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Volume 3, Issue 191: Wednesday, April 18, 2001
- "Technology Giants Get Dose of Reality"
International Herald Tribune (04/18/01) P. 1; Buerkle, Tom
Companies worldwide continue to react to the tech industry's meltdown, as Philips, Eastman Kodak, and Texas Instruments Tuesday announced or hinted at coming layoffs. Philips said it would lay off 7,000 workers, Kodak up to 3,500, and reports yesterday suggested that Texas Instruments is considering laying off 2,000. Earlier this week, Cisco Systems announced the layoff of 8,500 workers--18 percent of its workforce. Analysts say this week's announcements are another clear sign that the tech industry is being subjected to the negative side of a traditional business cycle, with many firms and consumers slashing their plans to purchase new computers and other equipment. Analysts at Morgan Stanley Dean Witter say the downturn could be especially severe in the semiconductor sector, as falling PC demand will, in turn, lower chip demand. The firm forecasts a 30 percent decrease in chip sales by September of this year, while analysts at J.P. Morgan Fleming see overall tech investment in the United States dropping by 15 percent this year.
- "Intel's Outlook for PCs Shines Light Into Gloom"
USA Today (04/18/01) P. 1B; Iwata, Edward
Although Intel's latest quarterly results, announced Tuesday, showed a substantial revenue decline from the same period last year, the world's leading chipmaker said yesterday it believes that the PC sales slowdown may have bottomed out. The company claimed net income of $485 million for the quarter ending Mar. 31, compared to $2.7 billion for the same quarter last year. However, the company said it was planning for stronger PC demand in the second half of 2001, with PC growth strong in two large markets--India and China. Other companies from around the world are increasing their tech spending, the company revealed, and demand is notably high in Japan. "The economy is still sending bad signals to tech firms, but at least the PC market seems to be stabilizing," ABN Amro analyst David Wu remarked. However, Intel warned that demand was still weak in several sectors, including corporate servers, laptops, and networking chips.
- "The Robot With the Mind of an Eel"
Washington Post (04/17/01) P. A1; Gugliotta, Guy
Scientists are working to fuse animal sensory resources with circuitry in order to perform such difficult tasks as detecting chemical elements or replacing important brain functions in stroke victims. One recent breakthrough comes from the Rehabilitation Institute of Chicago at Northwestern University, where researchers have wired the brain stem of a lamprey eel to a small robot. Encapsulated in an oxygen-rich saltwater solution, the eel brain receives and sends signals to the robot through a set of microprocessors according to light stimulation. The experiments focus on simulating the equilibrium function of the eel, and scientist Sandro Mussa-Ivaldi says he has managed to teach the eel brain but cannot yet test its memory because of the short shelf-life of animal tissue. Mussa-Ivaldi hopes that his research will lead to the development of replacement circuitry for people with nervous system damage. Other cyborg-type experiments attempting to harness the biological functions of organisms face the same types of problems. Another project involves using parasitic wasps trained to detect small chemical elements such as those found in drugs or explosives. Department of Agriculture scientist Joe Lewis created a wasp-equipped device that senses atmospheric elements and could be used to help find landmines on the battlefield or disease smells emitted from the human body.
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- "One Tool, Many Functions"
New York Times (04/17/01) P. C1; Deutsch, Claudia H.
The rising popularity of digital cameras and the increasing quality of printing technology, with even desktop units now capable of printing photographs as good as those developed professionally, has caused many industry observers to see a convergence of formerly unrelated tech firms--all aiming to sell products that combine graphics, text, and photographs. For example, Kodak has partnered with a maker of inkjet printers, while printer giant Hewlett-Packard now markets a line of digital cameras. Firms on either side are hiring employees who have worked for the other. Kodak has gone so far as to name the sector "infoimaging" and says it is worth $225 billion. Observers say the number of players in this new sector ensures that no one company will dominate it but means that consumers must choose between companies that have individual strengths, whether the high-speed volume printing of document firms, or the professional-quality developing of photo firms. Several software vendors have also entered the fray, offering a range of programs that can assist users in combining text and images, combining what were once considered completely separate tasks. Observers note that casual consumers are already seeing the results of this convergence. Copy shops such as Kinko's have installed photo-developing kiosks, while camera shops now sell printers and other digital technology.
