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Volume 2, Issue 7: Wednesday, January 19, 2000

  • "Microsoft Challenges Antitrust Arguments"
    Washington Post (01/19/00) P. E1; Segal, David

    Microsoft yesterday submitted a brief to Judge Thomas Penfield Jackson arguing that the government's antitrust charges against the company are not supported by evidence or legal precedent. In the brief, Microsoft says it does not have monopoly power, and is threatened by competitors such as Apple as well as wireless devices that do not use Windows. The brief argues that the government has failed to prove that Microsoft "engaged in anti-competitive conduct that significantly contributed to the maintenance of an alleged monopoly in operating systems for Intel-compatible personal computers." Furthermore, Microsoft says the government has not shown that the company set out to monopolize the market for Web browsing software. Responding to the charges that it prevented computer makers from altering Windows, Microsoft notes a number of earlier copyright suits. For example, in a case in which ABC tried to edit Monty Python skits, a federal appeals court ruled that "unauthorized editing" violates a copyright. Microsoft contends that Windows should be similarly protected from modification. The Justice Department and the 19 states suing Microsoft have already filed their brief, and the opposing sides will respond to each other's briefs in the next few weeks. Judge Jackson will release his conclusions in March, and if he finds that Microsoft has broken the law, a final ruling is expected in June.

  • "Top Chip Firms Join to Develop New DRAM Technology"
    Wall Street Journal (01/18/00) P. A21; Flannery, Russell

    Six major chipmakers have announced an alliance aimed at creating new technology for PC memory chips. The group includes Intel, Micron Technology, NEC, Samsung Electronics, Hyundai Electronics Industries, and Siemens' Infineon Technologies. Not including Intel, the alliance accounts for 70 percent of the worldwide DRAM market, which reached $21 billion last year. By working together, the companies will be able to save money on developing advanced DRAM technology, says Hyundai Electronics' Simon Hong. The group aims to develop next-generation DRAM technology that will be available by 2003. In addition, the alliance will offer information that will help the development of other PC components such as chipsets.

  • "Mystery Chip Finally Ready to Roll"
    San Jose Mercury News (01/17/00); Quinlan, Tom

    Transmeta, which has kept its business a secret for the past five years, now plans to unveil a line of chips called Crusoe for mobile computing devices. The Crusoe chips are rumored to be fast, programmable in real time, and use little energy. Some say the chips will serve as a universal replacement for many other types of chips, using Transmeta's morphing hardware and software technology that would allow Crusoe to imitate almost any chip design. Transmeta has previously discussed the possibility of "smart" processors that could be programmed in real time to modify the instruction set in the chip. This type of programmable chip would enable the development of cheaper TV set-top boxes and other devices because manufacturers could use the same chip for a number of products, programming them for different uses. Transmeta's chips are rumored to run at speeds ranging from 400 MHz to 750 MHz. Crusoe chips might include 64-bit components that would allow the chip to process more data at the same time, and an instruction set based on the same technology as Intel uses in its Itanium chips. In addition, the Crusoe chips are expected to require half as many transistors as Intel's Pentium IIIs and use significantly less energy. The Crusoe chips could target markets such as set-top boxes, dedicated Internet access devices, handhelds, and possibly laptops. None of these markets now has a leading chip design, so Transmeta could succeed if it offers high performance at a low cost, analysts say. However, many analysts question whether Transmeta's Crusoe line will be able to live up to its hype.

  • "Does Your Company Own What You Know?"
    USA Today (01/19/00) P. 1A; Armour, Stephanie

    Companies are increasingly controlling their employees' behavior in an effort to keep proprietary information from spreading to rival firms. The ability of information to flow quickly and simply via the Internet, as well as the hot economy, which has contributed to workers jumping from good jobs to even better jobs, has prompted employers to guard valuable information tighter than ever before. Companies have reported a huge rise in information theft within the last 17 months, according to a recent survey by the American Society for Industrial Security and PricewaterhouseCoopers. In 1998, Fortune 500 companies reported losses of more than $45 billion due to the snagging of trade secrets, often from the inside. This has led many companies, such as Starbucks, to force employees to sign agreements stating that they will not work for any competitor after they leave their job. Other companies are requiring contractors and others with whom they do business to sign contracts swearing them to privacy about company secrets. Analysts say that employer paranoia is greatest in the high-tech industry, where information about new products can make or break a company depending upon when it is released. The cut-throat environment of Web startups competing against one another with ideas as the main form of currency has also contributed to the culture of secrecy. Analysts contend that many companies are increasingly willing to file lawsuits against other companies or their own employees when they believe proprietary information has been compromised.

