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Volume 3, Issue 229:  Friday, July 20, 2001

  • "In the Future, You'll Pluck Your Info From Thin Air"
    USA Today (07/20/01) P. 1B; Maney, Kevin

    Almost every tech firm is undertaking a personal information (PI) initiative, the goal of which is to separate users' data from PCs, laptops, and other kinds of hardware, and to store it on the Internet instead. The advent of PI will signal significant shifts in power as well as in the use of software, the Web, and associated equipment. One of the unique user applications of PI is the creation of a virtual mirror image, a personalized agent that can carry out automated activities, communications, or transactions on a user's behalf. Moving personal information from hardware to the Internet will also likely lead to a fusion of files and software applications, allowing consumers to access their information from any Web-enabled device; however, this development will have to wait until broadband wired and wireless networks are ubiquitous and until users are more agreeable to being less reliant on their hardware. Another obstacle is security: users and consumers will have to put their faith in the networks to which they transfer their information, and they will also have to collaborate with government and business to decide how much information they can release without creating an invasion of privacy. PI may take as long as five to 10 years to reach its full potential, while Merrill Lynch forecasts that the "content-centric" era will probably launch in 2005 and peak in 2030.

  • "U.S. 'Skills Gap' Called a Problem for Industries"
    Baltimore Sun (07/19/01) P. 1C; Walker, Andrea K.

    Many U.S. citizens lack the skills needed for a competitive, high-tech labor market, said U.S. Secretary of Labor Elaine Chao at the Joint Employment and Training Technology Conference in Baltimore, Md., on Wednesday. Monthly unemployment figures show that manufacturing jobs are in decline while high-skilled jobs are on the rise, she explained. "[T]here's a disconnect between many of the new jobs that are being created and the current skill level of many people in the workplace," Chao said, adding that firms are likely to seek immigrants and older Americans to fill the gap. Frequent job switching and shorter work lives compound the problem, Chao said. This year's conference highlighted e-learning for boosting employee skills; transferring government services to the Web was also addressed. Chao stressed that federal and private concerns need to work together to upgrade workers' skills.
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  • "House Clears Bill With Cyber-Security, H-1B Funding"
    Newsbytes (07/19/01); MacMillan, Robert

    The House has passed the Commerce-Justice-State appropriations bill, legislation that provides funding for cybersecurity efforts and initiatives to curb online crime, including online child pornography. The Senate must pass its own version of the legislation and the two bills must be reconciled before being sent to the White House. The reconciled legislation in its final form could be significantly different than the two draft bills. The House bill as currently constituted would provide the Justice Department's Criminal Division with an additional $2.5 million for cyberterrorism and other security issues. Some $469 million would be allocated to the FBI, U.S. Attorneys, and Drug Enforcement Administration for an umbrella of issues, including "new tools to combat cybercrime and national security threats." The FBI's cybercrime funding would be boosted by $17.2 million, to a total of $108.6 million. The appropriations report addresses several Internet security concerns, including child pornography and intellectual property issues. The report gives its support to the Internet Crimes Against Children Task Force Program and calls for the attorney general to provide an official update of its cybercrime efforts by Jan. 4 of next year.

  • "Microsoft Says PC Business Will Worsen"
    New York Times (07/20/01) P. C1; Lohr, Steven

    Microsoft on Wednesday announced revenue of between $6 billion and $6.2 billion for its most recent quarter, slightly below analysts' forecasts, and said it does not expect PC sales to improve in the current quarter. CFO John Connors said PC sales in the current quarter will be "very soft to flat" worldwide. For the recently completed quarter, PC sales growth totaled only 7 percent, Connors reported. Still, Microsoft has performed extraordinarily well during the current economic downturn, and Connors said the company has a great deal of excitement about next year. Analysts say Microsoft has been able to avoid the layoffs and large losses that have plagued other tech firms so far this year because businesses are buying its Windows 2000 operating system; in addition, sales of email and SQL database software for corporate servers has grown 30 percent from this time last year. Also, ad revenue from the company's online venture grew 50 percent in the recently completed quarter. Connors made only passing reference to the continuing antitrust case against the company, but a federal appeals court on Wednesday ordered the government to address Microsoft's request that the court rehear a point in the case concerning how the company tied together Windows and the Internet Explorer Web browser.
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  • "Software Download Patent Refuses to Die"
    CNet (07/16/01); Festa, Paul

