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Volume 2, Issue 51:  Wednesday, May 3, 2000

  • "E-Commerce Software Spending Set To Explode"
    E-Commerce Times (05/02/00); Enos, Lori

    Forrester Research predicts expansion in the market for packaged e-commerce software as U.S. e-commerce spending approaches a possible $2 trillion by 2003. Organizations will increasingly seek out platform products that provide them the ability to customize and quickly make use of new applications, according to Forrester. A new strategy to form a single integrated platform based on the coordinated use of an applications platform, a framework of standards, and plug-in component applications will force companies to allow their IT and e-business to work together to avoid internal duplications and incompatible systems within the organization. The Forrester report predicts that friction will increase between platforms and component applications in the packaged software market during the next few years, but the field will have fewer companies competing due to consolidation. This will result in a stronger market. A U.S. Small Business Survey predicts the number of businesses with fewer than 100 employees will double in a year and continue to grow. The increased number of small businesses, especially those that develop stores online, should benefit companies that provide Web hosting, CRM solutions, and Internet postage and package handling. Forrester says online organizations will depend on a third party to handle their e-commerce needs and thereby remove the large financial investment essential to personalizing, measuring, and sustaining nonstop e-commerce.

  • "Microsoft to Use 'Biometric' Tools to Bolster Security for Windows"
    Wall Street Journal (05/02/00) P. B5; Sapsford, Jathon

    Microsoft today will announce a deal with I/O Software that will allow the software giant to incorporate biometric technology into future versions of Windows to improve security. I/O Software has an application programming interface (API) that allows biometric tools such as eye and fingerprint scanners to communicate with operating systems. Biometric scanners could eventually enhance or replace passwords if an API that allows easy use of biometric devices is accepted, experts say. Microsoft's announcement is an important validation for biometrics and is likely to expand the market for the technology. Adding biometrics to Windows would affect both the consumer and corporate markets, improving security for computer activities ranging from financial transactions to data mining. Microsoft has not said when biometrics will be available on Windows, saying the move will require some time. Businesses note the need for major investments in infrastructure to support biometric devices.

  • "Two States OK E-Commerce Standards Bill"
    CNet (05/02/00); Jacobus, Patricia

    Encouraged by Virginia and Maryland's adoption of the Uniform Computer and Information Transaction Act (UCITA), the National Conference of Commissioners on State Laws, the group responsible for drafting UCITA, is ramping up efforts to get other states to approve the bill over the coming months. UCITA is currently pending in the legislatures of Delaware, Hawaii, Illinois, and Oklahoma. John McCabe, legislative director of the National Conference of Commissioners on State Laws, acknowledges that UCITA is controversial, but feels encouraged that two states have already signed it into law. UCITA is a single standard that reconciles e-commerce rules produced at the state level. Law Professor Raymond Nimmer of the University of Houston Law Center says that some groups were hoping UCITA would provide greater consumer protections, but he also notes that the law has been drafted so it does not change state consumer protections.

  • "PC Makers Announce Online Parts Market"
    Washington Post (05/02/00) P. E3

    A plan to create a new Web site for the exchange of electronics and computer components was announced on May 1 by Compaq Computer, Hewlett-Packard, Gateway, and nine other companies that supply computer parts. The site will list chips, hard drives, and other parts in online catalogues and hold auctions for users to buy and sell products. The companies say the new site will reduce inventories, costs, and delivery time, which is important in an industry where small inventories are kept to avoid being stranded with leftover, obsolete parts. The founding companies said they would admit more founders and anyone interested in trading will be accepted at the site. Although they intend to have the online exchange operating within three months, neither a name for the site nor management has been selected. Other industries, including automotive and aerospace companies, airlines, and tire manufacturers, are creating similar Web sites, but, according to HP CEO Carly Fiorina, the high-tech exchange site will probably be the biggest online trading community.

  • "Intel to Phase Out Controversial Processor Serial Numbers"
    IDG News Service (04/28/00); McCarthy, Jack

    Intel this year will begin phasing out the serial numbers it places in processors, in response to concerns that the number could be used to track Web surfers' online activities. Beginning with the Willamette processor, Intel will stop including the number. Privacy advocates expressed concern last year over Intel's plans to include the serial number in the Pentium III. Intel said the numbers help IT managers keep track of their systems, and the number will still be included in Pentium IIIs. Privacy groups are pleased with Intel's plan to phase out the numbers.

