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Volume 3, Issue 233:  Monday, July 30, 2001

  • "Tech 'Upgrade Fatigue'"
    Los Angeles Times (07/29/01) P. C1; Shiver Jr., Jube

    Broadband technology, despite winning the business market and making significant inroads into American homes, has not been the catalyst to tech spending companies had hoped for. International Data says consumer tech spending this year is corresponding with the 0.2 percent drop in corporate hardware expenditures, despite doubling last year. The effects in the industry are obvious--a recent dearth of sales at wireless phone makers Nokia and Motorola, a 20 percent drop in Intel chip sales for the first quarter, and the precipitous drop in operating income at Sony for the recent quarter. Though Napster's popularity seemed to signal one technology that would bolster tech sales, the music industry has effectively shut the file-trading network down. Analysts say a similar unprecedented technology will have to serve as catalyst to the new generation of tech gadgets that take advantage of the broadband infrastructure. Microsoft President Rick Belluzzo recently told a conference of cable operators that the company is eager to launch into the broadband market with other tech leaders, but developing valuable services will be key.

  • "Tech Firms Fund Open-Source Lab For $24 Million"
    Investor's Business Daily (07/30/01) P. A7; Riley, Sheila

    Nineteen American and Japanese tech companies--including IBM, Hewlett-Packard, and Fujitsu--have invested $24 million in the Open Source Development Lab (OSDL), a nonprofit organization for the development of Linux software. Lab director Tim Witham says the purpose of the facility is "to provide [vendor-neutral] equipment and infrastructure to developers working on open-source projects that are aimed at data center and telecom applications." He adds that the two-year goal of the OSDL is to make Linux the data center's mission-critical data server. The Oregon-based OSDL opened in January, and a second lab is expected to open in Tokyo by year's end; Witham attributes the decision to open a facility in Japan to the region's strong open-source infrastructure.

  • "For Now, Rivals See Microsoft as Savior"
    Washington Post (07/29/01) P. A1; Cha, Ariana Eunjung

    PC manufacturers, software makers, and other tech firms are relying on Microsoft's Windows XP to boost product sales. Critics say Windows XP unfairly monopolizes the market; however, the same firms have been anticipating the product launch for months. Tech firms will spend $1 billion alone on Windows XP advertising. "They see the XP rollout as something that will be a catalyst in stimulating demand for new computer services," says Prudential Securities Research analyst James Lucier. However, some federal authorities have demanded Microsoft eliminate some Windows XP features or stop shipments totally. But the government is unlikely to interfere in the product's launch, say experts. Such actions would cause damage to thousands of companies, say industry officials . To be unveiled in stores in October, Windows XP will offer support for such features as videoconferencing and DVD players; the operating system is expected to take computing beyond the PC.

  • "Investor Drought Dries Up Innovation"
    USA Today (07/30/01) P. 1B; Hopkins, Jim

    The rate of technological innovation in the United States appears to have dropped off, according to forecasts. Venture capitalists (VCs) are investing less money in startups, which are often hotbeds of innovation. Last year, VCs invested $103 billion in U.S. companies, but are expected to invest only half of that amount this year. Patent growth rates are also expected to level off, mainly because companies want to avoid filing expensive applications, says CHI Research. Experts predict that innovation levels could take as long as five years to return to the growth rates of the late '90s.

  • "Not Every Tech Firm Is Laying Off--And Some Are Even Hiring"
    San Francisco Chronicle (07/26/01) P. B1; Pender, Kathleen

    Some tech companies in Silicon Valley have avoided laying off employees despite falling sales figures and pressure to produce profits. Sun Microsystems, for example, has retained nearly the same amount of employees from the third to fourth quarters even as it declared its first quarterly profit decline in 12 years. Legg Mason fund manager Peter Sorrentino says Sun's workforce had grown 40 percent over the last two years, but that he was happy the company was not laying off in order to boost short term performance. Other large Bay Area tech companies such as Apple, AMD, and Agilent have decided against layoffs as well, but are trimming expenses significantly in other ways, such as requiring workers to take more vacation days and eliminating office perks. Meanwhile, Veritas and Brocade, both mid-size data storage companies, have plans to increase their workforces this year.
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  • "Patents"
    New York Times (07/30/01) P. C2; Sabra Chartrand