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- "Device Synchronization Gets Simpler"
PC World.com (04/17/01); Crouch, Cameron
Numerous software and hardware vendors are supporting SyncML, a new protocol that will facilitate the synchronization of data between handheld and mobile devices and desktop platforms. Among its supporters are Motorola, IBM, Nokia, Palm, and Starfish Software. Starfish has already shown its TrueSync Synchronization Server, the first such device to be SyncML-interoperable. Based on the XML Web programming language, SyncML is designed as a standard on which vendors can build applications to work across proprietary platforms. Although most SyncML-based software will work to smooth synchronization from desktops to handheld devices, the protocol also enables synchronization from devices to the desktop. Developers say SyncML could be as important an open protocol as POP3, the email protocol that allows users to check mail from one email system, such as Hotmail, through another, such as Microsoft Outlook.
- "Despite the Lean Times, Tech Firms Still Investing in the Future"
Los Angeles Times (04/15/01) P. C1; Flanigan, James
High-tech firms continue to invest for the future, and veteran venture capitalists are taking a long-term view because they have seen the tough times come and go before. Analysts aware of history realize that previous downturns have prompted tales of the end of Silicon Valley as well as concerns about the value of technology. The immediate problem of the Internet economy takes root in the establishment of the new Internet's "last-mile" connections. Local new Internet connections are not in place and functioning, although new long-distance or city-to-city Internet exists. Already, entrepreneurs and financiers envision devices and processes that connect the new Internet to homes and offices as a possible solution. All in all, experts are aware that cycles can end the dominance of market players and bring about a new winner for the next era, as was the case when Motorola supplanted RCA as electronic computing and communications emerged. They are also aware that it can take decades before technology becomes fully commercial--the 1947 transistor and the introduction of Intel's microprocessor 21 years later is an example. Even automakers had to contend in 1919 with a Forbes magazine cover that pondered whether automobiles had reached a saturation point.
- "From Teen Hackers to Job Hunters"
Washington Post (04/17/01) P. E1; Eunjung Cha, Ariana
Teen hackers are learning important life lessons from older techies at the notorious 2600 Club. Despite their reputation for illegal exploits, most of the club's members now espouse a "hacker ethic" to newer inductees and encourage them to pursue legitimate jobs. Former Electronic Frontier Foundation attorney Mike Godwin says the 2600 Club is actually beneficial to society because it encourages youngsters to learn important computer skills. The club's meetings in Washington, D.C., are something of a networking and career-counseling center for teen job-aspirants. Motorcycle rider, former hacker, and current PSINet security expert Michael Shoupe offers interested teenagers advice on how to avoid his life's mistakes, which include jail time for computer crimes such as hacking telephone systems to get free calls. He encourages the teens to use their social connections in the hacker community to land jobs.
- "Employee Training, Without the No-Doz"
New York Times--E-Business (04/18/01) P. 7; Stellin, Susan
Web-based employee training cuts expenses and makes courses more accessible to workers. Otherwise known as e-learning, the movement is shifting from IT-related fields to other industries and will comprise a $11 billion market by 2003, according to International Data Corp. Circuit City saw e-learning as a perfect solution for updating its 50,000-plus employees on new products and sales techniques. Although the company still uses traditional classroom settings for some topics, Web courses are much more accessible, and 90 percent of the company's employees have logged on to complete more than 400,000 online courses. American Airlines also saw an opportunity for its 23,000 globally dispersed flight attendants in e-learning. Flight attendants now can complete a portion of their yearly certification training online instead of using the previous workbook, which some described as tedious and hard to gauge in its effectiveness. MasterCord International has also moved training via the Web by updating 2,800 of its 3,000 employees with new sexual harassment courses. The company used to spend $150 per person for the class, but has cut costs down to only $10 per person and has succeeded in reaching a broader amount of its workforce.
