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Weekly Happenings about & affecting the Computer World

 

 

 

 

BATTLE ESCALATES IN MESSAGING WARS

For the second time in as many weeks, America Online blocked Microsoft's competing messaging app. And in a one-two punch, the online giant also announced an alliance with Apple, giving Mac users the ability to exchange messages in real-time. Instant messaging programs allow Internet users to send (and receive) text messages that pop up immediately on the computer screens when the recipient is online. Market leader AOL says users of its Buddy List and AIM services send more than 430 million messages a day. Last week Microsoft launched its Messenger tool with the ability to exchange instant messages with AOL's IM users, but AOL altered its system to lock out competing apps. Microsoft has been updating its tool to get around the blocks, and AOL has created new blocks. Bottom line: It's a mess in need of a standard. But the one the EITE is working on is still months away.

DOJ SEEKS ADVICE ON BREAKING UP MICROSOFT

Admitting it approached investment banks for advice on the ramifications of a Microsoft breakup, a Justice Department spokesman insists the agency has not settled on a single remedy should it win its antitrust case against Microsoft. She also called discussion of possible remedies premature. Seems so; closing arguments are slated for September and a ruling isn't expected until November.

CISCO STIRS CABLE CONTROVERSY

The networking giant -- which supplies Internet gear for the cable industry -- is touting products that allow cable companies to slow or limit consumer access to Web sites, drawing the wrath of consumer advocates. The flap comes as the cable industry is spending billions to roll out high-speed Net service over cable lines and struggling against would-be regulators. So far the industry has mostly avoided regulation, in part by agreeing to allow customers access to any Web site, affiliated or not. But with the Cisco development, the Center for Media Education and other consumer groups sent a letter to the Federal Communications Commission calling for regulation of cable Internet services.

600 mhz!

Having delayed the introduction of the chip code-named Coppermine--the first x86 CPU to be manufactured on a 0.18-micron process, a means of producing more efficient silicon technology--Intel has instead announced two new chips based on its 0.25-micron process, the current standard. These processors--the 600-MHz Pentium III and the 500-MHz Celeron--are merely faster versions of existing CPUs, but additional speed is always welcome in the ever-evolving desktop PC market.

Here, we review two of the first commercial machines to use these processors: the Compaq Prosignia Desktop 330 ($2,699 direct), based on the Pentium III/600, and the HP Brio BA400 ($1,330 street), built around the Celeron/500. Both are designed for small businesses, offering high-speed networking and several tools to facilitate e-commerce.

During testing for an upcoming overview of the CPU market --which involved benchmark testing of different chips in similar high-end systems--the Pentium III/600 outperformed its 550-MHz sibling by roughly 4 percent under the Winstone 99 benchmark test program and close to 9 percent under the CPUmark 99 test. The Winstone score of the Prosignia Desktop 330 reviewed here was less than 1 percent higher than the average score in our recent roundup of 550-MHz Pentium III machines, but it significantly outperformed that roundup's Prosignia Desktop 330, a machine of comparable design.

Previously available at up to 466 MHz, Celeron is Intel's low-cost desktop CPU and uses the same core as both the Pentium II and III. Unlike the Pentium III--which sits on a palm-size strip of substrate with a separate, half-speed L2 cache--Celeron uses an on-board, full-speed L2 cache, which runs clock for clock with the CPU.

This cache is a quarter the size of the Pentium III's--128K rather than 512K--but what it lacks in size, it almost makes up for in speed. The 500-MHz Celeron scored only 7 percent lower under the Winstone 99 benchmark test program than the 500-MHz Pentium III--but only 3 percent higher than the Celeron/466. Using a low-cost Intel 810 chip set--rather the Intel 440BX chip set used for our CPU overview--the Celeron/500-based HP Brio BA400 fails to take of advantage of this potential performance boost.

Though the Brio BA400 scored almost as well as our CPU overview's Celeron/500 system under CPUmark 99, it scored 20 percent lower under the Winstone program, which is graphics-dependent. The Brio BA400 was also unable to run our 3D WinMark 99 test at a color depth higher than 16 bits.

Of course, the Brio BA400--a sub-$1,500 machine--is not meant for high-end 3-D applications. Like the Prosignia unit here, it's meant for office applications and business-related Internet tools.

