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Volume 2, Issue 67: Monday, June 12, 2000
- "Microsoft Tries Another Court; Public Opinion"
New York Times (06/12/00) P. A1; Broder, John M.
Microsoft has begun an all-out publicity campaign to persuade lawmakers and the public to back the software giant in its battle with antitrust regulators and the courts. The company is contributing to both major political parties, hiring lobbyists, backing the creation of seemingly independent trade associations, running ads in the major media outlets, and supporting free-market oriented research groups. Computer and Communication Industry Association President Ed Black, whose organization is mainly backed by Microsoft opponents, says, "It's everywhere and it's huge." Microsoft critics, including Sun Microsystems, IBM, Novell, America Online, and Oracle are responding with a huge push of their own, including the hiring of former federal judge Robert H. Bork, PR firms, and other lobbyists. Total spending in anti-Microsoft propaganda surpassed $11 million in 1999, according to the Federal Election Commission, while Microsoft spent $4.6 million. Microsoft's Rick Miller says the company's PR efforts are in response to the attacks by its rivals and the portrayal of Microsoft as a bully. Miller says, "Microsoft is fully intent on mobilizing our assets and our friends to tell our story." Miller says the company does not expect Congress or other political leaders to intercede in its court case. He says, "We feel we have a good case on appeal and we're very much focused on fighting the battle in the courts and not in the political arena." Microsoft's political lobbying efforts were virtually nonexistent six years ago, but today the company is the third-biggest corporate political contributor, with only AT&T and Philip Morris contributing more. It also is aggressively pursuing a grass roots effort to mold public opinion, and has hired the same consulting firm that Republican presidential nominee George W. Bush uses.
- "Corporate US Hostile to E-Tax Proposal"
Financial Times (06/12/00) P. 3; Leffall, Jabulani
Nearly two-thirds of CFOs and tax directors at 2,000 of the U.S.'s biggest companies say implementing and administering tax collection from Internet sales would be hard, according to a new survey from KPMG. The survey results were based on 270 responses from companies in a wide variety of industries. Over a third of the respondents said that e-taxes were a bigger obstacle to overseas sales than cultural issues, an issue that could loom large as the European Commission recently proposed extending its value added tax provisions to online goods and services. In contrast, the U.S. is expected to maintain a tax-free Internet for the foreseeable future. Lycos CEO Bob Davis says an e-tax burden eventually "will restrict and impede the process of e-commerce on a global level."
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- "McCain Favors Slower Pace for Internet Legislation"
USA Today (06/12/00) P. 16A; Squitieri, Tom
Sen. John McCain (R-Ariz.) called for a more "measured" approach to Internet issues, urging his fellow lawmakers to put the brakes on the rush to pass Internet legislation. "I do have some concerns they are rushing some legislations through just so we can gain the allegiance of Silicon Valley," McCain said. The Senate Commerce, Science, and Transportation Committee will address the issue of online privacy on Tuesday; McCain is chairman of the committee. McCain believes most of the Internet legislation called for in the House GOP's "E-Contract 2000" should be delayed, including a five-year extension of the Internet tax moratorium. McCain has given his approval to one piece of current Internet legislation--the electronic signatures bill that was approved by a House-Senate conference committee Thursday night. McCain noted that the high-tech industry has a powerful lobbying force. McCain chastised his peers for concentrating on smaller Internet issues, such as spam, rather than the larger ones, such as Internet privacy. Spam will evolve to the point where it "outstrips the legislative solution," McCain said. McCain's technology agenda includes hearings on high-speed Internet access solutions to the digital divide, the use of Internet filters, and oversight hearings on the FCC. McCain criticized the FCC for being "out of sync with Internet technology."