    A federal appeals court has confirmed its earlier ruling that a lower court must reconsider a patent claim made by the firm E-Data. The appeals court found that the lower court had interpreted the patent in question in too narrow a manner when it rejected E-Data's claim in March 1999. E-Data's claim, which has been in the courts since 1995, centers around the downloading of software over the Internet. E-Data believes that the patent in question affords it the right to receive licensing fees for many Internet software downloads. The lower court found in favor of AOL Time Warner's CompuServe, Intuit, and other software firms, ruling that the patent applies to a narrow range of software downloads obtained from physically based delivery systems, such as kiosks. The appeals court has remanded the case to the lower court, ordering that it interpret the patent in a broader manner. Carl Oppedahl, an attorney for a defendant in the case, says a ruling for E-Data could make the company "wealthier than Microsoft."

  • "Virus-Like Software Disrupts Web, Attacks White House Web Site"
    Wall Street Journal (07/20/01) P. B4; Bridis, Ted

    Over 225,000 corporate server computers were hit by a worm nicknamed "Code Red" yesterday in an apparent attempt to shut down the White House Web site. The virus-like program exploits a flaw detected last month in Internet server software designed by Microsoft, and uses infected computers as weapons by automatically programming them to send copious amounts of data to the White House site in a denial-of-service attack, but first it posts the message "Hacked by Chinese!." The FBI has called the attack a "significant threat" that has the potential of broadly disrupting Web traffic, and computer experts are amazed at the speed with which the worm is spreading. "Preventative measures" taken by the White House have seemingly worked to deflect the attack. Unlike traditional email viruses, Code Red does not usually reach individual computer users. "Hacker Group: Software Will Make Censors 'Powerless'" E-Commerce Times (07/17/01); McDonald, Tim The Cult of the Dead Cow (cDc) hacker group has announced that its Peekabooty anti-censorship software will soon be complete. The software is designed to prevent repressive governments from censoring free speech and keeping dissidents silent; countries that the software will target include China, Saudi Arabia, and North Korea, as well as censorship initiatives in Australia, Germany, and Ireland. The cDc plans to release Peekabooty as open source code. A mix of IT professionals, human rights workers, lawyers, international students, and "informal layers of support" are working on the project, says the cDc. The organization defines Peekabooty as a "distributed collaborative privacy network" on its Web site, adding that it lets users avoid most types of domain name service filtering. Network members can request specific files or documents; the browser packages and encrypts this material and transmits it back to the computer where the request originated. The cDc originally planned to launch Peekabooty at the DefCon 2001 hacker convention, but has decided to conduct further tests.

  • "Hacker Group: Software Will Make Censors 'Powerless'"
    E-Commerce Times (07/17/01); McDonald, Tim

    The Cult of the Dead Cow (cDc) hacker group has announced that its Peekabooty anti-censorship software will soon be complete. The software is designed to prevent repressive governments from censoring free speech and keeping dissidents silent; countries that the software will target include China, Saudi Arabia, and North Korea, as well as censorship initiatives in Australia, Germany, and Ireland. The cDc plans to release Peekabooty as open source code. A mix of IT professionals, human rights workers, lawyers, international students, and "informal layers of support" are working on the project, says the cDc. The organization defines Peekabooty as a "distributed collaborative privacy network" on its Web site, adding that it lets users avoid most types of domain name service filtering. Network members can request specific files or documents; the browser packages and encrypts this material and transmits it back to the computer where the request originated. The cDc originally planned to launch Peekabooty at the DefCon 2001 hacker convention, but has decided to conduct further tests.