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- "Wearable Computers: A Different Kind of Fashion Statement"
USA Today (04/18/01) P. 7B; Maney, Kevin
Xybernaut is generally acknowledged to be the leader in the young, but growing market for wearable computers. Although wearable computers came to the public's attention last year when IBM aired a commercial in which a young man wearing nothing more than a sleek headset buys and sells stocks online, actual wearable technology is still several years away from that level. Instead, the latest wearable computers, as tested by columnist Kevin Maney, are still bulky contraptions that require users to strap both the computer and a large battery to their belt and wear an oversized headset. Xybernaut CEO Ed Newman says the computers should become more manageable within a few years, but already several companies have ordered Xybernaut's current models, including Federal Express. Xybernaut CTO Mike Jenkins says an early use for wearable computers will be to deliver operating manuals remotely to workers--Federal Express, for example, plans to give its wearable computers to its aircraft maintenance staff.
- "The Approaching Internet Domain Name Revolt"
NewsFactor Network (04/13/01); Sausner, Rebecca
ICANN faces a number of challenges in the near future, namely, the U.S. alternative root server system, international ccTLD operators that resent ICANN's U.S.-based control, and oversight pressure from Congress. Of all the alternative root server systems accessible by adding software to a browser or altering browser settings, New.net may be the most formidable. New.net's 20 alternative TLDs are intended to rival ICANN's TLD system and are accessible through ISPs EarthLink and ExciteAtHome, a 15 million-user audience. Steve Chadima, New.net's chief marketing officer, believes if New.net grows large enough, ICANN will have to recognize it, thereby allowing New.net sites to be accessible from standard Web browsers. New.net is unrepentant in its opposition to ICANN. "Our ultimate goal is ubiquity, whether we achieve that by running this parallel world or we get close enough so that ICANN says, 'Okay, we don't care,'" says Chadima. Congress recently held hearings on ICANN's extension of VeriSign's .com registry, while in the international arena, countries seem to possess ambivalent desires to protect their national Internet but also be part of a uniform World Wide Web.
For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html.
- "Federal Managers Push to Meet IT Accessibility Deadline"
GovExec.com (04/17/01); Ballard, Tanya N.
With federal agency Web sites up and running, IT managers are rushing to make them accessible to the hearing and vision-impaired by Jun. 21, 2001, in accordance with Section 508 of the Rehabilitation Act Amendments (RAA) of 1998. The General Services Agency (GSA) has asked agencies and departments to focus on their 20 most-visited sites and report their progress to the Justice Department, which will deliver a report to Congress on Aug. 7. The RAA mandates that sites must be readable by screen readers, provide text transcripts of Webcasts, and minimize flashing text, among other requirements. Private-sector firms have already emerged to cater to the law, and the software program AccVerify is also available to run automatic 508 compliancy tests. Although some agencies may face problems, the Department of Housing and Urban Development (HUD) designed its site specifically for low-income people with slow computers and so may be a step ahead. Because HUD chose to go with one HUD site rather than sites fragmented according to project or inter-HUD departments, its task is streamlined, says HUD associate Web manager Sam Gallagher.
- "Blue Collar Occupations Moving Online"
CyberAtlas (04/12/01); Pastore, Michael
The rate of lower income people accessing the Internet from home is rising, according to two reports. A Nielsen/NetRatings survey revealed that factory laborers, housewives, and service field workers are some of the fastest rising sectors. Since March 2000, Internet access among these groups rose by 52 percent, 49 percent, and 37 percent, respectively. Blue-collar workers' Internet use growth rate was double that of the overall Internet growth rate over the past year, and factory workers and laborers now make up 9.5 million of the total Internet population. NetRatings' Sean Kaldor says the Internet is now being accessed by people with a variety of incomes rather than by those with higher incomes and greater computer expertise. A report by the Pew Internet Project shows that among people with incomes below $30,000, Internet use increased from 28 percent in the spring of 2000 to 28 percent in the fall, while those in the $30,000 to $50,000 income bracket had an increase of 50 percent to 64 percent. Yet home Internet access is still greatest among populations making more than $75,000; such homes have Internet saturation of 82 percent.
