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Volume 2, Issue 10:  Wednesday, January 26, 2000

  • "Microsoft Is Told to Abide by Sun on Java"
    New York Times (01/26/00) P. C2

    United States District Court Judge Ronald Whyte has issued a ruling that requires Microsoft's Java products to comply with Sun's standards. The ruling amends a preliminary injunction that prevented Microsoft from releasing Java products that did not follow Sun's standards. According to the injunction, which was overturned in an appeals court, Microsoft would break Sun's Java copyright and violate its contract with Sun if it sold products that did not comply. Sun originally filed suit against Microsoft in October 1997, claiming that Microsoft broke its contract with Sun and violated Sun's copyright on Java by trying to modify Java for Windows. Some issues in the suit are unresolved, but Microsoft is still prohibited from shipping its own forms of Java.

  • "Sun to Unveil Solaris 8, With a Plan for Free Use"
    Wall Street Journal (01/26/00) P. B10

    Sun today plans to announce Solaris 8, along with plans to make the server operating system available for free. Solaris 8 is expected to appeal to systems managers with new features such as the ability to run up to a million programs at the same time. Sun will offer Solaris source code as well as full versions of the software free of charge, in a move that could give Solaris an edge on Linux. Already, Sun offers many of its chip designs for free online.

  • "Government Fires New Microsoft Salvo"
    Washington Post (01/26/00) P. E3; Segal, David

    The Justice Department and the 19 states suing Microsoft yesterday submitted a brief to Judge Thomas Penfield Jackson that attacks the arguments in the brief Microsoft recently filed. The government's brief says common sense and legal precedent support charges that Microsoft violated antitrust law. "Microsoft fought a multi-front campaign, using a broad array of anti-competitive tactics that reduced rather than enhanced consumer choice, to sustain the critical barrier to entry protecting its monopoly power," the brief says. The brief rejects Microsoft's argument that it is threatened by market competition, noting that Jackson has already found that companies such as Apple are not a significant threat to Microsoft. Government lawyers contradict Microsoft's claim that copyright laws apply to its contracts that prevent computer makers from altering Windows. In making this point, government lawyers cite a Supreme Court ruling in Broadcast Music v. CBS that found that copyright laws do not permit copyright holders to fix prices or break antitrust laws. Responding to the brief, Microsoft says the government ignores threats from growing rivals such as AOL. Microsoft will now have the opportunity to file a brief responding to the government's document, and oral arguments are scheduled to begin in February.

  • "ComNet 2000 Packed With Outsourcing Options"
    InfoWorld.com (01/25/00); Jones, Jennifer; Moore, Cathleen

    This week's ComNet 2000 show will feature a number of new products and services aimed at capitalizing on the growing corporate demand for network outsourcing. AT&T plans to announce outsourcing services for large clients that do not want to manage their own network operations. In addition, Cisco will announce products that integrate circuit-oriented telephone services with new packet services. Cisco's new offerings target carriers that are part of the service provider market and want to expand telephony options. Meanwhile, Nortel plans to establish a group that will design and manage networking technology for large customers, says Nortel CEO John Roth. Although Nortel's service organization was probably worth almost $1 billion last year, the company never broke out services as a separate business, Roth says. However, Roth says with more corporations outsourcing networks, Nortel needed to emphasize its services group. The rising interest in outsourcing stems from a lack of trained technical workers and the need for IS departments to devote time to mission-critical programs, experts say.

  • "'Cyber-Leak' Threat to Corporate Secrets"
    Financial Times (01/25/00) P. 6; Labate, John

    Corporations now must contend with "cyber-leaks"--postings on the Internet that spread rumors that may or may not be true about a company's plans--as the latest security threat. In the last several weeks three separate leaks on the Internet predicted mergers at least one day before there was any mention in the news of a deal. For example, a pastry chef who happened to be working in a lawyer's office where terms of the AOL-Time Warner merger were being discussed leaked that information to an Internet chat room. The phenomenon has lead to the creation of online investigation companies that track down messages through software and other techniques. Leaks also affect domain name registration, as they allow "cyber-squatters" to claim dot-com addresses before the companies can.

  • "Application Service Firms 'Snake' Out New Market"
    Investor's Business Daily (01/25/00) P. A6; Crum, Rex

    ASPs have grown over the past few years from relative obscurity into a buzzword associated with e-commerce. Still, less than 1 percent of companies used hosted applications from ASPs last year, according to Forrester Research. However, Forrester expects the ASP market to reach $11.3 billion by 2003, up from $933 million in 1999. Currently, the emerging market is facing some challenges, including confusion as a result of the abundance of companies calling themselves ASPs. "There's almost as many vendors as there are customers right now," says Giga Information Group analyst Art Williams. In addition, some ASP offerings are criticized for not being network-ready, providing too many features, or needing too much customization. Some ASPs are beginning to focus on specific areas; for example, InfoCure offers applications for the health-care industry. Meanwhile, Linux companies are also moving into the ASP business. VA Linux Systems recently announced its SourceForge service, which offers free communications resources to open-source developers. SourceForge aims to speed the development of open-source software, VA Linux says. Experts say ASPs will be particularly popular among small and midsize businesses that need applications but cannot afford them.

