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Volume 1, Issue 9: Monday, December 20, 1999

  • "Companies Move to Curb Web Surfing on the Job"
    Washington Post (12/20/99) P. A1; Stoughton, Stephanie; Grimsley, Kirstin Downey

    Many employees are using work hours to do their holiday shopping online, and as a result companies are increasingly trying to limit personal Internet use at work. About half of the companies in a recent Washington Post survey conducted by the American Management Association monitor employees' Web use, and 12 percent plan to begin monitoring. Many companies are taking harsh action against employees that misuse the Internet, and about 11 percent of companies have fired workers because of Internet abuse, according to the survey. Many employees have responded to the strict Internet rules by changing their habits. Some workers browse the Web at work but do not make purchases, while others limit the amount of personal time they spend online. Some companies, especially Web firms and small businesses, are lenient about Internet use at work and do not mind if hard-working employees spend a few minutes on the Internet for personal use. Privacy advocates criticize monitoring, saying the practice could be the biggest violation of privacy an employer could commit, especially if monitoring software unearths information about a worker's health problems or family. Furthermore, experts say strict policies might hurt companies as workers defect to more tolerant firms. However, analysts predict that as Internet use rises, more companies will limit access. E-commerce companies that depend on daytime business are already trying to build stores inside corporate intranets.

  • "US, EU Aim to Conclude Talks on Data Privacy"
    Financial Times (12/20/99) P. 4; Hargreaves, Deborah

    The United States and the European Union have set a March deadline to end 20 months of negotiations over the EU's data privacy directive. Those familiar with the negotiations say that the dispute over the data privacy directive must be settled within coming months because businesses are becoming impatient and are worried that the dispute will be taken up by the World Trade Organization. The EU and U.S. are working out the details of a self-regulation framework that would simplify the process for businesses and stiffen data protection, says a European Commission official. However, once again, the enforcement of the safe harbor scheme proposed by the U.S. is a stumbling block. U.S. negotiators argue that self-regulation offers a better solution than the legislation proposed by the EU. Barbara Wellbery, counselor to the U.S. undersecretary for electronic commerce, notes that a Jupiter Communications survey found that just 10 percent of the top 125 EU Web sites had a privacy policy on their home page, compared to 70 percent of U.S. sites.

  • "Cisco to Buy a Pirelli Unit for $2 Billion"
    Wall Street Journal (12/20/99) P. A3; Thurm, Scott; Ball, Deborah

    Cisco Systems may announce a $2 billion stock deal to buy Pirelli's fiber-optic telecom gear operations, according to insiders. Cisco may also provide a roughly $100 million investment in the optical-components and submarine-cable operations of Pirelli. Insiders said negotiations between the two parties were proceeding today in Italy. Cisco is attracted to Pirelli's gear for routing data or voice traffic over fiber-optic lines. Pirelli is the No. 4 manufacturer of equipment that divides a single light beam into up to 128 colors, allowing for a significantly larger amount of information to be routed over a single strand of fiber-optic cable. Pirelli's gear would enhance Cisco's products for telecom network operators.

  • "Software Evolving Into a Service Rented Off the Net"
    New York Times (12/20/99) P. C37; Fisher, Lawrence M.

    The transition of software from traditional packages to an Internet-based service is likely to advance significantly in 2000. Software companies in the future will sell applications as a service, just as utility companies sell electricity or phone service. The move to Internet-based computing is happening much more rapidly than the last major shift in computing, which was the move to client/server architectures that occurred about 10 years ago. As computing changes, new industry leaders will emerge, and investors are racing to support companies such as Inktomi that offer software to develop the infrastructure for Internet-based programs. In the future, the client could become essentially a Web browser, rather than a powerful PC. Established vendors are working to make their products suitable for the new computing model, while startups are designing their products around the Internet model. Oracle, for example, has modified its core database program and all of its applications. The shift of computing to the Internet threatens Microsoft's dominance, which was built on the PC computing model. Experts say any ruling in the antitrust trial might be irrelevant because of the rapid changes brought by Internet computing that are diminishing Microsoft's hold on the market. Linux and Sun's StarOffice are both freely available online alternatives to Microsoft's programs. The success of Windows 2000 will make or break Microsoft in the new Internet-centered software industry, experts say.

