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Volume 3, Issue 182: Wednesday, March 28, 2001
- "Report: Dot-Com Layoffs May Have Peaked"
E-Commerce Times (03/27/01); Enos, Lori
Job layoffs in the dot-com sector totaled 9,533 in March, down from 11,649 in February, a decrease of 18 percent, according to Challenger, Gray & Christmas. However, Challenger, Gray CEO John Challenger says the drop in dot-com layoffs may be because of a decrease in the overall dot-com workforce and not because the economy is beginning to turn around. In the last 16 months, the dot-com sector has lost 75,525 jobs, with 34,010 of those jobs having been cut in the first three months of this year. Also, Challenger notes that, of the dot-coms that laid off workers this month, 22 percent closed their doors, an 8 percent increase over January. Challenger says dot-coms that have yet to show a profit or that have been relying on ad revenue will risk having to shut down in the coming months. However, International Data analyst Jonathan Gaw says nearly 90 percent of new companies eventually fail, meaning the high rate of dot-com attrition is not a product of that sector alone. Gaw also notes that many victims of dot-com cuts are able to find new jobs quickly. "It's easier to count layoffs than hires," he says. Still, Challenger says his firm's numbers are troubling, as they point to a weakening in the dot-com's sector's backbone.
- "Silicon Valley Endures Cash Drought as Markets Tighten Spigot, Report Shows"
Associated Press (03/27/01); Liedtke, Michael
Several new studies have revealed decreased investment in the tech sector, highlighting the economy's continued downturn. According to a report from Bowne & Co., stock sales by Silicon Valley firms during this year's first quarter to date total $2.7 billion. During the same period in 2000, stock sales totaled $14.1 billion. In the final quarter of last year, stock sales were $6.5 billion. However, the report notes that last year may have been aberration, as Silicon Valley firms had never before raised more than $1.9 billion from public markets during a year's first quarter. In addition, a report from the research firm Venture Economics reveals that venture-capital investment in firms in the Northern California area fell 19 percent from the final quarter of 1999 to the final quarter of 2000. The reports says economists expect an even further drop in this year's first quarter. Finally, IPO revenue has dropped significantly among Silicon Valley firms. In the first quarter of last year, IPO revenue in the tech-heavy area totaled $2.5 billion for 16 firms. In this year's first quarter, three companies' IPOs raised only $387 million.
- "Revisiting the Killed Ergonomics Rule"
Washington Post (03/27/01) P. E1; Skrzycki, Cindy
Political observers say it is still uncertain whether Congress or the Bush administration will pursue new ergonomics regulations after overturning the controversial standard enacted by former President Clinton. Lawmakers used the little known Congressional Review Act to defeat Clinton's standard, and part of that act stipulates that no "substantially familiar" regulation can replace one overturned using the act. Lawmakers and observers are not sure as to the extent of that stipulation. Still, labor groups are not optimistic that any ergonomics standard will replace the defeated one, which would have provided protection for repetitive-motion disorders to some 100 million workers. Business opposed that standard as being too costly and too generous in its conditions. For example, a repetitive-motion disorder not caused on a work site would have been covered by the standard. Also, opponents questioned why federal workers' compensation in the new standard was greater than state compensation. AFL-CIO director of safety and health Peg Seminario says she does not think the administration will express much interest in pursuing a new regulation, despite comments from Secretary of Labor Elaine L. Chao that she would meet with business and labor groups on the issue. Sen. John Breaux (D-La.) is trying to introduce a new ergonomics standard that would meet some of the objections of the former rule's opponents.
- "IT Industry Starts to Get the Message on Economy"
Financial Times (03/28/01) P. 8; Daniel, Caroline
Several U.S. tech company executives have muted their optimism that Europe's IT sector will be insulated from a U.S. downturn. Hewlett-Packard's Carly Fiorina warned at the CeBIT trade show in Germany that she no longer saw Europe escaping a slowdown similar to the one in the United States. Nomura analyst Keith Woolcock adds that the same forces that drove 30 percent annual IT growth in the United States also pushed the European market to over-invest. First, the Y2K bug threat prompted new system overhauls, then the dot-com boom alarmed traditional companies, which then rushed to build new, cutting edge infrastructure. These factors have led to a saturation of the market. Gartner Dataquest reported this week that the U.S. PC market had reached a limit and that the European situation was close behind. Consequently, European companies such as Philips Electronics, ASM Lithography, and STMicroelectronics have begun to issue profit and sales warnings, echoing alarms sounded in the United States. Experts note that there is no quick and easy fix to either of these problems and that the IT market will probably remain weak until the next cycle is spurred by the advent of broadband communications. This will provide the incentive for adopting new applications and faster hardware to capitalize on that technology.
