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Volume 3, Issue 167: Wednesday, February 21, 2001
- "E-Business to the Rescue of the Valley"
Financial Times (02/21/01) P. 11; Kehoe, Louise
San Mateo, Calif., is the latest hub of technology activity in the San Francisco region, gathering together a slew of e-business software companies. Siebel Systems and Oracle, two big competitors in the e-business applications market, have provided fertile ground for startups siphoning their talent pools. Companies such as Blue Martini, AvantGo, AserA, Manugistics, iManage, and many others have their headquarters or regional offices there. Many of these firms are reflecting their Silicon Valley heritage in their need for networking and keeping close to both competition and venture capital. E-business software companies emphasize the necessity of their product to stay competitive. Former Oracle president and COO Ray Lane, now with a venture capital group and involved in several e-business startups, says, "E-Business applications can reduce costs by a factor of 10 to one." He adds that the speed at which business culture will change necessitates company-wide adoption of e-business practices. Firms focused on integration software are hoping to exploit this market. Although e-business applications have proven very effective at handling specific processes, experts are touting the benefits of integrating such software throughout the company. Although software developers, including both Oracle and Siebel, are creating whole families of applications, some believe that integrating "best of breed" software will keep the industry vibrant and open. Integration companies such as Tibco, WebMethods, and AserA provide the integration tools and framework in which e-businesses can knit their applications together in a "standard way to mass customize," describes AserA CEO Warren Weiss.
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- "Global Tech Spending Seen Rising"
A new report from Deutsche Bank concludes that IT spending around the globe will grow between 5 percent and 10 percent this year. Deutsche Bank based the report on a survey of 45 businesses in the United States, Europe, and India. Among the purchases driving this growth will be software for the management of supply chains and for customer relationship management, according to the report. The report predicts stronger demand in Europe than in the United States. Also, the report maintains a positive outlook for India's IT sector, noting that U.S. businesses in particular are becoming more likely to outsource IT work offshore. "We believe the bulk of this trend is driven by economics, where offshore development still can price at a fraction of onsite costs," the report states. India has recently seen investment from U.S. companies including chipmaker Intel and the networking firm Cisco Systems.
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- "Intel to Slash Spending, Hiring to Cut Costs"
Associated Press (02/20/01); Wong, May
Intel today announced a reduction in hiring and spending, a move analysts say adds to the tech industry's dim outlook for 2001. Needham & Scovel analyst Dan Scovel believes that the announcement is "incrementally bad news for the overall sector. Something prompted them to do this; a sign of recovery may not be on the horizon at this point." Intel's Robert Manetta noted that layoffs are not part of the chipmaker's cutbacks but that the company will likely eliminate some jobs through attrition. The company, worth $34 billion, aims to save "hundreds of millions of dollars" by not hiring new employees except for the most critical positions and by reducing overtime, travel, and other discretionary expenses as much as 30 percent, Manetta said. However, Manetta made clear that the company's capital expenditure and research and development funds will not be affected.
- "The Key Vanishes: Scientist Outlines Unbreakable Code"
New York Times (02/20/01) P. D1; Kolata, Gina
Encryption science has discovered the Holy Grail of secret messaging: an unbreakable code with a disappearing key. Dr. Michael Rabin of Harvard says his technique uses a conventional encrypted message from the sender to recipient that details the time to start recording a random string of continually broadcast numbers from an assigned source, such as a satellite. The ephemeral numbers are used to encode and decode the message almost instantaneously. Dr. Rabin says the simple genius of his method is that no eavesdropping party could ever decode the initiating message in time to catch the right stream of numbers and that those numbers vanish into thin air once broadcast. No computer could feasibly record a continuous string of randomly generated numbers. Many researchers and security experts are intrigued by Dr. Rabin's work but remain divided over its significance. Hewlett-Packard CTO Dr. Richard DeMillo says this possibility "reshuffles the policy deck" when it comes to government agencies such as the FBI requesting wiretaps from telephone companies. However, others doubt whether the scheme is too unwieldy for longer messages and point out ways of reading secret messages other than breaking code. Dr. Robert Morris, former chief scientist for the National Security Agency, pointed out the fundamental nature of humans weakens any secure system. "If you're in the business, you go after a reasonably cheap, reliable method. It may be one of the three B's: burglary, bribery, or blackmail," he advised.
