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Volume 2, Issue 41: Monday, April 10, 2000
- "1.6 Million High-Tech Jobs Expected to Be Created This Year"
Associated Press (04/09/00); Love, Alice Ann
U.S. companies will open about 1.6 million IT positions this year, according to a study that the Information Technology Association of America plans to release on Monday. About a third of these jobs will be reserved for technical support workers, and 35 percent of the new jobs will be in the Midwest, says the survey, which was funded in part by ITAA members Microsoft, Cisco, and Oracle. In addition to technical support, the most rapidly growing high-tech jobs are database developers and administrators, programmers and software developers, and Web site designers and managers. Companies believe they might have difficulty filling more than half of the new jobs. Although businesses are urging lawmakers to issue more visas for foreigners with high-tech training, others are pushing for increased training for U.S. workers. About 10 million Americans are now employed in the IT field, the ITAA estimates based on the survey.
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- "Report: Software Piracy Epidemic Could Slow E-Commerce Boom"
E-Commerce Times (04/06/00); Creed, Adam
The Business Software Alliance (BSA), an anti-piracy industry group, believes that the e-commerce boom could be negatively affected by the hundreds of thousands of "warez," "appz," and "crackz" Web pages that are giving Internet users access to pirated software, illegal serial numbers, and software patches. The Internet now has 500,000 warez pages, 144,000 appz pages, and 46,000 crackz Web pages, the BSA estimates. E-commerce companies are losing an estimated $1 billion annually in revenue due to piracy, says BSA CEO Robert Holleyman. The best ways to prevent such losses in revenue are to implement stronger laws and penalties against piracy, create laws against reverse-engineering software, place liability on ISPs for hosting piracy Web pages, and force domain name registries and ISPs to reveal information about warez Web sites, says Holleyman. Holleyman believes governments should take the first step and ratify the World Intellectual Property Organization Copyright Treaties.
- "Historians Take a Longer View of Net Battles"
New York Times (04/10/00) P. C1; Riordan, Teresa
The United States Patent and Trademark Office has recently been criticized for stifling innovation on the Internet by granting broad patents. Critics say the office is issuing too many patents, and that the people who award the patents do not understand new technology. Critics further argue that software differs from older forms of technology because software builds more on past invention. However, historians of technology say software development is similar to the creation of past communications technologies, such as the telegraph, the telephone, and the radio--all of which led to patent disputes. Communications technology has often relied on the work of others, and many inventions have been simultaneously developed by more than one person, historians say. For example, historians note that Alexander Graham Bell and Elisha Gray both took the idea of the telephone to the patent office within hours of each other on Feb. 14, 1876. The two inventors decided on a settlement, with Gray getting $100,000 and contract work. However, the telephone continued to spark patent arguments, with 600 telephone patent infringement cases once pending at the same time. Historian Amy Friedlander says the development of the Internet closely mirrors the growth of the radio. "A radio patent pool was finally formed in 1919," because of the proliferation of radio patents and cross-licensing, Friedlander says. Historians suggest that patent wars are an inevitable part of invention.
- "Truth, Justice and the Dot-Com Wars"
American Lawyer Online (03/31/00); Pearlman, Laura
The creation of the Internet Corporation for Assigned Names and Numbers (ICANN) was the result of a protracted legal war between those who believed the Internet needed an organization to set policy and Network Solutions (NSI), the domain name registration company. By the time Internet experts began to realize the dangers of leaving the computers that store domain names unguarded in the basements of universities and research centers across the country, they also began to hear of more court cases involving trademark and antitrust disputes involving the Web. Trademark owners, members of Congress, foreign governments, and other techies were all voicing their concerns about the Internet being out of control. The Clinton administration came forward with a plan to overhaul the domain name system in 1997, and later instructed Internet experts to create an international, not-for-profit policy-making corporation. This ideal materialized as ICANN and its first task was to bring some order to the domain name system by opening up the registrar name business of NSI to competition. Unfortunately, NSI had begun to lose its academic edge to those who wanted to turn the company into a huge money maker. A year after NSI amassed $275 million in its IPO, the Clinton administration proposed in September 1998 to give other companies the right to oversee domain names when NSI's exclusive contract expired. After some intense lawyering, technical researchers and Washington policy makers last November finally convinced NSI to recognize ICANN as the official authority on Internet policy. Not only did NSI walk away with four more years of authority over the dot-com registry business, the company was also acquired by VeriSign in March for $17 billion in stock.
