working with the government easier online. Hi-Shear Technology, a small parts maker, was recently awarded a contract by the Navy to make 700 or more buttons for airplane ejection seats after bidding online. The Navy, which contracted FreeMarkets to help find suppliers and oversee the online bidding process, said the Internet auction was a success, and plans to have a second online auction, accepting bids for a contract to provide sleeping compartments for ships. Over the past six months the Army has also been testing online bidding. Developing Army-wide and Navy-wide online auctioning and bidding is the intention of both branches of the military. The government's move to e-commerce is helping smaller companies in other ways as well. SurplusBid.com, an online auctioneer, now takes care of the surplus inventory for all of the armed forces. "As a commercial venture, we're going to be able to eliminate a lot of the red tape in the procurement process," says Michael Himelfarb of SurplusBid.com. Internet technologies make working with large federal organizations easier and allow smaller companies to provide more automated auctions on the Internet. SurplusBid, partnered with Norman Levy & Associates and Latham, works under the name of Levy Latham Global to purchase the surplus products. The Department of Defense receives 80 percent of the proceeds. The first auction held in April took almost 7,000 bids and sold approximately 800 items. The second auction had over two times the number of bidders and sold 1,800 electronic and industrial items.
- "E-tailers 'Face Trouble Raising Further Funds'"
Financial Times (06/02/00) P. 16; Grimes, Christopher
As the shakeout among consumer e-commerce firms continues, many companies need to bring in more money by the beginning of next year or risk going out of business, according to a Goldman Sachs study. E-tailers with unproven business models who do not lead their sectors might have difficulty raising the required funds, says Goldman Sach's Anthony Noto. In recent months, investors have become skeptical of unprofitable e-tailers that spend large amounts of money on marketing. Among the e-tailers that need to improve their burn rates are CDNow, Buy.com, and Autobytel.com. Second-tier players such as Etoys have enough money for the rest of this year, but will need additional funds early in 2001. Meanwhile, third-tier e-tailers such as Autoweb and Garden.com might be unable to remain standalone firms.
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- "The Microsoft-Free Office"
Interactive Week (05/29/00) Vol. 7, No. 21, P. 94; Guglielmo, Connie; Babcock, Charles
Although Microsoft maintains that it does not monopolize the operating system, office suite, or Internet technology markets, experts say running a business without using any Microsoft technology is extremely difficult. Many alternatives to Windows are now available, including Apple's Mac OS, Sun's Solaris, Unix, and Linux. Still, IT managers view Microsoft technology as the safe and easy choice, and Windows accounted for 94.6 percent of the OS market last year, according to International Data. In addition, even the software giant's rivals admit that running a business without Microsoft Office, which includes Word, Excel, and PowerPoint, is nearly impossible. Companies essentially have no alternatives when it comes to word processing and spreadsheets, with Office holding over 90 percent of the Windows market for desktop suites. To open documents saved in Word and Excel, users must either have those programs or use file translation software, which can be inconvenient. Meanwhile, a Microsoft-free office might not have access to some valuable tools since many applications are written for Windows first, and some are available exclusively for Windows. Furthermore, Internet businesses must consider Microsoft's Internet Explorer when creating Web sites, experts say. In general, trying to work around Microsoft is an impractical and inefficient strategy, experts say. Still, Microsoft's rivals are now better positioned than ever to gain market share, as Microsoft is plagued by its antitrust trial and the rampant security flaws in its technology, particularly in Outlook. However, companies should focus on building to open standards and multiple platforms rather than relying completely on any one vendor, experts say.
- "Info Wars"
Business Week (06/05/00) No. 3684, P. EB107; Mullaney, Timothy J.; Ante, Spencer E.
The Internet has become such a battleground for intellectual property disputes that many experts say the trend is having a negative impact on the innovative force that is driving the New Economy. Instead of being wide open, the Internet is fast becoming closed off as companies patent technologies to ward off competitors. For example, Amazon.com used its patent on technology that allows customers to place orders for purchases with one mouse click against Barnesandnoble.com and other rivals. Meanwhile, copyright protections have become a troublesome issue for tech observers. Technologies such as MP3 and Napster have attracted much of the headlines involving the copyright disputes linked to the Internet. Last year, there were more than 8,200 cases involving patents, copyrights, and other intellectual property brought under federal law. Over the past five years, patent, copyright, and other intellectual property cases have occurred 10 times faster than other cases. As fears grew concerning the Web as a tool for stealing the work of innovators and artists, patents were lengthened to 20 years, and copyrights were lengthened to 70 years after an artist dies. However, some experts do not feel that the tougher laws will do any good. Although the pace of developing technology is likely to render long patents useless, the proliferation of digital information is likely to do the same to copyright laws. There are too many ways to share information these days that make enforcement difficult. Although experts say the answer is not to do away with patents and copyrights, they believe some recent changes need to be reversed. By shortening patents, companies will be forced to share technology and innovation will be encouraged. And the music industry and other industries should not view the Internet as the enemy. Not long ago, the music industry thought the radio industry would steal its music, and now the music industry gives its music away to radio deejays.