  • "Online Security Remains Elusive"
    Wired News (01/18/00); Oakes, Chris

    E-commerce security is becoming an increasingly important issue in light of the recent hacks of a French company's 56-bit encryption key and the American e-commerce site Online CD, from which 300,000 credit card numbers were stolen. Dr. Tai Rabin, security specialist at IBM's T.J. Watson Research Center, says more complex safeguards such as "elliptic curve" technology are needed. Many in the industry are not just calling for financial information to be secure, but also for consumer privacy from e-commerce itself. Secure Web connections "do nothing to protect me against who's watching to see what books I'm interested in," said Sun Microsystems' Whitfield Diffie. Kocher suggests an e-commerce regulatory agency be set up, but is skeptical of putting such control in the hands of the government. "You need a regulatory entity that is controlled by the relying parties," Kocher says.

  • "Linux Vendor Set to Get $57 Million Infusion"
    New York Times (01/17/00) P. C11; Markoff, John

    Linux vendor TurboLinux on Monday expected to receive a $57 million investment--the largest round of private funding a Linux company has ever received. Investors include Dell, Compaq, Intel, and many others. TurboLinux sells a version of Linux with proprietary software that allows Internet sites to tie computers together to form Web farms. TurboLinux is strong in China and Japan. The investment in TurboLinux is the most recent in a series of investments in Linux firms. Caldera, for example, announced a private investment of $30 million last week. Linux has been growing rapidly because it is considered more reliable for business applications than Microsoft's Windows NT. However, Microsoft next month will release Windows 2000, which will compete for the markets in which Linux has been most successful.

  • "A New Net Craze Is on the Way"
    Philadelphia Inquirer (01/18/00) P. C1; Hill, Miriam

    Business-to-business (B2B) e-commerce firms seem poised for huge growth, and investors are eagerly buying stock in these companies. Companies will sell an estimated $1.3 trillion in business products on the Internet by 2003, compared with today's $109 billion, according to Forrester Research. Although B2B firms will only receive a percentage of these total sales, they can earn money in a number of ways. For example, B2B companies can serve as a broker that takes a percentage of each sale, help other businesses establish sales sites, or allow advertisers to access online marketplaces for specific industries. Currently, the B2B market is an estimated three to 10 times larger than the business-to-consumer market. The stock values of B2B companies are rising on investor enthusiasm, and some experts believe investors will be disappointed as a number of B2B firms fail. However, investors believe that stock prices will stay high as successful companies buy up those that fail. Still, B2B stock prices appear to be highly volatile. For example, online industrial products auctioneer FreeMarkets' stock dropped 41 percent this year after General Motors announced that it would use Commerce One rather than FreeMarkets. Another risk to B2B firms is that large companies will decide to deal directly with other businesses, bypassing e-marketplaces. In addition, major software firms such has Oracle and SAP are moving into the B2B market and could shut out B2B players.

  • "Doors Open for One-Stop Surfers"
    Financial Times (01/18/00) P. 10; Nairn, Geoff

    Many companies are trying to spark employee use of corporate intranets with workgroup-tailored Web pages called portals. Designed to resemble consumer portal sites such as Yahoo!, corporate portals are becoming a fast growing sector of the Internet software. Market analysts predict its worth could reach $15 billion by 2002. Many companies have thrown their weight behind intranet portal development. "In the past, Web sites were used for external communications," says NetObjects CEO Samir Arora, "but now we are beginning to see Web technology transform the enterprise from within." NetObjects' Authoring Server Suite fosters collaboration through a team-based design approach to creating a company's intranet portal. Also, Lotus and Microsoft jointly unveiled what is known as a knowledge management (KM) portal, designed to provide customized information links to corporate intranets.

