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Volume 3, Issue 232: Friday, July 27, 2001
- "Technology Downturn Becomes Threat to U.S. Innovation"
Wall Street Journal (07/27/01) P. B4; Clark, Don
The third Internet Summit this week was overshadowed by a serious lack of venture capital for technological innovations on account of the economic downturn. Salesforce.com Chairman Marc Benioff expects the drought to last 18 months, throwing many companies off the track to profitability. Many venture capitalists have adopted a policy of risk-avoidance, while others are busying themselves bailing out or shutting down their portfolio companies. Although conference attendees were quick to blame the downturn on over-enthusiastic predictions of Web growth, venture capitalist John Doerr also attributed the problem to declining numbers of engineering and science graduates. The solution he suggested was a $2 billion annual stipend from Congress to churn out 100,000 more technologists per year. He added that Congress should also grant U.S. residency to foreign-born engineering graduates. Morgan Stanley analyst Mary Meeker estimated that the falling market value of some 362 Internet companies between December 1999 and mid-July 2001 led to a $727 billion loss.
- "Microsoft, Red Hat Argue Open Source"
CNet (07/26/01); Shankland, Stephen
Attendees at the O'Reilly Open Source Convention on Thursday showed little patience with Microsoft's position on the open source model. Microsoft's Craig Mundie--who earlier this year made a speech in which he attacked open source software and the General Public License (GPL) on which much of it is based--addressed the convention, saying the company is not against sharing code but worries that the GPL creates "its own closed community." The company instead favors what it calls a "shared source" model in which developers have limited access to proprietary code. This, Mundie argued, provides many of the qualities that the open source model does: for example, a sense of community among software programmers and the pursuit of common intellectual goals. This model has already caused 10,000 users to access the Windows CE source code in its first three days of availability, Mundie said. However, CollabNet CTO Brian Behlendorf complained that Microsoft's shared source plan does not require it to offer anything to developers in exchange for their work on its software. Other attendees questioned the company for its attempts to portray the open source model as bad policy. As to Microsoft's conciliatory approach at the convention, Red Hat CTO Michael Tiemann said, "To build an architecture of trust, it is better to be open than to seem open, better to be trustworthy than to seem trustworthy."
- "E-Workers Hanker for Old Economy"
Financial Times (07/26/01) P. 18; Ehren, Harald
A new survey by Financial Times Deutschland has found that employees at British and German Internet startups are disillusioned with the New Economy. The survey of 450 employees and managers reveals that 80 percent of staff and 50 percent of management want to leave their New Economy positions, with 88 percent of staff and 61 percent of management expressing a desire to return to positions in the Old Economy. The main reason for the workers' dissatisfaction is a lack of structure, not a lack of adequate compensation, says Professor Bernd Wirtz of Herdecke University. Survey respondents said their employers often displayed a lack of professionalism and were weak managers, with a respondent saying, "Apart from learning to cope with chaos, I myself have not developed any further." The chaos of the New Economy may actually benefit workers returning to Old Economy positions, Wirtz counsels, saying they will at least be effective at managing a crisis. However, Wirtz warns New Economy employees not to expect better pay by returning to the Old Economy.
- "31,000 Tech Jobs Slashed Globally"
Los Angeles Times (07/27/01) P. A1; Kaplan, Karen
Tech firms around the world announced a total of 31,000 cut jobs on Thursday. Tech industry layoffs had fallen off after peaking in April, but analysts warn that the growing unlikelihood of a year-end rebound will prompt firms to continue to shed workers. Telecommunications companies have been the hardest hit by the slump and have announced massive cuts. Lucent Technologies has reduced its workforce from 123,000 at the beginning of the year to only 57,000 through job cuts and the spin-off of its semiconductor division. PC makers Dell, Gateway, and Compaq--each of which have seen sales fall hard over the last year--have cut 11,500 jobs since January, and Hewlett-Packard announced the layoff of 6,000 on Thursday. Challenger, Gray & Christmas say 40 percent of all the layoffs resulting from the slump have occurred in the first half of this year.
- "Tech Giants Targeting SEC Stock Option Rule"
Washington Post (07/26/01) P. E14; Reddy, Anitha
With its new chairman soon to be confirmed by the Senate, the Securities and Exchange Commission (SEC) is preparing a new rule requiring extra disclosure on tech companies' stock option plans for employees. The SEC says it is nearly impossible for investors to adequately anticipate the impact of stock options on earnings, since the exercise of those options dilute earnings per share. Also, SEC attorney Mark Borges says investors often are not informed about the amount of stock options issued. Verizon and Microsoft have voiced objections to the proposed rule, arguing that it would impose an undue administrative burden on companies and that current disclosure practices are sufficient. Intel and Lucent support the regulation but have asked the SEC to consider trimming the amount of financial disclosure required.
