8th > September > 1998 Archive
Geoffrey Moore, chairman of consultants The Chasm Group and well-known author of Crossing the chasm -- which became the little red book of Silicon Valley --spoke to an overflow audience at the IDC European IT Forum in Paris. His theme was marketing and selling high-tech products to mainstream customers. The "chasm" is the gap that innovative companies must cross in order to reach lucrative mainstream markets. Moore's messages were refreshingly clear to his attentive audience: when an innovative company is trying to sell, it should not talk about itself; it should talk about the potential customer and its problems; and it should not assume that all prospects have the same set of problems. Moore recommended not talking about happiness from a product installation, but talking about pain. Different selling techniques are needed for selling to visionary, early-adopter prospects compared with pragmatic prospects. Moore believes that the vendors that capture the pragmatists will win, because they are in the majority, but it is important to generate good press reports with successes in marketing to the visionaries. Different approaches are necessary for each group. Visionaries tend to adopt something new across the enterprise, whereas pragmatists adopt a product one department at a time. Integrated suites will attract visionaries but point products appeal to pragmatists. Compelling reasons to buy include for competitive advantage, or to fix a broken business process. ®
A Danish firm which sells computer kit on the World Wide Web has undercut the channel and OEM price for K6-II 350MHz parts. The company, Bluecom, today sent out an email to its customers quoting a price of $239.50 for the part. AMD's official price, in quantities of 1000, is $317, a representative said today. The company is also selling a wide range of other AMD parts at similarly low prices. It is offering the K6-200 at $64.50, although that part is understood by the channel to have been dropped by AMD. A representative was unable to explain how the company was able to offer the processors at such low prices. ®
National Semiconductor is to pay a large amount of money to IBM Microelectonics to sever the contract to fab its 6x68 chips, according to reliable sources close to the company. NatSemi-Cyrix will hand over a figure in the region of $40 million, according to the source. That will mean that IBM Micro will, effectively, stop producing x.86 clone processors. Although it has an existing contract with AMD, that is understood to be close to termination also. IBM Micro had a deal to produce the wafers for Cyrix, before it was bought by National Semiconductor last year. But the arrangement has always been fraught with difficulties, with IBM Micro often undercutting Cyrix products and antagonising the channel. Late last month, NatSemi said it would be able to produce the vast majority of its MII processors itself by the end of this year. But the deal, when it goes ahead, is likely to antagonise existing companies which use the 6x86 part. The sources said that Granville, part of Time, is likely to switch to AMD processors to build its PCs. At press time, no-one from IBM Micro, NatSemi, Granville or AMD had responded to the report. ®
The five rules of Lew's Law were elaborated by the eponymous Lewis Platt, Chairman of HP, at the IDC European IT Forum in Paris. His first rule was that people should "choose smart" -- or to put it another way, eat or be eaten. He described how the electronic graveyard of equipment had come from obsolete or failed products, and admitted the failure of the first HP inkjet printer. However, HP persevered and the result was the Deskjet, which helped to propel HP to a situation where half the world's PCs had an HP printer. His second rule was to "add genes". Corporate diversity worked for HP, and kept the company away from false assumptions and stereotypes in its staff hiring policies. Third was "listen deep" (this use of adjectives as adverbs gets to you). Platt advocated paying attention to young people as they are tomorrow's customers, and have untapped talent. The Internet world had reached 50 million users in four years, compared with 13 years for TV and 38 years for the telephone to reach the same mark. "Move fast" was the fourth key to survival. Again challenging the English language, he suggested that "Doing the right thing right -- right now" was essential. Lew's last rule was "Banish complexity". All these rules had not helped HP prepare itself for the rapid collapse in Asian and South American markets. In South Korea, HP revenue had reached a billion dollars a year, faster than in any other country, but this year Platt thought it unlikely that HP would see more than $400 million. Platt agreed that HP's embrace of NT followed his "eat or be eaten" maxim, although he felt that HP had made the right decision because many HP customers wanted a mixed Unix-NT environment. Platt saw the future as one in which special purpose devices or appliances would play a major role. His choice of words gave the impression that Microsoft partners were under instruction never to utter "NC". ®