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- "Technologists Forget All Their Troubles, Get Happy at PC Forum"
USA Today (03/28/01) P. 7B; Maney, Kevin
At this year's PC Forum, a gathering of 670 tech leaders, the mood is one of optimism--for next year at least. "Don't define yourself in terms of what you thought you'd be last year, when any idiot was worth a billion dollars. Define yourself by what you'll be next year," coaches Esther Dyson, host of the Forum. Drugstore.com CEO Peter Neupert echoes the hopeful sentiment by saying that his company probably has enough cash to wait until consumers pick up with buying drugs online. InternetAssist CEO Gail Bronson explains that Internet companies remain cheery, saying, "We've finished building Chapter 1 [of the Internet]. Now it's time to build Chapter 2." Much of the discussion at the PC Forum is centered around 11 new companies that offer innovation and opportunity to the industry. Two of the most popular presentations--OpenDesign and KnowNow--focus on B2B systems-interoperability technologies.
- "Firms Renew Assault on Privacy Rules"
Los Angeles Times (03/27/01) P. C1; Sanders, Edmund
Only months ago the way seemed open for Congress to pass legislation regulating Internet privacy, but resistance from the private sector has stiffened considerably, and the chances for Internet privacy legislation passing during this session are now in doubt. Indeed, Evan Hendricks, publisher of the Privacy Times, says that the Bush administration appears uninterested in passing Internet privacy legislation. Just last week, Commerce Secretary Don Evans said that the administration would prefer to allow the industry go about its business without interference from the government. Lobbyists and other groups and organizations, including the Online Privacy Alliance and Microsoft's chief privacy officer, Richard Purcell, have taken the fight against privacy legislation directly to Washington in recent weeks. IBM, Ford Motor, Proctor & Gamble, and other members of an industry coalition this fall will launch a $30 million consumer education campaign on privacy issues. The anti-legislation cause has been helped considerably by two recently published reports on the effects of privacy legislation, including one from the Direct Marketing Association. Marc Rotenberg of the Electronic Privacy Information Center dismisses the reports as having a political agenda. Rep. Bob Goodlatte (R-Va.) and Rick Lane of the Chamber of Commerce have indicated that privacy is losing momentum among lawmakers.
- "San Francisco's Dot-Com Meltdown May Worsen"
Wall Street Journal (03/28/01) P. A4; Muto, Sheila
A real-estate services firm in San Francisco has released a study showing that nearly 80 percent of the remaining dot-coms in that city will be defunct by year's end, eliminating about 30,000 jobs. The joint Cushman & Wakefield and Rosen Consulting Group report drew upon financial data from 150 dot-coms that are publicly traded. Since the beginning of last year, 22,000 of 150,000 Internet jobs have been cut, freeing up office space--nearly 4 million square feet--in the pricey downtown neighborhoods the dot-coms have flooded. However, analyst Steven Levy explains that even as many dot-coms fail, the remaining ones "will survive and grow and prosper." He adds that software and other computer service jobs will increase, making the dot-com sector a smaller portion of the overall IT economy.
- "Computing, One Atom At a Time"
New York Times (03/27/01) P. D1; Johnson, George
Scientists at the Los Alamos National Laboratory are carrying out simple computations on the atomic level, delving into territory that may eventually lead to near-instantaneous, micro-sized quantum computers. They are using a nuclear magnetic resonance spectrometer--the same technology used in MRI scans at the hospital--to shift the atoms so that they either read a 0 or 1, or both simultaneously. Because of the laws of quantum mechanics, for each atom that is added to a string of computing atoms, the power of the machine is doubled. One atom can simultaneously compute two calculations--two, four; three, eight; and so forth. Currently, doctors Emanuel Knill and Raymond Laflamme of the Los Alamos lab have assembled the largest string yet--seven atoms--and this year they aim for 10. A future quantum computer with thousands of linked atoms would be able to crack codes that require the instant factoring of long numbers, something that digital computers are at a loss to do. The two scientists have also created a simple computational process for checking for atomic errors and correcting them. The process involves linking atoms together in a molecule and using the quantum mechanics law of "entanglement" to identify and fix errors in the 0 or 1 value assigned an atom. California Institute of Technology physicist Dr. John Preskill says the idea of error correction is vital to the hope that quantum computers can be built on a large scale. Dr. Knill is very optimistic about the future of his project, noting that there are no fundamental barriers to their goal--it is simply a matter of applying the technology.
