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Volume 3, Issue 197: Wednesday, May 2, 2001
- "Skills Shortage Puts Job Market Out of Balance"
Financial Times--IT (05/02/01) P. 1; Fisher, Andrew
Despite the global downturn in the tech economy, businesses are still looking for workers with specific tech skills, such as networking, Web site design, and e-business applications. Part of the reason is that IT has grown beyond being another liability to become a crucial factor in profitability for all companies as they move into the Internet age. IBM vice president Nicholas Donofrio calls the current IT shortage a threat to future prosperity in the tech sector. Currently, there are 850,000 IT positions open--twice the amount from two years ago--according to Meta Group analysts. Experts foresee a growing shortage, reaching 1.7 million vacant positions in Europe by 2003, according to International Data, although most say government and corporate training programs should ease the burden after that. Cisco Systems has invested heavily in training the next generation of IT workers through its Cisco Networking Academy Program, which has prepared about 200,000 students with networking skills through online courses. Other companies are turning to outsourcing fringe functions, such as portions of Web hosting and management, as well as some e-business applications, to ASPs. Giga Information Group analyst Kazim Isfahani says corporations can do more to make full use of the employees they have now by implementing knowledge-sharing software and other technologies that direct people with the right skills to the right projects.
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- "IT Spending Expected to Rebound"
CyberAtlas (05/01/01); Pastore, Michael
Although IT spending growth has fallen this year, a new report from International Data (IDC) suggests that it may rebound as soon as next year. IDC analyst Kevin White blames the current economic troubles on a "vicious circle" of stock declines, saying the overall, long-term IT picture remains strong. IDC forecasts that spending on IT will grow 7 percent in 2001, down from 11 percent last year, with the hardware sector carrying the burden of that downturn, going from 9.6 percent growth last year to 1 percent contraction this year. However, White says, "The long term trends in e-commerce and Internet usage are strong. The expansion of their use will benefit not only Internet companies and retailers but also hardware and software vendors whose products power the Internet." A survey from CIO Magazine confirms that IT spending growth in the following 12 months will be 7 percent, down from 10 percent for the previous 12 months. The survey also found a decline in the percentage of companies planning to increase spending on data networking and communications equipment, hardware, and telecom equipment. Also, survey respondents reduced by nearly half the amount of their revenue they expect to raise through Internet-related transactions.
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- "Microsoft Offers Prizes to Identify Orders of PCs Without Windows"
Wall Street Journal (05/02/01) P. B8; Buckman, Rebecca
Microsoft has confirmed that one of its regional units sent PC makers an email offering prizes for reporting customers who ordered "naked" PCs, those that lack Windows or any other operating system. The company, in explaining that the prize giveaway was a "pilot program," said its aim was to stop users of its software from misinterpreting the extent of their software licenses. Often, the company said, users think they have the right to install Windows on many or all of their computers, regardless how many licenses they own. The program is also a way to prevent software piracy, as some purchasers of naked PCs may own pirated copies of Microsoft software. However, critics say purchasers of naked PCs may be trying to avoid being double-charged for Microsoft software, which occurs when they must purchase a PC that has Windows pre-installed and then must purchase a separate licensing agreement from Microsoft. Giga Information Group analyst Rob Enderle argues that this practice "does nothing good for Microsoft's image." The email was targeted mostly at small PC makers and assemblers, since the large PC makers are all strategic partners of Microsoft and would likely not sell PCs without its software installed.
- "Foreign Tech Worker Wins Victory in H-1B Visa Case"
In a victory for foreign tech workers employed at recruitment firms in the United States, Indian worker Dipen Joshi has successfully sued Compubahn, his former employer, over his contract. Superior Court Judge Phrasel Shelton ruled that Compubahn's contract included "void and unenforceable" stipulations, such as requiring Joshi to pay $77,000 in "finder's" and other fees after he terminated his contract early. Up to half of the hundreds of thousands foreign tech workers in the United States work for tech firms directly, but the rest are hired out from so-called "body shops" that often exact restrictive contracts from their employees. Experts say the case against Compubahn is significant because it sets a precedent for similar lawsuits.
- "Silicon Valley VCs Grow More Pessimistic"
Financial Times (05/02/01) P. 28; Clow, Robert
Venture capitalists in Silicon Valley do not expect the U.S. economy to regain its former strength until at least early 2002, according to survey by Deloitte & Touche. An 88 percent majority of the survey's respondents said they expect the U.S. economy to remain stagnant or to fall further in the coming six months. The survey's results are much more dour than a similar survey Deloitte & Touche conducted three months ago, when venture capitalists seemed hesitant to call the economic troubles a downturn, rather than a pullback. The survey also revealed that a majority of venture capitalists are now averse to the Internet, with biotechnology seen as the rising area for promising investment.