- "Computer Company Warns of 'Attack' Software"
Wall Street Journal (06/09/00) P. B2; Bridis, Ted
Network Security Technologies says that it has evidence that new "attack" software has been implanted in business and home computers, perhaps thousands of them--part of a coordinated effort that could be used to cripple Web sites and electronic commerce. The software is downloaded onto computers when the user launches what is partially disguised as a small video file, received by email or found on the Internet; the program turns the computer into a platform for remote-controlled attacks on Web sites, especially denial-of-service attacks. The software will run only on computers with Microsoft's Windows 95 or Windows 98, but New Media Designs employee Grant Stanion says the program is easily removed once it is found. Network Security says it has identified as many as 2,000 computers around the world that were implanted with the software; the name of the file changes randomly but usually contains nonsensical letters.
- "House Votes to Block Work Safety Rules"
Washington Post (06/09/00) P. A9
The House voted 220 to 203 Thursday night in favor of blocking federal rules aimed at preventing almost 2 million workplace injuries a year. Organized labor has taken one on the chin, as this episode in the battle over ergonomic rules that has gone on for the last decade has ended in a loss for unions. The Occupational Safety and Health Administration had planned to release final rules by the end of the year that would have forced 1.6 million employers to make adjustments to protect workers from repetitive-stress injuries. But organized labor can rest assured that, although they have lost this battle, President Clinton will almost certainly veto any legislation that prevents the ergonomic rules from taking effect.
- "Web-Brand Study Says Awareness Isn't Trust"
Wall Street Journal (06/07/00) P. B6B; Ellison, Sarah
Consumers find the brands of traditional companies to be more trustworthy than those of Internet startups, according to new research from advertising agency Leo Burnett. Brand awareness itself has little to do with consumer trust in the online world, the research finds. Consumers show a greater degree of trust with online companies that have a well-established parent company--the Freeserve and Dixons Group relationship being a good example. Joe Staton, a director at Leo Burnett, says promoting online brands and consumer trust can be accomplished in three ways. One way is to build a completely new brand on the Internet. A second approach is to use the name of the established parent company as the name for the online brand. Lastly, is a compromise tactic that promotes a new online brand by making it well known that the parent company is backing the startup. Dixons used this last strategy with Freeserve. Leo Burnett polled some 200 U.K. Internet users and found that consumers give traditional companies high marks for brand awareness and brand trust. Brand trust is not as strong for new Internet brands, including Freeserve. Building consumer trust is key to building a brand, says Staton.
- "Java: Can Sun Control the Flood?"
Interactive Week (06/05/00) Vol. 7, No. 22, P. 116; Babcock, Charles
The Java coalition is starting to come apart as companies play hard-ball with one another, now that Microsoft is tied up with a landmark antitrust suit. Open source programmers have become increasingly vocal about Sun Microsystems refusing to make its source code public and open to modifications by developers who use it. The community of open source programmers, which is responsible for the Linux operating system and so many of the standard technologies of the Internet, says that Sun does not want true standardization and has too much control over Java, the computer language that has become the language of choice for designing Web applications. Last November Sun abandoned a promise to seek an international standard in its encounter with the ECMA, the international standards body formerly known as the European Computer Manufacturers Association. Now the open source community is warning Sun to watch out for a true standard or an open source-based challenge to Java. Meanwhile, open source programmers have gone elsewhere, prompting Eric Raymond, president of the Open Source Initiative, to say Java is in jeopardy of "being relentlessly pulled about into incompatible dialects, exactly the same way that proprietary Unix went." Although Sun views the rumblings as a threat, the company sees IBM's refusal to sign agreements for the latest version of Java, Java 2 Enterprise Edition, as the more immediate problem. Sun has angered IBM and a number of other venders for charging a branding fee for use of Java 2EE. In January and February, many vendors were considering following IBM's lead. International Data's Rikki Kirzner says the developer community will ultimately determine the future of Sun. Developers could pressure Sun to adopt an international standard, or pressure IBM into giving up its stance against compliance. Meanwhile, IBM has teamed up with Microsoft for an XML strategy. As for Sun's next-generation networking technology Jini, the industry generally views the company as having stumbled with its technology.