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- "Businesses Boost Buying Over Web, NAPM Study Finds"
Investor's Business Daily (04/17/01) P. A6; Prado, Antonio A.
The percentage of businesses purchasing materials and supplies online rose nearly 10 percent, from 61 percent to almost 71 percent, from 2000's fourth quarter to the first quarter of 2001, according to a new study from the National Association of Purchasing Managers (NAPM). The average firm bought 9.3 percent of its total purchases online, up from just 1 percent last quarter, NAPM found. However, the study did reveal some concern among businesses as to the future of online buying. The percentage of businesses that see the Internet as being very important to their future purchasing fell from 33.3 percent to 24.9 percent, and the percentage that said it was critical declined from 8 percent to 6.1 percent. Those surveyed by NAPM said reasons for the skepticism include the downturn in the economy, especially in the dot-com sector. Businesses do not want to engage in online purchasing if they do not think their partners will still exist in six months.
- "Some Suffer Tax Hangovers From Microsoft Option Spree"
New York Times (04/18/01) P. A1; Morgenson, Gretchen
Microsoft employees who exercised stock options last year but held them as the stock nose-dived are facing hefty tax bills on unrealized profits. Some employees are complaining that the problem was exacerbated by Salmon Smith Barney consultants who urged them to put their stocks into high-risk margin plans that borrowed against their equity to pay taxes. Now that the stock is about half of what it previously was, some Microsoft workers have not only lost equity, but they have also been forced to sell off much of their stock to pay for the money borrowed on margin. Additionally, some investment lawyers say the Salmon advisors may have violated National Association of Securities Dealers suitability rules requiring that they caution their clients against taking untoward risks. The relationship Salmon had with Microsoft as the financial firm contracted to help employees exercise their options has drawn ire as well, not only because Salmon made a profit from loans made for margin accounts, but also because Microsoft benefited from options exercised. Major companies like Microsoft, Dell, and Cisco can greatly reduce, or in some cases, eliminate, their tax burden by writing off paper profits employees make on their exercised options.
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- "Power Dressing"
New Scientist (04/14/01) Vol. 170, No. 2286, P. 21; Graham-Rowe, Duncan
Scientists at the University of Stuttgart in Germany have developed a synthetic fiber that can, using solar power, conduct electricity. Experts think the technology could be a significant step forward in the progress of wearable computers and other portable devices requiring a large power supply. The fibers work by layering amorphous silicon doped with electron-rich impurities on top of amorphous silicon doped with electron-poor impurities, with a undoped layer in-between. A current is created when photons strike the top layer, sending the electron through the middle layer to the electron-poor silicon. "Any substrate that looks like a cylinder, from wires to fiber-optic cables, will work," says Martin Rojahn of the University of Stuttgart. The scientists used amorphous silicon because it is better at absorbing light than crystalline silicon, even though it is less efficient. The scientists say numerous issues, including the temperature and radiation generated by the process as well as getting power in and out of fabrics, still must be resolved.