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- "Wired World Raises Security Concerns"
USA Today (02/20/01) P. 10B; Jones, Del
A current California court case highlights the problems that many companies and their former employees face in today's digital age. Chipmaker Intel won an injunction to stop Ken Hamidi, a former engineer with the company, from emailing current Intel employees. Intel labeled Hamidi's actions--emailing as many as 35,000 employees simultaneously--a form of trespassing. Hamidi has appealed the ruling, and the American Civil Liberties Union has filed a brief on his behalf, calling email "the electronic version of a protester's picket sign and leaflet." Intel's Chuck Mulloy insists the company is not trying to impinge on Hamidi's right to free speech. He notes that the company has not pursued Hamidi's Web site nor does has it sought to prevent Hamidi from emailing individual Intel employees. The case is pending. Observers say the Internet has given disgruntled former employees an outlet to air their anger at the companies that fired them, with Web sites such as Vault.com allowing them not only to air their grievances and commiserate with fellow lay-off victims but also possibly to influence a company's prospective future employees and customers. In some cases, former employees have used the Internet to commit acts of sabotage. Last year, an English man was sent to prison for hacking into the computer system at his former employer, the Daily Mail newspaper, and preventing it from printing.
- "Discrimination Lawsuits Stacking Up at Microsoft"
Associated Press (02/16/01)
Several employees filed suit against Microsoft last week, alleging that the company has discriminated against African-American workers. A suit filed Thursday in Seattle by famed attorney Johnnie Cochran will be heard simultaneously with a class-action suit filed in October by the Seattle firm of Cohen, Milstein, Hausfeld, & Toll. Cochran's suit, on behalf of Landruff Trent, alleges that Microsoft discriminated against African-Americans in its promotion process. The class-action suit, on behalf of Monique Donaldson, alleges racial as well as gender bias at the company. Also last week, a Seattle-based attorney filed a separate discrimination suit against Microsoft. That suit, on behalf of Ronald Douglas, alleges that Microsoft provided Douglas with a lower salary and fewer stock options than it offered to white employees of equal rank. Microsoft's Matt Pilla would not comment on the specific cases but claimed that the company's policy on workplace discrimination was "zero tolerance." Pilla, who noted that 21.6 percent of Microsoft's domestic workforce is comprised of minorities, said, "The challenge of promoting diversity in the workplace, especially in the tech industry, is an industry-wide problem." Microsoft also faces a $5 billion federal suit from seven African-American employees, both current and former, who allege that they faced discrimination in salary rates and promotions.
- "US Urged to Hit 58 Nations For Piracy"
The International Intellectual Property Alliance (IIPA), a coalition of copyrighted-material industries, has filed a request with the office of the U.S. Trade Representative to take stringent action against 58 countries that are not enforcing promises to clamp down on music, video, and software piracy. As part of its annual report to the Trade office, the IIPA explains that although such countries as Malaysia, Russia, and Egypt are infested with pirated materials, their governments are making serious attempts at curtailing such activity. However, wholesale copyright infringement is on the rise in Taiwan, Indonesia, and the Philippines, where criminal syndicates have organized large illegal operations. The report proposes market access restrictions for those countries that are not adequately countering such distribution networks and asks for a "Special 301" review that would involve U.S. Trade investigations and possible sanctions against offending countries. Industries that rely mainly on copyrighted material comprised 5 percent of the U.S. GDP for 1999, the IIPA claims.
- "Employers Fight Workplace Safety Law"
Planet IT (02/19/01); Thyfault, Mary E.
Many corporate executives and industry trade associations are working to stop a new ergonomics standard issued by the Occupational Safety and Health Administration (OSHA). The standard seeks to identify and prevent a series of common workplace injuries, including carpal tunnel syndrome and tendonitis, collectively known as musculoskeletal disorders (MSDs). OSHA reports that 1.8 million workers per year claim to suffer from these injuries. The new standard for workplace ergonomics would establish "action triggers" to identify aspects of a certain job that may cause MSDs. Possible causes could include repetition, contact stress, and awkward posture. If an employee reports that he or she has an MSD, and the employee's job meets one of the action triggers, the employer must take action to remedy the problem. Opponents of the standard say it will be too costly to implement and unnecessary to begin with. "We feel very strongly there is no justification for the new regulations and certainly no reason to force companies to make the huge capital expenditures that will be required," says Jeff Lande, vice president of the Information Technology Association of America. Estimates of the cost of implementing the standard vary widely. OSHA forecasts a $4.8 billion annual cost, but the National Association of Manufacturers predicts small and midsize business alone will spend $6.7 billion annually, while the Employment Policy Foundation estimates a $125.8 billion annual cost. Opponents may exploit a little-known law that allows Congress to overturn a new regulation and also hold out hope that President Bush may block the standard. Bush's Secretary of Labor, Elaine Chao, has been noncommittal on the issue. Proponents of the new standard argue that it could prevent as many as 4.6 million work-related injuries in the decade after its implementation, according to the Communications Workers of America.