  • "Net Conference Focuses on Privacy"
    USA Today Online (01/17/00)

    Experts at the RSA Conference on software security warned on Monday that companies need to forge stronger working relationships to craft standard security platforms that will safeguard e-commerce transactions. RSA Security used the forum to announce a partnership with insurance group American International to study the perils of e-commerce and to build new insurance products for e-commerce. RSA is also partnering with VeriSign to develop secure wireless e-commerce devices. Companies are expected to take the wraps off several new security-oriented software products over the course of the conference, including data scrambling technologies for credit card numbers.

  • "Ford, GM Drive Onto Information Highway"
    Washington Post (01/15/00) P. E1; Brown, Warren

    The 2000 North American International Auto Show showed that competition between auto executives is becoming oriented toward electronics, wireless communications, and Internet access rather than engine power and exterior design. Ford showed off the 24/7 concept vehicles, which are full of telecommunications and other equipment. Ford CEO Jacques Nasser said the 24/7 vehicles are "about establishing the car as the Internet on wheels." General Motors officials spoke similarly. At the show, Ford announced a deal in which Yahoo! will carry thorough information about Ford, with GM announcing similar deals with AOL and NetZero. But the announcements did not mention making prices available online, which auto dealers are against, arguing that only they should be allowed to set prices. However, Ford and GM executives all say the dealers will eventually lose the battle and prices will be made available online; some already are on Edmunds.com and other sites. DaimlerChrysler is trying to head off clashes with dealers in the U.S. by moving into e-commerce more slowly, but the company is set to announce its own strategy for e-commerce. This could also affect traditional media, which could lose a great deal of automakers' advertising money to the Internet. A KPMG research report says these are the natural results of the industry's move into the information age, in which automakers will have to focus on marketing rather than manufacturing.

  • "World Cybercrime Treaty May Be Underway"
    Newsbytes (01/14/00); Gold, Steve

    The governments of the United States, European Union, Japan, South Africa, Canada, and other countries are working to develop a draft treaty on Internet security that would outlaw hacking and unauthorized Internet eavesdropping and surveillance, according to unsubstantiated Usenet reports. The reports suggest that the treaty would also ban Web sites that post lists of passwords and codes for unauthorized access to computer systems. Spam would not be covered by the treaty, the reports say. EU press officers did not comment on the reports.

  • "Technical Complexity Brings Simplicity to the Net"
    Interactive Week (01/10/00) Vol. 7, No. 1, P. 59; McGarvey, Joe; Babcock, Charles

    Internet-enabled devices are becoming increasingly varied, creating a complex communications network. Yet even while mobile devices make the network more complex, they aim to simplify Internet use among consumers. Therefore, networking hardware and software must evolve to facilitate user-friendly, Internet-based communication among disparate mobile devices such as cell phones and pagers. Essential to simplifying communications among various systems is middleware, which automatically links applications without user intervention. One form of this software is the application server, which has emerged over the past year. Application servers automatically link application requests to a legacy system resource such as a database. Another method of simplifying communications among different sources is a common language such as XML. Standards groups such as RosettaNet and the Oasis are currently working to develop XML vocabularies to enable businesses using different platforms to exchange documents.