  • "Big IT Companies Ask U.N. to Help Oversee New Software System"
    Fox MarketWire (05/03/00)

    The Application Service Provider Industry Consortium is asking the United Nations' World Intellectual Property Organization (WIPO) to aid in developing a system to avoid legal complications caused by the global nature of the Internet. The 460-member ASP Industry Consortium, which includes such high-profile participants as IBM, AT&T, and Microsoft, says that because the ASP model will become increasingly mainstream, action must be taken now to prevent intellectual property disputes. By 2004, the ASP market will reach $7.8 billion, up from $296 million last year, according to International Data. By using an ASP to access needed applications, customers avoid hardware and software upgrades, which saves a lot of money, particularly for large organizations. The state of Florida says using an ASP costs about 10 cents per document, compared to the $1.20 per page it was spending before with its own applications.

  • "British Plans For E-Mail Snoop Center Revealed"
    E-Commerce Times (05/01/00); Gold, Steve

    The Sunday Times recently ran a front page article exposing the British government's plan to conduct surveillance of Internet transactions. The Times report says the new Internet monitoring center, known as the government technical assistant center (GTAC), will be situated at the M15 headquarters in London, and will be up and running by the end of this year. The British media also recently ran stories claiming that the government has set aside $40 million for GTAC, and expects the country's ISPs to pay for the wideband connection linking them to the monitoring center. British civil liberties organizations have criticized the long-rumored GTAC, claiming that the government will be able to obtain access to private email and mobile phone calls without a warrant. The legal framework for GTAC may be provided by the United Kingdom's Regulation of Investigatory Powers (RIP) bill, a proposed law that would update the Interception of Communications Act. RIP would provide regulations and procedures that police and security services must follow when demanding that a computer user provide the decryption codes protecting email or other data. Critics of RIP say the bill would cause anyone who used encryption devices to be viewed as a criminal by the government, and that this principle goes against the spirit of the Human Rights Act. However, the British Home Office says critics of RIP and GTAC are jumping to hysterical conclusions. The Home Office claims that it would be impossible for the Security Services to monitor all private email, and that a warrant would still have to be obtained in order to conduct surveillance on specific Internet or email accounts.

  • "Restrictions Sought by U.S. on Microsoft Could Threaten New Windows Program"
    Wall Street Journal (05/02/00) P. A3; Bridis, Ted

    The government's proposed restrictions on Microsoft's use of middleware could cripple the company's next generation of Windows. As part of its proposed remedy in the antitrust suit, the government calls for restrictions on Microsoft's ability to add middleware to Windows. Middleware, software that sits between the operating system and applications, is broadly defined by the Justice Department to include software such as Web browsers and instant-messaging technology. Some of the Microsoft software threatened by the restrictions includes Internet Explorer, Outlook Express, Windows Media Player, and the MSN Messenger Service. Some of these programs are major parts of Microsoft's Next Generation Windows Services. Government officials aim to encourage competition by preventing Microsoft's use of middleware that is most effective or only effective with Windows. The proposed restrictions would force Microsoft to provide customers the choice of removing access to software such as the Internet browser. In addition, Microsoft would be required to sell a version of Windows without the middleware products included. Microsoft says the middleware rules would severely harm the company, noting that Windows could not have been developed without middleware. Industry experts say the middleware rules would be difficult to enforce and would likely lead to continued federal litigation if adopted. In addition, experts say the proposed rules could effectively prevent Microsoft from adding any new technology to Windows without giving consumers the option of removing it.