- "Congress Weighs High-Tech Agenda"
Hill (06/07/00) Vol. 7, No. 23, P. 4; Miller, Ian
Although time is running out in the current session of Congress, the IT industry hopes that lawmakers will have enough time to address such issues as digital signatures, accounting rules, and increasing foreign worker H-1B visas. The prospect of legislation on digital signatures looks promising, with Rep. Rick Boucher (D-Va.) having said that the final bill is rapidly approaching. Boucher co-chairs The Congressional Internet Caucus with Rep. Robert Goodlatte (R-Va.), who expects the bill to be signed into law this summer. However, the most immediate issue for the industry is the H-1B visa bill. More than half of the engineering degrees that U.S. universities grant this year will be to foreign-born students, and U.S. companies want to be able to hire these skilled people. California Reps. David Dreier (R) and Zoe Lofgren (D) have introduced a bill that increases the visa cap, while Rep. Lamar Smith (R-Texas), who is chairman of the Judiciary Immigration and Claims Subcommittee, has introduced a bill that would lift the cap altogether. Both bills are seen as temporary solutions to the problem of finding enough high-tech workers. One major issue that the IT industry and members of Congress are not likely to address is privacy, because both the industry and lawmakers think it is still too early to act on the issue.
- "Enterprise Computing"
Washington Technology (06/05/00) Vol. 15, No. 5, P. 26; Toigo, Jon William
Government agencies such as the U.S. Postal Service (USPS), the Environmental Protection Agency (EPA), and the Federal Deposit Insurance Corporation (FDIC) are using IT solutions to streamline their business processes. The USPS had been aiming for more than 10 years to simplify its processes for reporting damages on mail shipped on commercial aircraft. The agency improved its system to report such incidents by replacing its paper-based accident forms with handheld devices. Ramp clerks can now enter data concerning mishandled mail into their handhelds, then send the information to a Web-enabled database that can be accessed by ramp clerks and administrators to monitor the results. In an effort to improve customer service offerings, the FDIC designed the idea of a user-friendly, online system to enable customers, including banks and their account holders, to estimate the amount of insurance provided by the FDIC to their deposit accounts. The system, which was created and implemented in late 1998, has helped the FDIC achieve its strategic goal of bolstering customer service, says Ellen Glover, president and COO of ATS, which built the system. The EPA has used technology to better manage information, a goal which EPA information management specialist Jeff Frithsen views as crucial to improving the core business processes of the agency and its partners. "The challenge is to combine sets of information...so it can be used by multiple investigators who are geographically dispersed and who may represent different government entities," explains Frithsen. The agency addressed this challenge with the Environmental Information Management System (EIMS), which provides a Web-enabled, searchable database of EPA research.
- "Feds, Industry Meet to Refine E-Gov Strategies"
Government Computer News (06/05/00) Vol. 19, No. 14, P. 6; Date, Shruti
E-government was the focus of a field hearing of the House Government Reform Subcommittee of Government, Management, Information, and Technology held last month in Herndon, Va., at the Center for Innovative Technology. The gathering was attended by private sector, state, and federal officials, including Reps. Tom Davis (R-Va.) and Steve Horn (R-Calif.), the subcommittee chairman who said the technology has the potential to reinvent the way in which citizens and businesses interact with the government. David McClure, associate director of government-wide and defense information systems at the General Accounting Office, says basic transactions, online procurement, interactive communications, and information dissemination make the Internet attractive to the government. However, McClure added that security and privacy, and technical expertise would be among the government's challenges. The government must convince the public that e-government is secure, and it must also find workers with the skill level that will make e-government work. McClure's other concerns were having effective executive leadership and management, developing a citizen-as-customer focus, and having the right technology in place to ensure a successful e-government program. Transportation Department Chief Information Office George Molaski added that the government would be able to meet these challenges by attracting tech workers and changing the way federal CIOs operate.
- "Are Old PCs Poisoning Us?"