    Many patents concerning widespread business practices have been secured in the past year, engendering debate over the legitimacy of such claims. Alexander Tuzhilin, a information systems professor at New York University, for example, has won a patent for the collection, processing, and analysis of consumer data to be used in customer relationship management (CRM). Under a provision of the 1999 Inventors Protection Act, however, companies or individuals can avoid licensing business practice patents if they can prove they have used those methods for over a year before the patent was issued. Last year, Microsoft and AOL won several other CRM-related patents, mostly for systems that could be applied online, such as Microsoft's automated collaborative filtering patent used to recommend items based on past behavior.
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  • "With Enemies Like This, Who Needs Friends?"
    Wall Street Journal (07/30/01) P. B1; Swisher, Karen

    Wall Street Journal columnist Karen Swisher observes that America Online should invest in friendly partnerships, especially as its battle with Microsoft heats up over issues such as the deployment of e-commerce and user authentication and identification technology. AOL Time Warner has had a long tradition of leveraging such relationships. Last week, AOL announced several deals that could fortify its position: a $100 million investment in Amazon.com and an agreement to pay Compaq a $35-per-user sign-up fee to feature AOL service on Compaq's start-up screens; an AOL/AT&T cable system integration is also being considered. These moves are spurring Microsoft to seek alliances for the first time, contemplating partnerships with Yahoo! and Disney, among others. Swisher notes that Microsoft sorely needs political allies, particularly with New York Sen. Charles Schumer seeking congressional hearings about "anticompetitive" practices in the launch of Microsoft's latest Windows XP operating system. AOL is targeting Microsoft foes as potential friends, while Microsoft is looking to those opposed to AOL.

  • "From the Trenches: Moore's Law Now Twice as Good"
    Red Herring Online (07/24/01)

    Chipmakers are expected to transition to 0.13-micron manufacturing by the end of this year, a process that will open up the amount of space available on which to install transistors. Chips fashioned from the new process should have around 100 million transistors, 2.5 times as many transistors than current models possess. With more than one processor on each chip, multiprocessing allows them to carry out numerous functions at the same time without being restricted by scarce resources. A chip with two processors is viable, but chips with more than two encounter problems. Programmers have not been trained to create software that can be easily distributed across multiple processors, bugs are harder to track down, and bigger buses for multiprocessor chips eat up space. Installing switches into the chips is one solution to this last problem.
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  • "Intel Backs Away From RDRAM"
    ZDNet (07/25/01); Spooner, John G.

    Intel will phase out a program intended to facilitate the adoption of RDRAM high-speed memory chips from the firm Rambus. The program, which began in November 2000, provided subsidies to PC makers that purchased RDRAM memory along with Intel's Pentium 4 processor. Intel also discounted the price of a Pentium 4 processor and two Rambus RDRAM chips bought "boxed" together, compared with the price of each component purchased separately. Intel says RDRAM chips have become widespread enough that it no longer needs to promote their use in such a manner, but analysts say Intel is clearly pulling back its support for RDRAM, which was the only memory chip compatible with the Pentium 4 upon its release. Now, Intel intends to release a chipset that will make the Pentium 4 compatible with SDRAM chips, which are the standard, and less expensive, form of memory. Analysts say this will likely become the standard Pentium 4 chipset, with the chipmaker then turning its work toward the future release of double data rate (DDR) DRAM chips. Rambus itself has experienced financial difficulty lately and is not having much success with a lawsuit intended to extend its royalties on RDRAM to nearly every form of computer memory.
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  • "Reconsidering the Privacy of Office Computers"
    New York Times Online (07/27/01); Kaplan, Carl S.

    Federal District Court Judge James M. Rosenbaum has written an important essay challenging the assumption that employees' use of company's computers is inherently the company's concern. As the use of the Internet increases in the workplace, monitoring of computer use has become a common practice. The Privacy Foundation estimates that 14 million employees in the United States work under continual surveillance of their digital activities. Additionally, the American Management Association says over three-quarters of U.S. businesses now routinely conduct unsolicited inquiries into their employees' online conduct, mainly due to increased concern over harassment in the workplace. Judge Rosenbaum, in his essay to the law review The Green Bag, argues that employers should conduct investigations into their workers' computer hard drives only with specific intent, and should inform the employees beforehand.
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  • "Home Computer Taking on New Meaning"
    Associated Press (07/27/01); Mabin, Connie

    IBM is developing the next generation of home computers--networked devices embedded in every conceivable function in the house. In IBM's Pervasive Computing Division labs, engineers are outfitting refrigerators with computer screens that read the contents, allowing people to check their food stocks via the Internet, while in the bathroom, computers would be able to scan medicine bottles and warn of adverse reactions to mixed drugs. Behind all the gadgets is a wireless network with multiple servers--part of IBM's effort to create an improved wireless communications infrastructure. However, having home appliances constantly connected to the Internet also raises privacy issues, such as the legality of companies monitoring home activity in order to form marketing strategies.

