Although the Gartner Group is considered a leading expert on Y2K readiness, some countries that received unfavorable ratings say the group's reports are inaccurate and have possibly harmed foreign investment. South Africa, for example, says international grain trader Cargill named a Gartner report as a factor in its decision not to deliver to South Africa for two weeks around Jan. 1. Later, South Africa received a positive rating from Gartner. "Gartner Group has a vested interest in stirring up panic," says Jamaica's government Y2K coordinator Luke Jackson. "They're consultants. That's what they do." Jackson says Gartner never approached him in compiling the report. Likewise, Ecuador's national Y2K coordinator Jacqueline Herrera says Gartner never called her before releasing a report that showed the country lagging in Y2K readiness. "The conclusions of this report are inaccurate," Herrera says. Meanwhile, Gartner, which maintains the confidentiality of its sources, supports its findings and says its information comes from thousands of its clients and other private companies.

AT&T and MCI WorldCom are set to unveil several outsourcing agreements with large businesses, people familiar with the companies said. AT&T is expected to announce a five-year, $550 million deal to provide General Motors and Delphi Automotive Systems with data and Internet services. MCI WorldCom is expected to announce an up to $700 million, five-year agreement to provide similar services to BP Amoco, insiders said. The contracts suggest that a growing number of businesses want help with handling their increasingly complicated telecom networks. None of the companies involved would comment on the deals.

Although U.S. firms are confident in their Y2K preparations, many plan to spend New Year's weekend monitoring systems for errors. About 23 percent of IT employees are required to work on Dec. 31 and an average of 62 percent of IT staff will be on call, according to an InformationWeek Research survey of 200 IT executives from businesses of all sizes. Upper-level staff will also be on site at many businesses, with 41 percent of survey respondents saying their top IT executive will be on site New Year's Eve. Visa and Prudential are among the firms requiring top IT managers to monitor the rollover, and both companies will provide food and housing for workers that have to be away from home. However, many companies will not make such provisions, with 45 percent of respondents saying they will offer no special accommodations for workers. Most companies will also prohibit workers' families and alcohol from being on site Dec. 31. Visa says workers are excited to be a part of Y2K, which they view as a once-in-a-lifetime experience. Still, many workers are being deprived of end-of-year vacations, and some companies are offering bonus pay or comp time to make up for the loss. IT managers are most worried about the parts of their system that they cannot control, such as telecommunications, power infrastructures, transportation, and logistics, according to the survey. Despite these worries, the survey shows that IT managers believe there is only a 7 percent chance of their company being affected by a business partner's Y2K problem. U.S. companies and government agencies have devoted considerable resources to preparing for Y2K, spending about $100 billion from 1995 to 2001 identifying, testing, and repairing systems, according to Commerce Secretary William Daley. As a result, only 1 percent of survey respondents say they will not be ready for the date change.

The New York Times Company yesterday fired 23 workers for internally circulating email that violates the company's email policy. The company's policy states that "computer communications must be consistent with conventional standards of ethical and proper conduct, behavior, and manners and are not to be used to create, forward, or display any offensive or disruptive messages, including photographs, graphics, and audio materials." Other workers at the company's administrative center in Norfolk, Va. where the dismissals occurred received warning letters as a result of the episode. Although the company has terminated employees in the past because of email violations, this is the largest group to date, says the New York Times' Nancy Nielsen.

Antivirus firms have warned of a new computer virus called Explorepak that spreads through email and destroys a range of computer files. Three Fortune 500 companies have been infected with Explorepak over the past few days, according to Trend Micro. Explorepak transforms all word-processing files into documents containing only zeroes. The virus sends itself as an attachment to users that send email to an infected system, and can only be detected with antivirus software updated as of yesterday, Trend Micro says. The virus appears as a compressed Pak file attached to an email reply, with the sender's own subject line in the heading. ExplorePak is similar to the earlier ExploreZip virus. Network Associates says it received reports from 11 companies infected by the virus yesterday.

Online auctions offer businesses many benefits, but these open exchanges cannot serve as the basis for all supply-chain relationships, some analysts say. In recent years several online exchange companies have emerged, including VerticalNet.com, the National Transportation Exchange, and ProNetLink.com. These firms help buyers and sellers find one another and advertise potential business partners. While online auctions are suitable for some purposes, many business needs cannot be met with an online auction, says AMR Research analyst Larry Lapide. Instead of a public exchange, supply chain relationships could rely on private password-protected intranets, Lapide says. Sharing the view that online auctions should have limited use, ProAction Group analyst Timothy Van Mieghem says, "The real benefit is extending the visibility throughout your supply chain, and to do that requires more than a vehicle for transmitting information." A company needs "the trust and commitment that goes along with exposing...proprietary information in that format," Van Mieghem says. Lapide suggests that auctions should be used in dealing with short-term, commodity-oriented suppliers. However, in buying from non-strategic suppliers that are not as commodity-oriented, companies should consider using an intranet. With long-term strategic suppliers that are part of a collaborative relationship, companies should establish a more advanced private exchange as one part of the partnership. Beyond the private exchange, buyers might send important decision makers to meet face-to-face with the strategic partner's workers.

