Computer security industry professionals have been cracking encryption technologies lately to show companies how weak their protections really are. The most recent attack is by nCipher, a small British specialty hardware firm that claims its encryption product is faster and more secure than most others on the market. One of nCipher's researchers recently created a program that can reveal the secret keys stored in Web servers that are needed to process credit card transactions. This attack is significant because if someone has a company's secret keys, which are actually the digital codes that unscramble data, the information can be used to disguise one's self as that company and obtain access to credit card numbers and other proprietary financial information. Small companies, and their customers, are most at risk because they often share Web servers with other firms to save money. The nCipher attack shows that the barriers that separate different companies' Web sites on the same server can be infiltrated and the secret keys can be obtained. The nCipher attack is effective against the majority of operating systems that run Web servers, such as Microsoft Windows NT, Windows 2000, and Sun Microsystems' Solaris. NCipher recently made a public announcement warning that it had created its attack program, and it also published the details of the program, making it accessible to hackers. However, the company also announced that it has a product to fend off such attacks. Although such activity may seem unethical in some businesses, it is not considered so in the computer security sector, because it does alert companies to the flaws in their security systems. Regardless, analysts say that because of the declining prices of computer systems, most companies in the future should be able to operate without having to share a server with other merchants.

The Federal Aviation Administration (FAA) contracted with dozens of foreign computer experts to make the nation's air traffic control systems Y2K compliant without first conducting background security checks, according to a recent announcement by the General Accounting Office (GAO). Workers from Ukraine, Pakistan, Britain, Ethiopia, and China performed Y2K testing on 15 of 153 essential air traffic computer systems, raising the possibility that computer codes could have been tampered with. The GAO says that the FAA's failure to conduct the security checks violates its own policies. However, the FAA did begin conducting investigations on the foreigners after a GAO report on the matter was released in early December, and so far no security risks have turned up.

According to the findings of the National Association of Purchasing Management (NAPM), manufacturing was not significantly affected by fears concerning Y2K computer problems. The NAPM's business-survey chairman, Norbert Ore, points out that though the manufacturing index level decreased from November to December, it remained above 50, signifying growth. He notes a slight decline in the new-orders index in this period, but also emphasizes the absence of any signs of panic-oriented behavior on the part of industries. Concerns over the possibility of rapid inflation due to discrepancies between supply and demand have surfaced as a result of the findings; however, interest rates are expected to be raised in February. The NAPM index also indicates a continued rise in employment, an increase in imports, and a slight decrease in exports.

Despite the great attention given to Internet retailers and other such companies, many analysts maintain that business-to-business (B2B) Internet companies are the real area for substantial growth. First of all, consumers will always have brick-and-mortar alternatives to Internet retailers, but if businesses develop a massive network of buyers and sellers, other business will practically be forced to participate, which more or less would eliminate the need for competing marketplaces. The key to electronic buying and selling for businesses is the increased efficiencies that result from bringing vendors and customers together electronically. Furthermore, B2B companies, unlike their retail counterparts, can actually provide investors with evidence of their success. Simply by counting the number, size, and quality of contracts a B2B company secures, analysts can judge the company's prospects. So far, several electronic B2B companies have risen to early prominence, all offering various ways of uniting buyers and sellers. Among the industry leaders are PurchasePro.com--which boasts Sprint, Office Depot, Caesars Palace, and Richfield Hospitality Services among its clients--FreeMarkets, Altranet, and Ariba--which has signed on Motorola, Bristol-Myers Squibb, Chevron, AMD, Hewlett Packard, Visa, Staples, and MCI WorldCom.

Allaire has acquired Valto Systems, a leader in Enterprise JavaBeans technology, in a deal worth over $30 million. The deal adds to Allaire's Java capabilities for its ColdFusion and Spectra lines, boosting Allaire's position as an e-business platform provider, says CTO Jeremy Allaire. "We're hearing substantial demand from our enterprise customers for additional Java2 server technology," says Allaire, noting that the acquisition will help his company meet this demand. Companies are now developing mission-critical Internet applications and are looking for high-performance systems that do not fail, Allaire says. Businesses are now implementing multi-tier architectures that support message queuing and distributed transactions based on Java, says Valto founder and CTO Imre Kifer. Allaire and Valto together will be able to provide "the most complete J2EE implementation available and give customers the infrastructure to develop and deploy mission-critical Web applications," Kifer says.
http://www.techweb.com/wire/finance/story/INV20000104S0003