  • "Automakers, Tech Firms Form Alliance to Put Motorists Online"
    Washington Post (01/25/00) P. E4; Brown, Warren

    IBM, Motorola, and Intel have joined forces to create an online system to be deployed in automobiles for as little as $300 by 2003. The system will allow automakers and dealers to provide car owners with additional services such as notices of impending vehicle problems and personal computer access. The technology could also ease tensions between automakers and dealers over which group will control auto retailing in the coming years. "Either we enter this new Internet age together, or we die separately and let some third party take over the business," says National Automobile Dealers Association board member Lou N. Kairys, alluding to the threat posed by upstart independent online dealerships.

  • "Slow Start in the Online Race"
    Financial Times (01/24/00) P. 12; Taylor, Paul

    European businessmen and lawmakers are coming to the realization that excessive telecommunications costs are stunting the growth of e-commerce in Europe. Yahoo! is the most popular Web site in the United Kingdom, followed by Freeserve, according to research from MMXI. The only other U.K. Web site in the top 10 is the BBC's site, which ranks at No. 10. All the others are American. U.S. companies are expected to spend $348 billion on e-commerce infrastructure by 2003, more than double last year's total of $153 billion, according to Internet Research Group and SRI Consulting. Still, Europe is doing some things right. Wireless mobile telephony use in Europe is higher than in the U.S. And free ISPs such as Freeserve have become extremely popular with European Internet users and have done a great deal for the e-commerce industry by getting more people online. IDC Internet analyst Stefan Elmer says the number of Europeans going online is increasing to the point that the European consumer e-commerce market will be ready to explode in one or two years. The U.S. is only slightly ahead of Europe in the use of the Internet as a basic communications and promotions tool for businesses, according to a report released this month by Mori. Europe as a whole is expected to generate 12 percent of its sales electronically by 2002.

  • "Japanese E-Commerce Set to Explode"
    E-Commerce Times (01/21/00); Greenberg, Paul A.

    Japanese e-commerce will skyrocket in the next few years, according to a new report from Andersen Consulting and Japan's Ministry of International Trade and Industry (MITI). Already, business-to-business e-commerce in Japan has risen 420 percent since 1998, and MITI and Andersen Consulting expect this explosive rate of expansion to continue until the market reaches $651 billion in 2003. Meanwhile, Japanese business-to-consumer e-commerce is steadily expanding. Andersen predicts that the market will reach $42 billion in 2003, with automobiles, travel, and real estate each accounting for over $9.5 billion of that total. Despite the rapid expansion of online business in Japan, e-commerce services represent just 2 percent of household spending, the report says. The report names factors such as high telecommunications costs and the lack of Japanese-language Internet applications as contributors to the nation's delayed e-commerce adoption. Business-to-business e-commerce may also be hampered by Japan's distribution system of middlemen, who could lose their jobs as online systems are deployed. Firms such as Nippon Telegraph & Telephone and Sony are working to make e-commerce more affordable by introducing low-cost Internet access plans, while Vertical Net has partnered with Softbank to create a service that will launch business-to-business trading networks in English and Japanese.

  • "DVD Issues Bruise Apple's iMac"
    Wired News (01/25/00); Kahney, Leander

    Apple's iMac DV model, promoted as a "mini movie theater," has a range of problems playing DVDs, users say. Most problems involve audio synchronization, but users have also reported stuttering, sudden stops and restarts, and fragmented pictures. Glitches in several software programs, including the DVD playback software, the Mac sound management package, and Apple's QuickTime multimedia software, seem to be responsible for the problems. Apple has released five software updates over the past four months that address the problems, but the company has not officially commented on the issue. Jeff Moore, Sound Manager software technical lead, says users can obtain software updates from Apple's Web site. However, some users still report problems even after installing the updates. The problems initially appeared in October when Apple moved DVD decoding from hardware to software, says Ted Landau of Mac troubleshooting site MacFixIt. Landau says the problems also occur with Apple's Power Mac G4 line. Mac sites suggest that users disable AppleTalk networking software and virtual memory and almost double the memory devoted to the DVD player software.

  • "IT Managers Push Broadband Service to Advance E-Biz"
    InternetWeek (01/21/00) No. 797, P. 8; Salamone, Salvatore

    IT managers looking to promote e-business have made broadband access for their customers a top priority. Internet users with broadband access view an average of 130 percent more Web pages a month and go online 83 percent more often than users with 28.8 or 33.6 Kbps modems, according to a recent A.C. Nielsen/NetRatings study. Considering the relationship between speed and Web use, e-businesses will push broadband to both customers and partners, experts say. One option for IT managers looking to provide broadband to customers, partners, and telecommuters is to sign up for a free DSL service offered by a company such as Broadband Digital Group, which registered 100,000 users in its first week. In addition, national DSL provider Covad Communications says it will start offering installation service on Saturdays, which will allow IT managers to schedule installation more easily. Meanwhile, Northpoint Communications has partnered with Microsoft and Radio Shack to facilitate DSL installation. The AOL-Time Warner deal might further drive broadband growth, as other portals form broadband strategies, experts say. Finally, the FCC recently decided to permit local exchange carriers to provide DSL over installed phone lines, which experts say could further drive the DSL trend.