The Pegasus project, which aims to create new technologies to ensure that the Internet can support its rapidly rising usage, has received $7.5 million in funding from the federal government. The project, funded by the Defense Advanced Research Projects Agency for the past two years, includes researchers from Bell Atlantic, Lucent, Drexel University, University of Pennsylvania, Princeton, City College of New York, and MCP Hahnemann University. The project aims to ensure that the government's Next Generation Internet is 1,000 times faster, more reliable, and more capable of supporting sophisticated applications than the current Internet. The federal government announced the Next Generation Internet project two years ago, not long after a group of universities announced the Internet2 project. The Next Generation Internet "focuses on creating new technologies to build networks of the future," says Drexel's Stewart Patrick, who will manage Pegasus. Pegasus will address architecture, optical networking, and applications. Researchers will examine issues such as whether current Internet protocols will support future multimedia applications. For its part, Lucent plans to create a packet switch that can process 100 times more information per second than today's switches.

Scientists worldwide are racing to redesign semiconductors to keep pace with computing innovations of the future. While semiconductors have so far adhered to Moore's Law, which states that computing power will double every 18 months, scientists fear that the limit may be reached in the next 10 to 20 years. "Unless new methods are developed, future scaling [shrinkage] of the transistor will result in a loss of total charge, an increase in resistance, and a potential decrease in performance," warns Intel researcher Paul Packan. To avoid this barrier to computer innovation, IBM researchers are designing microscopic circuits that organize themselves into molecular structures under certain conditions. This technology shows promise, as scientists at IBM and elsewhere have already built organic molecules capable of forming channels for conducting electrical charge. Furthermore, molecular technology may reduce costs by eliminating the need for the expensive, dust-free manufacturing plants used today.

Office-supply retailer Staples has filed suit in federal court against an as yet unnamed computer hacker who redirected traffic from Staples' Web site to that of Office Depot, Staple's chief competitor. Federal law calls for a punishment of as much as 10 years in prison if one has been found to have caused damage by gaining access to a computer without permission. The redirection of site traffic was successful for about an hour before Staples officials recognized the problem. In addition to the loss of business for an hour, Staples is claiming the hacker cost the company time and money to fix the Web site. Staples expects to have $1 billion in online sales by 2003. Staples' Shannon Lapierre says the company thinks it "highly unlikely" that Office Depot had anything to do with the sabotage and expects to name the hacker soon.

Web site crashes have become common due to heavy site traffic and inadequate technology. Often, companies are unable to gauge how many people will visit their sites, resulting in data overloads when sites unexpectedly become popular. "There's an undersizing element--the sites didn't anticipate whether they could handle the volumes they see coming at them," says IBM's Jeff Gore. The most common sources of crashes are inadequate servers and database systems, as well as software upgrades. A system can become overloaded when there are too few servers to handle the information, or when the database and order-entry systems are not scaled for heavy use. Furthermore, software upgrades and new applications can cause problems when not properly tested before being offered on the site.

Online vendors last Friday saw a significant rise in the number of visitors to their sites as the holiday shopping season began. Yahoo! on Monday announced that its site made five times as many sales last Friday as on the same day last year. In addition, Yahoo!'s sales last Friday were up 35 percent from the previous week's Friday. AOL reported that its shoppers spent almost three times as much last week as they spent during the same week last year. Amazon.com and Barnesandnoble.com also reported strong sales gains. Nielsen/NetRatings measures the traffic to major e-commerce sites, and notes an 18 percent increase in traffic between last Wednesday and Friday. Online toy vendors, with an 83 percent rise in activity, showed the largest gains over last year. Meanwhile, electronics vendors saw 65 percent more visits the day after Thanksgiving than the day before. Book and music vendors had the highest level of shoppers, with a 27 percent rise in visitors over the Thanksgiving holiday, according to Nielsen/NetRatings.