- "Giving Away Dot-US in an Unseemly Hurry"
San Jose Mercury News Online (07/21/01); Gillmor, Dan
The U.S. Department of Commerce is moving quickly to pass control of the .us country code top level domain to a private entity. States, schools, public libraries, and local communities currently use the .us domain. The entity that gains oversight control over the .us domain will be allowed to charge for listings and would be encouraged to make .us a commercial domain. The Commerce Department has spent an insufficient amount of time to consider this vital issue, as it only began accepting proposals in June, and the proposal period will end next week. VeriSign's Network Solutions might be favored during the process, according to some observers. The Commerce Department's actions have generated criticism from non-profit organizations, public-interest groups, and even members of Congress. Critics believe that the Commerce Department should again consider how short the process is before giving away the .us domain. The Commerce Department "proposes to divest the American people of a unique national resource for no substantial return, while enriching the single private contractor lucky enough to receive the award," said Commerce Secretary Donald L. Evans in a recent letter that contained the signatures of representatives from the Media Access Project, Goodwill Industries International, Consumer Federation of America, National League of Cities, and the United Church of Christ.
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- "PC Groups Fail to Reboot Demand"
Financial Times (07/27/01) P. 16; Morrison, Scott
Computer companies have been caught up in falling PC sales, resulting in disappointing second-quarter results and bleak third-quarter forecasts. Studies from two research firms last week indicate that the worldwide computer market is experiencing its first decline in 15 years. Hewlett-Packard expects third-quarter sales to fall 24 percent from last year and announced the layoff of 6,000 employees Thursday. Compaq Computer also anticipates third-quarter sales to be below analysts' estimates. The economic slowdown and a lack of new "killer apps" are discouraging consumers from purchasing PCs. Many companies hope that the Oct. 25 release of Microsoft's Windows XP operating system will give the market a shot in the arm. However, some industry observers point to product differentiation or consolidation as possible solutions to the current PC sales downturn.
- "Intel Expected to Unveil Tualatin Next Week"
InfoWorld.com (07/24/01); Neel, Dan
On July 30, Intel will officially debut the Tualatin chip, the first processor to be fashioned from the 0.13-micron process. The chip will run at higher clock speeds, operate at lower temperatures, and consume less power than 0.18-micron models, Intel representatives say. Such characteristics should help the Tualatin find use in server blades, mobile computers, and similar systems. Industry observers expect the Intel processor to compete with 0.13-micron offerings from Advanced Micro Devices and Transmeta. Compaq and Toshiba are among the vendors that plan to ship the first batch of Tualatin processors in their mobile products; IBM, Hewlett-Packard, Dell, and other computer makers will probably do the same. An Intel spokesperson says the company should start switching its Pentium 4 desktop processor line over to 0.13-micron in the fourth quarter, while a mobile Pentium 4 chip should be unveiled in early 2002.
- "Call for Tougher Laws for Cyber Crime in India"
Newsbytes (07/25/01); Mahabharat, CT
India's Information Technology Act 2000 is not doing enough to address cybercrime and other technology issues and may need to be supplanted by broader legislation, according to Supreme Court of India Justice Umesh Chandra Banerjee. Banerjee's comments, which came during a technology seminar hosted by the Indian Law Institute and other groups, were echoed by many other participants. Many who attended the seminar said that several pieces of legislation must be amended, including the India Evidence Act, the India Penal Code, the General Clauses Act, and the Criminal Procedure Code. The World Trade Organization is expected to address related Internet and technology issues, including a multi-lateral trade deal that covers the use of the Internet, said Banerjee.
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- "Tech Talent Alarm Sounded"
SiliconValley.com (07/22/01); O'Brien, Tia
Speaking at the New Democrat Network's fifth annual retreat, Hewlett-Packard nanotechnology chief Stan Williams said Silicon Valley is suffering from a talent shortage, a deficit that could topple the United States' technological leadership. At the same meeting, economist and Stanford University professor Paul Romer told members of Congress that the number of foreign-born engineers and scientists is rising, causing other nations to make high-tech gains while America stagnates. More students graduate with science and engineering degrees in England and South Korea than in America. Meanwhile, U.S. computer-science graduates have fallen from 45,000 per year in 1986 to 24,000 today. Furthermore, many innovators in U.S. companies are foreigners on loan; when their visas expire, U.S. firms will lose a wellspring of skills and ideas. Democrats warn that tax cuts and budget slashes proposed by the Bush administration will only further handicap science research and new programs. Romer has advised Congress to encourage more U.S. students to obtain high-tech degrees through federal funding and is creating a bill to that effect with Sen. Joseph Lieberman (D-Conn.).