Business Week (06/12/00) No. 3685, P. 78; Alster, Norm; Echikson, William
Discarded electronic equipment is creating a major environmental hazard, as toxic materials contained in computers, cell phones, TVs, and other devices seep into the groundwater from landfills and produce carcinogens when incinerated. Computer screens and TVs, which contain five pounds of lead or more, account for 40 percent of the lead in U.S. landfills. In addition, electronic garbage produces a billion pounds of plastic waste each year, a fourth of which contains material that emits a carcinogen when burned. The problem is becoming more severe as technology accelerates, reducing the life span of computers. The European Commission is responding to this threat by proposing legislation that would force manufacturers to collect old products and recycle or dispose of them properly. The proposed legislation would also outline a time frame for phasing out toxins such as lead, mercury, cadmium, and certain flame-retardants. Europe's decisions could affect the actions of the U.S., where only a few regional solutions have emerged. Some large manufacturers, including IBM, Intel, and Hewlett-Packard say they are willing to assume the financial burden of recycling old computers. Meanwhile, other PC makers such as Compaq already have take-back programs for corporate customers. Although environmental efforts have some manufacturer support, manufacturers object to any move to phase out toxins, saying no alternative materials exist at this time. Lobbying from the electronics industry has already succeeded in postponing the EC's toxin phase-out deadline from 2004 to 2008.
- "Testing the Waters"
Asiaweek.com (06/09/00) Vol. 29, No. 22,; Ranawana, Arjuna
Unlike most traditional Asian companies, Malayan United Industries (MUI), a Malasian conglomerate that operates retail outlets, hotel chains, real estate arms, and stock brokerages, is testing the Internet environment before moving online in force. MUI is first working to develop a private network for the company's department store chain, Metrojaya, through which company buyers would work with some 1,500 vendors in an effort to reduce costs, react to changes in consumer demands more quickly, and control inventories more efficiently. MUI also plans to provide training seminars and recruit management trainees that understand the Internet and newer technologies so that they can, in turn, train the company's older employees. Although internal operations are the primary focus of MUI's e-business strategy, MUI is also preparing for a commercial future online. Metrojaya intends to develop an Internet site on which specialty items will be sold. Further, MUI has spent commissioned a subsidiary to assist its move online, and invested in Internet startup companies that will work with existing operations. The company already has a Chinese-language lifestyle Web portal, and intends to move its Hong Kong travel agency to the Internet as well. Although the steps taken by MUI are tentative, the organization accepts that the e-business transformation must continue. "We have to do this because of efficiency and because that is the way of doing business in the future," says Loy Yet-king, chief of MUI's Internet subsidiary.
- "Is It Sharing or Stealing?"
U.S. News & World Report (06/12/00) Vol. 128, No. 23, P. 38; Vogelstein, Fred
As the entertainment industry makes its way to Capitol Hill this week to convince lawmakers that more needs to be done to protect copyright owners from file-sharing technology, it is becoming apparent that a legal victory in the industry's infringement suit against Napster would be only symbolic. Some uncertainty about the suit already exists because Napster is essentially a go-between. Although Napster does not sell, buy, own, or distribute music, its file-sharing technology operates servers that allow users to surf for often-pirated music, and music companies want the servers shut down. Meanwhile, the entertainment industry will have an even tougher time combating Gnutella, a more advanced file-sharing program. Unlike Napster, Gnutella has no central server and the technology is not owned by anyone. Although Marc Andreessen, the Netscape co-founder who developed the first browser, does not condone the stealing of copyrighted music, he does take offense to the entertainment industry's view of file-sharing software. Andreessen, who believes file-sharing software is the greatest Web development since the browser, says the Internet is currently too centralized and that technology such as Gnutella "mirrors the original architecture of the Internet." Even some artists, such as rapper Chuck D, welcome file-sharing software, saying it exposes music to more people and reduces the power of the middleman. Entertainment industry analyst Ric Dube says the industry must evolve, for example, by charging consumers a monthly fee to listen to all the music they want. By the end of summer, almost all music companies plan to make their music available online.