- "Discarded Dreams of Dot-Com Rejects"
New York Times (02/21/01) P. C1; Lee, Jennifer 8.
As dot-com layoffs continue, recently unemployed workers are left dazed and disbelieving. San Francisco employment lawyer Mark Rudy says there is a lot of anger over how people have been let go once the initial shock has worn off. For example, Marlinda McPhail, a former employee at the consulting group Wheelhouse, was packing up her things with another laid-off colleague when management began strolling into their office to hold a meeting about the layoffs. "I was like, 'You've got to be kidding me,'" she fumes. Because they are often intelligent and capable, young dot-commers hardly ever expect they will be the ones to be let go, observers say. "I was employee No. 1 right after the founders," says Lorraine Cheu, who was let go from SpotLife.com in January. Others are oblivious to the situation, as was the case with Walker Digital. One week, company officials exuded confidence--the next, says Kari O'Toole, workers received a day's notice to gather their things. O'Toole, who worked as an administrative assistant, says many employees did not even receive a full last paycheck. Bill Quackenbush, a San Mateo, Calif., labor lawyer, explains that, most of the time, laid-off dot-com workers do not have a legal standing against their former employers even though their termination may seem unfair and uncouth. Some observers attribute the brashness of many layoff situations to the fast-and-loose management style common in the dot-com sector, where quick decisions and movement served to keep companies on top of the competition during the Internet boom.
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- "Virus Writing Is Now Infectious"
Investor's Business Daily (02/20/01) P. A6; Howell, Donna
Hackers and their nefarious programs are expected to be increasingly active this year. April Goosetree, who, as a research manager for the antivirus company McAfee, monitors the numbers of new viruses each month, says last year's numbers were up significantly over 1999 and that January of this year indicated that 2001 would be busy for security experts as well. McAffe.com says one in five computers tested were infected with at least one malicious virus. The recent outbreak of the Anna Kournikova virus proves how easy it has become to penetrate the Internet's security systems. The Dutch man who confessed to programming the virus said he did not know the programming language he used to initiate the virus but found instructions on the Internet. Also, earlier this month, stolen information on high-profile attendees of the World Economic Forum was released to a Swiss newspaper by "hacktivists" protesting globalization. Government and corporate officials are concerned over the multitude of threats posed by hackers and terrorists, who can use the Internet to relay information, coordinate operations, and even conduct cyberattacks. The CIA, for example, recently revealed that the group led by Osama bin Laden was encrypting secret messages in Internet content.
- "China Now Home to Over 22.5m Internet Users--Study"
Newsbytes (02/19/01); Creed, Adam
More than 22.5 million Internet users were in China at the end of January 2001, according to a report by the China Internet Network Information Center. Line connections were leased by 3.64 million Chinese, 15.43 million were dial-up users, and the rest utilized both methods to access the Internet. According to the survey, 23.4 percent of Chinese sites are hosted in Beijing, 14.24 percent in Gunagdong province, and 10.61 percent in Shanghai. China's total international bandwidth comes to 2,799 Mbps. Most of the survey's participants were men with a bachelor's degree between the ages of 18 and 24. A little more than 60 percent of the surveyed Chinese users accessed the Internet from home, while a little less than 44 percent accessed the Web from an office. Email was the top service, and those surveyed used the Internet an average of 13.66 hours per week. Over the past year, only 32 percent of those surveyed bought things over the Internet, with a little less than 9 percent purchasing items through an Internet auction. As many as 15 percent of those surveyed never received goods purchased over the Internet. The largest problem with accessing the Internet is slowness and cost, according to those surveyed.
