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Volume 2, Issue 37:  Friday, March 31, 2000

  • "Sun Adjusting Terms of Java Server Software Licensing"
    CNet (03/31/00); Shankland, Stephen

    In an effort to appease the Java community, Sun has decided to let companies gradually implement parts of Java 2 Enterprise Edition (J2EE) rather than forcing users to adopt the new version all at once. Sun released J2EE in December, but many business partners did not immediately embrace the new technology. However, the number of J2EE licensees has risen from seven to 12 over the past week, and the company expects at least two more licensees soon, says Sun's Mike Roth. J2EE is a series of nine Java software technologies that perform server tasks, including communicating with databases, running modules of e-commerce software, and automatically building Web pages. Other companies, particularly IBM, have accused Sun of limiting Java's potential by trying to maintain too much control over the technology. On two occasions Sun has retreated from handing Java over to a standards body, which would have allowed others greater control over Java. Sun is now working to improve the Java Community Process, a standardization process that allows Sun to establish the rules. However, Sun is trying to be more flexible with Java, and the company is willing to reevaluate the 3 percent of J2EE revenue it requires of licensees, Roth says. In addition, Sun is willing to excuse companies from some of the 4,000 to 6,000 compliance tests that are part of Sun's J2EE requirements, if a company has a legitimate complaint about a test, says Roth. Sun's J2EE partners include InterWorld, Sybase, Hitachi, Compaq, and Art Technology Group.

  • "Microsoft Enters an Era of Uncertainty"
    Wall Street Journal (03/31/00) P. B6; Buckman, Rebecca

    The rapid advance of Internet technology and the related cutthroat competition have altered business strategies and consequently thrown software giant Microsoft into a period of uncertainty. Although Microsoft's Windows still dominates the PC operating systems market, it lags far behind rivals like AOL, Palm, RealNetworks, and the soon-to-be-created AOL-Time Warner entity in the fields of Internet services, wireless communications, and interactive media. Also, many senior level Microsoft executives have left the company, lured by the challenges and potential wealth of dot-com startups. Microsoft is not the same company it was just a few years ago, "first and foremost because of the very substantive brain drain they've undergone," says former Microsoft executive and founder of RealNetworks Rob Glaser. Consequently, some Microsoft employees say the company has been forced to soften the corporate hierarchy and adopt a more team-oriented approach to formulating business strategies, allowing more individuals to participate in the decision-making process. However, many at Microsoft do not view this period of change as negative. In order to keep pace with the latest industry developments, "the company changes completely every 18 months," claims Charles Fitzgerald, director of business development for Microsoft's division that provides tools to outside software designers. Others feel Microsoft has changed very little and is essentially the same corporate being it has always been--aggressive, highly competitive, and run entirely by a handful of infamous top-level executives. The question of whether Microsoft has indeed reshaped its business practices lies at the heart of the ongoing government antitrust lawsuit, and the judge's answer will determine the fate of the software giant.
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  • "Common Sense Rules in an Arrogant Suit"
    SiliconValley.com (03/30/00); Gillmor, Dan

    A recent lawsuit filed by Ticketmaster Online-CitySearch against an Internet company that created a hyperlink connecting its Web site to the Ticketmaster site demonstrates the ludicrous litigation often spawned by competition over Internet technology, writes Dan Gillmor. Although the judge in the case ruled that hyperlinks are legal, the lawsuit represents a threat to the very nature of the Internet. The Web was deliberately designed to allow people to click from one Web page directly to another, and the Internet company sued by Ticketmaster was essentially sending business directly to the ticket seller via its hyperlink. Perhaps Ticketmaster views links to its site, which typically bypass advertising pages, as competition. At any rate, the Ticketmaster lawsuit is not the only example of the corporate foolishness the Internet tends to breed. The U.S. Patent & Trademark Office has been churning out business process patents, awarding companies for "inventions" that frequently amount to little more than a technological repackaging of existing and obvious innovations. Patent Office director Q. Todd Dickinson says he plans to alter current methods for reviewing a patent application, but whether such changes will eventually prevent the issuance of broad patents remains to be seen. There is also the problem of Internet con artists, individuals who post false data on financial Web sites and deliberately circulate inaccurate stock tips in order to mislead people and convince them to buy worthless stock or sell valuable stock. However, the SEC's plan to monitor activity in Internet stock chat rooms does not particularly inspire the public trust or confidence it presumably was meant to.