  • "Dot-Info: The Race Is On"
    Wired News (07/25/01); Glasner, Joanna

    Anyone with a trademark will be able to register .info domain names between July 25 and Aug. 27. However, those who are interested need to act quickly because whoever files over the next week will have the first chance to make a legal claim to a new Internet address, according to .info administrators. Afilias intends to accept around 500,000 .info registrations from trademark owners over the next month, and believes that the most registrations will occur over the next seven days. After these registrations are processed, the .info domain will be opened to the general public for registration. The .info domain will go live Sept. 19, according to the company. The .info domain is unrestricted; however, Afilias is promoting the domain as more appropriate for informational sites as opposed to online stores. Afilias also hopes that .info will be popular internationally, as .com is primarily the domain of businesses in the United States. "A lot of areas of the world never really had a fair crack at .com, so it stands to reason that they would want a crack at new domains," says Register.com's Shonna Keogan. Afilias believes that it will accept about 3 million .info domain name registrations during the first year, according to Afilias Chief Marketing Officer Roland LaPlante.

  • "F.B.I. Use of New Technology to Gather Evidence Challenged"
    New York Times (07/30/01) P. C7; Schwartz, John

    A federal judge in Newark, N.J., today will hear motions by defense attorneys for Nicodemo Scarfo Jr., who is charged with running gambling and loan-sharking operations for the Gambino crime syndicate, to throw out evidence garnered by the FBI using a "key-logger" system, which can record every keystroke entered into a given computer. After agents raided Scarfo's business in January 1999, and copied contents from a hard drive, they were unable to read a file because it had been encrypted by software called Pretty Good Privacy. The FBI went back to the suspect's business with a search warrant and secretly installed the key-logger system on the computer in question, and after several months, a password was captured. Though it was not able to unscramble the original file, agents used it to decrypt similar files they found in Scarfo's home, files that contained records of gambling and loan activities. Attorneys for Scarfo claim that since the system used by the FBI read everything that was typed on the computer, it violated constitutional rules, which say that search warrants and evidence should be as narrow as possible. The judge's decision will play a vital role in finding a balance between the government's right to conduct an investigation and citizens' rights to privacy in the Internet age.
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  • "Ideo Gives Technology a Human Touch"
    SiliconValley.com (07/21/01); Seipel, Tracy

    Silicon Valley design firm Ideo, responsible for such design innovations as the Palm V and Oral-B Squish Grip toothbrush, humanizes its products, services, and technology. The company seeks input from far-ranging disciplines, including cultural anthropology, linguistics, architecture, interior design, and cognitive psychology. For example, when developing the Juniper Bank Web site, the Ideo team interviewed consumers to gain insight on their relationship to money and apply that insight to the interface's design. "The research started to give us a very clear picture of what our Web site should look like from a customer perspective, as opposed to the way the bank looks at customers," says Juniper Bank director of marketing Ben Brake. Ideo's design process starts with a great deal of prototyping and research so that the company can achieve a great understanding of user interaction with products and services.

  • "IT on Tap"
    InformationWeek (07/23/01) No. 847, P. 20; Greenemeier, Larry; Garvey, Martin J.

    Many companies carry far greater server capacity than they actually need, operating an inefficient system today to guard against a sudden increase in demand on their units tomorrow. Now, however, several major server vendors are offering systems that let users pay for however much computing power they use over a given period of time--in essence, allowing them to increase or decrease their server capacity as needed. Compaq will introduce such a feature in its AlphaServer, NonStop Himalaya, and ProLiant servers this fall, Unisys has included similar options in its ClearPath Plus sever line, and Hewlett-Packard last month unveiled a usage-based pricing plan for its NetServer and Superdome server systems. "If your company has variable demands for Web hosting or storage, it makes sense to pay for exactly what you use," explains IDC analyst Melanie Posey. For example, a firm that has an HP Superdome server, which carries a price of roughly $2 million, can save up to 50 percent from its monthly costs under the new Hewlett-Packard pricing plan if it runs that server at under 10 percent capacity. However, some observers say not everyone will want to switch. Firms that already run servers at or near capacity could pay more under the new pricing plans: for example, with the HP Superdome server, the new pricing plan would result in a 17 percent premium for firms running it at 100 percent. Also, some IT departments may prefer to allocate the same amount toward their server costs every month rather than scaling it up or down each month based on the server capacity used.