EBay, which used to be the embodiment of the unregulated Web, is now beginning to police itself. After several well-publicized incidents in which organs and babies were put up for sale at the online auction house, the company hired Robert Chestnut, a former federal prosecutor, as its associate general counsel. Chestnut not only enforces the rules to deal with fraud, scams, and the selling of illegal items, but also creates them. The site has 350,000 new items for sale every day, and does not attempt to weed any out beforehand due to the sheer volume. However, the site does have a disclaimer that says it is not responsible for the authenticity of any of the items sold through it. Regardless, the company realized that if it wanted to continue to be a highly-regarded, publicly traded company, as well as gain new business, it would need to have some sort of policing body. This led to the creation last summer of the Fraud Prevention Department, of which Chestnut is a member. Usually, the most severe action the unit takes is to suspend a user's account, but sometimes the unit will have to notify the police if more serious crimes occur. Chestnut says although the quantity of hoaxes has declined since eBay began requiring all sellers to have a credit card number in October, the number of rules and the personnel needed to enforce them will most certainly grow in the near future.

The Society for Information Management (SIM), a group of IT executives, plans to fight the adoption of the Uniform Computer Information Transaction Act (UCITA), which SIM says gives vendors too much power. Although UCITA must be approved by all 50 states to become the standard, if one or two critical states such as Washington or Virginia adopt the law, software vendors might be able to apply UCITA throughout the U.S. The legislation is a model commercial code that applies to a wide range of software licensing issues, defining the rights of software buyers and sellers. UCITA covers issues such as shrink-wrap licenses, contract disputes, and liability. Critics say UCITA would enable software vendors to disable software if they thought a user had broken the contract, in the same way that a bank repossesses a vehicle. Another problem SIM sees with UCITA is that it changes current practices on contracts, for example, if a license does not name a duration, the contract is restricted to a reasonable time. However, UCITA advocates say the legislation will provide businesses with uniformity, particularly in the area of e-commerce. SIM and other groups plan to launch a lobbying effort called 4Cite within a few weeks to discourage adoption of UCITA, but experts say the legislation will be difficult to stop.

Wearable computers, not simply portable ones, are the future of the personal computing industry, say those involved in the research and development of the devices. However, the wearable era has not yet arrived, mainly do to current battery technology that lags well behind computing technology. Juha Kaario of the Nokia Research Center says current wearable computer technology really only is "bearable." Eventually, wearable computers "will know where you are, how you're feeling, and they'll be continuously feeding you information," says Cliff Randell at the University of Bristol in England. Wearable PC users will receive a steady stream of information, triggered by voice cues, motion sensors, Global Positioning System (GPS) sensors, etc., relevant to whatever context the wearer is involved in at any moment. The U.S. military has run field tests for wearable computers that translate languages as they are spoken and others that aid in carrying out extensive maintenance checks for airplanes and ground vehicles.

To remain competitive, insurance companies need to pursue innovative technology solutions to more effectively distribute products and increase customer service, says David Annis, The Hartford's senior vice president of information technology. Technology can mean valuable benefits if handled in the right manner, but technology can also mean the failure of the company, Annis says. Annis believes information technology professionals should be part of a company's strategic plan from the beginning, not just hired to complete projects. CIOs with long-term relationships with the company's executives can mean a more intimate and more effective relationship between business and technology strategies. However, many information technology employees do not stay at the same company for longer than three years, which could be due to high demand in the technology industry for talented people. Annis says that's why companies need to offer good compensation, a great working environment, and great employee services to retain the best technology professionals. Annis makes it a point to focus his attention on his technology team and the plans made by senior business leaders, the company's vendors, and other CIOs to stay up-to-date on the latest business and technology trends. CIOs should be excellent leaders willing to serve as role models who provide direction, hope, and trust to the company, Annis points out.

Cyberslacking, the practice of employees using company-provided Internet or email access for personal use on company time, is an issue growing in prominence and surrounded by controversy. "It may be unfair for a boss to fire you for a five-minute Web site visit, but it's not illegal," says Lewis Maltby, the American Civil Liberties Union's workplace-rights chief. The American Management Association says 27 percent of companies monitor employee emails, and 21 percent monitor computer files. In a survey performed by Vault.com, 90 percent of respondents say they recreationally surf Web sites on company time, and 84 percent say they send and receive personal emails from work. According to another survey by Elron Software, more than half of American workers shop online during office hours.

The government is increasingly imitating commercial models in designing IT contracts. Governments are embracing commercial solutions such as outsourcing of desktop services, enterprise resource planning solutions, and call centers, and shifting their top priority from low cost to best value. As part of this new focus on business practices, U.S. and international governments are adopting e-commerce. Governments are increasingly looking for ways to use the Internet to improve services for the end user. The government of Singapore, for example, developed the TradeNet system to streamline the data collection processes of the 26 agencies that all companies must consult when exporting or importing products. The government's focus on commercial practices is good news for businesses because they can negotiate more valuable contracts based on performance. Yet even top players in the government market continue to gain the majority of their revenues from commercial contracts.