- "Congress No Haven for Hackers"
Wired News (07/25/01); McCullagh, Declan; Osterman, Andrew
While programmers, technologists, and consumer advocates rail against the Digital Millennium Copyright Act (DMCA), insiders believe that they do not have much chance of changing the law. Approved unanimously in both the House and Senate in 1998, the DMCA has received continued support from Congress and its corporate lobbyists. Leaders of the technology and intellectual property rights committees on both sides of Congress--in which moves to change the law would necessarily originate--say they approve of the law in its current form. Legal challenges to the law, including free speech arguments, have not fared well either, as shown in the case of the recording industry against the online magazine 2600, which failed in a bid to publish code that can unscramble DVD copy protection. Currently, the hacker and developer communities are in an uproar over the arrest of a Russian programmer accused of creating and disseminating software to circumvent file-copying protections on e-books. Although Adobe, the software firm that first sought the programmer's arrest, has since reversed its calls for prosecution, observers say the government is likely to press forward with its case.
For more articles regarding DMCA and DVD cases, visit http://www.acm.org/usacm.
- "Vendors Struggle to Get Online 'Yellow Pages' Rolling"
IDG News Service (07/24/01); Vance, Ashlee
Industry observers claim that several major firms have yet to provide the necessary corporate information to the Universal Description, Discovery, and Integration (UDDI) database, an online directory of businesses. First announced in September and launched in May, UDDI is meant to facilitate connections among its members, with businesses providing basic contact information and details of what products and services they offer. However, of the major tech firms behind the initiative, few have entered their own information into the registry. Sun Microsystems, Hewlett-Packard, and Oracle are among the firms that have yet to provide much useful information to UDDI. Sun, for example, has provided only a false phone number under its corporate listing, while Hewlett-Packard has yet to register its name with UDDI. Spokespersons for these firms say drawing together the necessary information from throughout the corporate structure can be a time-consuming process, but observers say these firms are not setting a good example for other potential UDDI members. Still, UDDI participants retain high hopes for the service, which some believe could have members numbering in the millions by next year.
- "Future's Big Sellers Rely on Tiny Science"
NewsFactor Network (07/24/01); Barlow, Jim
The potential scientific and commercial applications of nanotechnology are tremendous, ranging from minuscule computer chips with molecule-sized transistors to robust laptop batteries that weigh far less and last much longer than lithium batteries to microscopic machines that work inside the human body. The federal government contributes a half-billion dollars to nanotech research annually, and venture capitalists have also started to allocate funds for nanotech. Nanotech material is already being produced in the form of nanotubes--carbon structures 60 times stronger than steel that conduct electricity. It will be some time before commercial nanotechnology debuts, during which time production costs must be lowered. Carbon Nanotechnologies founder Richard Smalley is in the process of building a facility designed to raise nanotube output from 25 grams to 2.5 kilograms daily. The pioneering work of Smalley, Robert Curl Jr., and Sir Harold Kroto serves as the basis of most nanotech research.
- "House Committee OKs Export Act Deadline Extension"
Newsbytes (07/25/01); Krebs, Brian
A House committee on Wednesday approved a deadline extension for the Export Administration Act (EAA). Originally due to expire on Aug. 20, the EAA deadline has been extended two months. House members say a Senate bill (S. 149) amending the export act contains concessions to the tech sector that could harm national security, but tech firms say the export act hampers expansion since it bans the export of certain items. The Senate bill removes the 180-day waiting period to which the president must adhere before approving the export of faster processing computers. The bill also lets the president regulate exports if the government feels that they could undermine U.S. security. Meanwhile, the House International Relations Committee plans to add more than a dozen amendments to the Senate bill for increasing national security, sources say.
- "Does the President Care About Technology"
Interactive Week (07/23/01) Vol. 8, No. 29, P. 22; Brown, Doug
President Bush continues to come under criticism from those who say he is more concerned about oil, tax refunds, holding teachers accountable, and faith-based programs than he is about technology. In fact, David Hart, a scholar of 20th century tech policy at Harvard University's Kennedy School of Government, says Bush's philosophy is to take a hands-off approach to the industry and step in only during crisis situations. So far, the Bush administration has failed to address e-commerce taxation and privacy legislation and has not taken a position on broadband regulation. However, Bush's supporters say he has a deep interest in technology but focuses on the entire economy, including issues of free trade and an educated workforce. Intel's Chuck Malloy says the reason why the Bush administration has not talked about technology is because it is still in transition. Nevertheless, tech industry advocates do not like Bush's budget proposal to hold steady research and development funding for the National Science Foundation. In addition, compared with the Clinton administration, Bush has no senior member in his cabinet who will champion tech issues, which is the role that former Vice President Al Gore played in persuading President Clinton to bolster the economy by strengthening the tech sector.