- "Old Consultants Never Die: They Just Go 'E'"
Fortune (06/12/00) Vol. 141, No. 12, P. 130; Colvin, Geoffrey; Vella-Zarb, Karen
The Internet has brought considerable change to the consulting industry and promises even greater transformation in the future. For the first time since the Industrial Revolution, technology is driving change and the pace of that change is fast, prompting companies to demand more from their consultants. While strategy and planning once dominated consultants' services, clients now demand that consultancies take over technology implementation projects as well to launch an Internet strategy as fast as possible. This trend has prompted a wave of technology-focused firms to launch consulting branches, including IBM Global Services, EDS, Hewlett-Packard, and Compaq. These firms offer complete end-to-end technology and strategy implementations, which, predictably, often include their own hardware and software technologies. Many traditional consultancies are also forming alliances with technology vendors in order to offer total solutions; for example, top-five firm Andersen Consulting partnered with Microsoft to form Avanade. Also competing are the scores of upstart Internet consultancies such as Razorfish, Zefer, Proxicom, and Groundswell, who are eager to capitalize on many companies' belief that the old-line consultants are not well-versed enough on the new Internet economy. These upstarts deal strictly in Internet technology and strategy. Although many old-line consultancies struggle to get a handle on the Internet Age and present an aura of understanding and competency to potential clients, the need for the consultant's expertise and service is clearly stronger than ever. For many businesses, success depends on successful e-business implementation, making their choice of consultant--and that consultant's ability--crucial, particularly when so many companies are hiring one consultant to handle the entire job.
- "New Dimensions In Software"
Silicon Valley Publishing (05/00) P. 130; Yehling, Robert
The focus of software development is shifting as the Internet begins to influence business. Applications are now being developed by application service providers (ASPs) to rent to other companies, by e-commerce enablers to bolster e-commerce systems, and by e-software developers to strengthen customer-oriented sales initiatives. An ASP rents software to other businesses on a monthly basis. ASPs are perfect for companies that need but can not afford an application that can immediately take care of numerous hits and transactions. Some corporations, especially small, fast-paced companies, use ASPs to handle issues that need to be handled in the short term. These companies want to move quickly to gain an advantage over larger corporations, and do not wish to complicate the infrastructure of the company or spend cash on installing software. The second software alternative, an e-commerce enabler, is business-to-business software that is developed, installed, and maintained by one company, while another reaps the benefits in terms of sales and profits. Computer Associates, which completes the back-end work in such partnerships, finds that the strategy is successful because it allows each company to focus on its strengths. A third focus of software development is customer management. The premise behind customer management software is to make a customer comfortable at a site to encourage loyalty. Knowledge of the customer gained through previous transactions is used to provide friendly, personalized, and efficient service. The customer information is kept in an electronic storage space and made available to those who need the information on the sales chain. Companies are willing to spend vast amounts of money to make use of software that can organize the steady flow of information and the databases that contain the information, and make the information accessible to ensure a customer base that can be solicited in the future.
- "Survey: Global Firms Stumble Forward on Internet Path"
KM World (05/00) Vol. 9, No. 4, P. 1
More companies are taking e-business implementation seriously, according to a survey conducted by PricewaterhouseCooper and the Conference Board, and have in place strategic, step-by-step plans to implement their e-business initiatives. The surveyed companies work in the manufacturing, financial services, retail, energy/utility, transportation, and communication industries, with 90 percent reporting revenues of more than $1 billion, and 50 percent exceeding $5 billion a year. The survey found that although more companies expect their e-business initiatives to increase revenues, build customer loyalty, reduce operating costs, and help access new markets, over half of the respondents concede they have no methods in place to determine to assess their efforts. However, one year ago companies listed the enhancement of brand recognition as their top Internet priority, so the change in focus is deemed to be progress. Now that Y2K-related projects are complete, the main obstacles to further e-business development are uncertainty surrounding the cost of e-business implementation, the lack of proven results within the industry, the lack of accepted standards, and suppliers and customers that do not use the Internet, according to the survey's responding business managers. Overall, the survey found most businesses to be still in a reactive mode, although with a strong understanding that they have to do something. "The study finds that even where companies lack a solid e-business strategy, they are still ramping up rapidly with their e-business plans," says John Oldfield, manager of the Conference Board's Information Management Center, to which most of the study's respondents belong.
- "Service Discovery Spans Platforms"
Network World (05/29/00) Vol. 17, No. 22, P. 47; Pascoe, Robert A.
Salutation Architecture is a processor, operating system, and communication protocol independent language intended to enable the next generation of networking, called the personal area network. Developed by the nonprofit Salutation Consortium, headed by IBM's Robert A. Pascoe, Salutation Architecture enables truly pervasive computing by freeing computing devices and appliances from the need to be bound to a certain networking infrastructure. With Salutation Architecture, says Pascoe, devices and appliances are free to pass into and out of networks by communicating directly with other network elements rather than platform-dependent directories. The service discovery middleware technology, which incorporates TCP/IP, InfraRed Data Association standards, Bluetooth, and Service Location Protocol, allows disparate appliances to communicate seamlessly, without need for manual re-configuration or set-up wizards, and in a manner completely transparent to users. Salutation Architecture is essential to the future development of pervasive computing, says Pascoe, as devices will have to be capable of communicating with each other to determine each other's purpose and capability without input from users.