  • "Revenge of the Downsized Nerds"
    Business Week (07/30/01) No. 3743, P. 40; Conlin, Michelle; Salkever, Alex

    Computer sabotage by former workers is becoming a serious concern for companies. Internet Trading Technologies CEO Craig Goldberg considers computer-related run-ins with laid-off dot-comers and other tech workers out for revenge to be a major threat. FBI authorities in Boston saw four cases of cyber sabotage last year, up from none in 1999, but James Hegarty, supervisor of the FBI's computer crime squad in Boston, says, "This is the tip of the iceberg." Hegarty believes that most companies refuse to report such incidents out of fear of negative publicity. Recent acts of cyber sabotage have included posting a company's payroll on its intranet, planting bugs that destroy data, and giving away intellectual property to competitors. Former employees are able to cause the greatest damage to companies--the average insider attack costs companies $2.7 million--because they rely so heavily on computers today. Still, many companies fail to protect themselves--in fact, IDC estimates that up to 30 percent of a company's approved users no longer work for the firm. Informing workers that giving sensitive information to competitors is a serious crime, treating laid-off workers with respect, and requiring remaining employees to change passwords are other ways in which companies can protect themselves.

  • "The Historic Battle of 1394"
    Electronic News (07/23/01) Vol. 47, No. 30, P. 24; Fyffe, Steven

    The USB and IEEE 1394 standards are battling to control the digital home of the future, which will feature an in-house data network. "The question is whether the devices that you attach to are going to report to a PC...or whether you will be able to attach things at random, and the bus structure will be sophisticated enough to handle new devices coming onto the bus without having a hierarchical structure," explains Semico Research director of emerging markets Bob Merritt. He notes that technology giants such as Intel and Microsoft prefer the former format, represented by USB 2.0, while video and home entertainment companies favor the latter, represented by 1394b. Although Agere Systems recently shelved plans to release a pair of USB 2.0 chips and accelerate its 1394b initiative, Agere's Sujal Shah says the decision was based on limited resources rather than confidence in the technology or a lack thereof. However, companies such as TI are investing in both technologies, since they display increasing levels of competitive overlap. Although the level of competition between the two formats in the storage space should be about equal, USB has already established a foothold in the PC sector, making 1394's challenge even harder.
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  • "Contractor Fees Drying Up"
    eWeek (07/23/01) Vol. 18, No. 28, P. 50; Wilkinson, Stephanie

    Hourly fees of independent IT contractors fell 10 percent to 20 percent over the first half of 2001, according to a survey conducted by ComputerJobs.com. IT contractors have to be more flexible in order to get more work, says contractor Tom Raef. Keeping track of IT skills demand through online forums and bulletin boards is another method contractors can use to their advantage, suggests ZipPark.com's Bob Hoeppner. Foote Partners President David Foote contends that the amount of pay independent IT contractors receive for their enterprise applications, database, and operating systems skills has decreased significantly since the second half of 2000. Pay for Web and e-commerce deployment skills also fell in the last quarter but has since leveled off. Messaging and groupware skills have maintained consistent value levels over the past year, while Oracle Developer C++, Extensible Markup Language, and rapid application development skills have made notable gains.

  • "How to Build a Hypercomputer"
    Scientific American (07/01) Vol. 285, No. 1, P. 38; Sterling, Thomas

    Future breakthroughs in medicine, defense, bioscience, and other critical fields will depend on the creation of supercomputers that operate at least 1,000 times faster than current models. These hypercomputers must also be more energy-efficient and cheaper to run. There are three challenges designers must meet to build such a machine--a method that aggregates the required processing, memory, and communications resources without overstepping size, cost, and power requirements, achieving reasonable efficiencies despite standard degradation variables, and improving system usability. One possible solution is the hybrid technology multithreaded (HTMT) system developed by NASA, the NSA, the Defense Advanced Research Projects Agency, and the National Science Foundation. The system will use high-speed superconducting logic processors administered by a "smart" memory system, multiple instruction streams and processor-in-memory technology to combat latency, a global name space in a shared-memory computing structure, holographic memory storage devices, and high-density optical data channels. It is estimated that with proper research and development support the speed problem can be tackled and more than 1 quadrillion operations per second achieved before the end of the current decade.

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