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- "Cobalt Won't Sue Apple Over Cube"
CNet (05/01/01); Loney, Matt
Stephen DeWitt, vice president and general manager for the server appliance business at Sun Microsystems and former CEO of Cobalt Networks, a server maker purchased last year by Sun, said last week Cobalt would not sue Apple over its use of the name Cube. Cobalt released its product Qube, which has the same dimensions as Apple's Cube, in 1998. While DeWitt admitted that a cube-shaped computer cannot be copyrighted, he said Cobalt owns the rights to the accompanying cube logo. DeWitt was more aggressive in his statements at a conference last year, when he said Apple would "pay" for its use of Cobalt's trademark. In response, over 1,400 Apple users emailed him, criticizing his threat.
- "States Rev up to Lure Tech Money"
Wall Street Journal (05/02/01) P. B11; Gavin, Robert
California, Texas, and Massachusetts tech companies received over 60 percent of American venture capital in 1999, spurring other states to consider guaranteed return programs to lure investors. Oklahoma is a pioneer with this strategy, having started in 1993 a tax-based guarantee program for financing tech companies in the state. The state obtains a loan from a bank that it then combines with venture capital money and gives to promising tech companies. To date, the program has garnered a 28 percent return for Oklahoma, and the state promises to make up any profit shortfall to investors through tax breaks should the company fail to make a profit. So far, tech companies in Oklahoma have received $27 million from the state in addition to $60 million from private investors attracted by the state's program. Other states are banking their tech sectors' futures on this style of financing, although critics assail such plans as risky and unnecessary. However, backers of the plans say traditional small-business loans do not adequately supply the type of fast access to cash that tech companies need to be competitive.
- "Is This World Cyber War I?"
Wired News (05/01/01); Delio, Michelle
The recent conflict between Chinese and American reconnaissance pilots resulting in the death of the Chinese pilot has prompted hackers in China to declare a cyber war against the United States. Starting May 1st, Chinese hackers said they would launch distributed denial of service (DDoS) attacks on U.S. servers for seven days. The National Infrastructure Protection Center (NIPC) run by the FBI has issued a warning stating that hacking activity has been high for the last two days, affecting the networks of the Interior Department's National Business Center, the U.S. Geological Survey Web site, and the Pacific Bell Internet Services among others. The NIPC warning says that the attackers focus on Unix networks' weak points by running network scans and other techniques. The warning suggests that the cyber assaults may result in network crashes due to data overloads. As proof of network corruption, Chinese crackers revealed details of network designs and other key information. Other U.S. Internet sites reporting damage are those of the United Press International, UUNet, The American Association of Travel Agents, and the White House Historical Association. The crackers have also targeted the network handling email for the House of Representatives. Mike Assante, director of the security firm Intelligence for Vigilinx, says up to now the Chines assaults have been minor; however, the attacks may climax on May 4 in China. That day is also Youth Day, a patriotic holiday. In response, American crackers have taken action against Chinese targets; the Xinhua News Agency stated that U.S. Web attackers have damaged the sites of three regional governments, the Deng Xiaoping police force, the universities of Tsinghua and Xinjiang, as well as the Korean Web sites of Samsung and Daewoo Telecom. Security analysts predict that the attacks from both countries could undermine their relationship and have an impact on future business negotiations.
- "Boffins Create Thought-Controlled Computer"
Register Online (04/30/01); McCarthy, Kieren
A group of scientists led by Jose del Millan at the European Commission's Joint Research Centre have developed technology that allows handicapped individuals to write sentences using thought patterns. A Sunday Times article said that Cathal O'Philbin, a middle-aged man with degenerating spinal muscles, was able to write "Arsenal Football Club" using the technology, called the Adaptive Brain Interface. The system is activated when electrodes attached to the top of a person's head with a cap pick up brainwave signals produced when the person changes his thoughts. A computer processes these signals to carry out different functions. O'Philbin was directed to think about a moving cube, use his left arm, which he is no longer able to do, and lastly calm his mind. The three actions were able to manipulate the movements of a cursor on the computer monitor. O'Philbin said getting the system to operate was difficult, but he would like to get one soon. Millan says "without any assistance, a user can teach the machine to recognize his thoughts within one or two hours." One million pounds were spent to create the platform, which incorporates Windows 2000. The group hopes the system will be useful to all types of people in the future.
- "IT Paychecks Keep Going up--But for How Long?"
InformationWeek Online (04/30/01); McGee, Marianne Kolbasuk
Although tech experts are still commanding premium salaries, many are worried about the fate of their jobs, concludes a study of about 20,000 tech workers and administrators by InformationWeek Research. In the study, called "National IT Salary Survey," 10,526 tech workers reported earning an average salary of $71,000, an increase of 8.5 percent compared to last year's $65,000. Among 8,680 administrators, the average salary is $97,000, a growth of 10 percent from last year's $88,000. The biggest money earners are those working in wireless infrastructure, enterprise resource planning, and Internet/intranet configuration, development, and supervision. However, because of the decrease in dot-com firms, economic woes, and a slower stock market, many tech professionals are apprehensive about their incomes, job availability, and job steadiness.
