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Volume 3, Issue 175:  Monday, March 12, 2001

  • "Technology Leaders Get Their Bearings"
    New York Times (03/12/01) P. C1; Schiesel, Seth

    As the tech economy continues to weaken, the executives of leading tech vendors are trying to find a course for their companies to take in these turbulent times. In a recent InformationWeek report, a survey of managers and business officials in charge of purchasing new technology showed that, for the first time, more than half of their companies were cutting back or maintaining their current tech budgets. However, Intel CEO Craig Barrett insists that his company's R&D expenditures increase, year to year, by about 10 percent. He claims that, although Intel is making broad cuts in spending, its core product development is maintaining its course. Microsoft president and COO Richard E. Belluzzo also says his company is looking at the "big bets" that will propel it in the future, despite the woes of its dot-com business. Many other CEOs say the slowdown has some positive effects for their companies. Scott Kriens, CEO for Juniper Networks, notes that companies with tight IT budgets are forced to make decisions between focusing on old legacy-system infrastructure or new technology. Kriens is confident that this pressure situation will lead many businesses to change their technology focus and abandon older systems, which is a healthy sign. Dell co-President and co-COO James Vanderslice says Dell stands to gain significant market share as it pushes price competition by passing on reductions in component costs to consumers. "This is our time," he says of the current weakness in the PC market. However, at least one analyst says these corporate leaders are not yet ready for the duration and severity of the market downturn. Yankee Group founder Howard Anderson says tech executives are in denial and that the sector will see two more years of financial woes before the clouds clear.
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  • "Losses From Computer Crime Show Major Increase, FBI Survey Finds"
    Los Angeles Times (03/12/01) P. C2; Piller, Charles

    Computer crime continues to increase, reveals a new report from the FBI and the San Francisco-based Computer Security Institute. The annual report, to be released today, surveyed over 500 organizations and companies. However, only 14 percent of those contacted to take part in the survey agreed to participate. Still, the industry views the survey as an important benchmark in monitoring computer crime, as no other set of comprehensive data on the subject exists. This year's survey is notable not only for the rise in computer crime but for a new trend in the source of that crime. Of the respondents, 70 percent said they were subject to frequent hacker attacks from over the Internet, while 31 percent said they were subject to attacks from within their own network. This counters the traditional belief in the industry that insider attacks are a greater threat than those from outside. "The threat from the inside is decreasing because people are getting better at security and are more vigilant with internal networks," said Richard Power, the editorial director at the Computer Security Institute. However, critics of the survey argue that insider attacks are still the largest threat but agree that there is a lack of empirical data to prove that claim. Few businesses were willing to participate in the survey, in part because they did not want to risk exposing internal information on their computer security, thus risking losing consumer confidence, and in part because they do not trust the FBI, which has a poor reputation within the industry for dealing with computer crime.

  • "Germany Scrambling for High-Tech Workers"
    Associated Press (03/11/01)

    Despite loosening its strict immigration laws, Germany still faces a severe shortage of skilled IT workers. International Data (IDC) estimates that Germany has a total of 400,000 IT job openings, including nontechnical e-commerce jobs, the most in any European Union country. Overall, the 15 nations of the EU have 1.9 million unfilled IT positions. Great Britain has 300,000, and France 250,000, according to IDC. Germany's new green-card program provides a five-year work permit for those who have a university degree in a relevant IT field or whose salary is at least $48,000. However, since the program began in the middle of last year, only 5,300 of the 20,000 available permits have been taken. Observers say large German tech firms, while making some foreign hires, would rather rely on their overseas subsidiaries. The permits are seen as more of a boon to small and mid-sized German firms, especially in the financially disadvantaged former East Germany, where observers say few German IT specialists wish to work.

  • "Palm Turns Focus to Corporate Market"
    Reuters (03/12/01)

    Leading handheld maker Palm is pushing into the corporate software market. Having gained a 60 percent share of the $25 billion handheld market, Palm executives believe that handheld software for the enterprise market is the key to the company's further growth. Analysts agree that the corporate market has the potential to explode. International Data (IDC) predicts that handheld shipments to corporate customers will increase from 30 percent of all handheld shipments in 2001 to 50 percent by 2004. The total number of handheld shipments will grow from 14.9 million in 2001 to 33.6 million by 2004, IDC forecasts. Becoming a leader in handheld software would give the company a major revenue source once the devices are ubiquitous. Moreover, with 90 percent of all handheld devices currently running Palm's operating system, the company has a significant advantage over rivals. "What we want to do is enable the whole economy for the Palm OS," explains Palm's Jerry Jalaba. "Some of those devices end up being Palm devices; all of them end up being Palm OS devices." To facilitate its move into corporate software, Palm has made several strategic partnerships over the past few months, including the acquisition earlier this month of Extended Systems, which provides applications for handhelds in the business environment, and an investment in Kenamea, which extends applications to handheld platforms.