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- "Magazine Fires Latest Salvo in DVD Case Appeal"
Newsbytes (03/23/01); Bonisteel, Steven
Lawyers for 2600 Magazine, the publication at the center of the legal firestorm surrounding DeCSS, the code used for descrambling DVD encryption, have filed a new brief with the appeals court hearing the magazine's case. The brief claims that federal Judge Lewis Kaplan was wrong in ruling that First Amendment protection does not extend to software in cases when that software is designed to override copyright-protection measures. Kaplan ruled that 2600 Magazine had violated the Digital Millennium Copyright Act of 1998 in posting a link to DeCCS as part of an article it wrote on the code. The brief argues that posting such a link is a standard part of online journalism and not an endorsement of any illicit uses of the DeCSS code. Also, the brief contends that prohibiting the publication of the code prevents lawful analysis of its design and implications. Lawyers for the Motion Picture Association of America (MPAA), the main opponent of the DeCSS code, have charged that the code has no use except for the unlawful pirating of copyrighted DVDs. A amicus curiae brief filed by the Justice Department echoes that argument, saying the case is only "about computer hackers and the tools of digital piracy," as US Attorney Mary Jo White wrote. Lawyers for 2600 Magazine contend that the magazine did not engage in any illicit act by publishing the code. Furthermore, the lawyers say the MPAA and the government are seeking to treat software as less worthy of First Amendment protection than traditional media such as text or photographs.
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- "Bush Urged to Speed Release of Key Economic Data"
Reuters (03/26/01); Wolf, Jim
President Bush on Monday received a proposal from the technology consulting firm Gartner that calls for a cabinet-level IT chief. Overall, Gartner warned that the federal government must be prepared for the way the Internet will change fundamental processes. It predicts that 30 percent of federal agencies will be made redundant through e-government and urged the president to name a cabinet-level federal CIO quickly to strategize the change. In all, Gartner proposed eight initiatives for the president to consider, also including Internet privacy and electronic election issues. Gartner says 70 percent of e-government initiatives will fail because of poor planning, and also noted the poor interoperability among federal and state and local governments. Gartner's proposal said, "To manage this national technology seismic shift, the federal chief information officer should be a cabinet-level position reporting directly to the president." Gartner says it should not take the government weeks to release census data or a week to release the latest Labor Department unemployment numbers. Gartner also called for fast adoption of wireless and wearable technology and the ability to monitor the safety of "personal technology devices." Gartner also predicted that by 2004 firms would be able to capture 30 times more data when users surf the Web, and thus called for new privacy protection laws.
- "White House to Pick Venture Capitalist to Head Tech Panel"
Wall Street Journal (03/28/01) P. B5
President Bush will soon appoint noted Silicon Valley venture capitalist Floyd Kvamme to lead an advisory council on technology and science, sources say. Sources add that the appointment will likely come in lieu of the Bush administration naming a "tech czar." Secretary of Commerce Donald Evans has reportedly scuttled plans for such a position, instead arguing that tech-related issues be placed under his authority. Kvamme will serve as a sort of tech-industry ambassador and will not be in the government's employment. The advisory council has, in the past, been dominated by academic scientists, but observers believe that Kvamme's inclusion will definitely give it a bias toward the tech industry. Kvamme has close ties to the Bush camp, having raised funds for the president's campaign and worked with Karl Rove, one of the president's top advisers.