  • "Congressional Investigators Scrutinize Internet Oversight Group"
    New York Times Online (05/02/00); Clausing, Jeri

    The General Accounting Office (GAO) is conducting a thorough investigation into the validity of the process that led to the formation of the Internet Corporation for Assigned Names and Numbers (ICANN). The GAO will release a report on the matter by the end of June. The GAO investigation centers on how ICANN was selected to oversee the Internet and whether the Clinton administration exceeded its legal authority in choosing to tap a private concern such as ICANN for that role. Meanwhile, Sen. Ron Wyden (D-Ore.) is providing more grist for the Internet taxation debate with a proposed bill that would extend the current moratorium on Internet taxes to 2006, while giving state and local governments until 2004 to come up with a plan to simplify their existing sales tax structures. Wyden's legislation is the only bill that specifies a deadline for state and local governments to come up with a sales tax plan. Wyden says his bill would allow both sides of the debate to look good. Finally, two conferences focusing on Internet issues are being held in Washington, D.C., this week. The Information Technology Association of America's annual policy conference takes place tomorrow. And a number of Internet companies will attend the Direct Marketing Association's annual Government Affairs Conference, where topics such as online privacy, Internet taxes, and e-commerce growth will be discussed.

  • "Report: E-Commerce Comes of Age in the UK"
    InternetNews.com (04/28/00); Cox, Beth

    The U.K. Internet Survey 2000, conducted by Forrester Research's U.K. research arm Fletcher Research, says e-commerce has overcome communications as the most important aspect of Britain's Web development. Last year most companies were using the Internet as a communications tool to correspond with consumers, investors, and employees. This year nearly 50 percent of the companies are seeking out the opportunities of e-commerce on their sites. The study also shows that the cost of setting up a competitive Internet site in the United Kingdom has risen by more than 100 percent in the past year. Large corporations are staying competitive with Internet startups in the UK, although U.S.-based companies are leading many UK services segments, according to Fletcher.

  • "Sign on to 'Clicks-and-Mortar' World"
    Financial Times--Information Technology (05/03/00) P. 1; Ody, Penelope

    Online retail is increasingly blending into the brick-and-mortar world, making technology pervasive and bringing large changes to retail. Traditional retailers, once concerned with location, are now focusing on channel, including not only physical stores, but Web sites, interactive TV, and mobile phones. While brick-and-mortar stores once tried to place items strategically in stores to target specific shoppers, they now engage in relationship marketing and customization. As traditional retailers move to the Internet, online retailers are also moving into traditional retail, with some experts predicting that at least one dot-com will turn brick-and-mortar in coming months. Some retailers aim to provide a seamless shopping experience across all channels so customers can buy an item online and return it at a physical store, for example. Japan's Lawson chain of konbini convenience stores provides Web-based kiosks, which IBM helped to create, that allow buyers to order items that are not in stock and collect the merchandise the next day. Since Internet access is not widespread in Japanese households, the kiosks offer a simple way to get online. Meanwhile, handheld devices and mobile phones are paving the way for mobile commerce. Web-enabled point-of-sale terminals, which allows salespeople to access company data or source information, are further merging the online and brick-and-mortar spaces. In the future, multichannel "click-and-mortar" retailers are most likely to succeed because of their many points of contact with customers and increased bulk buying power, experts say.

  • "Electronic Authentication Technology Takes Off"
    TechRepublic (04/26/00); Recktenwald, Jennifer

    Electronic authentication tools, particularly biometric technology, might be widely used within a few years, experts say. Biometrics is the most effective way of confirming a person's identity, and the technology provides a high level of security and privacy for electronic transactions, says Dennis Quiggle of biometrics firm Cyber-SIGN. Biometrics could be used for accessing and verifying medical records or other personal data, purchasing items online, accessing cash machines, and protecting networks. Other uses of the technology include law enforcement, military, and government applications as well as benefits, entitlements, and service delivery. Biometrics can prevent cybercriminals from assuming a false identification to commit online crimes. Different types of biometric identification, most of which are already in use, include fingerprints, retinal patterns, hand geometry, voice recognition, facial recognition, typing pattern recognition, and signature dynamics. The European Union embraced authentication last December by passing a law that gives digital signatures the same legal weight as handwritten signatures. Meanwhile, the U.S. House of Representatives is considering a bill that would establish a policy for agencies to implement electronic authentication, and several federal agencies are already using the technology.