Fiorina new hp CEO

Hewlett-Packard Co. made a surprising and bold move today in naming Carly Fiorina, former president of Lucent Technology Inc.'s global services provider business, as its new CEO. Surprising because, in the end, the company decided to choose someone from outside HP, going against the traditional HP grain. There had been intense speculation that insider Ann Livermore, head of the Enterprise Systems Division, would succeed Lew Platt. The move is bold because Fiorina, 44, will be the first woman CEO of a company of HP's size, which has about $40 billion in revenue.

Telecommunications background key
Some analysts applauded HP's choice not because of Fiorina's gender or outsider status but because she comes from the telecommunications world. "Companies are making big capital investments to make broadband [communications] real," said Roger Kay, an analyst at International Data Corp. in Framingham, Mass. "It's where the action is."

Indeed, HP's future lies largely in the success of its massive e-services initiative, which is dependent on a fast, reliable and cheap communications infrastructure. Similarly, Fiorina's successful tenure as services chief at Lucent -- the $20 billion group is Lucent's biggest and fastest growing -- can only help HP as it hones its services strategy.

"They're confirming the importance of services to the organization," said Mark Specker, vice president at Soundview Technology Group in San Francisco. Fiorina's appointment "couples two strategic areas for HP -- services and telecommunications," said Tony Iams, an analyst for DH Brown Associates Inc. in Port Chester, N.Y. "These are key points to success in Internet business and the recipe for what HP is after."

Livermore 'disappointed'
In an interview Monday, Livermore said she was "disappointed" when Platt told her last Friday that Fiorina would get the top job. "I was disappointed not to be selected but Carly’s background in telecommunications and services is critical to the computer industry," Livermore said. "It's the cornerstone of delivering electronic services on a global basis." Long-time HP watchers said that both candidates seemed to have the right stuff for the job.

Fiorina "brings a sensibility for running the business as a service business," said Nina Lytton, president of Open Systems Advisors in Boston. "They're not pushing boxes." At the same time, "the e-services initiative has already had a big effect on the stock price" on Livermore's watch, Lytton said. Livermore is still president and CEO of the Enterprise Computer Group, the division responsible for developing and selling e-services.

Most recently, Livermore said, HP has struck deals with companies such as I2 Technoloiges and EAI to build portals that establish what she calls "online trading communities" for OEMs, distributors and service providers. In another executive move, HP said that director Richard "Dick" Hackborn will replace Platt as chairman, but in a non-executive chairman role. Hackborn, a former HP executive, is credited with getting HP into the printer business, which by some estimates accounts for about half of the Palo Alto, Calif., company's profits.

"They couldn't have picked a better candidate" for chairman, said Specker. Wall Street appeared to like HP's choices. The company's stock jumped more than two points in early afternoon trading. The other closely watched CEO search, that of Compaq Computer Corp., is proceeding apace. The company's board of directors will meet this Thursday with its executive search firm to discuss candidates.

Online Retailing to Reach $36 Billion in 1999

The rapid growth of online retailing in North America continues, with revenues expected to top $36 billion by the end of the year and a projected growth rate of 145 percent in 1999, according to a study by Shop.org and The Boston Consulting Group.

The study is based on data from 328 online retailers, 158 of which participated in a detailed survey. The study also found that total 1998 online revenues across all categories reached $14.9 billion, representing 0.5 percent of all retail sales. Online orders in 1998 were up 200 percent and the number of online shoppers was up 300 percent, according to the survey.

"Most people think e-commerce is mainly being done by Web-only businesses, but 62 percent of the $14.9 billion of online revenues in 1998 were from retailers who had businesses that predated the Web. These catalog, call centers and brick-and-mortar retailers are a growing force behind the continued rapid growth of online retail," said David Pecaut, Senior Vice President of The Boston Consulting Group and leader of its E-Commerce Practice.

The Shop.org/BCG study compares multichannel retailers -- those with brick-and-mortar, call center or catalog operations who also sell online -- with "pure-play" retailers who sell strictly online. A number of key differences are cited:

Currently, pure-play retailers are dominant in the collectibles (person-to-person auctions), books, music/video and automotive categories. In categories such as financial brokerages, consumer electronics, apparel and computers, the majority of sales are from multichannel retailers.

