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Volume 3, Issue 190: Monday, April 16, 2001
- "Tech World Makes Strides Toward Diversity"
USA Today (04/16/01) P. 1B; Iwata, Edward
The tech industry, long criticized for its predominance of white male employees, is making strides toward greater diversity. Cisco Systems has added 50 percent more minority managers in the past year through a proactive promotion process, while Silicon Graphics says 23 percent of its executives and managers are minorities, much higher than the Silicon Valley average. In 2000, firms run by women or minorities received $3 billion of venture capital firms' $98 billion total nationwide investment, according to the Milken Institute. Also, several major tech firms have increased the amount of business they do with women- or minority-run suppliers. Agilent will spend $280 million this year, an increase of $80 million, and Sun Microsystems will increase its spending 200 percent, up to $60 million. Jesse Jackson, an outspoken critic of the tech industry's lack of diversity, says tech firms are making process. However, he points out that the percentage of women and minorities among tech firms' board members remains in the single digits.
- "As Auto Makers Heal, Tech Threat Looms"
Wall Street Journal (04/16/01) P. A1; Ip, Greg
Economists warn that the tech sector's slowdown could be far more substantial than that in Old Economy industries such as auto manufacturing. While auto makers have reigned in inventory and are preparing to meet revised demand, woes in the tech sector continue to deepen. Analysts point to the contrasting numbers in tech employment--which has risen 92,000 since July 2000, despite high profile layoffs--and plunging stock prices. They caution that a serious recession could be in store for the tech industry if economic indicators fail to follow stock prices. ISI analyst Nancy Lazar says normal business cycles apply to the tech sector as well, countering the hopes of some that rapid innovation and the efficiency potential of technology would sustain demand. Although inventories in Old Economy industries have fallen recently, showing a strengthening of demand, technology inventories are still at record levels, suggesting that a recovery is still further down the road. As a result, the price of computers and other tech goods are plunging in a deflationary market and propping up investment even while sales and profits for tech companies fall.
- "Flood of Spending Due for Streaming Video"
CNet (04/12/01); Festa, Paul
Corporate spending on streaming video will total $2.8 billion in 2005, compared with $140 million in 2000, according to a new report from Jupiter Media Metrix. Although the streaming video market has not expanded as quickly as many would like, Jupiter forecasts that the growing demand for companies to broadcast quarterly earnings statements, annual reports, and other information, as well as online marketing applications and product launches, will lead to increased use. Video streaming will be particularly successful with corporations, rather than with consumers, because most companies have access to the high bandwidth that streaming video requires, while most consumers still use dial-up connections. Many prominent streaming video ventures aimed at consumers have failed in the past few years, including Pop.com, iCast, and Time Warner's Entertaindom.
- "Bush's Slow Dance With E-Commerce"
E-Commerce Times (04/13/01); Enos, Lois
Some industry observers are expressing concern over President Bush's seeming nonchalance toward e-commerce. Although experts roundly agree that e-commerce will grow during Bush's tenure, they are divided about what his impact on the Internet economy will be. Bush's budget proposal includes the research and development tax credit for which the industry had been lobbying, but it cuts funding for research programs at the Department of Commerce and for the Advanced Technology Program. His budget also decreases money for the U.S. Patent and Trademark Office, which is so inundated with applications that it cannot issue patents within several product cycles. Forrester Research director John McCarthy says one way to bolster e-commerce would be through strong support for e-government initiatives. Other analysts say the Bush administration is likely to protect e-commerce from undue global regulation, especially from the European Union. However, such a protectionist stance could hinder e-commerce if Secretary of Commerce Donald Evans stands in the way of liberalizing U.S. trade policy, some analysts contend.
- "Banks Share Privacy Policies, But Examine Them Carefully"
SiliconValley.com (04/10/01); Gillmor, Dan
According to the Financial Services Modernization Act, new financial conglomerates will have more freedom to share their customers' data with other institutions under the same corporate aegis. The law that the new legislation amends prohibited the merger of different financial institution types--insurance and banking, for example. Lawmakers included a proviso in the new legislation that requires financial institutions of all kinds to notify customers of their privacy policies and their right to abstain from information sharing by Jul. 1. However, columnist Dan Gillmor argues that companies are likely to make it very difficult for customers to opt out of this information sharing. He argues that companies will either provide their privacy policies in a format that resembles junk mail, which consumers are likely to ignore without reading, or will present the policies as "pledges" or something similar so that consumers will not even realize that the companies are required by law to provide the policies.
- "Are Antitrust Laws Obsolete in the New Economy?"
Investor's Business Daily (04/16/01) P. A6; Prado, Antonio A.