  • "Inside Intel"
    InformationWeek (01/17/00) No. 769, P. 38; McDougall, Paul

    Intel plans to move beyond its core chip business and become a provider of the basic components of the Internet economy, including client microprocessors, high-end server components, networking hardware, and e-business services. Analysts say Intel has the experience and resources to enter new markets, but might have trouble balancing new areas with its core chip business. Over the past several years Intel has successfully turned itself into an e-business, and now does about $1 billion a month in online business. Intel believes its own e-business efforts will help it create components designed for e-business and eventually to build e-business architectures for other firms. Although most of Intel's revenue still comes from its main chip business and will continue to do so for several years, Intel CEO Craig Barrett says large growth in the chip sector is mostly over. Although Intel chips have secured their position in desktops, the company says its CPUs represent only 13 percent of the chips in large enterprise servers in the U.S. Intel's Pentium and Pentium Xeon chips are not widely used on back-end enterprise systems, in large part because large companies have viewed the Wintel architecture as lacking in reliability and scalability. However, Intel's 64-bit Itanium chip offers features to make it more suitable for back-end operations. Intel server manufacturers believe the combination of Intel's IA-64 line and Microsoft's Windows 2000 will improve the servers' ability to compete with high-end proprietary systems. Itanium will run Monterey, Solaris, HP-UX, and Linux, making it "the back-end engine for the Internet because it's the only processor that can run all major operating systems," says Intel's Sean Maloney. In addition, Intel aims to move into the areas of business networking, wireless communications, and Internet technologies, and has been expanding its network offerings through a series of investments and acquisitions.

  • "Congress Faces Cyber-Agenda"
    Interactive Week (01/17/00) Vol. 7, No. 2, P. 69; Brown, Doug

    The Internet will probably become a major topic for Congress this year, with the biggest issue being the balance between individuals' privacy rights and online companies' collection, use, and selling of user data. Industry representatives have touted self regulation and warned that government intervention could stifle the growth of e-commerce, but polls indicate that citizens consider personal privacy a top concern. Congress introduced several bills dealing with online privacy during 1999, including the Internet Consumer Information Protection Act, and more are due this year. The Act would regulate the ability of ISPs to share data about specific subscribers, and would bar the disclosure of data that could identify individuals, unless the provider complied with a number of conditions. The Online Privacy Protection Act would set up general guidelines for company online privacy policies. Electronic Privacy Information Center general counsel David Sobel says neither bill satisfies privacy advocates, though he adds that the Online Privacy Protection Act could be a beginning framework. Sobel contends that Capitol Hill does not have a cohesive vision for privacy, and says that a workable approach must be a general privacy law whose principles apply in any context. However, Information Technology Association of America senior vice president Marc Pearl says the states may do a better job of balancing consumer rights versus business rights. Taxation of e-commerce will hit Congress this year as well--the Advisory Commission on Electronic Commerce is to vote in March on how and whether e-commerce should be taxed, and then to send Congress a report with recommendations in April. The use and ownership of databases will also be an issue. The Collections of Information Antipiracy Act is supported by industry groups that want to own huge information networks, while the Digital Future Coalition wants information to be opened up to organizations and individuals. There are 18 bills, at least, pending in Congress to deal with digital authentication. Other issues include infrastructure protection and security, encryption exports, unsolicited commercial email, and Internet gambling.

  • "Survey: Online Food Sales Rose 950 Percent"
    Supermarket News (01/17/00) Vol. 48, No. 3, P. 20; Zwiebach, Elliot

    From Oct. 31 through Dec. 26 of last year, sales of food and groceries via the Internet rose 950 percent, according to a survey of 3,000 home-based Internet users conducted by PC Data Online in cooperation with Goldman Sachs. In mid-December 1999, online food and grocery sales reached $138 per person per week compared to the $19 being spent online for food and groceries at the end of October 1999. Also from October to December, online purchases of toys rose 483 percent, purchases of flowers and cards rose 348 percent, and purchases of videos and DVDs rose 308 percent, according to the survey. The large increase in online sales of food and groceries is mainly due to the low base from which the category began, says PC Data analyst Cameron Meierhoefer. More consumers were using the Internet to research and compare prices of food. Most online shopping was done regionally, since the service is mainly available in Boston; online grocery services will soon expand to New York, San Francisco, and Washington. Meierhoefer believes online sales of groceries will not harm the business of brick-and-mortar supermarkets, because most consumers will split their funds between the two.

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