- "Time Is Running Out as the Euro Deadline Approaches"
Financial Times--Information Technology (02/21/01) P. 12; Nairn, Geoffrey
As of December 31, 2001, companies operating within the European Monetary Union must pay taxes and run payroll and other internal financial systems in the new euro currency, which will begin circulating in eurozone nations on January 1, 2002. The problem, however, is that many companies have failed to take the obligatory currency transition seriously enough, devoting IT resources instead to the Y2K problem or money-making opportunities such as e-business. "There would be a lot more excitement if it was a strong currency," adds the head of IBM's euro customer program, John Downe. "For many companies, the euro is just a big distraction, there is no question about it." Some 10 percent of eurozone businesses have not initiated any IT efforts to convert their systems to the new currency while another 20 percent are still in the very early stages of their transition effort, according to a Cap Gemini Ernst & Young survey of 1,000 businesses. Further, many businesses seriously underestimate the challenge conversion to the euro presents to their IT departments.
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- "Web's Major Registrar Turns Phone Numbers Into Net Names"
CNet (02/20/01); Borland, John
VeriSign today initiated a beta version of its WebNum service, thereby staking a claim in the wireless domain name market. WebNum is intended to make it easier to locate Web sites using a telephone keypad. The idea is to offer a numeric string of numbers that is similar to a telephone number in order to locate a domain name, as it is difficult to type in a long string of letters using a keypad. To leverage WebNum, a user would log onto the WebNum site via a mobile phone and enter the number string of the desired site. WebNum would then take the user to that site. VeriSign would keep the numeric addresses in its own system, which it would maintain. Besides regular number strings, VeriSign will offer Logo Numbers, which are shorter, easy-to-remember numbers such as "1" or "1000." VeriSign is accepting applications for the numeric addresses through the end of April and will offer the best numbers to the applicants it believes will utilize the numbers most effectively, according to a VeriSign executive. This method is intended to keep the new names out of the grasp of cybersquatters, says Tim Griswold, marketing director of the wireless division at VeriSign. A pricing system is not yet established, although number strings registered prior to May 1 will be free through May 1, 2002, and Logo Numbers will be more expensive than regular phone number-like strings, according to VeriSign. The WebNum system will face competition from RealNames and other, smaller companies that deal with wireless domain name registration. Another system called Enum, which VeriSign helped found, is working on finding a way for Internet users to utilize Internet protocols to contact someone online via a telephone number. This service might not be available for some time.
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- "Registrars Meet to Discuss Hijacking of Domains"
InfoWorld.com (02/20/01); Evers, Joris
With 66 country domain registrars in attendance, WIPO's Geneva conference began today. During the conference, a range of issues will be discussed, including abusive domain name registration and policy issues pertaining to country code top level domain intellectual property conflicts. WIPO wants a greater number of individual registrars to utilize its Uniform Dispute Resolution Policy (UDRP). Thus far, 18 countries have agreed to use WIPO's system, including Mexico, the Philippines, Venezuela, and various smaller countries. No country in Western Europe has adopted WIPO's UDRP. Canada does not use the system, either. "We want to create stability so the promise of e-commerce can come true," says a WIPO spokeswoman. Although the UDRP has some good qualities, it does not stand up to Nominet's standards, according to Nominet. The UDRP does not use mediation, which has worked well in the United Kingdom, says a Nominet spokeswoman, mentioning that Nominet has used its own dispute resolution process for three years. The Dutch Stichting Internet Domein Registratie Nederland (SIDN) is looking into whether a dispute procedure is necessary.
- "A Positive Spin on Problems"
Washington Post (02/17/01) P. E1; Johnson, Carrie
Several companies are giving their help-desk workers a crash course in help-desk etiquette. Companies such as Washington, D.C., utility Pepco believe that the lessons will teach the help-desk workers to be more polite and to speak in less technical terms with co-workers or customers. Help-desk workers see the writing on the wall, analysts say, as the current economic downturn has led some companies to outsource their tech support staff entirely. "We were programmers back in the days when we were treated like gods," says systems programmer Peter Abresch. "Now we're almost like everybody else. We have to be nice, a little bit more friendly." Pepco brought in former IBM programmer Calvin Sun. Sun now runs Technology Horizons and gives lectures on how to handle help-desk problems without alienating users who are often frustrated and upset. Sun encourages the workers to be supportive, to use terms such as "as soon as" and "as little as," and to avoid complex jargon that only hard-core tech workers could understand.