Antitrust laws are too slow for the new economy and may hinder vital partnerships, argues University of California at Berkeley law Professor Daniel Rubinfeld and other experts. Because 19th century antitrust legislation was designed to prevent industry monopoly, it could begin to hinder technology partnerships among online companies. Brooklyn Law School Professor Ted Janger refers to tech companies as "creatures of contract." One example of a trade practice that could run afoul of antitrust law is Yahoo!'s licensing of Google search engine technology. Even when antitrust is meant to spur competition, it sometimes only distorts market activity, as it has done to the broadband industry. While phone companies were legally forced to open cable lines to competition, antitrust enforcement has ignored the cable companies. Hence, non-phone DSL firms have had a hard time keeping pace and cracking cable company lines. Furthermore, with the Internet economy and technical innovation changing so rapidly, the five-year-plus antitrust process is simply obsolete.
- "Industry Closer to XML-Based Web Services Standards, IBM Says"
Computer Reseller News Online (04/13/01); Montalbano, Elizabeth
Representatives from IBM, Sun, Microsoft, Oracle, Hewlett-Packard. Cisco, Nokia, WebMethods, BEA Systems, and Bowstreet met Wednesday and Thursday in San Jose to discuss the development of XML-based standards needed to power Web services. IBM and the World Wide Web Consortium (WC3) sponsored the summit, which was deemed a success by IBM's Bob Sutor. "What I think will come out of this is a good sense of what all the pieces need to be for Web services," he said. The largest issue regarding Web services facing vendors is agreeing to the standards that will facilitate interoperability between disparate systems--interoperability that is automated and free of human involvement. Developing security specifications is also important, as are workflow issues and reliable messaging procedures. IBM's Sutor expects the WC3 to assume greater responsibility for developing standards and coordinating vendors' compliance.
- "Online 'Yellow Pages' For Business to Launch Next Month"
InfoWorld.com (04/13/01); Vance, Ashlee
A finished version of the long-awaited Universal Description, Discovery, and Integration (UDDI) Business Registry from Ariba, IBM, and Microsoft is expected to be launched by May, according to a Microsoft spokesman. The initiative has 30 vendors on board to help with the rollout, while its backers have increased to 130 since the project was first announced last September. The UDDI Registry will be split into three sections: the White Pages, Yellow Pages, and Green Pages. The White Pages will list what services each vendor offers and what protocols they support; the Yellow Pages will sort companies by geographic location and tag business operations with government codes as well as international and technology-based naming standards; and the Green Pages will specify transaction entry points, documents the companies can receive, and the technology they support and interact with. Ariba, Microsoft, and IBM plan to coordinate the collection of registry data for about the next year, and then turn the operations over to a standards body whose name has not been disclosed yet. The three founding vendors hope that the UDDI Registry will be an easier way for companies to provide information about their online products and services as well as attract customers and business partners, and promise that submissions will be free.
- "Anti-Virus Update"
International Herald Tribune (04/16/01) P. 13; Dembart, Lee
- "From Old-Line Companies, Hopes of New Tech Employment"
Washington Post (04/15/01) P. L1; Johnson, Carrie
Despite much news in recent months about layoffs in the tech sector, recruiting officials in the Washington, D.C., area report that more than a few opportunities for gainful employment remain. The city and its suburbs benefit from the presence of the federal government and its many contracts, such as a recent $4.1 billion deal for Electronic Data Systems to build an intranet for the Navy and Marine Corps. EDS says it will require network engineering and project management employees to fulfill the contract. Recruiters say many old economy firms still require tech employees, especially those with advanced Java and C++ skills, and are offering bonuses to former workers who can recommend qualified candidates. These old economy firms say many workers who once considered their positions too "mainstream" during the height of the tech boom are now finding a degree of comfort in the firms' relative stability. Overall, however, the tech sector is turbulent, with the job Web site Techies.com and the trade association Information Technology Association of America both reporting lower demand for tech-support workers and other entry-level positions.
- "Internet Rumor Mill Changes Layoff Process"
Wall Street Journal (04/16/01) P. B3F; Miles, Stephanie
Rumors of impending layoffs spread quickly on the Internet, forcing company executives to change the way they address the media, investors, and employees. Tech companies face an especially dangerous minefield when considering layoffs because such a move has almost become synonymous with impending closures. EToys and Garden.com, for example, both announced major layoffs three months before the companies folded. New disclosure regulations also prohibit companies from disseminating information through large investors or industry analysts, forcing many executive teams to remain completely silent about the layoff process. Meanwhile, Internet message boards often fuel false rumors that analysts say are best addressed quickly. Enron's stock plunged last month as investors' fears took flight after rumors began circulating regarding layoffs in the company's Internet unit. Investor confidence had already been shaken by Enron's recently cancelled agreement with Blockbuster. The company refuted the allegations, sending the stock up more than 10 percent in one day.