- "Online 'Yellow Pages' Goes Live with a Bang"
InfoWorld.com (05/02/01); Vance, Ashlee
The first fully operational version of the Universal Description, Discovery and Integration (UDDI) Business Registry, touted as the Web's first true "Yellow Pages," went live today. Its launch was facilitated with the support of more than 260 companies, including American Express, Compaq, SAP, Dell, Sun Microsystems, Boeing, and British Telecommunications. The registry will collect three types of data: Information relevant to businesses, such as names and descriptions, will be listed in the White Pages; government, international, and technology-based identifiers as well as geographic locations will be cataloged under the Yellow Pages; and transaction points, compatible technology, and specific documentation apropos to companies will be found in the Green Pages. UDDI was announced in September 2000 by IBM, Ariba, and Microsoft. Hewlett-Packard will soon take over for Ariba, and together with IBM and Microsoft will continue to maintain the registry's servers throughout the next year before turning it over to a standards body. The participating companies believe that the directory will clear the way for Web services by applying a universal set of protocols that can make sharing information and locating partners and customers a simple matter for businesses. A second version of UDDI should launch within the next two months, followed by a third version by the end of this year, says Microsoft's Chris Kurt.
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- "State Enforcers Protect Consumers"
SiliconValley.com (04/28/01); Gillmor, Dan
In the past decade, state attorneys general have taken on the role of lead consumer-protection agents. While analysts observe the Bush presidency for signs of its stance on issues of competition and consumer protection, the state attorneys general are actively pursuing perceived injustices. Increasingly, their integrated efforts have made a large impact on business--for example, with the tobacco industry and, more recently, with Microsoft. One recent focus has been on protecting individuals' privacy from firms that would abuse the Internet to collect personal data. Financial and medical information is especially important, says Carla J. Stovall, Kansas attorney general and president of the National Association of Attorneys General. There is some concern that corporate interests will influence Congress to pass more lenient versions of bills that would otherwise go through in individual states, she claims.
- "IDC: Asia Web Users to Outnumber United States by 2005"
InfoWorld.com (04/27/01); Cowley, Stacy
A number of Internet research firms show that the emerging Asian Web population will continue to grow, eventually exceeding the United States in online numbers. International Data (IDC) predicts there will 240 million Internet-connected users in 2005, minus Japan. Those with wireless Internet access in Asia, while currently comprising one-fourth of the world total, will continue to represent the majority of Asians online. More than 40 percent of Asian mobile phone users will be connected to the Internet in 2005, according to IDC. Additionally, mobile-derived e-commerce sales will total $36 billion in 2004, and Asian e-commerce will altogether exceed $600 billion. EMarketer.com predicts lower numbers for Asian e-commerce, with $338 billion in 2004, and says that the Web population in the region will reach 173 million people--27 percent of the global total. Nielsen/NetRatings says that U.S. Internet users make up 43 percent of the entire Web population, and that the Asia region holds 47.9 million Internet users.
- "European Commission Says Net Protocol IPv6 Must Be Introduced"
Europemedia.net (04/25/01); Hall, Angela
The implementation of the new IPv6 protocol is becoming vital to the Internet community, as Internet addresses will no longer be available through IPv4 by 2005, according to the European Commission. IPv6 has become vital for the future success of the Internet considering the recent influx of wireless devices and the possibility that one billion people will have wireless access to the Internet by 2003. An IPv6 task force comprised of ISPs, mobile phone operators, and telecoms has begun to hold meetings in order to set a number of goals such as making IPv6 available through service providers by 2003 and having telecoms operators convert all systems to IPv6 before the end of 2005.
- "A High-Tech Lifeline in Europe's Rust Belt"
New York Times (04/29/01) P. BU5; Green, Peter S.
Poland's Internet economy is selling itself on the fundamental benefits of bringing traditional businesses onto the Web. Analysts say that Poland's 4.4 percent GDP growth is the successful exception in Eastern Europe, but that the sober atmosphere will help new high-technology companies maintain their focus. One example of the common Internet application in Poland is iron-working plant Z.R.E. Grodek's Internet-based contracts from U.S. companies looking for cheap outsourcing. The factory using a simple dial-up connection to bid for U.S. contracts via online industry exchanges. Rafal Styczen, one of the few native venture capitalists in Poland, says the companies started by his fund are not based on hype, but have solid business plans. Billbird, for instance, offers Web-based bill payments as a way for Polish citizens to circumvent waiting in long lines with rolls of money. Other traditional Polish companies are moving onto the Web as well, even though Internet penetration here is dismal--between 5 percent and 8 percent. Agora A.S., owner of Poland's premier newspaper, plans to leverage its brand recognition in its bid to launch the country's leading Internet portal.
