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Volume 2, Issue 5: Wednesday, January 12, 2000

  • "Smooth Entry of 2000 Is a Puzzle"
    New York Times (01/09/00) P. 18; Feder, Barnaby J.

    Many computer experts are wondering why countries that seemed to put relatively little effort into preparing for Y2K fared as well as nations such as the U.S. and Britain that devoted considerable resources to the glitch. Last January, a World Bank survey reported that only 54 of 139 developing countries had laid out national Y2K programs, and just 21 were acting on these plans. Experts were deeply concerned about the readiness of countries such as Japan, China, Italy, Venezuela, Russia, and many others. In light of the smooth rollover, experts believe they might have underestimated many nations' efforts in the last few months before 2000, and the considerable benefit late starters had as a result of what the Y2K forerunners had already learned. However, analysts also misjudged the world's reliance on technology since most countries are not as dependent on computers as the U.S., and the computers they do use are simpler and less interconnected, experts now say. Some analysts say the spending of other nations is comparable to that of the U.S. if adjustments are made for the level of computerization in various nations. In addition, part of the U.S. spending on Y2K went toward fixes in other nations, because some U.S. companies funded repairs for overseas factories and the federal government financed a number of global efforts to disseminate Y2K information. Finally, comparing the cost of Y2K is difficult because different countries are not consistent in the way they determine Y2K expenses; for example, many nations do not include labor in the total cost of Y2K, while the U.S. and Britain do.

  • "Internet Extortionist and Thief Challenges Computer Experts"
    New York Times (01/11/00) P. A18; Markoff, John

    Computer security experts say that it will be extremely difficult to track down a computer hacker who placed the credit card numbers CD Universe customers on the Internet after the company refused to pay the man $100,000. The hacker, who calls himself Maxus and claims to be operating from Russia, broke into CD Universe's network several weeks ago and told the company that he would place its customers' credit card files on the Internet if he was not paid $100,000. When CD Universe refused to comply with his demands, Maxus placed over 25,000 customer credit card numbers on an illegal Web site, where tracking data reveals thousands of people have visited over the two-week period the site was in operation; it was shut down on Sunday morning. Security experts say that Maxus is most likely based in Eastern Europe, not Russia, and that Maxus would soon make good on his threats to re-establish another Web site listing stolen credit card numbers.

  • "Business E-Commerce Expanding"
    Baltimore Sun (01/09/00) P. C1; Patalon, William

    Business-to-consumer e-commerce did well over the holidays, as consumers spent some $10 billion online, but now consumer e-commerce is fading somewhat. However, business-to-business e-commerce is picking up. Forrester Research says by 2003 the business-to-business e-commerce market will be worth $1.3 trillion and will affect almost every consumer in some way. Business-to-business e-commerce currently is mostly just trade between businesses that is made easier by computers, but as it evolves, e-commerce will become more sophisticated. Commodities marketplaces are appearing online, and quality of service will become more important than price. Business-to-business e-commerce will combat inflation and reduce costs and wastes, says Grant Thornton manufacturing consultant Paul Engle. He says that moving a supply chain to the Internet can streamline the process by allowing different parts of the chain to see how the others are doing. For instance, if PCs are selling well at the retailer, the manufacturer can start building more computers, and check back along its own chain to be sure there are no shortages. A vendor's system can even be programmed to automatically ship products if the customer's inventory level drops. Inventory measured as a percentage of sales is at a historically low level, and it will drop further--letting companies save money by not having to stock as much. Middleman distributors will disappear in some industries, says economist Pradeep Ganguly.
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  • "Microsoft Settles Caldera Lawsuit"
    Financial Times (01/11/00) P. 19; Kehoe, Louise

    Microsoft yesterday agreed to settle an antitrust suit filed by small software rival Caldera in 1996 for an estimated $153 million. The suit, scheduled to go to trial within three weeks, could have been another significant legal matter for Microsoft. Caldera charged that Microsoft used its leading position in the PC operating system market to eliminate competition from DR DOS, a product that rivaled MS-DOS, which underlies Windows. In charges similar to the product tying accusations in the government's antitrust suit against Microsoft, Caldera claimed that Microsoft illegally tied Windows to MS-DOS to establish its Windows monopoly. If Caldera had won the suit, Microsoft might have been responsible for damages on all Windows sales, experts say. Microsoft says its settlement with Caldera has no bearing on the government's case or any other suits. Separately, the Supreme Court yesterday upheld an appeals court ruling that Microsoft's temporary workers should be allowed to participate in Microsoft's discounted stock-purchase plan.