  • "Data Sealed But Delivered"
    USA Today (12/20/99) P. 3D; Weise, Elizabeth

    TRUSTe, BBBOnline, WebTrust, BetterWeb, and other top privacy seal programs are coming up short in protecting users' online privacy, privacy advocates say. Although these programs ensure that participating members inform users how their personal data is going to be used, they actually do little to protect the data itself. One problem with seal programs is that they are funded by their members, says Forrester Research analyst Eric Schmitt. "You can't protect consumers when you're being paid by the companies you're supposed to protect them from," Schmitt says. Schmitt believes that government regulation is the only reasonable long-term option to ensure online users' privacy. David Steer of TRUSTe concedes that while TRUSTe plays an important role in protecting online privacy, it is not the final answer. BBBOnline finds that the top problem among Web sites is misleading advertising, according to the seal program's Russ Bodoff. WebTrust requires member sites to undergo quarterly audits by a certified public accountant. The program also requires that encryption be used to protect customer data and that customers have the choice of arbitration. PricewaterhouseCoopers' BetterWeb has been criticized for not requiring that its members offer opt-out programs for data collection.

  • "The Importance of Assurance for Electronic Shoppers"
    Financial Times (12/20/99) P. 20; Edgecliffe-Johnson, Andrew

    Customer service is even more important at e-commerce sites than at brick-and-mortar stores, yet many online retailers seem to be neglecting this aspect of their business. In a recent Ernst & Young survey, half of the email inquiries sent to retail sites were still unanswered after 24 hours, and a fourth were never answered. This lack of customer service is especially significant because online customers are more in need of assistance than their brick-and-mortar counterparts; online buyers cannot actually inspect the items they are ordering and many still do not trust Internet transactions. In order to satisfy customers and ensure that they return to the site, e-commerce vendors need to ensure access to the site and its offerings, and be able to fill orders accurately and on time. Furthermore, customers need email confirmation of their orders, the ability to track orders, and the ability to return items easily. Many e-commerce vendors are now working to improve customer service by responding to email requests or employing workers to handle telephone calls.

  • "Is PKI Ready for Takeoff? Many Say Yes"
    PC Week Online (12/17/99); Kerstetter, Jim

    Several leading public-key infrastructure (PKI) vendors, including IBM, Microsoft, and Entrust Technologies, formed the PKI Forum to speed up the deployment of the security system by resolving interoperability issues among vendors and users. Meanwhile, users, particularly those in the health care industry, are working to come up with a certificate revocation authority. Gordon Romney, president of certificate authority Arcanvs, expects the government will assume the certificate authority role and issue root keys, from which companies can base their encryption strategies. Signs of PKI acceptance in the marketplace include the 500,000-user Healthcare Internet Interoperability Security Pilot, which is scheduled to go live next year, and the news that PKI Forum member VeriSign posted its first profit last quarter.

  • "The Leaders of E-Business"
    InformationWeek (12/13/99) No. 765, P. 62; Violino, Bob

    InformationWeek recently compiled a list of the 100 most innovative e-business companies. The E-Business 100 range from established firms to startups less than a year old, and cover a variety of industries. The companies are all using the Internet to conduct sales, offer customer service, and to connect customers, suppliers, partners, and employees. Almost 60 percent of the companies say e-business extends through the entire enterprise, and the companies receive an average of about half of their annual revenue from e-business. The main objectives in launching e-business initiatives, listed by 94 percent of the E-Business 100, are customer satisfaction and customer service. Customer self-service applications are a growing trend on Web sites, and two-thirds of the E-Business 100 offer such applications for order or service tracking. In addition, the companies connect an average of almost 60 percent of customers and 55 percent of suppliers via extranets. Intranets are growing along with extranets, and almost 70 percent of the E-Business 100 run intranets to provide employees with better access to information. The most common difficulty in deploying e-business initiatives is connecting legacy IT systems to Web systems, a problem listed by half of the E-Business 100. The top 10 E-Business 100 companies in order are Office Depot, IBM, Cisco Systems, Army and Air Force Exchange Service, E-Trade Group, Dell, Lockheed Martin, Avnet, Insight Enterprises, and Marshall Industries.

  • "CA to Host IT Operations"
    InfoWorld (12/13/99) Vol. 21, No. 50, P. 1; LaMonica, Martin

    Computer Associates (CA) plans to move into the ASP market next year, offering network management services such as storage, desktop management, and security. CA also will let existing ASPs use its CA-Unicenter network management platform to provide corporations with services. Although ASPs have usually focused on ERP and CRM systems, CA's plan centers on offering nuts-and-bolts IT applications. Large corporations have not expressed a large interest in ASPs to this point because they have the resources to invest in applications such as sales-force automation and data warehousing. However, large enterprises might be more receptive to CA's outsourced IT operations. Meanwhile, ASP clients are likely to start demanding integrated applications with uniform provisioning and billing functions. CA's Unicenter platform could appeal to ASPs that want to integrate application offerings, experts say.
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  • "Academia and Industry Move to Bolster E-Commerce"
    E-Commerce Times (12/15/99); Greenberg, Paul A.