- "The Beast of Complexity"
Economist (04/14/01) Vol. 359, No. 8217, P. S-3; Siegele, Ludwig
Today's software code is often too large and too complex, leading to bugs that usually cannot be fixed without creating yet more bugs, argues Stuart Feldman, director of IBM's Institute for Advanced Commerce. However, cutting-edge software developers such as Feldman say the future of software, as determined by the advent and rapid growth of the Internet, will see the demise of immense, independent programs. Instead, business and individual users will turn to custom services that operate as what Feldman envisions as a "cloud" of Web-based software. Already, software is migrating toward the Internet, with many vendors either downloading their programs directly to users or offering to host the applications remotely, allowing users to access it through a standard Web browser. What has developers such as Feldman truly excited, though, is the move toward open standards that the Internet has created. Open standards such as XML, UDDI, SOAP, and many others are being developed by consortiums that cut across corporate divisions. These standards will, if Feldman and others have it right, allow software from different vendors to work together seamlessly, giving users exactly the services that they want. Indeed, if the communities of users of open source software such as Linux are any example, these standards may lead to entirely new business models and economies.
- "Buried in Tech"
Fortune (04/16/01) Vol. 143, No. 8, P. 51; Bernasek, Anna
Morgan Stanley chief economist Stephen Roach has made a name for himself by arguing that companies eventually will lose faith in technology because all the money that they have spent on PCs, routers, and software will never come back to them in productivity gains. The average productivity growth doubled to 2.4 percent a year over the past decade, while tech spending soared from an annual rate of 9 percent during the fourth quarter of 1999 to 21 percent during the first quarter of 2000. Roach maintains that CEOs realize that they have overspent on technology and are starting to slash their IT budgets. Over the past few weeks, Cisco Systems, Compaq, Nortel Networks, and several other IT companies have indicated that they are losing orders, making Roach's prognosis appear more credible. More economists seem to be taking Roach's ideas seriously these days, but most of his colleagues are not ready to completely agree with his stance. For instance, determining that IT spending is on the decline is not the same as concluding that companies do not believe technology offers any benefits and will no longer invest in IT. Corporate America already has indicated that it is committed to technology, and a worsening economy will not cause it to abandon IT. Moreover, a PricewaterhouseCoopers survey shows that the productivity of companies that invested in the Internet grew 13.4 percent last year, up from 4.9 percent the year before.
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- "Laws Need to Enhance Digital Economy"
Nikkei Weekly (04/09/01) Vol. 39, No. 1973, P. 11
Governments worldwide have decided that because of the Internet's role in the structural reform of industry and the resulting change in new business models, they must do more to secure and advocate such models. Three sessions on the issue sparked discussion on how the legal frameworks of governments can be changed to get in tune with the new "information society." Although virtually every aspect of the digital economy was discussed during the meetings, one of the most important aspects covered was Net security--finding ways to go beyond passwords and credit cards, such as authenticating electronic signatures through public key infrastructure, in order to secure confidential data from competitors and hackers. The U.S. government sees itself playing four roles in the digital economy debate: to foster an environment where private companies can better compete and prosper through deregulation and active promotion of competition, to work on ridding the nation of the "digital divide," to promote the creation of content, and to encourage through legislation the protection of individual privacy and security.
- "More Bangalore For Their Bucks"
Business2.com (04/17/01) Vol. 6, No. 8, P. 40; Thompson, Mark
Last year Congress widely passed legislation upping the number H-1B visas to be issued in the next three years by 600,000. The biggest names in the tech industry are clamoring for more skilled labor, especially highly proficient, English-speaking Indian workers. But members of the Institute of Electrical and Electronics Engineers and the Programmer's Guild are worried that Indian-based companies will use the increase in H-1B visas to undercut their offerings and dole out more work overseas. A number of the top employers of H-1B visas are based in India or are headed by Indian nationals that have significant operations in India. Mark Rothman, president of IT staffing firm Myta, says that the situation is putting pressure on his company to compete, even though he also employees many H-1B workers already. New clauses added to H-1B legislation last fall have somewhat mitigated these worries. Now, companies whose workforce is comprised of more than 15 percent of H-1B status employees will be dubbed "H-1B dependent" and submit proof they are actively seeking to hire American workers as well. Fines and expulsion from the H-1B program may result should the firms be able to prove their claims, but leading Indian firms in the U.S., such as Tata Consultancy, are actually planning to expand in the U.S. market--using American workers.