The 'review' of licensing policies Microsoft said it was undertaking last week (see separate story) is going to cost customers a bundle, according to a forthcoming Gartner Group study. At Citrix's Thinergy conference in Florida Microsoft came under considerable fire over its refusal to countenance concurrent licensing deals for NT Terminal Server systems, but its plans for the consolidation of several different licensing models seem to mean less, rather than more, concurrent licensing. The concurrent model, where users pay for a maximum number of clients connected at any one time, is particularly appropriate for thin client-server systems, but also clearly applicable to Microsoft BackOffice applications. Not all users with rights to connect to an NT Server or to use, say, SQL Server across the network will be doing so at any one time, so by licensing a fixed number of concurrent connections rather than paying a fee for every single client that might be connected businesses can save a great deal of money. That however is money that comes straight off Microsoft's bottom line, and says Gartner the company intends to slowly eliminate the concurrent licensing provisions it has at the moment, with BackOffice a major target. Whether or not it will be able to sustain this is a different matter. As regards Terminal Server, customers are becoming increasingly aggrieved at having to shell out what could be more in operating software licence fees than on the client hardware itself, and a common view at Thinergy last week was that the company was digging a very large hole for itself by refusing to countenance concurrent licensing. Conceivably, as the thin client-server model becomes less obviously chained to Windows NT, perceptions of disproportionately high costs for NT Terminal Server systems could lead to companies heading for Sun, RS/6000, AS/400 or NetWare instead. Elimination of concurrency for BackOffice will also be tricky. Microsoft takes the view that total cost of BackOffice systems is far less than the mid-range ones it likes to compare them to, and therefore probably feels there's room to claw-back revenue without eroding this price advantage too severely. But simple elimination of concurrency could easily lead to increases of 200 per cent in a customer's licensing spend. This probably wouldn't prompt many existing BackOffice shops to defect, but would be a major negative for companies considering moving to BackOffice.
Shares in UK-based cellular company Vodafone rose sharply yesterday following weekend rumours of a tie-up with US company Airtouch. According to The Observer newspaper Vodafone is considering leveraging its $23 billion stock value into a $40 billion merger with the company that claims to be the world's largest cellular provider. The paper quotes unnamed sources as saying the companies were involved in talks last year, and suggesting two possible routes for Vodafone: first, a full-blown merger, or second a carve-up of Airtouch's assets with Worldcom. In the latter case the deal would be decidedly hostile. Following its takeover of US West's cellular business earlier this year Airtouch became the second largest cellular company in the US, and its network would therefore have potential attractions for Worldcom. But Airtouch has considerable international interests and ambitions, and has a stated policy of expanding its stakes in existing partnerships. Its international business is now a net contributor to its revenues, and any deal involving splitting the business, with international going to Vodafone, would be a substantial volte face for Airtouch. Airtouch and Vodafone do however have a great deal in common, and there clear synergies could be derived from a full-blown merger. Both companies have a string of partnership deals throughout the world, and in some cases are shareholders in the same group (for example Europolitan Sweden, where Airtouch has 51 per cent and Vodafone 19 per cent, and both are involved in Globalstar). Vodafone in particular favours the policy of buying into and growing its stakes in existing markets rather than breaking ground in new (and often dubiously profitable) ones. The combined companies' presence in Europe in particular would be strong, and the temptation to build what could be seen as the first truly global cellular provider must be great. Price, and the differences between the US and European markets, could however be stickers. Airtouch probably wouldn't want Vodafone in the driving seat of a merger (and hence, probably, the possibility of Worldcom waiting in the wings), while although Vodafone has pushed international expansion hard, it has so far shown little inclination to get involved in the US, where business models are radically different, and from a European perspective, unattractive.