    Stanford University and Andersen Consulting this week both announced major initiatives aimed at supporting e-commerce. The moves verify the confidence of academia and industry alike in the promising future of Internet commerce. Stanford announced a think tank called the Center for Electronic Business and Commerce, which aims to study and promote e-commerce. The center, which will be part of the university's graduate business program, will eventually offer a complete e-commerce curriculum. Meanwhile, Andersen Consulting announced a $1 billion pledge to support e-commerce startups. Andersen plans to invest in new firms that are able to use technology to enable new business models and change the industry. Andersen's pledge is one of the largest commitments ever made to online startups.

  • "Telecommunications: New Technologies Change the Face of the Future"
    BusinessWorld (12/17/99) P. 24; Sun, Vivian A.

    A wealth of new technologies aim to revolutionize cell phones, allowing mobile access to the Internet, email, digital photos, and even videos. Technologies such as Bluetooth, the Wireless Application Protocol, and 3G are expected to transform communications in the future. Bluetooth was designed to facilitate wireless communication between mobile devices such as notebook computers, cell phones, and personal digital assistants. This provides a great number of possibilities for the communications industry, according to analysts. "Bluetooth represents a completely new dimension to e-commerce which will radically change how portable and wireless devices are viewed and used," says GartnerGroup research director Nigel Deighton. Bluetooth, which was founded in 1998 by IBM, Intel, Nokia, Ericsson, and Toshiba, provides clear communications using radio frequencies in the 2.4 GHz range, which is mainly used by high-speed wireless LANs and bar-code scanning devices. The technology is expected to achieve mainstream use in three to five years; analysts predict that more than 75 percent of new handheld devices shipped in 2004 will feature Bluetooth technology. The Wireless Application Protocol (WAP) also promises to strengthen mobile communications. The specification provides wireless devices such as cell phones with instant access to Internet-based content and services. WAP uses XML technology to scale Internet data to fit mobile screens. One last technology is 3G, which uses GSM, IS-136, and CDMA network standards to provide constant wireless Internet access. All three technologies are still in the early stages of development, meaning that they will lead to greater possibilities in the future, according to research analyst Peter Rysalvy.

  • "For Certificates, a Slow Rollout"
    Internet World (12/15/99) Vol. 5, No. 35, P. 35; Carr, David F.

    Digital certificates help secure e-commerce transactions and offer proof of online identity that is accepted worldwide, but few people are actually making use of the technology. The technology needs to be made simpler and people need to be educated in its use before it gains widespread popularity, according to most computer experts. Nevertheless, Dataquest expects the market for digital certificate software and services to grow from $144 million in 1998 to $1.5 billion by 2002. In order to obtain a basic secure Web Connection, a certificate must be present on the server, but does not need to be on the browser.This makes the technology useful for business-to-consumer sites, but not for more complicated scenarios where the identity of all parties involved must be known. Digital certificates need to be more widely used and simpler in order to identify visitors to basic Web sites. Digital certificates are based on PKI technology, which is seen as the most secure encryption available. Experts say despite the wide range of possibilities associated with this technology, the product should become more familiar to people before it is released on a large scale.

  • "E-Business Digital Divide Is European Not Transatlantic, Say Pollsters"
    Tornado-Insider.com (12/14/99); Middleton, Guy

    A Mori survey of high-ranking officials at U.S. and European businesses indicates that the difference in attitudes about the Internet between the two regions is not as large as previously thought, but that northern and southern Europe are exhibiting a significant disparity. Overall, 60 percent of U.S. respondents say the Internet is already a critical aspect of their business or will be within two years, compared with an average of 55 percent of respondents in the United Kingdom, Sweden, France, Spain, and Germany. Swedish companies led the European pack with a 66 percent positive response rate, followed closely by 64 percent of British companies. Germany was third with 53 percent.At the bottom were France with 49 percent and Spain with 42 percent. One factor keeping French and Spanish companies from valuing the Internet as highly as their U.S. and northern European counterparts is the need of the southern countries for non-English language sites. Eighty percent of Spanish respondents say they need to conduct Internet business in languages besides English, as do 69 percent of the French. Despite those high figures, an overall majority of English-speakers also expressed a desire for alternate language Internet business.

  • "Seeing Is Believing"
    Telephony (12/13/99) Vol. 237, No. 24, P. 70; Labarba, Liane H.