- "State Asks Supreme Court to Uphold Anti-Spam Law"
Seattle Times Online (04/07/00); Lewis, Peter
Washington Attorney General Christine Gregoire is asking the Supreme Court to overturn last month's ruling against the state's anti-spam law, arguing that "companies who spam consumers for profit should not be able to hide behind the protection of the Constitution so they can continue to send deceptive email." King County Superior Court Judge Palmer Robinson decided last month that Washington's 1998 anti-spam law was unconstitutional because it violated the Constitution's interstate-commerce clause. Should the Supreme Court agree with Robinson's ruling, the spam law would be voided. If that scenario unfolds, the state hopes the court would provide guidelines allowing the state to craft a better law, says Assistant Attorney General Regina Cullen.
- "The Rest of America, Online"
Interactive Week (04/03/00) Vol. 7, No. 13, P. 116; Trager, Louis
The Web is increasingly becoming a haven for blue-collar Americans. According to a new report from The Boston Consulting Group, Americans earning between $25,000 and $49,000 annually represented more than one-third of the Web's newcomers in 1998, up from less than one-quarter of new Web surfers before 1996. By 2003, households earning less than $35,000 a year will represent one-third of the projected 162 million home users in the U.S., according to International Data (IDC). For many low-income Americans, cost will be a major barrier for going online. However, the price of computers continues to fall, and many PCs, including monitors, now cost $800 or less before any rebate. In fact, the computer price range of $800 or less is attracting the most buyers. Employers are also playing a role in bringing blue-collar Americans online. Companies such as American Airlines, Delta Air Lines, and Ford Motor are subsidizing PC connections for their employees' homes. Kmart is even offering free Internet access with its BlueLight.com service, and there are other free services like NetZero. Still, market observers say hardware issues are more important to blue-collar Americans than free Internet access. Many people are still intimidated by computers. As far as e-commerce is concerned, low-income Americans have less disposal income, and as a result, Internet businesses should not expect blue-collar Americans to spend as much online as middle-income Americans. Blue-collar Americans accounted for only one-eighth of those making purchases during the 1999 holiday season. Companies that attract blue-collar dollars are likely to be trusted offline brands such as Kmart and Wal-Mart instead of such dot-coms as eToys and Pets.com. Nevertheless, low-income Americans will invest in computers and the Internet for their children. Many parents are learning about the Internet from their kids, who are being exposed to the technology in schools, and these parents want to prepare their children for a future in the wired world.
- "Where Will E-Business Take You?"
InfoWorld (04/03/00) Vol. 22, No. 14, P. 49; Dugan, Sean M.
Large companies are still grappling with how to fit the Internet into their business models, but most corporations are headed toward business-to-business (B2B) e-commerce, according to a recent InfoWorld survey. Of the 105 enterprises responding to the survey, 73 percent now have B2B models, compared with 57 percent in the May 1999 survey. Meanwhile, 64 percent of respondents now have business-to-consumer models, up from 49 percent in May of last year. The most commonly outsourced function was Web site hosting, cited by 20 percent of respondents, followed by payment/credit card processing and security systems, each of which was outsourced by 17 percent of respondents. However, respondents seemed hesitant to rely on ASPs, with most companies using an equal mix of outsourcing and in-house development. In the future, nearly 65 percent of respondents said they would do more in-house development. The main focus of Internet projects for 61 percent of respondents was to improve existing relationships rather than building new ties. Serving existing customers was listed by 42 percent as the largest advantage of Web efforts. In terms of how respondents viewed their Internet efforts as compared to other companies, 40 percent said they had a lead over others, while 13 percent considered themselves laggards. The main problems for companies trying to move online were time to market, cited by 46 percent, and a worker shortage, listed by 34 percent. Respondents took a modest view of the effects of the Internet on their business, with 24 percent saying the Internet's impact on their firms was minimal. Meanwhile, 38 percent said the Internet was altering some aspects of business, while 14.3 percent said the Internet was transforming their entire business.