  • "IBM to Announce $1 Billion Deals in Financial Services Industry"
    CNet (05/03/00); Farmer, Melanie Austria

    IBM on Wednesday will announce alliances worth a combined $1 billion formed with financial services software makers Tig, Yojna, and S1 that will significantly intensify competition between IBM and rivals such as Oracle and Sun Microsystems. IBM expects the software deals to generate approximately $5 billion in sales over the next three years. Under the terms of the partnerships, IBM will market London-based Tig's Innovative Claims Management product for large insurers, promote Yojna's FinancialNet Web transaction applications to midsized banks, and sell S1's Corporate suite of Web banking tools. Additionally, IBM recently signed an agreement with CommercialWare in which IBM will combine CommercialWare's applications for online retail businesses with its hardware and Global Services consulting and systems integration support. IBM also recently agreed to market and support Siebel Systems' CRM software, and in March signed deals with software developer i2 and e-commerce software provider Ariba. IBM general manager Bob Timpson says IBM is currently negotiating approximately 50 other partnerships and seeks to forge 20 similar alliances by this June.
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  • "Panel Highlights Threat of Broadband Security"
    InfoWorld (04/24/00) Vol. 22, No. 17, P. 62A; Sykes, Rebecca

    Participants at the recent ACM-sponsored Computers, Freedom, and Privacy conference in Boston agreed that broadband Internet access poses great security risks, but differed on which risks are greatest and what solutions should be employed to secure computers with high-speed access. John Denker, manager of research at AT&T laboratories, said computer users who exchange a small amount of personal information for the chance to go online or to purchase a particular product may be giving up more than they bargained for. "The biggest threat to privacy is unrestricted data mining," said Denker. Others agreed, but singled out ISPs as the enemy of privacy, saying service providers need to be strictly regulated. Although government surveillance, hackers, and Trojan-horse software programs get much of the press and are legitimate broadband security risks, most of the participants stressed that computer users need to educate themselves on securing their data. For example, users should not leave private information on a public terminal, like a computer at the library. Dermot O'Carroll of Rogers Cable said computer users need to be taught easy methods of testing their computer security such as accessing Shields UP. Other participants suggested integrating stronger security systems into hardware and software before it is purchased.

  • "Many Firms Not Fully Ready for E-Business"
    IT Professional (04/00) Vol. 2, No. 2, P. 8

    Many companies moving into e-business lack the technological knowledge required for their online projects, according to a recent Cutter Consortium study. Although most respondents claim sufficient knowledge in core e-business technologies such as Java, routers, and firewalls, they cite inadequate knowledge of advanced development technologies such as XML and the common object request broker architecture (CORBA). Business rather than IT appears to be the main driver of e-business, the study finds. For 49 percent of respondents, business owns the e-business project, while business and IT jointly own the initiative for 32 percent. IT owns the initiative for only 19 percent of respondents. IT is critical to moving business processes online and integrating these processes with back-end systems, but usually performs these functions only to meet business goals. To align business and IT goals, 84 percent of respondents say their companies include the top IT executive in strategic planning efforts. Still, business-IT alignment is the leading concern among respondents.

  • "Congress Staves Off Taxing E-Commerce--But Then What?"
    Washington Technology (05/01/00) Vol. 15, No. 3, P. 18; Gallagher, Anne

    Congress appears ready to act on some of the recommendations it received from the Advisory Commission on Electronic Commerce regarding the taxation of sales made over the Internet. Although the commission released its report on April 6, recommending an extension of the moratorium prohibiting any new Internet taxes through 2006, several versions of legislation for prolonging a period of no new taxes on Internet transactions have appeared on Capitol Hill in recent months. Rep. Christopher Cox (R-Calif.) says the House will work on the issue before Memorial Day and that he expects to see Congress pass legislation soon. Many lawmakers in both houses seem to like the idea of a broad adoption of the commission recommendation--a five-year extension on the moratorium. Among the commission's other recommendations that Congress could act on shortly is eliminating the Spanish American War tax. Such a move would end the 3 percent federal telephone tax, a luxury tax dating back to 1898 that helped pay for that war. Legislation for repealing the telecommunications tax is in the works in both chambers, and Cox says Congress is on track to eliminate the tax. While lawmakers are working to prevent any new taxes for the Internet, their efforts will not stop state and local governments from enforcing taxes on their books that existed before the moratorium. Such taxes will allow states, which are opposed to a tax-free Internet, to collect taxes on online sales. States generally fear that their revenues for paying for public services will erode in a tax-free environment. Like lawmakers, the information technology industry is working toward reaching an agreement on the recommendations. Although Internet taxation remains a huge issue, the IT industry is almost as concerned about the government's increasing use of Web-based technologies for improving public sector services, which could lead to competition between the public and private sectors.