- "Companies Spending Big Bucks to Move Markets Online"
CyberAtlas (04/10/01); Pastore, Michael
New research from Forrester Research and International Data (IDC) show that B2B marketplace activity will grow significantly in the next few years as big business invests heavily to bring their procurement processes online. Forrester predicts that companies will each spend an average of anywhere from $5.4 million to $22.9 million on e-marketplace integration. Forrester analyst Matthew Sanders points out that the expenditures will be in different areas depending on how far along the company is in its e-marketplace implementation. However, he suggests that the largest investments will be in rethinking internal purchasing processes, systems integration with e-marketplace solutions, buying B2B applications, and anteing up for transaction fees. Sanders adds that companies that document their workflows, and focus on integration and online purchasing will be able to realize cost savings faster. IDC also expects B2B online markets to grow, from $5.2 billion in 2000 to $17 billion in 2005--an annual rate of 27 percent. Senior IDC analyst Leo Lipis says e-marketplace service providers will see tremendous demand for integration solutions. Whereas 85 percent of e-marketplace service providers' revenue currently comes from the e-marketplaces themselves, nearly half of all service revenue will come from e-marketplace participants in 2005, according to IDC. Research also shows that e-marketplace growth in North America has plateaued, but opportunity still exists in European and Asian regions.
- "Report: Latin American E-Biz Transforming IT Landscape"
E-Commerce Times (04/12/01); Saliba, Clare
Latin American e-commerce remains stymied by underdeveloped infrastructure, although local e-business service providers are strengthening their position for future growth. A recent "Latin America's E-Builders" report shows that, on average, companies are willing to spend $1.2 million for individual Web development or e-commerce initiatives. This is strengthening the market for local service providers, which the report says are building up to go "head-to-head" with multinational e-business players. "The [local] e-builders' lower cost structures mean they can underbid the competition while providing high-quality design and implementation," says Yankee Group analyst Andres Broner. These companies are also being helped by the 16 percent of revenue supplied by e-government initiatives that favor local contractors. However, the report also shows that Latin America's Internet infrastructure is severely underdeveloped, with only 2.7 percent Internet penetration compared to the United States' 40 percent. Additionally, e-commerce is held back by the low use of credit cards and ownership of PCs. However, U.S. Commerce Secretary Don Evans predicts that B2B and B2C e-commerce in Latin America will total $7 trillion in 2004.
- "Techies Plug Into Hot Skills"
eWeek (04/09/01) Vol. 18, No. 14, P. 64; Moad, Jeff
Although the tech boom of recent years and its corresponding labor shortage meant that workers could leverage their IT certifications to receive raises and bonuses from employers, industry observers say employers are now more likely to provide such compensation only for certifications that are guaranteed to bring a return on their investment. Among the hot certifications in today's job market are those for Web-related technologies such as Java Server Pages and XML, while the growth of e-business and related customer-relationship-management applications has created a strong demand for database management certifications. Also very much in demand are the A+ designation of the Computing Technology Industry Association and, as Windows 2000 gains a foothold in the enterprise market, the Microsoft Certified Systems Engineer certification with a specialization in the latest operating system. Observers say Linux-related certifications as well as those for Certified Computing Professionals and Certified Novell Administrators are currently not experiencing high demand, largely because the marketplace has become saturated with holders of these certificates. Observers say project-management and security certifications will enjoy great demand in the future. "Any combination of certifications that suggest cross-platform knowledge or Internet working skills plus other technical skills will be a big draw to employers," says David Foote of Foote Partners.
- "Boot Camp for Engineers"
Forbes (04/16/01) Vol. 167, No. 9, P. 158; Ghosh, Chandrani
The Indian Institute of Technology (IIT) runs arguably the toughest IT program in the world--and it may be one of the most influential as well. Its alumni include such tech luminaries as Juniper Networks founder Pradeep Sindhu, Sun Microsystems co-founder Vinod Khosla, and Sycamore Networks founder Desh Deshpande, not to mention the CEOs of US Airways, Citibank, and McKinsey & Co. IIT accepts only 2 percent of applicants, who must sit through two grueling sets of exams to narrow the initial 150,000 hopefuls to a class of 3,000. Once they have been admitted, students face 42 hours of class and lab work each week, exams once every four weeks, and public grading. Reportedly, some professors hand out only one "A" per class. The program is especially attractive for students from India's working- and middle-class, who pay tuition of $600 per year, plus room and board of $33 per month, but can receive starting salaries of $50,000 from major tech firms when they graduate. Graduates are also sought after by major U.S. grad programs. In fact, the program's reputation is so strong that it is beginning to have a negative effect: students are choosing the potential for making money in the working world over pursuing IIT's graduate program, while professors are balking at their low salaries in comparison to what they could be making at tech positions in the real world. Several tech companies have opened offices near the school to allow students and professors to earn money for their expertise while pursuing their studies and teaching.