  • "Unwieldy Process, Flawed Procedure Dog ICANN in Net-Management Mission, Panelists Charge"
    IDG News Service (03/08/01); Evans, James

    During a panel discussion at the 11th annual conference of Computers, Freedom, and Privacy on March 7, four panelists criticized ICANN for how it handled the elections of its at-large board members and for being insufficiently international. ICANN's election was "a waste of my time," says Barbara Simons, former president of the Association of Computing Machinery and unsuccessful candidate for ICANN's board. Another unsuccessful candidate, Emerson Tiller, was unable to join in a panel discussion during the elections because of poor weather in the Boston area. Further, candidates had to answer a number of questions, but ICANN's software made this task difficult, according to Simons. The domain name system needs to be changed, according to the panel. A "fairly drastic step has to be taken" in order to change the domain name system from its current form, says Brad Templeton, a panelist and chair of the board at the Electronic Frontier Foundation. The domain name system must be fixed using an international approach, according to Peter Neumann, principal scientist at SRI International Computer Science Laboratory. At the conference, it was announced that Stanford University law school Professor Lawrence Lessig, Simons, and Tiller sent a letter to ICANN Chairman Vint Cerf. ICANN failed to put any at-large board members on the committee it formed to examine ICANN's at-large membership, according to the letter.
    For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html

  • "On the Job"
    Wall Street Journal (03/12/01) P. R33; Eure, Rob

    E-learning is gathering steam on the corporate scene because it offers anytime access to skills training, makes employees technology-savvy, and lets large businesses quickly mobilize their workforces for new initiatives. International Data (IDC) reports that e-learning currently generates $4 billion in annual sales and that the market is poised to explode to $14.5 billion by 2004. Cushing Anderson, e-learning analyst for IDC, says e-learning still only represents a small portion of the current $58 billion corporate-training market but takes up nearly one-third of external expenditures devoted to workforce education. Motorola has embraced e-learning for its 140,000 employees worldwide, delivering about 30 percent of coursework through non-traditional channels. The result, says Bill Wiggenhorn, president of the company's training division, is not a reduction in costs, but rather a potential tripling in the time-efficiency of teaching. Instead of taking eight hours to learn a subject, Wiggenhorn expects that e-learning will eventually drop that time to 2.5 hours, allowing the company to teach three times as much information and skills in the 40 hours per year allotted to each worker for training. Motorola e-learning development leader Jill Brosig says e-learning helps make employees more at ease with the technology. New channels of teaching also are providing for revolutionary applications of coursework. Ninth House Network, for example, develops project-management, leadership, and communication skills for over-the-Web or CD-ROM-based e-learning programs. The curriculum features simulated situations that grab learners' attention and get them to interact with the program. Students make decisions that affect the outcome of the simulation, depending on guidance from a programmed software mentor. So far, the company has subscription purchases from 60 companies, including the U.S. Department of Justice, the U.S. Navy, and Hewlett-Packard.

  • "Can Magnets Improve Memory?"
    Investor's Business Daily (03/12/01) P. A6; DeTar, James

    New magnetic memory chips (MRAM) promise to provide all the benefits of current DRAM, SRAM, and flash memory technologies, and many other advantages as well. Besides being cheaper than many current memory chips and providing all the features essential for a broad range of applications, MRAM will also allow computers to boot up instantly and perform billions of cycles without wearing out. Most electronic devices use a combination of flash, SRAM, and DRAM. Flash memory technology usually breaks down after between 100,000 and 1 million cycles, and SRAM does not save data once the power is turned off, requiring the timely reloading of files when devices are switched on again. However, many experts warn that a MRAM chip is still a few years off and that there could be the potential for technological pitfalls. Despite such challenges, many companies are racing ahead to create a MRAM product, the forefront developers being Motorola, IBM, and Infineon Technologies. IBM and Infineon have teamed to produce a chip, together devoting more than 80 experts to the project. Motorola is working to leverage the 45 patents that the company already holds for potential MRAM technologies. Both teams have received funding from the Defense Advanced Research Projects Agency (DARPA), which plans to apply sturdy MRAM chips in satellites and weapons. IBM Microelectronics CTO Russell Lange explains that, although MRAM is essentially a risk, it is a revolutionary technology that could very well see broad application in a few years.