- "Bright Lights Begin to Emerge at CeBIT Amid Tech Gloom"
Despite the clouds currently overshadowing the tech industry, several companies in niche markets are growing significantly. Psion, Software AG, and McData each offers products that enhance business efficiency and production. Psion's Teklogix unit offers wireless handheld products that give a full return-on-investment within one year. Their sales are still strong in the United States and the Far East, regions where tech sales have been slowing. Software AG CEO Erwin Koenigs says there is no slowdown in the U.S. market for his company, which sells an XML-based database. XML technology sales are expected to grow 130 percent annually, totaling $1 billion in 2004, according to West LB Panmure. McData holds a 90 percent market share for high-end data switches that make storage area networks more efficient. Whereas slowing sales have affected the low-end market, McData Jack McDonnell says the high-end market has remained solid and will contribute to the 80 percent revenue growth the company expects this year. Other companies, especially telecoms that had bet heavily on the disappointing WAP technology last year, are facing trouble with low consumer spending and uncertainty about new mobile technologies. However, Ericsson, Motorola, and Alcatel executives agreed that they expect opportunities in the Chinese market to help prop up growth. France's Alcatel aims to win 50 percent of the new DSL market in China, where the need for high-speed Internet access utilizing existing infrastructure is strong.
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- "Net Pioneers Move On"
USA Today (03/27/01) P. 3D; Weise, Elizabeth
Many of the engineers, scientists, and academics that helped build the Web now shy away from the bustle and noise found online today. Eric Allman, who wrote the first Internet email program in 1981, says the Web is overextended and diluted in its effect. He says the explosion of activity on the Internet, with its newfangled bells and whistles, discourages him. However, he adds, "It may actually be for the better. I've recently started to remember that having friends in meatspace has certain advantages over cyberspace." Another Net pioneer, John Gilmore, founded a small ISP that offered automatic email forwarding but was bought up by Verio. The industry has rejected the technology since the advent of spam and the proliferation of trashy ads, although the service was once thought to be the hallmark of a good "netizen" because it fostered the free-flow of email. Gilmore is disenchanted with what he calls undue online censorship. Most Web trailblazers now use the Internet as a simple tool for one-on-one email or research. Even then, "The Virtual Community" author Howard Rheingold says he only surfs the Web according to URLs suggested by a network of correspondents.
- "Despite Fear of Prying Eyes, Encryption Software Finds Few Takers"
Associated Press (03/23/01); Jesdanun, Anick
There are roughly 400 million Internet users across the globe, but fewer than 10 million have used the Pretty Good Privacy (PGP) email encryption technology, a stat that illustrates just how difficult it is to make the public aware of Internet security and privacy issues. "We've had trouble getting PGP employed across the breadth of society," says PGP inventor Philip Zimmerman. Zimmerman says that part of the problem is the difficultly in using PGP, although he notes that it has become easier to use. The Electronic Privacy Information Center's David Sobel says that many Internet users do not understand the basics of email transmittal. Companies such as VeriSign use S/MIME, while others use Secure Sockets Layer, or IP Security. Some doctors will not respond to their patients' emails unless the email is encrypted. Likewise, the IRS will not use email to correspond with taxpayers.
- "R&D Drives On"
Industry Standard (03/26/01) Vol. 4, No. 12, P. 41; Boslet, Mark
Although tech companies across the country are cutting back on many things as the economy turns downward, few are touching their research and development departments. Some, such as Microsoft, are actually putting more money into this area, knowing that if they do not invest in next-generation technology they will soon run out of revenue streams to push them out of the current downturn. Microsoft will spend $4.5 billion over the coming year on R&D, an increase over last year's $3.87 billion. Cisco Systems bumped its R&D budget up to $981 million, after spending $602 million last year. Analysts say the spending increases are a good indication that the current tech slump won't last long. Wit Soundview analyst Arnold Berman says, "Tech companies have learned over the years that to not invest in next-generation technology is to surrender." Texas Instruments and Intel also plan greater R&D spending in the coming months, although such spending increases in the chip industry are smaller and some are spending less on new plants and equipment.
- "Machines With Minds of Their Own"
Economist--Technology Quarterly (03/24/01) Vol. 358, No. 8214, P. 53
Although computers scored a victory over people in 1997, when the IBM supercomputer Deep Blue defeated world chess champion Garry Kasparov, scientists say that achievement was nothing more than the triumph of Deep Blue's processing speed--it computed the game's mathematical possibilities far more quickly than a human being ever could. However, Deep Blue could not teach itself a better way to anticipate Kasparov's next move; it could only process based on its original program. Evolvable hardware (EHW) is a relatively new area of technology that seeks to add the paradigm of trial-and-error thought to artificial intelligence. This paradigm, the genetic algorithm, lets EHW devices test their configuration against performance guidelines. The configuration is then modified continuously until each component of the device reaches an optimum performance level. Human beings only have to set the guidelines. Each step, from the genetic algorithm to the guidelines to the reconfiguration, can be etched onto a single microchip, allowing the "evolution" to occur in less than a second. One area in which EHW could play a key role is in the design of analog circuitry. Despite the rise of digital technology, most everyday consumer devices still rely on analog for a wide range of purposes. However, analog circuits have tricky tolerances and the number of people who can design them is shrinking. Scientists in Japan have developed a technique using EHW to make each analog circuit conform to the design specifications.