  • "Reno to Discuss Proposals to Bolster War on Cyber-Crime"
    Los Angeles Times Online (01/10/00); Miller, Greg

    U.S. Attorney General Janet Reno on Monday planned to propose several initiatives aimed at fighting cyber crime by improving the way law enforcement agencies across the nation cooperate in such matters. Technology crimes, especially those involving the Internet, are now a high priority for the government, which has recently introduced a number of initiatives aimed at curbing high-tech crime. One of Reno's proposals calls for a nationwide network of computer crime coordinators at law enforcement agencies. The coordinators would be able to rapidly serve court orders to get account information or trace calls and data transmissions from local telecom companies and ISPs. Reno's second proposal suggests the development of a national computer system that would enable law enforcement agencies to contribute and access information about investigations into all types of crime. Although a network already exists that allows state and local agencies to access federal crime databases, the network does not let state and local agencies supply information. Finally, the third proposal calls for the establishment of forensic computer crime labs across the nation that would employ federal, state, and local authorities. The labs would employ computer experts who would analyze hard drives and other systems for evidence of cyber crimes that would aid in prosecution.

  • "It's the End of TV as We Know It"
    Wired News (01/07/00); Gartner, John

    Cable networks, satellite providers, ISPs, set-top box manufacturers, and Web portals could be at the beginning of a road leading to enhanced television features such as DVD-quality movies, music, and Internet access that includes instant messaging. In the second quarter of 2000 customers will have the ability to record up to 30 hours of programming that can pause, rewind, and fast-forward using TiVo software that will emerge from a deal between TiVo and DirecTV. Users can schedule a recording based on a variety of categories up to two weeks in advance. AOL has partnered with DirecTV to offer "AOLTV," which allows users to access AOL services such as email and instant messaging on televisions that link to DirecTV. Intel, Sun Microsystems, and WebTV are all developing television systems that are interactive, allowing users to participate in votes and change the view of certain cameras. Digital TV is widely accepted by public broadcasting stations in the U.S., and it is mainly used for educational purposes in schools. Since it is expensive to purchase new televisions that are capable of digital TV and relatively inexpensive to purchase video cards that enable digital televisions on computer screens, many analysts believe digital TV will be on PCs before it makes it to TV screens. A partnership between Intel and WebTV has created a way to view statistics and information on top of programs by using HTML to display text and graphics. Cable boxes that enable Internet access, enhanced TV, and digital video recording will be available later this year from Thomson Multimedia and Philips Electronics.

  • "Study: Linux Gaining in Corporate World"
    USAToday.com (01/06/00); Rodger, Will

    Open source operating systems such as Linux are rapidly gaining corporate PC market share, and the success of these Microsoft rivals might prevent courts from forcing a breakup of the software giant. Linux and other free operating systems will claim 9 percent of corporate PCs within two years, according to a recent Survey.com survey. "People are sold on open source software," says Survey.com analyst Dave Trowbridge. "The era of proprietary standards is gone." Companies that already use open source operating systems intend to use open source on nearly 23 percent of desktops by January 2002, up from the current 10 percent. In addition, more than 34 percent of those firms' servers will use open source software by 2002, up from today's 18.7 percent. This growth is occurring much more quickly than firms such as International Data had predicted. However, Linux might not move from the business world to the consumer market as Windows did. To succeed in the consumer market, Linux would have to be simple enough for average users, and Linux versions of consumer applications would have to be available. Red Hat CEO Robert Young says his company will continue to make Red Hat Linux easier to run on PCs, but the market will move more toward non-PC devices. The shift away from PCs is likely to make Microsoft's dominance in the PC market a less significant issue.

  • "Linux Boosted by IBM Support"
    Financial Times (01/11/00) P. 22; Foremski, Tom

    In an effort to boost hardware sales and services revenues and expand its e-business offerings, IBM is investing hundreds of millions of dollars in a plan to focus its hardware and software units on the Linux operating system. "This is a strategic move to ensure that IBM is ahead of the industry in taking advantage of the momentum building behind Linux," says IBM's Samuel Palmisano. "We believe that Linux is now at the point that the Internet was several years ago." IBM will work with other Linux developers to establish the operating system as the standard for e-business. Irving Wladawsky-Berger, formerly responsible for expanding IBM's Internet-related business, will lead the new Linux effort.