  • "Studies Conflict Over IT Spending Trends"
    Network World Fusion (07/17/01); Marsan, Carolyn Duffy

    Recent surveys from Gartner and Merrill Lynch offer conflicting views of corporate plans for IT spending. In its survey of 65 U.S. and European CIOs, Merrill Lynch reports that U.S. corporate IT spending will grow by 4 percent in 2001, while European corporate IT spending will decrease 2 percent. In a survey of 589 corporations, Gartner found that 57 percent of respondents will increase IT spending this year, with the average increase 21.5 percent, while 21 percent will decrease IT spending. The reports do agree that firms' greatest IT outlay is staff; also, the reports both say IT outsourcing is increasing while hardware and software purchase are decreasing. Merrill Lynch, concluding from its survey that a "global IT recession" is occurring, says a majority of CIOs have no plans to grow PC purchases, nor are they interested in Linux; in addition, the CIOs it surveyed said they are not in favor of the new software-subscription plan that Microsoft is trumpeting. Gartner found that while IT spending was decreasing in certain sectors, such as the utility and construction industries, other sectors, including government IT spending, were increasing significantly.

  • "Some Tech Firms Skip the Slump"
    Los Angeles Times (07/19/01) P. A1; Kaplan, Karen

    Southern California tech firms have fared much better than their counterparts in Northern California. Generally, they have a broader customer base and were not lured into seeking super-fast growth through painfully expensive consumer acquisition strategies. Employment in the business services sector, which includes software programmers and engineers, has grown from 689,300 to 714,200 over the last year. Similarly, the Southern California telecommunications sector has grown by 2,800 workers. The resiliency of most of these companies lies in their products and customer base. Photobit, a company that manufactures special-effects equipment and other high-end, custom-designed imaging chips, says sales are still robust because of demand from Hollywood and the government. Tech companies make up only 14 percent of Southern California's economy compared to the 40 percent tech segment in Silicon Valley.

  • "Web Won't End Political Repression, Study Finds"
    IDG News Service (07/18/01); Legard, David

    A new report from the Carnegie Endowment for International Peace has found that the Internet does not necessarily promote democracy or pose a threat to authoritarian governments. In fact, several authoritarian governments have been able to restrict their citizens' Internet access as well as manipulate the Internet to serve their own ends. In many cases, authoritarian governments have been in control of the Internet since its emergence within their borders. The study is a rebuke to President Bush, who has expressed the opinion that the Internet will move China toward freedom. However, the study did find that four aspects of the Internet can challenge authoritarian governments: access to international groups and foreign governments, to economic groups, and to civil pressure organizations, and mass Internet use by the public. However, in its research of Internet use in China and Cuba, the study found that governments can influence Internet access by encouraging self-censorship and filtering sites, as China does, or by restricting access to select institutions, as Cuba does. The study does suggest that future Internet development could complicate attempts by authoritarian governments to restrict access, but its authors note that these governments have been more than able to adapt to changes in technology in the past.

  • "Tech's Still Got IT Made in India"
    Wired News (07/19/01); Joseph, Manu

    India's software industry is growing, despite--or even because of--the global tech-sector slowdown. Corporations in other countries look to India as a cheap outsourcing alternative and are continuing to expand there. Atul Takle of Tata Consulting Services notes that while Nortel cut 30,000 jobs worldwide, the firm did not lay off any of the 500 workers it has in Mumbai, India. Exports of software from India totaled $6.2 billion in 2001, reflecting an annual growth of 65 percent, and India's National Association of Software and Service Companies expects this number to reach $8.5 billion by March 2002. Over the past decade, India's software industry has turned from a U.S.-dependent market to a global supplier that now exports 62 percent of its products to the United States, 24 percent to Europe, and the rest to other markets in Asia. However, executives at Indian software firms admit to reacting somewhat to outside market forces. Infosys Technologies, for example, this year cut offshore prices by 6 percent.