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- "B2B Standard Ready for Scrutiny"
Computerworld (03/26/01) Vol. 35, No. 13, P. 1; Meehan, Michael
The electronic business extensible markup language (ebXML) standard for business-to-business (B2B) e-commerce is now open for public review. Over 2,000 people from more than 30 countries have been developing ebXML over the past 18 months under the aegis of the Organization for the Advancement of Structures Information Standards (OASIS) and the United Nations Center for Trade Facilitation and Electronic Business (UN/CEFACT). The effort was directed by executives from IBM, Microsoft, and Sun Microsystems. Transport routing, trading partner agreements, document construction, naming conventions, business process integration, and security protocols will be incorporated into the standard, which is expected to receive final approval in May. The standard must enter the market soon because companies are impatient to get into the B2B sector, says Chevron IT architect Neal Smith. Boeing's director of e-business information systems, T. Kyle Quinn, speculates that the development of ebXML depends on users. "The Unix/Windows debate is still alive, and one of the things we want to do is drive the standards discussion to make it go away," he notes. "The point of e-commerce is we're all supposed to be working together, and it's crucial to keep the standards open."
- "In Search of the Net's Next Big Thing"
Business Week (03/26/01) No. 3725, P. 140; Ante, Spencer E.; Borrus, Amy; Hof, Robert D.
The World Wide Web is the Internet's "killer app." However, that may not be the case in the years to come. Many companies are experimenting with technologies that they hope will enable them to move beyond the Web, which is now looked down upon for its relatively static pages of text, images, and information. Companies believe that there is a more efficient way to communicate over the Internet. However, they have not been able to turn their new technologies into profit-making ventures. For example, instant messaging, which allows PC users to zap quick notes to each other, appears to be a promising Internet application, but it is hardly generating any revenues for its vendors. "Its not clear yet where the business model is," acknowledges Donn Davis, president of the Interactive Properties Group at instant-messaging leader AOL Time Warner. Some companies hope that wireless Web applications are the next big thing. Tech research firm eTForecasts predicts that the number of wireless Internet users will rise from 40 million in 2000 to 225 million in 2002. Vindigo in New York plans to use wireless to notify diners about nearby restaurants, and cellular companies in Europe want to allow consumers to dial a number from their mobile phones to pay for sodas from vending machines. Other companies hope that peer-to-peer technology, which was popularized by the music-sharing service Napster, is the next "killer app." With P2P technology, PCs will be able to communicate with one another directly via the Internet.
- "Linux Slips Slowly Into the Enterprise Realm"
Network World (03/19/01) Vol. 18, No. 12, P. 26; Connor, Deni
Linux is gaining greater support in the enterprise sector, according to several recent studies. "It's being brought in by system [managers] who need to get a job done for the lowest possible cost," says International Data (IDC) analyst Dan Kuznetsky. An IDC report forecasts that only Microsoft Windows will have more users than operating systems based on Linux and xBSD by 2004. Open source software such as Samba and Apache are used for Web and e-business applications, and several server vendors, including IBM, Dell, and Compaq, now offer Linux-based tools. Enterprise users who favor Linux say its benefits lie not only in its cost but its flexibility as well. For example, if a team needs to deploy a solution quickly, it can use a Linux-based solution without first having to receive budgetary approval. Still, a report from Evans Research Group found that, of the companies it surveyed last year, nearly one-third do not approve of open source development. The survey also found that Linux developers use it primarily for ad hoc applications, 19 percent, or Web applications, 21 percent. Only 12.5 percent use Linux for enterprise-wide applications. Analysts say this reluctance to embrace Linux stems from a somewhat mistaken perception that Linux lacks a support network--false now that Linux vendors such as Red Hat and major companies such as IBM offer extensive Linux experience and support. Indeed, IDC predicts that the market for Linux support will reach $285 million by 2004, up from $56 million this year.
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