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Volume 1, Issue 6: Monday, December 13, 1999

  • "Concern Over Year 2000 Remains Low in Surveys"
    New York Times (12/13/99) P. C10; Feder, Barnaby J.

    Recent surveys conducted by the National Federation of Independent Businesses and the National Association of Manufacturers show that the huge majority of businesses are not worried about Y2K. The Manufacturers survey reveals that 93 percent of its members think that the switch to 2000 will have "no impact" on their companies, and that only 4 percent foresee any "significant disruption" of any sector in the economy. Most businesses are staying calm and are not stockpiling inventory, according to the surveys. Many Y2K polls are reinforcing calm, but those conducted by specific companies tend to be self-serving advertisements, such as the one commissioned by Blockbuster Video that found that 22 percent of respondents were planning to stay in New Year's Eve and rent a movie. And many books and manuals dealing with Y2K are way down on the book sales list, not only because many people are not interested but also because much of the same information is being offered in various quarters for free.

  • "Net's Rise, Microsoft Case Feeding the Linux Frenzy"
    Investor's Business Daily (12/13/99) P. A6; Crum, Rex

    Enthusiasm for Linux is growing, fueled by an increasing shift to the Internet as well as the antitrust suit that has exposed Microsoft's weakness. Linux firms are increasingly appealing to investors, as seen in VA Linux Systems' 698 percent stock gain in its IPO on Thursday. Andover.Net, which manages Web sites containing Linux news, also saw significant stock gains last week. As more information is exchanged on the Internet, servers become increasingly important. Companies are therefore looking for inexpensive servers and are turning to Linux rather than Unix or Microsoft server operating systems. Companies such as VA Linux and Andover.Net are emerging to help businesses set up and run Linux. However, Forrester Research analyst Matthew Nordan says investors are not selective enough in choosing firms that add value to Linux. Companies that are adding real value to Linux include Cobalt Networks, which makes servers based on Linux, and TurboLinux, which makers load balancing technology that sends traffic to Linux servers, Nordan says. Although Linux is perhaps being inflated by media hype, experts say Linux's promising future is evidenced by the support of major players such as Dell and IBM.

  • "Online Sales Heating Up Tax Debate"
    Washington Post (12/13/99) P. A1; Chandrasekaran, Rajiv

    The debate over e-commerce taxes continues to shape up as a major political battle. The pro-tax forces include traditional retailers and many state and local government officials, while those opposed to new Internet taxes include GOP leaders in Congress, some business executives, and a handful of local officials. The Advisory Commission on Electronic Commerce will meet tomorrow in San Francisco; there the two sides on the debate will voice their concerns. Virginia Gov. James S. Gilmore III (R), head of the commission and an opponent of new Internet taxes, will call for a permanent ban on e-commerce taxes. On the other side, Utah Gov. Michael O. Leavitt (R), chairman of the National Governors' Association, will introduce a voluntary plan urging that third-party clearinghouses and Internet retailers work together to come up with the correct Internet taxes owed to states. As a reward for their cooperation, certain tax audits would not apply to those online retailers that decide to participate with the plan. The governors' association claims that e-commerce will cost state and local governments $10 billion a year in lost tax revenues. Efforts to keep the Internet permanently free of taxes are receiving increased support. The issue has even been addressed in Republican presidential debates. Presidential candidates John McCain, Steve Forbes, Gary Bauer, and Orrin Hatch all have said they oppose Internet taxes. On Friday, the Clinton administration criticized Gilmore's plan over concern that retailers would be encouraged to establish kiosks in their stores to allow customers to shop online without paying sales taxes.

  • "SAP Seen Creating at Least 10 Portals for Big Companies"
    Wall Street Journal (12/13/99) P. B11; Boudette, Neal E.

    SAP by the end of the year expects to announce deals to build at least 10 portals for business-to-business e-commerce. The portals will manage communications and transactions between large companies and their suppliers, says SAP co-CEO Hasso Plattner. One portal will serve as a marketplace for such German chemical companies such as Bayer, BASF, and Hoechst to purchase non-production supplies. SAP will manage the portals and collect part of the revenue transacted. In five years the marketplace business could account for 10 percent to 20 percent of SAP's revenue, Plattner says. Although Plattner did not provide specific details since not all of the agreements are final, he said the deals involve major firms from Europe and the U.S. Although SAP leads the market for software that runs internal processes, the company is lagging in helping clients move to the Internet. SAP was forgotten in October when Ford chose Oracle and General Motors chose Commerce One to build portals connecting the manufacturers to their suppliers. However, Hewlett-Packard last week signed a $36 million agreement to use mySAP.com for buying transactions.