- "Schools Are Building a New Breed of Engineer--One With Management Savvy"
U.S. News & World Report (04/10/00) Vol. 128, No. 14, P. 86; Thomas, Susan Gregory
Universities are beginning to expand the field of engineering to include areas such as business management, communications, and medicine, in part because companies are seeking more versatile engineers. Although engineers in the past worked on one part of a product, they are now part of the whole development, design, and marketing process, says William A. Wulf, president of the nonprofit National Academy of Engineering. Polytechnic civil engineering professor Magued Iskander says his school works with local businesses to give students the opportunity to work on actual paid jobs. For example, the Empire State Development Corp. hired some of Iskander's students to reinforce the Chelsea piers in Manhattan using recycled plastic supports. Polytechnic's graduate students receive e-business training that teaches them not only how to program, but also how to write business plans, obtain financing from venture capitalists, and give Power Point presentations to equity research analysts. Meanwhile, MIT's System Design and Management program trains students to collaborate with co-workers in various fields to design products. The Stanford University School of Engineering is offering an interdisciplinary biomedical engineering program that provides graduate students with both medical and engineering training. Mechanical engineering professor Tom Andriacchi, an expert in sports medicine and prosthetics, requires his biomechanical engineering students to learn anatomy, biology, and physiology. The course also requires students to shadow residents in a hospital and interact with patients, to gain insight into how to improve the design and use of medical equipment.
- "Crammed With Spam"
Newsweek (04/10/00) Vol. 135, No. 15, P. 115; Tanaka, Jennifer
Twenty-four percent of 13,000 Internet users polled last year by the Gartner Group wrongly believed their ISPs were selling or giving their names to spammers, and 71 percent of 1,400 Internet users polled recently by ChooseYourMail.com believe spammers got their email addresses from an e-commerce Web site they used. Companies such as ISPs and e-commerce firms would lose their business if they actually participated in spam-related practices due to the contempt Internet users have for unsolicited and unwanted email from marketers, Internet experts agree. However, one in 10 emails sent over the Internet is spam. Spammers have designed programs that collect valid email addresses from public forum groups and member directories, which are normally used to look up addresses of friends and family. Another way spammers are sending out spam is through a dictionary attack, in which a spammer uses every name in the book to email possible addresses. Email providers, AOL, Yahoo!, and Hotmail, have created spam-blocking software as a means to fight back against spam. For example, Yahoo!'s SpamGuard routes all spam into a bulk-mail folder where users can review it for 30 days and then it is automatically deleted. AT&T WorldNet is using Brightmail's anti-spam technology that sets up dummy addresses in an attempt to block spammers from the server. California, Washington, Virginia, and Rhode Island have all recently adopted anti-spam laws that make it easier for Internet users and ISPs to sue spammers. To universalize anti-spam legislation, many Internet users and ISPs are supporting federal spam regulation bills, which would allow lawsuits against spammers who ignore user requests not to receive spam. However, such legislation could be circumvented by offshore spammers.
- "Hacking Away"
Potomac Tech Journal (03/27/00) Vol. 1, No. 9, P. 1; Hardy, Michael
Businesses across the spectrum must now face up to the fact that anyone who can download a Windows program and type in a Web address is a potential hacker. Nevertheless, computer security experts say most companies are not taking IT security seriously. The Fortune 500 companies often cannot find employees with the right technical expertise, and medium and small companies usually have only a couple of green IT people on staff who are already overworked. Security professionals say so many companies are trying to be the first online and beat out the competition that they relegate security concerns to low priority status. Experts also say companies are mistaken if they believe the myth that computer attacks are often inside jobs. A 1999 FBI survey reveals that 43 percent of intrusion attempts originated from outside the targeted company; 37 percent were found to have come from the inside, and the remainder's origins were unknown. Since many companies remain blissfully unaware of their vulnerabilities to computer attacks, security firms will perform a "penetration test" showing exactly how they hacked into a client's system. This usually jolts companies out of their complacency. Security outsourcing is expected to grow in coming years, because contracting out those services allows an IT staff to focus on other items, according to industry watchers. However, firms that provide outsourced security warn that they are not a replacement for common-sense security measures such as guards and sign-in desks. Hackers can often obtain important information about a company's computer security status by spending just a few moments at a vacated computer terminal or by simply telephoning a company's clerk and asking a few pointed questions. Companies need to have some physical security measures in place to act as a bulwark against this type of hacker activity.