Toshiba in October paid $2.1 billion to settle a lawsuit centering on a flaw in its floppy-disk controllers, and now four other PC makers face similar class-action suits. The flaw can overwrite or damage data on floppy disks under rare circumstances. Originally, the flaw was discovered in NEC and Intel chips in 1986, but then appeared in Toshiba products as well. NEC and Intel were notified of the problem and corrected the flaw, even running some warning ads to notify consumers, but Toshiba did not address the flaw. Toshiba manufactured the flawed floppy-disk controllers, which it supplied to other PC makers, and made notebooks that contain the flaw. Toshiba officials maintain that they wanted to fight the lawsuit in court, but say they feared a ruling that would force the company to pay back the average value of five million notebooks, which would have cost at least $9 billion. Toshiba lawyers warned the company that it had an almost 100 percent chance of losing, so the company chose to settle, says President Taizo Nishimuro. Now similar lawsuits have been filed against Hewlett-Packard, Packard Bell NEC, Compaq, and eMachines. Lawyers say these PC makers have advantages that Toshiba did not, because the plaintiffs have not proven that the flaw has harmed anyone and none of the four companies manufacture the floppy-disk controllers themselves.

Free delivery, offered as a promotion by several online retailers this holiday season, is likely to become a regular feature at many online sites, according to Forrester Research. Retailers such as Circuit City, ZanyBrainy.com, and Blue Nile offered free shipping to attract customers during the holiday shopping season and will find it competitively difficult to lift the offerings if they hope to retain customers, Forrester says. Shipping costs will be reflected in the fixed prices established by retailers, say Forrester researchers Donnie Young, David M. Cooperstein, and Stacie S. McCullough.

The holiday season already has retailing executives analyzing its online sales trends. As retailers doing business on the Internet look for clues concerning the future of e-commerce, the most apparent issue that they will have to address is delivering their products on time. Toys "R" Us was among the many Web businesses that had problems delivering gifts. Three days before Christmas the company even announced that it would not be able to deliver all of its products to consumers. Demand and infrastructure issues were problems for retailers that used the services of fulfillment centers as well as retailers that have their own order-filling process facilities. What retailers can take away from the shopping frenzy is the need to automate their entire order-filling process and to be ready to ship last-minute purchases. Aside from infrastructure issues, the holiday shopping season had other lessons for retailers. Market research indicates that the online retailers that spent the most money advertising their Web sites did not necessarily reap the most visitors. KBkids.com spent about $40 million but trailed eToys and Toys "R" Us in visitors. The strategy behind the spending was to build brand identity. Although companies focused on network radio, television, and national print advertising this year, focused local markets will be the way in which retailers differentiate themselves from competitors in 2000. Retailers also learned that brick-and-mortars were gaining on the click-and-mortars in sales. Other than the likes of eBay, Amazon, and CDnow, many of the top 50 sites were not Internet-only retailers, according to lists by Media Metrix and Nielsen. Consumers primarily purchased toys, electronics, and other known quantities such as books and CDs, and stayed away from couture fashion and other areas of the traditional touch-and-feel business.
http://www.nytimes.com/library/tech/00/01/biztech/articles/02webb.html

The hype surrounding Linux will fade in 2000, yielding "more rational valuations" for Linux stocks, but the open-source operating system will continue to grow on new applications, according to a recent Forrester Research report. CIOs are not likely to leave existing platforms for Linux, but Linux will dominate new applications, the report says. Companies such as Red Hat and Corel will not experience large growth from reselling Linux, even with planned expansions into technical services and help desk support, Forrester says. However, Linux companies with "defensible assets" such as Cobalt Networks and TurboLinux, which have innovative Linux products, will continue to flourish in 2000. Linux will grow in emerging business areas such as e-commerce applications. High-volume Web sites will deploy Linux systems to power customer experience engines, and Linux will power more consumer appliances, Forrester says. Linux will run car stereos, home entertainment systems, and consumer Internet appliances with easy-to-use interfaces. By 2004, Linux and proprietary Unix will be so similar that many binaries will run on either operating system, Forrester says.
http://www.ecommercetimes.com/news/articles/991230-4.shtml

VA Linux Systems on Tuesday announced that it will begin offering a hosting service called SourceForge for open source projects, in a move that makes VA Linux Systems an ASP for corporations as well as the open source community. SourceForge will offer developers free hosting and communications resources at Sourceforge.net, while companies can buy a commercial package. The service will supply the resources necessary to create and maintain software in a collaborative, online environment. In addition, the service will offer access to projects and an archived history. "There needs to be a place where everyone can go and get every release of Linux and other projects," says VA Linux Systems CEO Larry Augustin. During the initial seven-week test phase, the SourceForge site registered more than 3,000 developers, and the number is rising by about 25 percent a week. SourceForge is hosting a number of significant open source projects, including Topaz, which aims to develop the next version of the Perl programming language. The site also hosts The Berlin Project, aimed at creating a next-generation graphical system for Linux and Unix.
http://www.internetnews.com/bus-news/article/0,1087,3_83102_Ext,00.html