  • "Video, Audio Add to Java Brew"
    Interactive Week Online (12/10/99); Babcock, Charles

    Java developers can now add rich-media handling capabilities to their programs, thanks to the release of a new set of APIs for Java Media Framework 2.0. Java Media Framework, developed jointly by IBM and Sun Microsystems, enables developers to support audio and video data, playback, synchronization and transmission across different platforms. It can be integrated with other media types, including IBM's HotMedia, Flash, and MP3. The enhanced rich media support provided by Java Media Framework will be useful in corporate training programs and Web and customer relationship applications, says IBM's Bill Pence.

  • "Standard Pitched for Linking E-Comm Apps, Directories"
    Network World Online (12/13/99); Fontana, John

    An industry alliance submitted a proposed standard that could ease data exchange among corporate directories and e-business applications. A group consisting of Bowstreet, IBM, Microsoft, and others submitted the Directory Services Markup Language (DSML) 1.0 specification to three standards organizations, including the Organization for the Advancement of Structured Information Standards (OASIS). DSML allows XML documents to read directory information that could be crucial to business-to-business transactions. Although DSML has gained strong industry support, the specification has also attracted some concern because it is largely unproven, much like its parent language, XML. Nevertheless, IBM, Microsoft, Novell, Oracle, and Sun/Netscape have all pledged to support DSML in their upcoming directories.

  • "Scientists Explore Next Wave of Technology, Referred to as the Post-PC Era"
    San Jose Mercury News Online (12/09/99); Claymon, Deborah

    Scientists at IBM's Almaden Research Center are busy developing the pervasive computing devices of the future. Projects in the works include the "emotion mouse," a mouse that can detect a person's emotional state and implement programs to improve it; Blue Eyes, a camera that monitors the user's eyes to determine what on the screen is most important; and Suitor, which would personalize Web content based on a user's input. With the pervasive computing initiative, IBM researchers are striving to incorporate computers into things that are a transparent part of everyday life, including cars, phones, refrigerators, walls, and roads.

  • "IBM to Boost Netfinity Availability and Scalability"
    VNUNet.com (12/08/99); Everett, Cath

    IBM recently unveiled an initiative to improve server availability. Dubbed Onforever, the program provides users with hardware and software to maintain and replace parts without shutting down their systems. Using Hotadd technology, users can add extra processors or replace adaptors while the server is still running. Meanwhile, Hotscale allows users to plug in a new port rather than install network cards or additional disk storage. The initiative also includes Chipkill memory, which features error correcting code for up to four bits of memory; PCs can currently handle error build-up in only one bit of memory. Also under the Onforever initiative IBM will release in two weeks Software Rejuvenation, a failure management program that allows users to plan and minimize their server downtime by scheduling occasional server "rejuvenation." A second release due in the third quarter of 2000 will also enable the software to predict when a crash will happen, allowing users to take preventative measures

  • "Byte-ing Into Wireless Communication: Bluetooth Ties Laptops, Cell Phones"
    USA Today (12/09/99) P. 3B; Della Cava, Marco R.

    The Bluetooth standard for wireless communications, developed by a consortium consisting of IBM, Nokia, Ericsson, Intel, and others, could give a tremendous boost to the new era of computing. Imagine a refrigerator that keeps tab of the number of soda cans consumed and automatically orders more online when all are gone. Once the Bluetooth silicon chips are small and inexpensive enough, the Smart Fridge will become a distinct possibility. Bluetooth relies on radio waves to enable communication between any number of devices equipped with the Bluetooth chip. Although the most likely first market for the chips is in mobile phones, the possibilities are enormous. Dataquest predicts there will be 61.2 million Bluetooth-enabled devices in circulation by 2003. Among the potential users are airlines, which are considering the technology to eliminate the miles of cable they currently use.

  • "Run for Coverage"
    Industry Standard (12/20/99) Vol. 2, No. 38, P. 116; Menduno, Michael