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- "Wanted: Hot Industry Seeks Supergeeks"
Newsweek (04/30/01) Vol. 137, No. 18, P. 54; Stone, Brad
Large tech firms are increasingly showing interest in bioinformatics, a growing field that merges biology with mathematics and computer science. The goal of bioinformatics is to know more about the human body in order to make more informed decisions about drugs. IBM predicts that about $43 billion worth of high tech equipment will be sold over three years to the bioinformatics market. One part of the field is genomics, which studies the components of genes and how they interact. The human body has about 3 billion base pairs of DNA, all of which were recorded last year by the Human Genome Project. Complex computers and databases are used to examine the piles of data that have been produced concerning gene sequences. Companies such as Celera and Human Genome Sciences maintain databases that are used by scientists who are required to pay fees if a drug is created. Informax and Lion Bioscience in Germany lease software and other services to researchers for as much as $100 million. Likewise, Silicon Genetics develops technology that allows users to evaluate the presence of certain genes in tissue. Tech companies such as Compaq, IBM, and Oracle all hope to take part in the field's expansion by supplying both services and gear. In addition, IBM is working on a project called "Blue Gene" that reveals the structural design of proteins and their functions, a part of bioinformatics known as proteomics. Oracle is investing in this area as well: the firm intends to map out all the proteins of the human body, thought to number one million. The field may help reduce drug testing time, detect unsafe medications, and prevent deadly side effects.
- "XML's Tower of Babel"
InternetWeek (04/30/01) No. 859, P. 25; Liebmann, Lenny
Industries such as electronics, high-tech manufacturing, insurance, and financial services have all found success using XML dialects that are specific to their industries. However, not everyone is convinced that industry-specific XML schema are best for business. Some observers say the specific database platforms or architectures that companies create to exchange data with their customers and partners are too varied in how they define their common data field, while others note that such XML schema tend to overlap their purpose or have narrow functions. Although many companies are rushing to setup an XML dialect as they move toward business-to-business systems, others are taking a more pragmatic approach to business communication. For example, Airborne Logistics Services in Seattle is seeking to make electronic communication easier for the various industries with which it does business by creating individual XML document-type definitions (DTDs) based on the specific requirement of each customer. Other companies, such as global chemical manufacturer Atofina, have discovered that their business partners are not ready for electronic transactions and are not overly concerned about supporting multiple XML dialects. Gartner Group analyst Rita Knox sees the current trend in industry-specific XML schema as first-generation dialects. More rational solutions are likely to emerge such as centralized XML "dictionaries," Knox says, as buyers display a desire to obtain information from a wider variety of sources.
- "Scents and Sensibility"
Economist (04/28/01) Vol. 359, No. 8219, P. 83
Bloodhound, a software product that allows organizations to determine how easy it is for Web surfers to navigate their Web sites, is meant as a way to answer those critics who argue that the Web is doomed by poor site design. Dr. Ed Chi, assisted by Dr. Stuart Card and a group of researchers at Xerox's Palo Alto Research Center, created Bloodhound, which is influenced by how animals forage in search of food. The software seeks to predict what information Web surfers are looking for as well as their clickpath to that data. Bloodhound takes "snapshots" of every word and link on a site and assigns a vector, or "smell," to each link. When words and phrases are fed into Bloodhound, the software goes from page to page in search of links that smell most like the intended target. Chi has already determined that Bloodhound searches for information in a manner very similar to the process human beings use. Its developers believe that Bloodhound, priced at about $2,000, is a more efficient and cost-effective way for organizations to test the usability of their Web sites.
- "Where Credit's Due"
Computerworld (04/23/01) Vol. 35, No. 17, P. 66; Bernstein, David
A number of states are considering whether to follow Arizona in passing a law that gives high-tech companies tax breaks for training workers. At the same time, some U.S. lawmakers would like to offer a tax credit for technology training at the national level. However, the national program would provide tax breaks to individuals who are seeking to obtain tech skills. U.S. Rep. Jerry Weller (R-Ill.) plans to try his Technology Education and Training Act again this year, and the office of U.S. Sen. Kent Conrad (D-N.D.) says he will rework his version of the technology training bill and introduce it later in the year. Weller's bill would provide a $1,500 tax credit to individuals and businesses for their IT training expenses. Arizona has adopted a program that benefits just high-tech companies--a tax credit for as many as 20 employees at $1,500 per employee a year--because there already is money available through loans and grants for people who want to attend school, says Steve Partridge, who will implement the program for Arizona's Department of Commerce. Arizona's law has endured criticism because it leaves the government covering half of the training costs of high-tech companies. Supporters contend the law is needed to lessen the shortage of tech workers in the state.
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