  • "ICANN Faces Mounting Pressure on VeriSign Deal"
    Reuters (03/12/01); Deane, Simone

    A number of organizations have called for ICANN to do away with the deal that it made with VeriSign, which the ICANN board has yet to approve. ICANN's Domain Names Supporting Organization (DNSO) Names Council and a group of registrars put pressure on ICANN's board to drop the proposal. There was some anxiety that the agreement does not leave ICANN and its supporting organizations sufficient time to look into the matter. ICANN's board should not be hurried to make a decision without fully considering the issue "in accordance with ICANN and DNSO's consulting procedures," said the Names Council in a presentation to the board. However, VeriSign asserts that it needs to have an answer around April 1, so that it can divest the registrar portion of its business if need be. "We have to make decisions for our business moving forward, so to create a universal debate on this that stays open for months and months and months is just not going to be acceptable to our board of directors or employees," says VeriSign CEO Stratton Sclavos. If the agreement is not finalized by the first week of April, VeriSign "must go down the other path," says Sclavos. This new deal is VeriSign's favored option, but it would probably not be an issue if the deal did not work out and VeriSign had to sell off part of its registrar business, says Sclavos. "The most important thing is to have clarity one way or the other," says Sclavos. Register.com, Melbourne IT, and BulkRegister.com were among the registrars that have joined together in an effort to have the deal thrown out.
    For information regarding ACM's internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html

  • "Commerce Secretary Promises Hands-Off Approach to Techs"
    Washtech.com (03/07/01); Morton, Felicia

    The Bush administration favors a "hands off" approach to the Internet and would like to see an extension of the e-commerce tax moratorium, said Commerce Secretary Donald Evans, speaking at the Global Internet Summit. The administration will push for the introduction of broadband technology across the country and would like to see greater competition in the telecom sector, Evans said. "The high tech community needs a champion in Washington," Evans said. "I want to be your advocate." AOL Interactive President Jonathan Sacks also spoke at the summit, criticizing lawmakers for not realizing that their efforts to legislate online privacy and other aspects of the Internet cause more harm than good.

  • "New Approach to Data Centers Could Stem Power Crisis"
    Computerworld Online (03/05/01); Verton, Dan

    U.S. Data Port may win approval from the state of Virginia for its 188-acre Internet campus, which will include up to 20 data centers powered completely by an onsite, 250 MW generation plant. The idea is partly a result of the nation's power crunch and the burgeoning demand for the electricity-hungry data centers and server farms that enable the Internet. Lewis Shadle, senior vice president for business development at U.S. Data Port, admits that this may not be an ideal solution for many tech companies, saying, "There are tremendous barriers, and capital is one of them." He explains that the power plant for the site will cost $300 million alone and that 2 million square feet of data center space is needed to generate enough revenue to make the operation profitable. However, Armando Perez, director of grid planning for the California Independent System Operator, says the U.S. Data Port approach is "a great solution" for companies with the resources to complete such a project, especially in California, where demand for energy is outpacing the ability to produce it. Already, U.S. Data Port is planning facilities similar to its proposed Virginia center in San Jose, Calif., and in the New York City area.

  • "Small Businesses Fear E-Commerce, But Recognize Power"
    DestinationSOHO (03/07/01); Medina, Maria

    A recent study shows that most small to medium-sized businesses are confident that e-commerce would help their companies, but apprehensive about perceived risks involved. Sage Software, a developer of accounting applications for the midrange market, conducted a year-long survey of 200 middle-sized company executives and found that only 7 percent offer e-commerce. More telling perhaps, was the response that 58 percent said they do not have a definite plan for how to move forward in that direction. Still, 70 percent thought that e-commerce would benefit their operations and keep them competitive in the future. Sage Software's John E. Carroll says that businesses are starting to use off-the-shelf software to build Web sites themselves, instead of outsourcing that work.