  • "Computers Change Typical Ways People Work"
    Nando Times Online (03/30/00); Choate, Trish

    Technology is revolutionizing the workplace, but not always for the better. For example, the pace of technological change is so rapid that individuals often cannot keep up, which leads to a higher degree of stress as people increasingly feel they are losing control. Since computers are touted as the ultimate organizers, individuals who used to employ secretaries to handle information must instead learn to manage material and tasks on their own. The laptop allows any location, including an employee's home, to become an office, which means the end of the business day no longer signifies the end of a day's work. An employee is often simultaneously involved in several different projects and must bounce from one to another without ever having enough time to work one through from start to finish. All of this so-called progress can also hurt a company financially; failed technology projects cost companies a total of $75 billion in 1999. University of North Texas computer information systems professor Leon Kappelman believes executives need to learn to thoroughly examine the ramifications of implementing a new technology in the workplace instead of immediately embracing the latest advancement. He says we simply need to "slow down our romance with bells and whistles."
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  • "Ex-Intel Engineer Indicted"
    San Jose Mercury News Online (03/30/00); Mintz, Howard

    Say Ley Ow, a former Intel engineer, was recently indicted for stealing documents and computer files relating to Intel's Itanium microprocessor. Federal prosecutors charged Ow with breaking the Economic Espionage Act of 1996, a rarely-used law that makes the stealing of trade secrets a federal crime. The Itanium processor has been in development for the last six years and is supposed to be twice as fast as Intel's current microprocessor design. The product is expected to be released in the summer as a way to help Intel combat new microprocessors from Sun Microsystems, Hewlett-Packard, and IBM. This is the first time that prosecutors have used the Economic Espionage Act in Silicon Valley.

  • "Congress Moves Forward on E-Signatures"
    Newsbytes (03/29/00); MacMillan, Robert

    The path to reconciliation of competing House and Senate digital signature bills has been cleared of obstacles by the Senate's appointment of members to a conference session on digital signatures. The Senate version of the bill is considered more conservative than the House version, the Electronic Signatures in Global and National Commerce Act. A compromise bill will be voted on before being sent to the White House. Conference appointees consist of 10 Republicans, including Sens. John McCain (R-Ariz.) and Orrin Hatch (R-Utah), and seven Democrats, including Sens. Fritz Hollings (D-S.C.) and Patrick Leahy (D-Vt.). The inclusion of Leahy is considered key; Democrats had been upset that Republicans had been excluding Leahy and others from discussions on the issue of digital signatures.

  • "It's Going to Be E-Commerce or Lost Commerce"
    Journal of Commerce (03/29/00) P. 7; Jasinowski, Jerry J.

    The health of the United States and the standard of living enjoyed by its citizens will be increasingly linked to the Internet, says Jerry J. Jasinowsky, president of the National Association of Manufacturers. Although government can certainly encourage manufacturers' adoption of Internet technology by enacting legislation to promote digital technologies, protect corporate trade secrets, and widen bandwidth, the chief responsibility of furthering e-business acceptance still falls on the private sector, Jasinowsky says. Unfortunately, says Jasinowsky, the private sector needs to do a better job of promoting e-business. Currently, 68 percent of manufacturers do not use the Internet to conduct business transactions, according to a survey of 2,500 companies conducted by the National Association of Manufacturers. Only 10 percent report having fully automated business process systems and just 5 percent integrate their supply chains via the Internet. Companies slow to adopt the Internet often report Y2K-related delays and fears of investing in technology that will be obsolete almost immediately. On the positive side, 80 percent of respondents have a Web site--although the majority offer only information--and there seems to be industry acceptance of the importance of Internet technology, Jasinowsky says. Furthermore, Forrester Research estimates that business-to-business e-commerce will be 10 times larger than business-to-consumer e-commerce within a few years.

  • "On the Global, Faceless Web, Trust Counts for Even More"
    New York Times--E-Commerce (03/29/00) P. E28; Slade, Margot

    Increasing numbers of B2B entrepreneurs are discovering that contrary to popular Internet sentiment, replacing human contact with digital contact is not necessarily good for business. The complexity and enormous amount of factors involved in B2B transactions means many corporate buyers often only completely trust those sellers with whom they have a personal relationship. Therefore, simply offering a low price does not guarantee an Internet business will be successful. "In this universe, you often need more than textual information," claims Anna Copeland Wheatley, editor in chief of business magazine AlleyCat News. She says purchase negotiations that take place solely through terse emails or frenzied online auctions are frequently hurried and result in poor decisions, prompting certain buyers to avoid certain sellers. Also, information shared electronically is much more likely to be presented in a manner that may be misleading or deceitful, resulting in transactions that benefit one party significantly more than another. The Internet should instead be used in conjunction with telephone calls and face-to-face meetings, thereby enabling buyers and sellers to both communicate inexpensively and efficiently and develop positive relationships that foster mutual trust and understanding.