    Insurers are facing numerous challenges as they move toward online insurance quotes and selling. The insurance industry, unlike other financial institutions, is regulated on a state-to-state basis, meaning different states have different insurance regulations, which makes selling insurance online more difficult. Another problem is that companies must spend a large amount of money to update their technology to support online sales; Allstate plans to spend more than $1 billion in the next two years on technology. Regardless, insurance companies are moving toward the Internet for sales. Almost 75 percent of carriers that were surveyed by the Gartner Group will provide insurance quotes over the Web by the end of 2000, and 39 percent will actually sell policies online. New Internet companies are also forming that provide quotes from carriers to potential customers. InsWeb, founded in June of 1995, offers comparison insurance shopping and will soon offer online purchasing of auto policies to its customers. InsWeb receives a small transaction fee for each quote it provides and a small commission of the auto policy sales it generates. Comparison-shopping sites seem to appeal to the consumer because of one-stop shopping and availability of quotes from a wide range of carriers. However, Forrester Research analyst James Punishill says sites such as InsWeb and Quicken are struggling because they have failed to simplify their products or make the process easier for consumers. E-businesses should focus on automating the core processes, elimination of the intermediaries, and outsourcing as much as possible, says Punishill. State Farm is attempting to merge the agent into the Internet process by offering agents' advice in real-time on the Web. State Farm's agents are also linked to the company through the corporate Intranet, which speeds up paperwork processing.

  • "Shakeout Ahead"
    Interactive Week (12/06/99) Vol. 6, No. 50, P. 84; Cone, Edward

    This holiday season could serve as the moment of truth for most Internet companies that are striving to position themselves as leaders in their markets. Those that are not able to rise to the top of their markets could find indifferent venture capitalists, steadily declining stock prices, and recurring offers of mergers or acquisitions. "I don't foresee that many bankruptcies," says Henry Blodget, a retail analyst at Merrill Lynch. "Some companies will just die, but a lot will get acquired or limp along with their stock at a tiny valuation." As many as three-fourths of all Internet public and private companies could be gone within five years, adds Blodget. Other observers, such as Todd Carter, director of investment banking at BancBoston Robertson Stephens, do not put the figure that high. Carter, who expects many consolidations, says one-third of the Internet companies will disappear. The top three competitors in a market are likely to make it, but there are some sectors that will be able to accommodate several players. Some markets, such as auto sales, have already succumbed to the shakeout. Internet Service Providers, books, toys, and home furnishings could be next. What is more, existing Internet companies will have to compete for capital with the latest companies in some hot, new market that are trying to establish an online presence.

  • "Outage Disrupts E-Business"
    InfoWorld (12/06/99) Vol. 21, No. 49, P. 1; Jones, Jennifer

    AT&T's recent dial-up service outage, which highlighted the instability of some forms of Internet connectivity, may have an impact on the success of its VPN offerings. The outage showed that Internet services are susceptible to failure despite carriers' claims that the services are appropriate for business customers. Although some corporate customers of AT&T's VPN service were affected, AT&T officials said the problems were not severe. A day-long, nationwide outage like AT&T's is atypical, particularly for a carrier of its size, said International Data analyst Stephen Harris. Service outages may be responsible for the jump in subscriptions to cheap or free ISPs. People are turning to ISPs as a backup measure, according to Harris.

  • "Wireless Consortium Meets With W3C"
    Computer Reseller News Online (12/08/99); O'Hanlon, Charlene

    At this week's WAP Forum meeting, the more than 250 Forum members met together with the WorldWide Web Consortium to discuss wireless data exchange. The two groups want to define and promote Internet access by wireless devices. They want to put into place standards that will facilitate the operations of cell phones, laptops, handheld organizers, and other wireless devices to receive data from the Internet as well as intranets. At the meeting, Australian telco Telstra announced that it would use Phone.com's WAP-enabled UPLink server in their handsets. However, analysts say that WAP technology does not provide complete Internet access. The carriers control the content because they must use specialized equipment, says analyst Jane Zweig. Microsoft and Ericsson also announced this week their plans to develop WAP technology that would use Microsoft's Mobile Explorer, a cell phone version of the popular PC software.

  • "CRM Offers Promise, Peril"
    Bank Technology News International (11/99) P. 1; O'Connor, Anthony

    European retail banks have zeroed in on customer relationship management (CRM) software as the key to making the most of customer information when developing marketing campaigns. The goal: stem the loss of business to foreign banks, insurance companies, and other rivals. The CRM market is growing quickly, with 80 percent of retail banks now basing their marketing plans on the use of the software, according to a survey by Datamonitor. CRM spending by European banks totaled $945 million in 1998, a number expected to reach $2.5 billion by 2003. The main payoff from CRM software is the reduction in marketing expenses. With 80 percent of the typical bank's business coming from 20 percent of its customers, the bank logically should focus its marketing efforts on its best customers. CRM allows banks to identify its best generators of revenue, by sifting through the large amount of information banks collect through the many transactions it handles annually. Datamonitor analyst Adam Hill says, "A current account holder may have several interactions with its retail bank in a week. This generates a large amount of data which can be used for marketing purposes."

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