  • "Web Gadgets That 'Phone Home' Can Spy on You"
    Reuters (03/07/01); Auchard, Eric

    Privacy concerns have swirled around Internet marketing practices for the last few years, but it is nothing compared to the monitoring systems now being installed in wireless devices, says privacy expert Richard Smith, chief technology officer of Denver's Privacy Foundation. From cell phones with built-in geographical location sensors to digital music players that report on a user's listening habits, wireless devices are being designed increasingly to send back data to marketing companies, law enforcement agencies, and other entities. "Most people don't understand how far this has already gone," comments Smith. Smith highlights a device called SportBrain that can be attached to a person's body during workouts. Through the use of a modem, the device can be used to send biological data back to the company's Web site, where the company will produce analysis of the person's workout. Smith questions the company's motives for using a Web site rather than giving SportBrain users software to install on their desktops, which would prevent the need for data transmission to the company. The SportBrain company argues that its privacy policy states that it does not share the data, and that it only makes money through Web advertising. Other devices are also incorporating loop-back transmission technology, technology whose long-term ramifications alarm Smith and other privacy watchdogs.

  • "Multilingual Montreal and the New Tongues of the Net"
    Christian Science Monitor (03/08/01) P. 17; Walker, Ruth

    Alis Technologies has its sights squarely set on making the Internet a place where people can communicate in languages other than English. The company sees huge growth potential in fulfilling the needs of multinational businesses that will be dealing with an increasing number of Internet users who do not speak English as their first language. "Eighty percent of the new users of the Internet this year--about 150 million--will not have English as their first language," says Claude Lemay, president and chief executive of Alis Technologies. Lemay also notes that more than 40 percent of current Internet users speak a language other than English as their first language. When multinational companies bring their software to Alis Technologies, the small firm in Montreal customizes the software for their offices in other parts of the world. Alis Technologies is also involved in machine translation, which includes enabling branch offices of multinational corporations to communicate across language gaps. The Netscape 6.0 Web browser features its technology, allowing users to click a button to translate a foreign-language page.

  • "The Shrinking IT Budget"
    InformationWeek (03/05/01) No. 827, P. 22; Rosen, Cheryl

    The percentage of IT and business executives who report stagnant or falling IT budgets has nearly doubled from 28 percent to over 50 percent, the latest InformationWeek "Priorities" quarterly survey states. The survey found that 15 percent of respondents have already cut back IT budgets on account of the recent economic slowdown, while another 7 percent are considering doing so. However, InformationWeek says the effect on IT budgets has not been dramatic as of yet. According to its survey, IT spending accounts for 7.7 percent of the average firm's budget, down from 8 percent in its survey three months ago. Of the survey's respondents, 49 percent report expected increases in IT budgets. The survey found that many IT initiatives, such as enterprise-resource planning and customer-relationship management, intranets, and extranets, have so far not been affected by cutbacks, while large-scale PC rollouts and custom software developments have. At Delta Air Lines, IT projects that are saving the company money--for example, online ticket sales, which save the company $10 million for each 1 percent of total ticket sales that is sold over the Internet--will likely survive any IT trimming. However, a plan to provide Delta employees with PCs and access to the Internet for only $10 a month may be in trouble. Meta Group reports that IT budgets for the 2,200 countries around the world that it tracks are growing by 10 percent this year. However, that growth is half of last year's growth, the first decline in the Meta Group's index since 1993. Giga Information Group vice president Paul Bartels warns that IT advances may be partly to blame for an economic slowdown. He argues that because companies now have much better models for forecasting market trends, their reaction to signs of a coming slowdown may in fact speed the development of that slowdown.

  • "Putting a Profit Margin on Ideas"
    U.S. News & World Report (03/12/01) Vol. 130, No. 10, P. 54; Rae-Dupree, Janet

    Although Xerox's Palo Alto Research Center (PARC) was the birthplace of the personal computer, laser printing, and the Ethernet, analysts wonder if it can survive Xerox's current financial troubles. The company has accrued $17 billion in debt, and some rumors have Xerox selling PARC to make up some of that shortfall. However, Xerox has instead asked PARC officials to find one or more outside investors to support it. Former PARC head John Seely Brown thinks that PARC should bring in two investors, one who knows the management of intellectual property and one who know how to build startups. "The key is to be able to honor the unique value of PARC and still find a way to amplify its ability to pay off," Brown says. PARC could still pay off big, analysts speculate, as last year alone its 250 researchers received 200 patents. Ongoing projects at PARC involve improved Web navigation and computer security, electronic paper, and "smart matter." Although PARC has lost some employees in recent years--mostly on account of the attraction of the growing dot-com sector, current employees say--the lab still attracts some of the brightest minds in numerous fields.