  • "Microsoft Seeks to Play Down Java Controversy"
    Financial Times (07/19/01) P. 21; Kehoe, Louise

    Microsoft plans to exclude software from new versions of Windows that would support Java-language programs. Microsoft and Sun Microsystems, which released Java in 1995, reached an agreement last January over Microsoft's use of the programming language. In that agreement, Microsoft would phase out its use of Java over the course of seven years. Microsoft officials Wednesday said the decision to remove the Java program from the new Windows XP and subsequent versions was consistent with the January agreement. Java Virtual Machine, as the enabling software is called, will still be available through manufacturers' installation or by download, said Microsoft representatives. Some fear that Java, which is popularly used for Web programming and works well with all platforms, could face pressure as a viable programming language if it lacks support on Windows. Sun officials maintain that nothing Microsoft does can diminish the importance Java has gained as a programming language.

  • "Processors Won't Keep Their Cool"
    Washington Post (07/20/01) P. E1; Musgrove, Mike

    As processors increase their speed, CPUs' cooling systems are having a hard time keeping pace. Paradoxically, as the speed increases, so does the heat generated. This, in turn, slows down the electrons that are running through the unit's transistors, making the computer slower. Apple's iMac uses a unique no-fan cooling system, but PC manufacturers for the most part have not innovated beyond installing larger cooling systems. Notebook computers, because of their size and power restrictions, require more thought. Manufacturers now use a heat pipe system that diffuses heat through liquid vapor. A number of companies have sprung up to deal with the impending cooling crisis. Richard Roser, a marketing manager at one such company, Melcor Thermal Solutions, says it is only a matter of time before PC makers have to implement new cooling technologies.
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  • "Indian Handheld to Tackle Digital Divide"
    BBC News Online (07/18/01); Ward, Mark

    A team of Indian engineers and scientists led by Dr. Swami Manohar has developed a new handheld device designed to bridge the digital divide and help India's rural poor and illiterate learn about aid initiatives. The simple computer, better known as the Simputer, features Information Markup Language software that can read Web pages aloud in Hindi, Kannada, and Tamil. Simputer owners receive a smart card that tailors email and browsing software to their personal preferences. No manufacturers have as yet decided to produce the Simputer, but the development team hopes that the Indian government will fund its continued development and use. Although the machine bears a resemblance to Palm handhelds, its processor is more powerful and its memory greater. Simputer trials should commence in August.

  • "Staying Online Without Cutting off the Rest of the World"
    New York Times (07/19/01) P. E5; Selingo, Jeffrey

    A new modem standard for dial-up Internet access is expected to offer higher speeds and advanced features that may cause some to rethink their plans to switch to cable modem or DSL service. Called V.92, the standard enables the user to pause an Internet session to answer a phone call, decrease the log-on time, and enhance data transmissions' upload speed. The V.92 standard, which received International Telecommunications Union ratification in 2000, has already been incorporated into modems on the market. Although computer users will be able to access the Internet via the new modems, the majority of ISPs may not provide the advances capabilities of the V.92 standard until autumn. The standard will address the fact that the call waiting signal is often misconstrued for a disconnect tone, a major problem for call waiting users. To skirt the obstacle, many users halt call waiting while they are surfing the Internet, sometimes missing vital phone calls. But the new modem standard allows users to halt an Internet session to answer a call, and return to the Internet without dropping the Internet link.
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  • "Ready For Hardball?"
    eWeek (07/16/01) Vol. 18, No. 27, P. 49; Chen, Anne