- "Pro and Con"
CIO (06/01/00) Vol. 13, No. 16, P. 72; Duffy, Daintry
Some in the IT industry contend that the best way to measure whether a company's network infrastructure is secure is "penetration testing," the practice of hiring a hacker to attempt a break-in. However, before hiring a hacker to discover network vulnerabilities, companies should give plenty of forethought to the issue. Otherwise, they may find themselves with a "tiger by the tail," as Mike Higgins of Para-Protect Services phrases it. The first issue concerns how security is defined: companies should strive for systems that deter hackers, not systems that are impenetrable. IBM's Al Decker says penetration testing should be used as an occasional test of network defenses, not as a search for weaknesses. Similarly, renowned hacker Kevin Mitnick says companies should be sure to install the latest in security technologies--not because they guarantee security but because they will deter most break-in attempts. Once the decision to hire a hacker is made, CIOs and network administers must be sure to conduct lengthy face-to-face interviews and thorough background and reference checks. If the hacker works for a third-party security firm, companies must make sure firm has ample insurance and the contract stipulates that only the agreed-upon hackers will be working on the project. Although some may say hackers are the only people who can give strong feedback on the strength of a network's defenses, others say that experience is not enough. Because a person is capable of hacking into a closed network does not necessarily make him or her capable or qualified to suggest potential solutions.
- "Online Customer Support Doesn't Come In a Wrapper"
InternetWeek (06/05/00) No. 316, P. 14; Drucker, David
Established companies that are using the technology find a step-by-step approach to customer relationship management (CRM) more effective than a widespread implementation. "It doesn't make sense to spend six months developing a Rolls-Royce of a system when at that stage all the business and technical requirements aren't understood," says Polaris Solutions consultant Colin Robinson. Eddie Bauer, a retailing company, is currently integrating a CRM system with the primary goal of improving Web support. Next, the company plans to combine the company's separate Internet and catalog call customer services into a single unit. The company now uses a Servicesoft customer service suite to handle e-mail and provide a self-serve question and answer service. Eddie Bauer intends to allow customers check order status at the site and eventually enable all the systems that interact with the customer to be interconnected and linked to backend systems. Another company, USA Group, which services student loans for other financial institutions, combined all customer service departments into a single entity, and then, through the services of eLoyalty, developed a system to hold all customer service information. The database is linked to the phone system so that when a call comes in the representative has instant access to that customer's history on their PC. The next step for USA Group will be to automate customer e-mail management. Monster.com wants to maintain a personal touch while providing repeat customers self-service online. The company developed middleware that automatically routes information into its database, and allows the database and the site share to information. Soon, Monster.com will automate the process of placing billing information in the customer's case history will be automated and introduce live chat.
- "Making a Powerful Match"
Knowledge Management (06/00) Vol. 3, No. 6, P. 32; Roberts-Witt, Sarah L.
The success of e-business initiatives is closely tied to effective knowledge management, and as a result the industry is experiencing phenomenal growth. Although predictions for the future value of the B2B market vary widely, analysts agree on the areas of KM that will experience the most change: business analysis, content management, e-infrastructure, and e-services. Although business intelligence (BI) tools have existed for years, companies are now beginning to adapt them to the Internet and e-commerce data mining. Some vendors are transforming themselves into for-fee information services, while others are overhauling their BI products, and still others are developing entirely new BI product lines. Content management represents the evolution of the traditional corporate practice of document management, which has to date involved archiving, maintaining, and protecting an organization's data, into a system to utilize such information from internal, public, and extranet Web sites. Additionally, companies are expanding beyond enterprise information portals into the B2B realm of virtual communities, products, and partnerships. However, businesses should remember not to get carried away by the e-hype. "E-business has made people forget about the first wave of knowledge management, when we learned that the tools don't always work and that you need a rich collaborative environment that makes everything go," says IBM's Scott J. Smith. It is important for a company to remember that people are the catalyst in any successful venture, e-business strategies should be part of a larger knowledge-building mission related to core competencies and missions, and many of the "old rules" of business apply to e-commerce as well.