  • "Bush Stresses IT Programs, But Funding Is a Mystery"
    Federal Times (03/05/01) Vol. 37, No. 5, P. 7; Robb, Karen

    President Bush's proposed federal budget is bullish on e-government initiatives, including beefed-up funding for inter-agency Internet projects, a move that federal CIOs and non-profit e-government groups have advocated for years. However, many projects do not possess specific funding levels, creating uncertainty among many federal agency officials. Bush's budget does include $10 million for inter-agency Internet projects, which rises to $100 million in three years. Also, he continues funding for the FirstGov inter-agency Web site and search engine and increases General Services Administration Internet security funding by 38 percent. In his proposal, Bush also mandates that agencies move to paperless contracting and tailor Internet services to taxpayer demands, but he does not specify particular projects or funding levels. The State Department, the Social Security Administration, Health and Human Services, and the IRS all have substantial computer-modernization budgets under the Bush proposal that is now making its way through Congress.

  • "It's Time to Can the Spam"
    Business Week (03/12/01) No. 3723, P. 24; Wildstrom, Stephen H.

    Columnist Stephen H. Wildstrom maintains that there are a few things that can be done to reduce spam drastically, apart from the ineffective filters offered by mail programs such as AOL and Yahoo!. Shutting down "open relays" on the Internet--which junk mailers use to cover up the source of their mail and to avoid being busted by their own ISPs for abusing their accounts--is already happening, but the author says more organizations should do it. This form of "Net vigilantism" occurs when groups, such as the Mail Abuse Prevention System, send out lists of servers used as relays by junk-mail senders, and subscribers then turn away any incoming mail from such servers. Such a practice blocks real mail as well as spam, so any ISP that finds itself on a blacklist will face serious pressure from angry customers and will work to fight the spammers. The author also suggests requiring every email to have a legitimate return address, instead of the fake ones that junk mailers use. Although this will not be the death knell for spam, says the author, it would dramatically lower it, just as the law that requires that every fax have a real phone number from which it originated has put a crimp in junk faxes. Finally, the author alleges that a law-enforcement agency needs to be created to combat illegal spam, as much of what is advertised in junk emails is illegal and a threat to true e-commerce.

  • "No Workers, No Offices: The Virtual Company"
    Industry Standard (03/12/01) Vol. 4, No. 10, P. 78; Roberti, Mark

    Virtual companies are ventures in which a group of partners build and offer products without the use of offices, factories, or a workforce--collaboration takes place over the Web. By forming virtual companies, small and mid-sized businesses can gain big-time contracts. Dirigo Energy CEO Bob Aldrich launched one such company with the aid of G5 Technologies and IBM. Aldrich's venture consists of six manufacturers that produce electric generators separately, but all of which hold a stake in the company. Only recently has the technology needed support virtual companies and help them attain profitability become available. G5's predecessor was the U.S. Defense Department's Agile Web project, which garnered contracts by coordinating the efforts of several companies to produce goods. IBM is providing an automated procedure for creating virtual companies to fulfill market needs and plans to extend the service to its suppliers through applications such as the recently tested Virtual Enterprise Builder.

  • "Ink on E-Sign Still Isn't Dry; Feds to Review Process"
    Computerworld (03/05/01) Vol. 35, No. 10, P. 31; Thibodeau, Patrick

    Last October, President Clinton signed into law a bill making e-signatures as legally binding and applicable as written signatures, but now the FTC and the Department of Commerce have opened an inquiry and public comment period to evaluate the broader ramifications of e-signatures, which eventually may lead them to request Congress make minor or major legal changes. Specifically, the FTC and Commerce are concerned about the security of e-signatures in B2C transactions. They wonder whether marketing discounts could be used to entice consumers into using e-signatures before the consumer understands them. Margot Saunders of the National Consumer Law Center worries that consumers may be so hungry for discounts they will choose e-signatures "even when they don't have a computer, in order to get a transaction at a reasonable cost." Despite FTC and Commerce concerns, businesses have been slow to rush into e-signature's nascent legal waters. Still, many businesses remain enthusiastic about e-signatures' potential to speed up the consumer transaction process.

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