- "The Growing Gay Workforce"
Computerworld (07/23/01) Vol. 35, No. 30, P. 34; Melymuka, Kathleen
Increasingly, gay, lesbian, bisexual, and transgender (GLBT) IT workers are pushing for equal treatment at work. "All gay people want is to be treated the same way--allowed to be who we are, just as straight people are," says Philip Calderon, a program analyst at American Express. Upwards of 50 percent of the Fortune 500 companies address sexual orientation in their fair treatment policies, according to Human Rights Campaign. Among the Fortune 100 firms, 77 percent do so, as do 82 percent of the Fortune 50. However, written codes are not enough--GLBT employees need a network to provide support, education, and consultancy, says Eastman Kodak software engineer Marjorie Meyer. Lucent, for example, has set up the Safe Space program for GLBT workers while Xerox has created a group called Galexe. Many GLBT tech employees are waiting for the day when leaders in upper management feel free to disclose their sexual orientations. AT&T and Lucent software engineer Jane Icenogle calls this the lavender ceiling.
- "Geeks in Ghana"
InfoWorld (07/23/01) Vol. 23, No. 30, P. 42; Habeeb, Ken J.
Geekcorps, a nonprofit organization dedicated to ending the digital divide around the world, recently sent a team of volunteers to Ghana, where the World Bank reports there are only 2.5 PCs for every 1,000 residents. Still, Ghana has a GDP of $22.6 billion and the IT efforts of its businesses, while still fledgling, are ahead of most other African nations'. Indeed, many Ghanaian businesses are now turning to the Internet not only as a source of revenue, but also as a way to uplift their surrounding communities. After an intensive round of training, Geekcorps volunteers worked with Ghanaian firms on such issues as Web development, GIS, wireless Internet, and Java and HTML programming. Although in many cases this work was tough going, as many of the Ghanaian firms were still relying on outdated legacy systems, Geekcorps volunteer Scott Ryan says he was "amazed by the resourcefulness of the Ghanaians."
- "Innovation in the Fast Lane"
eWeek (07/23/01) Vol. 18, No. 28, P. 47; Stackpole, Beth
Analysts and industry insiders say the market for online applications to assist in product design and development is set to explode in coming years. AMR Research forecasts that the product lifecycle management (PLM) sector will grow from $1.2 billion in 2000 to $8 billion in 2005, increasing 50 percent in 2001 alone. Manufacturing executives agree, with a recent Forrester Research survey revealing that 72 percent of product development executives believe that their efforts in the next two years will in large part depend on PLM and more integrated collaboration with suppliers. Online design collaboration is gaining favor because many manufacturers expect that it will reduce development costs as well as time-to-market. Collaboration software facilitates design work not only between a manufacturer and its supplier, but also among different departments within the enterprise, hence its potential for greatly benefiting overall integration efforts. The importance of minimizing development overhead is clear, says Forrester analyst Navi Radjou, as the design phase accounts for as much as 80 percent of a product's total cost. However, analysts and insiders agree that some barriers to acceptance of PLM, especially of online collaboration tools, remain. Engineers may not want to work with others, nor will manufacturers want to send critical information online, let alone share it with other companies, if they are not certain that the information will remain secure.
- "The Decline and Fall of the American Programmer?"
Communications of the ACM (07/01) Vol. 44, No. 7, P. 43; Mander, Keith
In his book, "The Decline and Fall of the American Programmer," Ed Yourdon argued that international rivalry would drive U.S. programmers out of business by the end of the 1990s. Keith Mander, director of the University of Kent's Computing Laboratory, notes that the reverse has actually come to pass: the need for programmers is so great that there is currently a worldwide skills shortage. U.K. universities cannot at present meet this demand for networking technology and platform-independent programming language graduates, nor can they meet demand for experts to teach these subjects, but Mander expects U.K. institutions will find a long-term solution to this dilemma. The first element of this solution will be a larger educated workforce that students may not enter until their 20s or 30s, rather than at 18, which Mander suggests will require diversification on the part of universities. The second element is greater company/university co-location, both physically and over the Internet. The third element will be academics who hail from the computing profession, as with doctors who also teach at medical universities, a vital link in the chain of research into practical applications.
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