- "Give Them the Drudge Work"
Business Week--Frontier (06/12/00) No. 3685, P. F.34; Cheney, Karen
Outsourcing companies offer firms in every industry a way to complete any duties that are difficult to perform in-house. Tasks that can be outsourced to Web-based services firms include such wide-ranging duties as benefits and payroll processing, Web hosting, email management, accounting, supply procurement, and marketing. Companies will spend $22.7 billion for Web-based services by 2003, up from $890 million last year, according to the GartnerGroup. While outsourcing can save a business time and money, businesses must first take several precautions before tapping a third party. First, a business must be clear about what it needs and what it expects from an outsourcer before beginning the relationship. "If you don't do that, then six months later everyone will be unhappy," says Gary Venner, director of consulting at Technology & Business Integrators. Next, businesses must be sure to check the references of all potential outsourcers to be sure past and current clients are pleased with the services. When considering startups with no prior customers, businesses should insist on a trial period before signing the full contract, or seek out a startup that has established a partnership with an established company. For many businesses, particularly startups, outsourcing is an excellent way to preserve crucial resources to focus on core business processes.
- "Customer Complexity"
Global Technology Business (05/00) Vol. 3, No. 5, P. 50
Just as the demand for back-end enterprise resource planning (ERP) applications appears to be tapering off, demand for front-end customer relationship management (CRM) software is growing fast. CRM vendors such as Banter Broadvision, Clarify, Personify, Pivotal, Siebel Systems, Silknet Software, and Vantive, for example, are experiencing significant upturns in sales revenue. In fact, in what is likely the largest ever CRM implementation, IBM recently signed Siebel to provide CRM applications for its 55,000 internal users, 30,000 business partners, and millions if customers who purchase products from IBM.com. However, it is important not to get too caught up in the hype surrounding CRM applications. "For us, CRM is more than installing new systems or providing capacity upgrades," says IBM's Graeme Knight. "We're working with business processes, corporate culture, providing training and development, and so on." A recent report from ANR Research backs this view. "CRM is a strategy, not an application, technology, or suite of products...CRM applications and technologies are tools used to implement such a strategy and must be woven into the fabric of a company's business strategy, not bolted on to it." Driving interest in CRM throughout all industries is the ever-increasing level of competition, which is prompting companies to become ever more sophisticated and flexible in their approach to customers. Companies need to be able to make their best offers to current and potential customers through any number of sales channels, a requirement which begs for comprehensive, fully integrated CRM systems.
- "Bank of America, Broadvision Go 'B-to-E'"
BtoB (06/05/00) Vol. 85, No. 7, P. 13; Clark, Philip B.
Bank of America and Broadvision have allied to create a venture that will develop business-to-employee Web sites for corporate intranets. The sites, which can be completed in just three months, will offer individualized corporate information such as travel booking, benefits and training information, and 401(k) services, as well as general content such as stock quotes and news feeds. The venture hopes to appeal to companies by encouraging employee satisfaction--an important issue as companies strive to retain their employees. Bank of America and Broadvision maintain that the sites will make employees happy by providing instant access to a broad array of information. "We are all suffering from information overload," says Valerie Usilton, Bank of America personnel services executive and interim head of the new venture. "This will be a centralized vehicle, an information warehouse for employees." The venture also aims to appeal to companies by advertising that the service will save them money. "This is deeply integrated with bank-end systems," says Broadvision chief strategy officer Jaime Allerton. "This could cost hundreds of thousands of dollars and months to do by themselves." The venture will target clients of all sizes, and hopes to sign up 1 million employees by the end of this year, according to Allerton. Already, the venture has signed one major client, Bank of America, who could be an important source of revenue. It is not known, however, how many of the firm's 156,000 employees will participate in the service.
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