  • "Canada Called Hotbed of Cyberterrorism"
    Newsbytes (03/27/00); Stone, Martin

    The U.S. Defense Intelligence Agency recently issued a report for Canada's Department of National Defense that calls the country a "Zone of Vulnerability" for cyberattacks. The report states that roughly 80 percent of the foreign attacks on U.S. computers either were directly from Canada or were routed through Canadian computers. The report also warns that the U.S. expects Canada to take action against such activity. FBI Director Louis Freeh says at least one Canadian Internet server was used in the recent denial-of-service attacks that hit Yahoo!, eBay, and other major commercial Web sites. Canadian computer experts say the country may be an attractive place for cyberterrorists because it is highly computerized. However, security experts say Canadians are also often the victims of cyberattacks, citing the recent example of two 18-year-old Welsh hackers who used the alias "Curador" to break into nine e-commerce sites, including at least one Canadian site. Sam Porteous, director of intelligence at Kroll Associates Canada, also says the estimates about Canada may be inflated, as the military often uses extremely broad benchmarks when it comes to defining cyberattacks. Other experts have expressed doubts about the accuracy of the report as well.

  • "Hackers Battle Security, Politicians For Conference"
    Associated Press (03/31/00); Copans, Laurie

    Three hundred and fifty hackers met in Israel recently for a two-day conference, the first hacker get-together since the February spate of denial-of-service attacks on sites such as eBay. Israeli politicians attempted to prohibit the conference from taking place, but Israeli Attorney-General Eliyakim Rubinstein finally capitulated to the hackers' demands. At the conference, the hackers defended themselves, saying that a true hacker is someone that attempts to make programs better and more secure by highlighting their weaknesses. "Crackers," on the other hand, who are the people that break into systems for financial gain or simply the sheer joy of disruption, were widely disparaged. The hackers at the conference discovered that roughly 28 percent of Israeli Web sites are vulnerable to cyberattacks, which is about the same percentage of at-risk Web sites around the globe. However, the Israeli police prohibited the hackers from publishing a list of susceptible Israeli commercial Web sites.

  • "Sixty Percent of U.S. Homes to Be Wired by Year's End-Study"
    Newsbytes (03/28/00); Bonisteel, Steven

    Six in 10 U.S. households will have Internet access by the end of 2000, according to a Cahners In-Stat Group report that surveyed 1,500 U.S. consumers. The remaining 40 percent will be a difficult market to crack, says Kate von Goeler, an In-Stat analyst who believes households that do not have Internet access by the end of this year will not want it. Goeler points to the digital divide that separates consumers who are connected to the Internet from those that are not, based on income and education. According to the survey, 72 percent of consumers with a graduate school education are connected to the Internet, compared with just 26.7 percent of consumers with a high school education or less. An important note is that demographic studies have shown that a digital divide does not exist along gender lines; by the end of 2000, 49.1 percent of consumers online will be female. Goeler believes that the Internet will eventually become a necessity for communication. The In-Stat survey also found that ISPs offering dial-up access services will receive an additional $2.2 billion due to the increase in homes wired for the Internet. PC manufacturers will sell more computers online as more than 40 percent of the 14 million new online customers plan to buy computers. The report also found that consumers pick ISPs based on price, and consumers spend an average of 12.2 hours a week on the Internet.

  • "European E-Commerce Poised for Boom"
    E-Commerce Times (03/28/00); Conlin, Robert

    Online business-to-consumer sales in Europe will reach an incredible $170 billion by 2005, up from just $2.8 billion in 1999, says Forrester Research. On average the growth would reach 98 percent annually. Although greater use of the Internet is expected to be a major contributor to the projected growth, the single currency in 2002 and the emergence of both interactive digital television and wireless e-commerce will be just as significant. Forrester expects European retailers that have the necessary logistics infrastructure, supplier relationships, and merchandising experience to succeed across the continent to lead the charge into Internet commerce. Senior analyst Matthew M. Nordan sees a trend toward industry consolidation in the next few years with companies that are not able to develop cross-border strategies seeking to bow out. Pure-plays will be particularly hard-pressed to compete with traditional retailers that would already be at a significant advantage in a borderless Europe. In fact, Nordan expects traditional retailers to carve out 75 percent of online sales in Europe within three years. Germany is expected to lead with 26 percent of online sales, followed by France at 14 percent. However, Sweden is expected to have the highest proportion of retail sales at 9.3 percent. Europeans will be buying so much apparel and groceries and so many autos by 2005 that online sales related to media, electronics, and leisure travel will shrink to 40 percent from more than 80 percent in 1999. Still, e-commerce will represent just 7 percent of total retail sales in Europe.