- "Cybergambling Prohibition Moves Forward"
Interactive Week (04/03/00) Vol. 7, No. 13, P. 34; Brown, Doug
The House of Representatives finally marked up its version of an Internet gambling bill in February. Introduced by Rep. Bob Goodlatte (R-Va.), the Internet Gambling Prohibition Act is the proposed legislation that serves as a companion to the bill introduced by Sen. Jon Kyl (R-Utah) in the Senate, which passed its version last fall. To many critics of the bill, the legislation is nothing more than a ploy of the established gaming industry. They maintain that the legislation is weak, and they stress that the established gaming industry has a lot to lose in terms of revenue if online gaming was allowed to flourish. In fact, Interactive Gaming Council Chairwoman Sue Schneider says online gaming will flourish regardless, but U.S. companies will suffer, she says. The bill would outlaw online casinos--as opposed to online gambling--based in the U.S. The legislation would not punish those who gamble online, and it does not punish ISPs that host gaming operations. As a result, established forms of gambling such as state lotteries and fantasy sports betting would not be affected by the law. Schneider says the U.S. would not be able to enforce such a bill, and that Web surfers presently can gamble at more than 1,000 Web sites. "Most are set up so they are companies outside of the U.S.," says the head of the trade organization for the online gaming industry. "It's a bill with no jurisdiction over the operators out there, and it's going to cut any U.S. entrepreneurs out of the business." Australia is involved in regulating and licensing online gambling parlors, and the country could very well be the online gaming leader in the years to come. Bear Stearns says online gaming could bring in revenue of $3 billion by 2002.
- "Sipowicz Goes Cyber"
Time (04/10/00) Vol. 155, No. 14, P. 50; Stodghill, Ron II
Federal authorities are enlisting the aid of state and local police departments in their fight against various computer crimes. Although email fraud, trade-secret selling, and child pornography are federal crimes, the recent explosion in these offenses due to the rise of the Internet has forced the Justice Department to launch Law Net, a group of federal, state, and local computer-savvy crime-fighters who share information and technology with one another. Wayne County, Michigan, is an example of a local police department that has a cybercrime fighting unit. The group's days are spent surfing the Web and hanging out in chatrooms, usually pretending to be someone else, such as someone looking for child pornography, guns, or illegal prescription drugs. However, law enforcement officials in Wayne County complain that the state's laws are too outdated for them to effectively do their jobs, particularly in the area of pedophilia and child pornography. The state's sexual-abuse laws are generally interpreted to mean that the target of a predator must be an actual child, not an undercover police officer posing as one. Since the Internet Crime Bureau was created, 17 arrests have been made, but none of the defendants were convicted for the charges on which they were arrested. This may change under a bill expected to be introduced into the legislature, which would treat police pretending to be minors online the same as if they were a real child. Legal experts say this bill would make prosecuting online child predators much easier.
- "Europe's ISPs Fill Their War Chests"
Industry Standard (04/10/00) Vol. 3, No. 13, P. 136; Spiegler, Marc
In contrast to the situation in the U.S., in which the influence of ISPs is waning in favor of the rapid growth of B2B and broadband, ISPs in Europe are scrambling to take advantage of what appears to be an incredible market opportunity. A host of independent European ISPs have sprung up in recent years, sacrificing revenue in order to offer more competitively priced packages for Internet access than do their government-supported rivals, which typically reap enormous profits by charging customers based on the amount of minutes they actually spend on the Internet. However, these new, revolutionary ISPs need cash to survive, and they are turning to the stock market to get it. A host of European ISPs have gone public recently, and are using the money gained from their IPOs to expand their service offerings and increase their customer base, primarily through the acquisition of smaller ISPs unable to act quickly enough to avoid such a fate. Although specific tactics vary, these fledgling European ISPs are focusing primarily upon e-commerce, advertising, and content, hoping their IPO-funded purchasing sprees will enable them to grow enough in size to stay afloat and attract a variety of business partners. "The options are to be big or be swallowed," says Global Retail Partners' venture capitalist Niko Waesche. It is unlikely one single ISP will emerge as the winner of this purchasing war, since cultural differences among Europeans make the Continental market difficult to dominate, but a major consolidation is expected, with European Internet users possibly benefiting the most from this flurry of activity.