An online performance test by Service Metrics confirmed Y2K's minimal impact on the Internet. Using common Web browsers such as Netscape Navigator and Microsoft's Internet Explorer, Service Metrics attempted to recreate the end user experience by downloading the Web pages of each of InteractiveWeek's top 200 e-commerce sites as the new millennium was ushered in. The fastest sites to load on New Year's Eve were Intel, Cisco Systems, and IBM. Overall, the test found that Y2K affected close to none of the sites. Although some sites such as Yahoo! experienced unusually slow download times, this low performance was attributed to increased traffic as users logged on to check Internet availability.
http://www.zdnet.com/intweek/stories/news/0,4164,2415863,00.html

Employers are increasingly attempting to create Internet policies for workers who go online while at work. Many employers say surfing the Net at work reduces employee productivity, ties up the networks, and makes sexual harassment and other lawsuits against the company more possible. Employment lawyers say that employers should create an Internet policy, but should first consider the corporate culture before fully implementing it. For example, employees at chain bookstores should probably have greater access to the Internet, while hospitals, law firms, and banks are more liable to limit what employees can access online; these types of companies are also more likely to monitor employee use of the Internet. Employment lawyers say a company's Internet policy should state that the network is the property of the company, and that employees should not break the law or company policy while using it. Although some companies trust their employees to monitor themselves when it comes to off-limits sites, others use technology to block access to those sights, as well as software to see how much time employees spend on the Web and where they go. Employment lawyers say that it is best to monitor an employee or a department only after there is reasonable suspicion that the Internet is contributing to poor productivity, but not to monitor all employees' Web use all the time. Although this would be perfectly legal, according to employment lawyers, it would also create great employee resentment and could cause a backlash.
http://www.lawnewsnetwork.com/stories/A12505-1999Dec30.html

In an effort to capture part of the growing EAI market, IBM and New Era of Networks (Neon) are offering co-branded enterprise application integration (EAI) software based on IBM's MQSeries middleware. EAI is a promising market: AMR Research analyst Kimberly Knickle predicts EAI software sales will reach $600 million in 1999 and grow nearly 50 percent annually the next few years. Furthermore, nearly 75 percent of 300 IT managers surveyed by InformationWeek Research said EAI is a planned project for 2000. National Securities Clearing (NSCC), the largest financial-transaction clearing house in the U.S., used Neon's MQIntegrator software to create the links required to edit, validate, reformat, and redistribute information in its insurance processing division. "EAI allows us to focus on the whats and whys" of the financial business, says NSCC's John Shranko.
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Many companies will follow their competitors into e-commerce, but few will become e-commerce leaders, writes Peter Keen. For a company to lead in e-commerce, it must change traditional e-commerce thinking and priorities, with the entire organization working together. IT departments, for their part, should add value to several business-technology dialogues, Keen says. For example, IT should focus on commerce rather than technology, creating value by focusing on relationships, community building, and business process design. In addition, IT departments should guarantee the integrity of the IT transaction platform to create trust in customer and supply-chain partner relationships. Reliability, security, and scalability are vital to maintaining relationships in e-commerce. Collaborations should form the basis of any strategy, since the demands of e-commerce push the limits of any single company, Keen says. IT departments should work with customers, supply-chain partners, portal partners, and service providers. If IT departments are unable to make informed decisions based on collaborations, a company cannot be an e-commerce leader, Keen says. Finally, companies should prepare to change their entire IT architectures to accommodate customer needs. The current distributed architectures are insufficient for future e-commerce, which will require wireless and mobile devices, roaming agents, IP voice merging with IP data, and increased scalability.
http://www.computerworld.com/home/features.nsf/all/000103keen

Technology is poised to transform the workplace of the future, agreed several industry members in a discussion with CIO's Polly Schneider. Schneider met with a number of industry leaders, including Paul Horn, senior vice president and director of IBM Research; Anita Borg, researcher at Xerox PARC and president of the Institute of Women in Technology; Haim Mendelson, professor of information systems and management at Stanford University; and Jim Sutter, senior partner at the Peer Consulting Group. Horn predicted that the companies of the future will bear little resemblance to the companies of today. The concept of e-business will skyrocket, giving rise to companies with few or no physical assets. The business world will become much less structured, with companies forming temporarily to meet a specific demand, agreed the panelists. Due to this increasing volatility, the biggest management challenge of the future will be to quickly establish a unified corporate culture. Basic workplace technologies of the future will include object-oriented programming and Java, enabling companies to build applications much faster than they can today. Meanwhile, core technologies such as semiconductors will continue to develop exponentially, much in the tradition of Moore's Law. Overall, technology will become much more prevalent as well as user-friendly.
http://www.cio.com/archive/010100_progress.html