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- "ICANN Critcs Await Commerce Move"
Interactive Week (04/09/01) Vol. 8, No. 14, P. 34; Gruenwald, Juliana
Many companies have begun to lobby the Commerce Department against ICANN's decision to extend VeriSign's monopoly over the dot-com registry to 2007, fearing the Commerce Department is less than focused on the issue. ICANN's decision will also allow VeriSign to remain in the dot-registrar business despite a 1999 ICANN agreement mandating a timely sale of its registrar businesses. Currently, VeriSign receives $6 per domain name as the primary registry for dot-com, dot-net, and dot-org domain names. Critics' ire is also being directed against ICANN's selection process for the seven new TLDs, all of which await Department of Commerce approval. Commerce Department spokesperson Jim Dyke recently attempted to rebuff concerns that Commerce may be sleeping on this issue. In analyzing ICANN's VeriSign renewal, Dyke said Commerce intends to ensure that "competition and consumer concerns are taken into consideration." DotTV's vice president of business affairs, James Ross, says his company is frustrated with the lack of communication from the Commerce Department regarding concerns over ICANN's gTLD selection process. DomainRegistry.com President Larry Erlich says he intends to appeal to the Commerce Department to "derail" the VeriSign agreement. Nonetheless, Erlich believes Commerce may rubber-stamp the deal.
For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html
- "Tech Choices for Tough Times"
Computerworld (04/09/01) Vol. 35, No. 15, P. 30; Hall, Mark
The current economic downturn is changing the spending priorities of corporate IT departments. A Technology Business Research poll of 64 senior IT executives revealed that over 25 percent plan to cut IT spending by 26 percent this year. In order to receive approval, IT projects must promise a return on investment, executives say. At Boeing, for example, IT spending is continuing for projects that will reduce the number of paper-based transactions conducted by the firm, including its Exostar aerospace business-to-business exchange. A greater emphasis is also being placed on projects that reduce time lost to tech snafus, which Boeing was able to reduce 20 percent last year. IT officials say another area of importance in lean times is improving infrastructure. Boeing is working toward equipping each employee with laptops and wireless LAN cards so it does not have to reconnect entire teams when their offices are relocated, which should save the firm millions of dollars.
BusinessWeek--The BusinessWeek 50 (04/01) No. 3726a, P. 208; Wildstrom, Stephen H.
The role of the PC in the overall tech market is changing. On the job and in the classroom, the PC will retain a strong presence. However, market observers do not expect that consumers will buy many more PCs. The market is nearly stagnant now that most homes, especially in the United States, have one PC, and market experts foresee consumers purchasing information appliances and other specialized devices such as Web browsers or music players in the years to come. However, the road to the post-PC era may be a bit rocky. Devices that perform one task must do that job very well. For example, no appliance comes close to delivering the same quality of Web surfing as PCs do. Web browsing appliances need almost the same innards as PCs and a browser as good as Microsoft's Internet Explorer, or the quality of the device is not the same. Moreover, the high-tech community will need to make the "networked home" available to consumers so their PCs, countertop appliances, handhelds, and the like can share information. While Microsoft and Sun Microsystems battle over standards for their rival technologies, broadband service providers such as AOL Time Warner and Verizon Communications may be able to have ISPs run home networks for their customers. The industry will also have to ensure that these new devices that can hear and see all are able to protect their users' privacy.
- "Protecting the Ideas"
Potomac Tech Journal (04/09/01) Vol. 2, No. 15, P. 19; Benhassain, Faycal
The advent of the Internet and e-commerce has presented a challenge to the established laws governing intellectual property. In general, intellectual-property laws oversee four areas of concern: patents, copyrights, trade secrets, and trademarks. All have met with controversy when applied to various Internet-related services. Napster, of course, is a prime example of a classic copyright dispute. Another Internet-related copyright concern--one now being examined by the Supreme Court--is whether authors own the right to articles published on a Web site. Trademark law has seen its boundaries pushed by the rising importance of domain names. In general, intellectual-property law considers domain names to be worthy of a trademark if they refer to sites that offer the public goods and services. However, before many businesses and other trademark owners, as well as some famous individuals, realized how significant domain names would be, many well-known trademarks were registered as domain names by individuals who did not own the original trademark. Many of these individuals then tried to sell these names back to the owners of the original trademarks, often at very high prices. This practice, which came to be known as cybersquatting, led the Internet Corporation for Assigned Names and Numbers (ICANN) to devise a system whereby trademark owners and others could challenge what they considered to be acts of cybersquatting. However, in order to win a case under ICANN's Trademark Cyberpiracy Prevention Act (TCPA), the trademark owners must substantiate that the domain-name owner registered the name in bad faith, doing so only to resell it. The TCPA does not prevent fair-use of trademarks in domain names.
For information regarding ACM's work in the area of intellectual property, visit http://www.acm.org/usacm/IP