    The National Transparent Optical Network Consortium (NTONC) is helping to develop the U.S. government's Next Generation Internet (NGI). NTONC is now working on the West Coast part of the network, which eventually will be used to test high-speed broadband applications. Already, NTONC has connected Portland, Ore., and Seattle. Nortel Networks is managing the project, and vendors, carriers, corporations, universities, and research groups have all contributed as well. The backbone of the network is a 10 Gbps OC-192 Sonet system that extends from Seattle to San Diego, says Nortel's program manager for NTONC Paul Daspit. However, only about half of the backbone is complete, and NTONC plans to add Layer 3 switching, ATM, packet-over-Sonet switching, and routing to the network's five main nodal points, Daspit says."Our purpose is to provide very high bandwidth research activities that [organizations] can't get from any other source," Daspit says. NTONC's network allows organizations to study next-generation issues involving protocols and devices, Daspit says. Currently, researchers are using the network to try out high-speed applications such as remote medical diagnosis and real-time distance editing of motion pictures. GST Communications, Sprint, and the San Francisco Bay Area Rapid Transit contributed the fiber part of the network, while Nortel provided its 10 Gbps optical equipment and Avici Systems offered its terabit switch/router.

  • "The Internet Unplugged"
    InformationWeek (12/13/99) No. 765, P. 22; Wallace, Bob

    Wireless Internet devices can help businesses improve internal processes as well as the services they offer consumers, and companies should begin implementing wireless technology now to take advantage of these opportunities. Wireless devices allow customers to engage in e-commerce from any location and at any time. Delta Air Lines, for example, announced last week that it is testing a wireless service that offers customers flight information and ticket purchasing. In addition to business-to-consumer services, wireless technology can also benefit internal processes. By 2003, the number of workers in companies with over 1,000 employees that use mobile devices will increase to 9 million, up from today's 784,000, according to Cahners In-Stat Group estimates. Media giant Bertelsmann plans to use wireless technology to improve its internal processes by providing junior-level executives with wireless access to a company portal called JuniorNet. JuniorNet will allow users, for example, to use a cell phone to access necessary information before giving a presentation, says Bertelsmann's Thomas Schroter.Businesses are just starting to move into wireless technology for consumer services and internal processes, and vendors are responding to the demand for wireless products and services. IBM and Nokia last week partnered in a venture to provide developers with a software toolkit, a testing facility, technical assistance, and Wireless Application Protocol devices to create applications. Meanwhile, Microsoft and Ericsson teamed in an effort to create applications and services that allow mobile phones to access Web sites and intranets. Oracle joined with Symbian, an alliance that includes Ericsson, Matsushita, Motorola, Nokia, and Psion, to create applications for Symbian's EPOC operating system. Analysts say IT executives, especially those developing an e-business strategy, should get involved with wireless technology now. However, companies deploying wireless applications are likely to face obstacles such as adapting existing applications to run on wireless devices, bandwidth shortages, and security issues.

  • "Joy to the World"
    Interactive Week (12/13/99) Vol. 6, No. 51, P. 72; Trager, Louis

    Home Web users spent $454 million online for retail purchases, excluding cars and travel, during Thanksgiving Week, according to PC Data Online, a good indication that the Internet is now woven into the fabric of mainstream culture. America Online saw its shoppers triple their spending from last Thanksgiving. Shopping orders were up 400 percent for Yahoo!, while monthly traffic surged ahead 250 percent for ExciteAtHome. Although the pace slipped somewhat the following week, toy and electronic sales were up two times as much as they were for Thanksgiving Week, according to PC Data, while food and pet products tripled. Big e-tailers such as Buy.com and Toysrus.com saw Web visits rise more than four times from the previous week, reports Media Matrix. Even department stores such as Wal-Mart and Sears enjoyed a 74 percent increase in visits, which was triple the traffic of a year ago. With all the interest that consumers have shown in e-commerce during the holiday season, e-tailers have had to scramble to beef up their servers and fulfillment capacity. Some by as much as five times. Still, Amazon.com has been down three times, promotions at Toysrus.com have been interrupted twice, and there has been credit-card processing problems at CyberSource. Meanwhile, Fingerhut, which handles fulfillment for a number of e-tailers, has added 3,000 workers, and UPS has increased its fleet of jets by more than two dozen to prepare for the holiday season rush. Although a late drop off in online purchases is expected, partly because products are sold out and because consumers got an early start on shopping, it appears that consumers have bought into the idea that the Internet offers shopping convenience and cost savings. E-BuyersGuide.com Chairman Irwin Barkan says that "after the holiday promotions, e-tailers will have to retain customers still expecting bargains online."

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