  • "E-Retailers Balance IT, Marketing"
    InternetWeek (01/10/00) No. 795, P. 1; Karpinski, Richard

    Online retailers are beginning to learn that a successful e-business requires a steady balance between marketing and order fulfillment. Although most e-commerce ventures strongly emphasized sales and marketing for the holiday season, many failed to adequately prepare their infrastructures to handle the traffic. "I had worried that sites would overspend on sales and marketing, and underspend on building out their back ends. And that's exactly what happened," says Jupiter Communications analyst Ken Cassar. Online retailers that thrived in the holiday season cite early planning and IT spending as the keys to their success. Electronics retailer Hifi.com, for example, bolstered its infrastructure after experiencing inventory shortages and understaffed customer service centers during the 1998 holiday season. After adding a new e-commerce and inventory management system and quadrupling its call center capacity, Hifi.com yielded strong sales figures and a 99 percent fulfillment rate this holiday season. Inventory fulfillment systems are particularly important to an e-business' success, says Toysmart.com CEO David Lord, whose company runs a $1 million inventory fulfillment system from Yantra. Although the cost of such a system is high, it yields an equally high value in terms of customer service, says Yantra's Rachel Lev. Too many sites "allow somebody to purchase something when they don't really know if it's available," says Lev. "A faux pas like that can do serious damage to a brand."

  • "E-Business Redefines Infrastructure Needs"
    InfoWorld (01/10/00) Vol. 22, No. 2, P. 22; Fisher, Susan E.

    E-commerce has created a need for around-the-clock systems, creating challenges for IT workers who are trying to eliminate downtime in complicated and often unstable networks. Since online shoppers can switch so easily to a rival company, e-commerce vendors must ensure that their site is always available. Online businesses cannot afford for systems to go down while they make upgrades or changes, says Calvin Braunstein of consultancy Robert Francis Group. Downtime cost large Internet companies $8,000 an hour in 1999, Forrester Research estimates. Online firms also have difficulty predicting traffic volumes. "The fact is that the world at large has on-demand access to your systems, and you no longer can fully control the impact they will have on you," says Corbis systems engineer Ian Cote. Availability is now a key emphasis in designing e-commerce systems. Drugstore.com, for example, uses software that caches a buyer's credit card information so that if the store's connection to the credit card authorization system fails, the information will be resubmitted before the customer even knows of the problem.

  • "Nibbling Away at Unix"
    VARBusiness Online (01/14/00); Jordan, Peter

    Linux is gaining momentum, leading analysts to debate the operating system's potential to take over rival markets such as Windows NT and Unix. Linux is particularly appealing to users because it is stable and, because of its free open source code. Although retailers can sell packaged versions of the operating system for a fee, the price is often much lower than rival platforms, and often includes extras such as firewall software and email access, says Caldera's Benoy Temang. Despite its assets, credibility remains a problem for Linux. Yet this is gradually changing as top industry players such as IBM, Hewlett-Packard, and Compaq pledge support for the operating system, according to a recent Forrester Research report called "The Linux Revolution." The report maintains that although Linux's potential effect on the Windows 2000 and NT markets is unknown, the operating system will provide strong competition for Unix. Others, such as IBM's Miles Barel, maintain that Linux and Unix can peacefully coexist. "We think that both operating systems have a role to play in customer solutions," says Barel. IBM views Linux as well suited for file/print serving, Web serving, and some technical applications, while it targets its Unix-based AIX operating system toward e-commerce transaction processing applications, including enterprise resource management and business intelligence. Despite the controversy over Linux's eventual market position, the operating system is still in the initial stages of adoption, with most resellers reporting customer interest but few deployments.

  • "Analytical Solutions Forum Brings Together Industry Leaders"
    Midrange Systems (01/10/00) Vol. 13, No. 1, P. 5; Doyle, Joanna

    A new industry group has formed to set performance standards and interoperability requirements for analytical software applications. The Analytical Solutions Forum (ASF), founded by Intel, Microsoft, IBM, and Sun Microsystems, aims to make it easier for end users to deploy, integrate, and choose products of different vendors. "We're in a win-win situation where the industry is growing very rapidly, to the point where people can put down their competitiveness long enough to gain from an organization like this," says Erik Thomsen, ASF chairman and chief scientist at DSS Laboratories. The group is divided into three work groups: the Benchmark Special Interest Group (SIG), to develop solution-oriented analytical benchmarks for real-world problems; the Conformance SIG, to establish levels of conformance relative to existing APIs; and the DSS Interoperability SIG, dedicated to creating standard connections within the DSS segment.

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