Because multichannel retailers have the advantage of an existing brand and infrastructure, they are more recognizable than online-only competitors in some areas. But online-only retailers have begun using aggressive online and off-line marketing and advertising campaigns to build their own recognizable brands, the survey found.

The two channels work the Web differently, with online-only retailers generating 6 percent of revenues from affiliate sites, compared to only 1 percent for multichannel retailers.

Pure-play retailers earned 12 percent of revenues from high-margin supplemental sources versus less than 1 percent earned by multichannel retailers, the study found.

Customer acquisition costs for online-only retailers are $42 per customer, almost double that for multichannel retailers at $22 per customer.

While multichannel retailers spend heavily on customer retention (16 percent of their marketing and advertising budget), online-only retailers spend only 3 percent on retention, devoting most of their resources to customer acquisition.

Online-only retailers tend to outsource back-office functions such as managing inventories and filling orders, while multichannel retailers more often outsource Web site development and maintenance.

 

Counties will urge tax on Net sales

Local governments want Congress to treat phone, mail and Web sales equally.

By Reuters
July 19, 1999 10:39 AM PT
WASHINGTON -- Thousands of U.S. counties Tuesday are expected to call for the collection of billions of dollars of sales taxes on goods sold over the Internet.
The National Association of Counties (NACo), which is meeting this week in St. Louis, said in a press statement that its general membership will clear the resolution adopted unanimously July 17 by its 80-member taxation steering committee. The resolution urges Congress to enact legislation that would treat all sales equally, ``whether the sale takes place over the counter, by phone, mail order or by Internet.''

$5 billion lost sales cited
It would be the first time that NACo's full membership has weighed in on the issue, group spokesman Shawn Bullard told Reuters. NACo estimates that the nation's states, cities, counties and parishes lose roughly $5 billion annually in sales taxes from out-of-state mail order sales. That amount is expected to mushroom as Internet sales skyrocket, NACo said. Economic forecasters say Net sales will top at least $100 billion over the next three years, NACo said.

'Major impact'
"The loss of revenue will have a major impact on county services,'' NACo President Betty Lou Ward said. Ward, who is commissioner of Wake County, N.C., noted that sales taxes equal 36 percent of state and local revenues, or some $237 billion.

 

NT 4.0 service pack 6 due shortly

Microsoft Corp. will release this week a beta of Service Pack 6 for Windows NT 4.0 to technical beta sites of its premier customers. The service pack will apply to the Workstation, Server and Enterprise Edition of NT and should be available in general release in approximately 60 days. According to a Microsoft official, the content of the new pack is not complete. However, some new fixes that will covered by SP6 include repairs for memory leakages that occur during remote access; DNS problems at startup; and a known blue-screen issue. The new service pack will include all fixes covered by previous service packs.

SP6 will not be a required upgrade and currently contains no Year 2000 fixes. If any new Y2K issues in NT are discovered before the release, the fixes will be included in the service pack and be available on the Microsoft Y2K site for companies that have locked down their desktop and servers from non-critical software changes, according to Microsoft. Service Pack 6 comes on the heels of Service Pack 5, which was released on May 18. Microsoft has been completing service packs with greater timeliness since it stopped introducing new features via the packs. The new features often degraded NT's stability.

In its SP6 announcement, Microsoft also telegraphed the end of support for Windows NT 4.0, stating that the operating system will be maintained through January 1, 2002 with compliance with Service Pack 4 or later or compliance with "acceptable deviations" (mainly Y2K fixes) on Service Pack 3. Microsoft is scheduled to release NT 4.0's successor, Windows 2000, before the end of this year.

NETSTUDIO 2000 SPICES UP WEB GRAPHICS

Time to spruce up the graphics on your Web site. NetStudio 2000 ($90) helps you create professional-quality buttons, banners, logos, hover buttons and other Web graphics using an interface closely resembling that of Microsoft Office 2000. The package is strong on graphics and text effects, but lacks HTML and JavaScript features that convert those graphics into mouseover buttons and navigation bars. The interface? Simple. Just an editing window next to a gallery of 51 graphics styles. You can create a Web image by answering questions in a wizard, or you can start with a blank window and create an image using toolbar icons. The program's standout feature is the way it applies effects to graphics and texts. For example, a click on a toolbar icon adds a shadow to an object in one step.

 

 

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