- "Prospects Appear Grim For PCs"
USA Today (02/19/01) P. 1B; Iwata, Edward
PC makers are searching fervently for the next big product, as revenues from desktops systems dry up. While other hardware markets are still expanding, the PC market seems to have matured and become saturated since its inception in the late 1970s. Today, consumers are looking for newer, snazzier products such as Internet-enabled phones, PDAs, and laptops, many critics of the PC industry say. Worldwide growth from 1999 to 2000 was 21 percent for laptops but only 2 percent for desktops. Sun Microsystems' Shahin Khan claims that, because so many other devices are relying upon new Internet-based software applications, the relevance of the PC to run programs is waning. Microsoft is anticipating this trend with its upcoming .Net initiative that will provide software via the Web to any connected hardware, much of it less powerful--and expensive--than bulky PCs. Meanwhile, PC makers such as Compaq Computer and Gateway are making every effort to bring something new to their mainstay market. Several attempts to revitalize things have failed, such as last year's Dell and Compaq iMac emulations and the profit-killing "free PC" trend.
- "IT's Golden Oldies Keep Businesses in Tune"
InformationWeek (02/12/01) No. 824, P. 116; Lodge, Michelle
Since the late 1990s, the nonprofit group Green Thumb has offered Got/IT, an IT-training program for older professionals. The Got/IT program provides courses in email, Web page design, troubleshooting, Microsoft Word 2000, Excel, and PowerPoint, among other topics. To date, Got/IT has trained nearly 500 workers age 55 and older. Workers age 55 to 74 comprise 12 percent of the U.S. workforce, but only 6.8 percent within that age group are currently employed. With Meta Group reporting 400,000 unfilled jobs in the IT sector last year, and perhaps as many as 1.3 million unfilled jobs within the coming years, Green Thumb officials believe that Got/IT can provide the sector with an as-yet-untapped source of labor. Green Thumb provides additional job-seeking skills, including lessons on resume composition and tips on interview techniques. The efforts of Green Thumb stand in sharp contrast to the conventional wisdom that the IT sector is a young person's field. However, author Beverly Goldberg contends, "Despite the youth focus in IT, despite the notion that youth and technology go together, older people are eminently trainable and are growing more and more interested in technology." Green Thumb program manager Nancy Falk adds, "The average age of our workforce is on the rise. So although technology skills will become more important over the next decade, there will be fewer younger workers and significantly more older workers to fill jobs."
- "Down on the Server Farm"
Industry Standard (02/19/01) Vol. 4, No. 7, P. 45; Abreu, Elinor
Web hosting companies in Silicon Valley are looking to generate their own energy or move out of California as a result of the California energy crisis. Web hosting companies run data centers, also known as "server farms," which Jeff Monroe, the vice president of design and construction at Metromedia Fiber Network, says typically use 10 to 20 megawatts of power per hour (sic). Now fearing higher prices as well as blackouts, Web hosting firms such as Exodus, which is in part served by a facility in Santa Clara, are looking into options other than their utility companies. Some companies intend to make backups of their own, while others will go where electricity is inexpensive such as Utah. The hosting companies' customers might see some of the costs stemming from recent increases in electricity costs or from costs associated with building new centers or relocating. Outages are not a concern because server farms have redundant systems as well as backup diesel generators, according to companies that run the data centers. However, while Exodus assures its customers that the network will be available 99.9 percent of the time, its promise is connected to charges that are imbedded in the contract. These hidden charges permit the Web hosting company to alter the prices as market conditions change.
- "Hauling Talent By the Truckload"
eWeek (02/12/01) Vol. 18, No. 6, P. 55; Villano, Matt
Many companies have developed strategies for the rapid recruitment of IT personnel needed to carry out e-business projects. San Francisco-based Toyota Motor Sales, for example, managed to staff its new Office of the Web project in only one month by recruiting mainly from within Toyota's IT organization and filling the gaps with contract workers. "We gathered the cream of the crop [within Toyota] and told everyone they were working on a special project," says Toyota Motor Sales business-to-consumer national manager Keith St. Clair, adding that his poaching operation did not cause problems with others. Some companies employ headhunters to find IT pros fast, while others, including Victoria's Secret, have been known to initiate all-out recruitment blitzes. One company, iPhrase Technologies, masked its aggressive recruitment effort by staging an "industry event." Whatever method companies choose to employ to staff their IT projects quickly, NerveWire analyst Art Hutchinson says they must be careful not to lower their standards just because they are in a hurry. "If you are a recruiter, the last thing you want is to hire the first body you see," he says. Hutchinson advises recruiters to set realistic staffing goals, commit to a fast hiring schedule, and to interview, train, and provide incentives just as they would under a normal timeframe.
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