  • "Study Shows Europe Ready for ASPs"
    Total Telecom (03/30/00); Clark, Vanessa

    The application service provider (ASP) business model is gaining popularity in Europe, particularly within the banking and financial services, transportation, utilities, travel, and tourism industries, according to a survey conducted by the Ovum consultancy. The survey, which was performed on behalf of the ASP Industry Consortium (ASPIC), found that two thirds of German and U.K. companies plan to contract IT services from an ASP in the next 18 months. The typical ASP user, according to Tim Pickard, director of public relations for ASP Esoft Global, is a medium-sized company that expects to grow quickly but wants to avoid capital spending in technology. Pickard says that the typical ASP customer will save 25 percent in IT costs by outsourcing applications. The most popular applications provided by ASPs are Web site hosting, e-commerce, and email. ASP firms need to do a better job of defining the ASP model for potential customers, says Traver Gruen-Kennedy, chairman of the ASPIC, but there is certainly a growing "comfort level with outsourcing among businesses and organizations in Europe."
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  • "Net Tax Debate Still Unresolved"
    Computerworld (03/27/00) Vol. 34, No. 13, P. 1; Thibodeau, Patrick

    The Advisory Commission on Electronic Commerce failed to get the required two-thirds vote on any of its Internet tax solutions, leaving the issue of Internet taxation still unsettled. Companies such as Wal-Mart want Internet taxes imposed on all online retailers to even the playing field. More companies are expected to turn their Internet businesses into separate subsidiaries, which means they can avoid collecting taxes from online customers; Wal-Mart has already done this, and J.C. Penney is considering a similar move. Six members of the commission sought physical presence rules to settle this issue, but disagreements among businesses, state governments, and state commissioners meant nothing has been settled. The key to Internet taxation is simplification of tax laws, which many states are accomplishing through technological solutions such as Internet protocols that manage taxes and link them to state tax systems. As more enterprise resource planning systems automate tax functions, Internet taxes will produce greater interaction between corporate tax departments and information technology departments, predicts Jennifer von Drechsel, an automated-compliance tax expert at PricewaterhouseCoopers. The Advisory Commission on Electronic Commerce must submit a final report to Congress in April after meeting for almost a year.

  • "Design--Not Just for Aesthetics But a Means to Drum Up Business"
    Daily Record (03/29/00) Vol. 111, No. 147, P. 1B; Jones, Marcie

    Numerous business executives who have realized the marketing importance of a product's visual appearance will join individuals from the media and design fields in attending a symposium entitled "Redesigning Business for the New Economy." The symposium is scheduled for April 13-14 and will be hosted by The University of Baltimore's Institute for Language, Technology and Publications Design. Conference discussion will focus upon how companies can use aesthetic appeal to communicate with consumers, shape corporate reputations, and portray products. "Designers need to know how to work with business people, and vice versa," claims University of Baltimore English and communications design Professor Ed Gold. "In order to survive, beyond creating new products, companies need to distinguish themselves from the competition," he adds. Conference speakers will include Amtrak's Barbara Richardson; O & H Company's creative director, Brent Oppenheimer; IBM's director of corporate identity and design, Lee Green; Gr8 President and CEO Craig Ziegler; Carton Donofrio Interactive's director of client service, Denise Ryan; Black & Decker's e-commerce division manager, William Girst; and Turner Broadcasting's president of sports and entertainment development, Jan Marie Smith.

  • "Directory Redux"
    InfoWorld (03/27/00) Vol. 22, No. 13, P. 34; Sanborn, Stephanie

    Directories, no longer confined to simply storing employee passwords, are playing a major role in many e-commerce efforts. As the Internet and e-commerce grow, directories are beginning to store security and access policies, external business partner data, and user profiles. The Internet is forming a global economy, forcing companies to open their internal networks to the outside world. Businesses must now share information across multiple systems, and the data in each system must be synchronized. By storing access policies, directories can determine which parts of the internal network are available to customers, partners, and the supply chain. Directories can also store information about e-business customers. Central security management is another use for directories, which can manage internal and external user accounts, authentication processes, and access rights for firewalls and virtual private networks. Major directory vendors Microsoft and Novell have addressed scalability issues that have been a concern in the past. In addition, both companies are preparing metadirectory solutions that can tie multiple directories to one another and other systems. Directories can also serve as a central point for policy management by storing load-balancing and bandwidth allotment policies. Despite the advantages of directories, many companies are reluctant to take full advantage of the technology because of concerns about sharing their networks.

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