Plustek leapt into first place in the flatbed scanner market in the UK in July, according to market research company Romtec. Romtec, which monitors indirect sales, said that in July Plustek had beaten HP into first place, with a 43 per cent market share compared to 15 per cent. In third place is Umax with 12 per cent market share, followed by Agfa with eight per cent and Epson with four per cent. Canon lags at the bottom of the league table at two per cent, below Visioneer and Primax. Alan Jones, an analyst at Romtec, said the figures were a reflection of shifts in the market. He said: "Plustek is sold predominantly through the retail channel and retail now accounts for a large part of the scanner market". He said Plustek had overtaken HP over the last four months. "Plustek sells mainly parallel scanners which are cheaper than SCSI, while HP relies on its brand name." Jones said that pricing was now a considerable factor in the market because of the shift in the focus of sales. ®
Computer Associates is claiming leadership in the enterprise management software market following the release of two IDC reports showing it way ahead of IBM in revenues. According to System Management Software: 1998 Worldwide Markets And Trends, CA has 25.3 per cent of the global system management software market and revenues of $2.25 billion, while Distributed Operations Management Market--1996-2002 puts it at $923 million revenue in international client/server operations management. IBM scored $1.7 billion and 318 million in the two sectors respectively. In sub-categories, CA also ranked first in distributed performance management software, distributed storage management and distributed job scheduling. According to IDC Infrastructure Software research VP Paul Mason, CA's strong position derives from its ability to integrate multiple network, system and application management disciplines: "CA has clearly covered more of these bases for more customers around the world than anybody else, and their Unicenter TNG and other product revenues and market share make this abundantly clear." ®
Siemens outsourcing plans for its PC business came under a cloud today, as Acer pulled the plugs on a deal to buy the German company's Augsburg PC manufacturing plant. The two companies agreed in April that Siemens would turn over most of its PC manufacturing to Acer, and that Acer would centre its European development and production on the plant. Acer's decision now to back out of the purchase raises questions over the future of both the plant and Siemens' PC business. According to a statement issued by Acer today, the company intends to concentrate investment on its semiconductor manufacturing, and because of the crises in Asia and Russia (where German companies are heavily exposed) is taking a cautious view of investment planning. Under the original deal Acer had agreed to buy the plant for an undisclosed price, and to retain 2,000 of the 2,450 employees. The plant has a capacity of 1.4 million PCs a year, and is probably a headache Siemens can do without. Both Siemens and Acer have been hit badly by the fall in semiconductor prices, and it seems likely that the collapse of the deal now was caused by arguments over pricing, funding and projected production levels. ®
Microsoft has released a patch for Internet Explorer 4 which is designed to seal a security breach that could allow unscrupulous Web site hosts and hackers to read files on a user's hard drive. The so-called Cross-frame Navigate bug effectively allows developers to code pages that will display files on the user's computer. The developer must, however, know the name of the files he or she is seeking. The bug was originally detected by Bulgarian user Georgi Guninski. All versions of Internet Explorer 3 and 4 are vulnerable to the bug, including Windows 95/98/NT and Macintosh platform. However, the patch is only available for IE 4 -- users of version 3 will need to upgrade. Microsoft said the bug also affects software that interprets HTML code through the IE engine, such as AOL. The patches are available from Microsoft's IE Web site. ®
Electronic phrasebook and dictionary specialist Franklin is expanding its Rex range of PC Card-sized PDAs with a new Pro model. The Rex Pro contains 512KB of memory, twice that of the standard Rex. In addition to the Rex's standard address book, calendar, to-do lists and memo utilities, Rex Pro ships with Starfish's TrueSync PIM and TrueSync Plus, which synchronises TrueSync data with the leading PC-based PIMs. Unlike previous Rex PDAs, which assume you'll simply download your data from your PC, Rex Pro allows information to be keyed directly into the device and edited. The Rex pro is set to ship later this month. ®
Consumer software distributor Koch Media has begun a major channel support initiative. The scheme involves keeping dealers up to date through the Web, a dedicated newsletter and an on-the-road sales team. Koch's Web presence covers all of the company's European operations, and contains a section dedicated to the UK. In addition to product and developer information, the site also provides chart and sales data, the company said. Resellers can also elect to receive Insider, Koch's monthly newsletter, containing market news, release schedules, and details of forthcoming promotions and incentive schemes. "We believe it is important to provide the channel with regular information about Koch's products and services," said company sales and marketing director Lance Brown. "These two services will be a real fillip to our dealer liaison programme." At the same time, Koch is preparing a nationwide on-the-road sales force. Initially covering the South-East, the team will work alongside Koch's current third-party sales operation, provided by Profile. "We believe it is essential to work with with and understand the day-to-day expectations of dealers," said Brown. "We intend to do all we can to ensure they have a closer understanding of our business and our product range." ®