  • "Microsoft Left Out of Mobile Frenzy"
    Reuters (01/11/00)

    Wireless Internet access is quickly becoming a formidable trend, with industry giants such as IBM and Oracle unveiling deals to position themselves in the market. The market for Internet access through handheld devices is expected to reach 500 million devices worldwide by 2003, out of a total of 1 billion cellular accounts. IBM and Oracle both leaped into the market this week: IBM introduced a series of deals with mobile operator Vodafone Airtouch, while Oracle has partnered with Cap Gemini. Software giant Microsoft was noticeably absent from the frenzy, raising questions as to its long-term success. Some analysts are also predicting that Microsoft's Windows CE operating system for mobile devices will be overtaken by rival platforms such as EPOC. Although the wireless Internet access market is just emerging, analysts say it is usually best to enter the market early. "For now, for the early years, it's a rising tide that lifts all boats," says Lehman Brothers analyst Brian Skiba.

  • "Cybershops Look to Keep U.S. Online"
    Associated Press (01/09/00); Beck, Rachel

    This holiday season, online sales reached more than $12 billion, which is 300 percent more than last year. Now cybershops are looking for strategies that will keep their old and new customers coming back to buy from the Web site throughout the year. Most companies are avoiding expensive advertising campaigns, which did not work for companies during the holiday season, in favor of improving customer service, creating personalized services, and offering valuable promotions. Companies such as Toysrus.com and eToys that experienced shipping delays during the holidays are overhauling their Web sites in an attempt to promise their customers on-time delivery of products. Ninety-five percent of 500 people surveyed by Andersen Consulting believe on-time delivery would increase the chances that they would shop at the same Web site again. Companies such as 800.com are taking the "surprise and delight" method to get customers to buy again; 800.com includes something extra with each customer's purchase, like popcorn or other free gifts. Companies such as SmarterKids.com are using their databases of information to create personalized shopping pages; however, many analysts warn companies to be careful with consumers' personal information.

  • "Retailers Would Bear Brunt of Online Fraud"
    American Banker (01/11/00) P. 1; Fickenscher, Lisa; Souccar, Miriam Kreinin

    Online businesses are hardest hit by credit card fraud, as they are required to pay the bills when fraudulent transactions occur. In the brick-and-mortar world, banks issuing the credit cards are the ones that end up footing the bill on bogus transactions. Consumers are legally supposed to pay the first $50 of any fraudulent transaction charged to their card, but this is often not enforced. This problem unique to online merchants was highlighted recently when a hacker broke into the computer systems of eUniverse and stole the company's customer credit card information. The hacker then demanded that eUniverse subsidiary CD Universe pay him $100,000 lest he place all of the customers' credit card information on a Web site. When CD Universe refused to pay up, the hacker created a Web site listing over 25,000 customer credit card numbers. Both Visa and MasterCard say that they are in the process of reviewing all of the credit cards involved in the incident so they can alert bank members to watch for suspicious activity in those accounts. Computer security experts say that Internet fraud can be severely curtailed by implementing the SET payment standard created by Visa and Mastercard, which uses digital certificates and does not require account information to be sent over the Web. By 2001, MasterCard will require e-merchants to ask customers for a special three-digit number that will soon be on the back of all MasterCard cards, a number that only the legitimate card owner could be privy to. Other analysts say that the CD Universe incident may speed up the use of smart cards, which require digital signatures and keep customer account and personal information contained on the card and not at the Web host site.

  • "Global Limits"
    Traffic World (01/10/00) Vol. 261, No. 4837,; Cottrill, Ken

    Although many companies aspire to serve international markets through e-commerce, most are stifled by the difficulties of global distribution. In a recent Forrester Research survey, 85 percent of U.S. retailers surveyed were unable to deliver products internationally. Furthermore, the companies that do serve international markets are mostly relying on a domestic warehouse to do so, says Forrester analyst Stacy McCullough. About 40 percent of respondents listed international distribution as their largest e-commerce challenge. Although the companies reported a large number of hits on their sites from foreign buyers, the companies said they had not determined a way to deliver to these customers, says McCullough. The challenges of serving foreign markets include handling sales cycles in different countries and making timely deliveries, according to experts. Companies should measure the cost of delivering to foreign customers against the profit these customers will bring, and provide service accordingly, experts say.