- "Get Real"
Business 2.0 (04/00) Vol. 5, No. 4, P. 195; Cross, Kim
While the Internet is gradually infiltrating the entire global economy, some markets are making more progress than others in becoming Web-enabled. At the forefront of Web development are retailers, with brick-and-mortar firms joining Internet startups in selling their products online. Fulfillment poses a significant challenge to retailers; although traditional companies plan to ease this problem by using their physical stores as localized distribution centers, most companies still must link each store to the e-commerce site. The utilities industry is using the Internet to smooth an ongoing deregulation by attracting new customers. Yet customers are also the greatest limitation to e-business in the utilities market, because they have been reluctant to adopt such services as online billing. Conversely, customers have driven e-business growth in the financial services industry, which has successfully launched online stock trading and online banking, and is now looking to develop personalized, long-term financial planning applications for consumers. E-business is particularly crucial to the manufacturing industry, which must adapt its processes to fulfill individualized orders made online. While e-business enables manufacturers to better collaborate, companies must still tackle the massive task of integrating their systems. The health care and telecommunications industries have each had mixed reactions to the Internet. While the health care industry could be transformed by online services for patients, providers, and pharmaceutical companies, the industry has been slow to adopt the Internet. Meanwhile, telecoms have benefited from the wealth of new business opportunities furnished by the Internet, but are weighed down by the responsibility of replacing their telephone-oriented networks to Internet-enabled packet-switched networks.
- "Enterprise Portals"
Beyond Computing (03/00) Vol. 9, No. 2, P. 18; Wreden, Nick
Enterprise information portals (EIPs) are proving to be effective tools for companies to organize and distribute enterprise data throughout the organization and among partners and customers on the outside. EIPs act as an intelligent assistant by providing distributed users with a single, personalized point of entry to enterprise data sourced from any number of applications or locations. EIPs also reduce IT departments' systems management tasks, because the portal allows the end user to customize information individually. Management consulting firm Hewitt Associates implemented an EIP in September 1998 after a customer approached the company with the idea of performing employee benefit self-services using information provided and managed by Hewitt on Hewitt's systems. The EIP has been a success, and Hewitt plans to extend the system to six regional offices, linking it to the company's roughly 2,000 databases. "We have a wide variety of knowledge systems with multiple data structures," says Hewitt's Helen Tipton. "Portal technology can tie together diverse back-end systems while allowing categorized searches that benefit offices around the world and provide a new service for our customers." At least 80 percent of Fortune 500 companies will implement or consider implementing EIP systems this year, according to the GartnerGroup.
- "How to Do E-CRM"
BtoB (03/27/00) Vol. 85, No. 2, P. 48; Shaw, Russell
Online customer relationship management is quickly becoming a crucial method to attract and retain customers, yet many companies fail to successfully deploy such a system. A successful e-CRM implementation often requires a costly investment and a reengineering of core processes. Successful CRM solutions cannot rely on technology alone; rather, companies should use technology as part of a comprehensive solution. To ensure that the right technology is chosen, companies should determine a business goal, then choose software and redesign businesses processes specifically to achieve that goal. Companies should design a CRM strategy that envelops all sales channels, connecting, for example, a Web channel with a call center and field representatives. Channel partners should also be included in a CRM system, providing instant access to schedules and product catalogs, according to Stephen Platt, global co-leader of Deloitte Consulting's CRM unit. Ultimately, CRM strategies should be devoted to the customer. Ideally, a CRM solution will be used to attract and keep customers by addressing their individual needs.
- "How e-Business Is Transforming Supply Chain Management"
Journal of Business Strategy (04/00) Vol. 21, No. 2, P. 36; Cross, Gary J.
The rise of e-business is spurring companies to redesign their supply chain processes to streamline communications. Business-to-business e-commerce is set to explode: Boston Consulting Group reports that online e-commerce transactions between businesses will rise from $92 billion in 1999 to $2.0 trillion in 2003. Companies are finding that e-business offers the opportunity to drive down the cost of accessing information while significantly increasing the value of the information available. Companies now have access to details such as configuration, product availability, and price negotiation, all without the expense of travel or face-to-face meetings. Meanwhile, online business-to-business networks allow companies to reach a greater number of companies, enabling competitive bidding. Companies such as IBM, Dell, and Cisco Systems are already demonstrating the efficiencies afforded by the Internet. By Web-enabling its processes, IBM, for example, has reduced inventory write-offs by $800 million, bolstered on-time delivery from 90 percent to 98 percent, and reduced order approval time from two weeks to immediately. The company has also used the Internet to transform its procurement processes, achieving a $4.2 billion reduction in the cost of purchased goods and services.
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