Spammers have taken to faking endorsements from leading US financial publications in their latest attempts to hoodwink Internet users into parting with their hard-earned cash. Beverley Hills, California-based junk emailer Diamond International, which runs an operation called the World Currency Cartel, claimed the Wall Street Journal, National Business Weekly, the New York Times and others had published ringing endorsements of the Cartel's money-making scheme. However, none of them have covered the company -- and certainly not backed its claim to turn $25 into four times that sum. Diamond's email requires a cheque or money-order payment of $195 in exchange for full details on how Net users can join an organisation whose members, the New York Times allegedly reported, are "amassing hundreds of millions of dollars in the currency market using a very legal method". Diamond International first sent the World Currency Cartel spam last year, and have been mailing it out at regular intervals ever since. ®
Boffins in the UK have succeeded in refining global positioning satellite (GPS) technology so that it can locate positions to within half a centimetre. A report in today's The London Evening Standard said that scientists have used mathematical formulae to refine GPS, allowing it to be used to monitor micro-movements. The newspaper said that Professor Paul Cross, at University College, London, announced the breakthrough at the British Association Science Festival. He said that uses included the exact positioning of engineering projects, weather forecasting and other geological surveys. The technology could also make GPS a practical way of assisting blind people. ®
Acorn is to provide the set-top box hardware for a broadcast TV over phone wire system being sold by Canadian software company ImagicTV. Imagic is an affiliate of Newbridge Networks and the New Brunswick Telephone Company, and specialises in the development of technology that allows service providers to deliver digital broadcast TV over copper via IP networks. Acorn is to deliver 10,000 of its acTiVe DVRD (Digital Video Receiving Devices) typographical abomination set-top boxes over the next nine months, and these will be deployed as part of an integrated solution sold by ImagicTV. The technologies used are IP multicasting, ATM, MPEG video and DSL, allowing telcos to provide digital TV and Internet access across copper wire. No customers for the ImagicTV system have as yet been announced, but the company proposes it as a 'killer app' for broadband in the telecommunications business, and if this is true Acorn should be on the threshold of large-scale sales. ®
Fujitsu and Orckit Communications have won a deal to supply Deutsche Telekom's projected country-wide ADSL network, the companies announced today. Deutsche Telekom will initially deploy in eight German cities, Bonn, Berlin, Cologne, Dusseldorf, Frankfurt, Hamburg, Munich and Stuttgart, and has agreed to deploy a minimum of 35,000 connections over a two year period. Orckit is to supply its FastInternet DSL multiplexer system, providing end-to-end ATM connectivity, while Fujitsu is to integrate FastInternet into its optical systems for future network expansion. ®
Life on the road is hard, thanks to these here global dial-up services. A few weeks back The Register found itself logged-off in France on the grounds that The Microsoft Network had thoughtfully blocked spammers and, er, all of the users who dialed into MSN via other ISPs. Call to tech support to get the details of the new mail server we're supposed to use and all is well again. But then we get back to London, dial up MSN direct, and that mail server won't let us in on that phone number. Maybe if companies would just stop trying to make things easy for us...
Fujitsu has claimed that it has managed to increase the capacity of ferro-electric RAMs (FeRAMs), according to Japanese reports. That follows a similar claim from Hyundai towards the end of last week, reported here. The reports said that FeRAMs, which will eventually displace DRAMs, will reach up to one Mbit. The technology is expected to arrive sometime in the year 2000, with the market then worth around $4 billion. ®
Hewlett Packard has expanded its storage line, introducing backup management software, back up hardware, and details of its fibre channel storage strategy. The news comes shortly before HP releases its digital linear tape (DLT) technology early next month. HP products will now support Microsoft clustering services for Windows NT, while its TopTools for Backup allows remote library management and diagnosis via a WWW browser. The company said it will expand those capabilities in the future. Next month, HP will introduce the SureStore DLT 718 autoloader and a DLT 70I internal drive, according to US reports. The DLT 718 is a 280Gb tape library which will have six removable magazines and a SCSI interface, while the internal unit, the DLT 701, has 35Gb native capacity and also uses a SCSI interface. ®
Oracle has signed marketing and technology partnerships with four Linux resellers and application developers -- Red Hat Software, VA Research in the US, Pacific HiTech in Japan, and US/European operation SuSE. "The response to our recent decision to support Linux [in the forthcoming Oracle 8] was a collective sigh of relief from developers worldwide who are looking for a low-cost alternative to Windows NT," Mark Jarvis, Oracle's senior vice president of worldwide marketing, told the US media. "With such obvious momentum behind our upcoming Linux database, we decided to go even further and commit significant resources to the existing developer infrastructure where Red Hat, VA Research, Pacific HiTech, and SuSE are already playing such a vital part." Oracle has not yet made clear exactly what the partnerships entail, but it's not hard to imagine it would involve funding to promote Linux more aggressively to corporate users. Linux, a free OS based on Unix, now has some seven million users worldwide. Claimed to be the fastest growing Unix platform, it has won many converts from proprietary versions of Unix, Windows NT and MacOS. Oracle 8 for Linux is set to ship at the end of the year. ®