  • "B2B: The Hottest Net Bet Yet?"
    Business Week (01/17/00) No. 3664, P. 36; Cohn, Laura; Brady, Diane; Welch, David

    Business-to-business (B2B) e-commerce is growing rapidly, with companies of all kinds moving to the Web and buying the technology to make transactions possible. By the end of next year 91 percent of U.S. firms will use the Internet for procurement, compared with today's 31 percent, according to Deloitte Consulting. This growth will make the B2B market six times as large as the business-to-consumer market by 2003, Deloitte says. B2B e-commerce could enable companies to increase productivity and reduce prices, experts say. Recent studies suggest that B2B e-commerce could raise productivity in manufacturing alone by 9 percent in the next five years, and could lower processing costs in certain industries by over 20 percent. GE Information Services, for example, orders office supplies online using a system called Trading Partner Register. Online transactions cost the company about $1, while ordering offline can cost between $50 and $200 per transaction with the expense of paperwork, says GE CIO Gary Reiner. Investments in B2B companies more than tripled in 1999 over 1998, with venture capitalists investing $3 billion in 200 B2B firms. Fueling these investments is the rapid adoption of B2B technology such as the Internet and Web browsers, which have made digital transactions much simpler and cheaper than the EDI systems of the past. Millions of businesses have moved to the Internet since Web browsers were introduced in 1994, enabling the development of broad B2B marketplaces.

  • "A New Kind of Client"
    PC Week (01/03/00) Vol. 17, No. 1, P. 44; Knowles, Anne

    IBM, Compaq Computer, and Hewlett-Packard are among the vendors working on new technologies that promise new ways of interacting with computers. In the future computing power is expected to become part of almost any device, and those devices will all be linked together, transparently, a concept known as pervasive computing. Compaq's Jerry Meerkatz says that computing power will evolve to where electricity is today. He says "you will no longer see technology, and you will no longer worry about" it. However, despite the changes, experts say PCs will be part of this future, although perhaps in much different form. Analyst Michael Slater says "we're moving to a world of pervasive digital media, and it is relatively easy to imagine a future world of computing quite different from today." Researchers at IBM, for example, are developing a Web browser capable of tracking a PC user's eye movements with infrared technologies. The browser takes note of what the user is viewing on any given page and displays related content in real time. This sort of technology, coupled with shrinking processors and memory chips and wireless bandwidth, is why IBM researcher Robert Morris says the PC era is far from over, even if PCs will be joined by countless other embedded and portable computing devices. In the near future, the computing environment "will become what we call an 'attentive environment,'" Morris says. "Computers will pay attention to you as well as demanding you pay attention to them."

  • "The Rush to XML"
    InformationWeek (01/03/00) No. 767, P. 71; Radding, Alan

    XML is now the most promising technology available for business-to-business information exchange on the Web, and many companies are beginning to recognize XML's potential. About 45 percent of IT executives plan to launch XML projects in 2000, according to an InformationWeek study. XML allows companies to structure and share data without rewriting systems or adding significant middleware. XML and related standards enable systems to parse documents to find certain content for other systems to process and to change the way content is displayed for different viewers. For example, solutions provider Synergistics uses XML on the portal for its Prevail Knowledge Center product to customize the data each visitor sees. XML seems to be most effective in high-end custom publishing, intra-enterprise application-to-application integration, and business-to-business communication, experts say. In terms of application integration, companies are usually seeking data integration, for example, by sending data from an ERP system to a customer-management system. Beauty product maker NuSkin Enterprises is trying XML as a way to integrate its SAP R/3 ERP system with other applications, and expects to eliminate the need to map record formats to each separate system. Even more than application integration, companies are interested in XML for business-to-business applications. XML uses document type definitions (DTDs) that define specific XML tags, allowing information to be understood by any system that supports XML. Companies can develop their own DTDs or work with other firms to create industry-specific DTDs. Using a standard set of DTDs, business partners can share XML documents rapidly and easily. XML appears ready to carry out the unfulfilled promise of EDI, which proved too expensive and complicated for many businesses. XML tools are inexpensive and widely available--unlike the value-added networks needed for EDI--and XML systems are significantly faster to implement than EDI systems.

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