  • "ASPs Make Room for Customized Apps"
    ASP Industry News (04/00) P. 1; Bloss, Leigha

    The rapid evolution of business practices driven by the Internet has many companies demanding customized applications and many ASPs scrambling to find cost-effective methods of offering such customization. Many company executives erroneously define customization to include such tasks as generating tailored reports or configuring pre-packaged applications to suit the individual needs of a business. "Changing the underlying schema or code so that the application does something different is what we call customization," says Corio's Hasan Rizvi. "You are actually making changes to the application in a way that when you do an upgrade, the application may break." ASPs should therefore customize new versions of applications before completing upgrades. Because an ASP may have 200 individual corporate customers, creating and maintaining customized applications can become quite a complex, expensive task. Consequently, many ASPs subtly try to convince customers that customization is unnecessary. However, some companies, like IBM, Corio, GTE, UUNET, and Digex, have recognized the importance of customization and are working to cost-effectively incorporate customization into their ASP offerings. Individual companies have specific, individual needs with respect to CRM and ERP, and the traditional one-to-many model employed by most ASPs is simply unsuitable for such applications. Additionally, companies want to be unique in their e-commerce initiatives, which Rizvi claims means that "there will be things that customers need that are not generally applicable to everyone."

  • "Web Hosting Guide"
    Internet World (05/01/00) Vol. 6, No. 9, P. 77; Seltzer, Larry

    In order to reduce expenses without sacrificing performance, many businesses are choosing to outsource their Web site operations and learning that not all hosting companies are created equal. Low-end Web hosting services are designed for low traffic, static content Web sites and host several corporate Web sites on a single server. Meanwhile, dedicated hosting services, in which each hosted corporate Web site has its own server, offer improved performance but also permit the hosting company to choose what software to use and how to maintain and operate servers. Another option is known as colocation, in which a business actually owns the server running its Web site but houses it in a separate location. In response to growing demand among business clients, many hosting companies have begun adding business-to-consumer (B2C) e-commerce packages to their standard hosting services. However, B2C e-commerce applications are often complicated and difficult to host efficiently. Consequently, some hosting companies maintain multiple data centers, including IBM, which manages more than 40,000 servers at 133 global centers. Other hosting companies lease vast international networks of servers and services that distribute e-commerce applications, improving performance by essentially bringing information closer to users. Often, these "private" networks colocate their servers at data centers owned by larger hosting companies, including IBM and Exodus. Additional ASP services include those previously performed by LANs or individual PCs, services requiring highly-specific expertise like online auctions, and non-Web applications traditionally managed in-house like administration. Also available now through such high-end vendors as IBM and Concentric Network are "next generation" hosting services to manage highly complex network-based applications like B2B e-commerce and CRM.

  • "Europe Swoons for Voice-on-the-Net"
    Business Week (05/01/00) No. 3679, P. 192; Baker, Stephen

    Internet telephony has emerged as an attractive feature in Europe, despite the fact that the continent lags behind the United States by one or two years in terms of Internet penetration. Internet telephony may relieve the costliness of phone calls, which are about 40 percent more expensive in Europe than in the U.S. Many European companies may soon employ Internet telephony as a marketing tool. French online brokerage firm Capitol uses NetCentrix's Internet telephony for marketing. The company is conducting trials of Internet telephony programs that will enable customers to use their wireless phones to review their portfolios and speak with their brokers simultaneously. But currently, Capitol President Dominique Velter is focused more on marketing than on cost savings from inexpensive calls. If the technology is successful at Capitol, its parent company Viel & Cie may adopt it. Telephone bills comprise over 10 percent of total costs at the company.

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