    IT managers are faced with tough decisions when it comes to licensing software during an economic downturn. Vendors are negotiating pricing schemes that can inflate software bills, report analysts and enterprise clients. For example, Microsoft has switched to a subscription model and replaced its Upgrade Advantage program with Software Assurance, a policy that requires customers to purchase discounted upgrades on a periodic rather than as-needed basis. There are a number of ways managers can fight or avoid these practices: licensing less expensive open source software, having vendors match the competition's prices or switching to a different vendor if demands are not met, boosting their knowledge of pricing strategy to protect themselves, negotiating discounts and added support or services, or delaying purchases to yield the most savings. Experts say it pays to negotiate a liability clause with vendors, while entering into multinational software licensing agreements could realize volume discounts. "With all of these machinations, IT managers really need to understand a vendor's pricing model before working with a sales representative on a deal," urges Robert Frances Group's Chad Robertson.

  • "Copyright Tug O'War"
    Interactive Week (07/16/01) Vol. 8, No. 28, P. 44; Gruenwald, Juliana

    Computer, mobile phone, and other electronics manufacturers are trying to prevent member nations of the European Union from imposing levies on hardware purchases. The levies are meant to compensate copyright holders for the copying of their material that could potentially take place on the hardware. Originally intended for storage media such as blank cassettes, the collection societies--a group of private-sector organizations that operate with the legal consent of EU members to impose the levies--argue that computers and other electronics devices are now used widely to copy digital content. In Germany, for example, a levy of $34 is now attached to PCs, while scanners carry a $216 levy; several other EU nations, including France, Austria, and Greece, are pursuing levies for PCs and other electronics devices. Manufacturers argue that the levies will likely hurt the economies of nations that impose them because consumers will be less willing to purchase electronics. In addition, some copyright holders say the levies are no substitute for technology to prevent copying altogether. In fact, critics say the levies are more likely to make consumers view copying as a legitimate activity, provided they have paid the necessary levies. Collection societies and their supporters contend that levies are the best way to protect copyright holders until reliable digital rights management technology becomes feasible.

  • "Bush Technology Policy: Less or More?"
    Washington Techway (07/23/01) P. 21; Snyder, Robert G.

    The Bush administration is continuing to support basic science research while refusing to involve the federal government in any industrial policies. Technology business and policy consultant Robert G. Snyder argues that this is a mistake, citing a report from the Progressive Policy Institute (PPI) that indicates that the government is the primary driver of demand for technologies in young markets. Snyder points out that government support has helped Virginia and Maryland grow into IT and biotech leaders, respectively. The government is also facilitating the next technological waves, genomics and Internet2, sweeping through the same region. The PPI report also makes a case for government action to perform basic, but high-risk, research necessary for the commercialization of technology, to make business- and consumer-oriented technologies compatible via unified infrastructure and performance standards, to supply underserved segments of the populace with access to important technology, and to offer access to early stage financing.

  • "Internet Appliances Struggle for Acceptance"
    Computer (07/01) Vol. 34, No. 7, P. 12; Lawton, George

    With the exception of WebTV set-top boxes, vendors have had limited success marketing Internet appliances due to their limited functionality and basic services, a dip in PC prices, non-compatibility with other devices, and ill-defined value propositions. Nevertheless, vendors such as Compaq Computer, Sony, Intel, and Gateway continue to develop Web-enabled appliances in the hope that they will catch on. IDC analyst Bryan Ma predicts that U.S. sales of such Internet appliances should leap from 150,000 to 1.2 million units between 2001 and 2005, but greater growth is likely to take place among set-top boxes, gaming consoles, and entertainment systems. Meanwhile, Cahners In-Stat anticipates that worldwide standalone consumer Internet appliance sales will jump from $219 million to $1.3 billion between 2000 and 2005, mostly in PC-deficient regions outside North America and Western Europe. Industry observers are split into several camps regarding business strategy: one advises appliance vendors to lower their prices and differentiate the user experience from that of PCs, while another suggests that they focus on niche markets, such as education, health care, and gaming. Compaq's Tashana Jett speculates that Web-based household utility controllers could be a lucrative product; PC extensions are another application that shows promise.

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