19th > January > 1999 Archive

The Register breaking news

Microsoft to bundle Terminal Server with Windows 2000

Microsoft has confirmed the new Windows NT Terminal Server pricing structures revealed here yesterday (MS Terminal Server policy collapses), and has committed to shipping the next edition as standard with Windows 2000. Terminal Server is to be integrated as of Beta 3 of Windows 2000, which is now due in April. Microsoft seems to have intended to integrate Terminal Server for some time now - a whole 18 months ago The Register heard Bill Gates himself say it would happen. But problems in defining pricing models have held the announcement back until now. The new price levels for Terminal Server mean, effectively, that the multiuser server component is free. If you minus the new licence costs from a five user retail pack's price of $1,299, for example, then you're down to the ballpark price for vanilla NT Server (although admittedly this comes with Client Access Licences too). As we said yesterday, the cost at the client end effectively halves, although the way Microsoft puts it, the list price goes up. How come? Previously you had to buy an NT Workstation licence, which we have down here at $319, but which Microsoft assigns a typical retail price of $269 to, and then you also needed an NT Server CAL at $39.95. Now you don't need the Workstation licence, and instead you just need to buy a new Terminal Server CAL at an estimated retail of $109. Microsoft hasn't confirmed that you'll also need an NT Server CAL for file and print, but this would seem likely. There are some obvious implications to the new structure. If you've got PCs deployed already as clients, it remains cheaper to run your applications locally rather than to start having rebellious thought about server-based multiuser apps. Also, although the MS software costs of deploying thin clients are no longer cripplingly expensive, they're still pretty high, and concurrent licensing in the corporate market remains beyond the pale. Microsoft hasn't confirmed the discounts of up to 50 per cent said to be available to enterprise customers, but it wouldn't, would it? We'd expect this to happen, and we'd also expect fairly high discount levels to come in for educational customers - they're a market Microsoft won't want to let escape. The single aspect of concurrency to the announcement, the $9,999 Internet Connector licence (we got the name wrong and missed the price by a dollar, sorry) looks like a possible weak link. This allows 200 "anonymous users" to connect simultaneously across the Internet, so it is actually a concurrent licence, designed to allow Application Service Providers to run NT Server apps and offer them to customers on a rental basis. The kicker however is that these anonymous users aren't allowed to work for you. Quite a lot of this is going to be difficult to police, and we wouldn't be at all surprised if something approaching Web-based software auditing crept into Microsoft's OS plans Real Soon Now. So what have we got, a great new pricing strategy or a collapse? Well, back in October, Microsoft Terminal Server Product Manager Solveig Whittle said: "We don't have any plans to change our model and move to concurrent licences at this point," while later that month Bill Gates said Microsoft had dropped concurrent licensing because it was unpopular. Microsoft has now changed its model and reintroduced an element of concurrent licensing. Yesterday's announcement however reads: "The change, which will take effect Feb. 1 in English-speaking countries, was made in response to customer feedback, Whittle said." Right. Oh, and compare and contrast these two statements: "Mirage decided the most efficient setup would be a computing environment powered by Windows NT Server 4.0 Terminal Server Edition server software. Using Terminal Server has enabled Mirage Resorts to save money by managing hundreds of desktop devices centrally from a handful of servers." - Microsoft announcement, 18th January 1999. "Mirage Resorts, Incorporated has deployed Citrix WinFrame and MetaFrame server-based computing software in all four of its celebrated resorts in Las Vegas." - Citrix announcement, 16th November 1998. Funny old life, innit? ®
John Lettice, 19 Jan 1999
The Register breaking news

Windows 2000 ship dates slip some more

The ship dates of Windows 2000 Beta 3 and the finished product have both slipped some more, to April and late 99 respectively. As late as last summer Microsoft was indicating that the product would go gold in Q1 of this year, but since then it's slid to second half, and now to the end of the year. The Register did get a guarantee of Beta 3 for Thanksgiving a while back, but that came and went. Microsoft also shipped a "Release Candidate 0" for Beta 3 last month, to 1,000 testers, and said at the time Beta 3 was still on target for Q1, in February or early March. Now the company is saying the target for Beta 3 will be "in the April 1999 timeframe," which you'll note needn't exactly mean April. Ed Muth, Microsoft group manager for enterprise marketing, has meanwhile been telling the press the product's in great shape, and that "we just want to take the few extra days to put the last final touches on it." By our reckoning that few extra days looks pretty similar to two months. Microsoft had better hope its counting isn't quite as faulty when it comes to shipping the final product before 2000. ®
John Lettice, 19 Jan 1999
The Register breaking news

Europe versus US wireless war looms

The prospects of a US versus Europe standards war over third generation (3G) mobile phone systems have grown stronger, after an apparent clash between EU and US officials. Yesterday EU commissioner Martin Bangemann released the text of a letter defending EU policy, which was sent to a number of US officials, including secretary of state Madeleine Albright, trade rep Charlene Barshevsky, commerce secretary William Daley and FCC chairman William Kennard. The EU and the US have been shadow-boxing over 3G for some time now. At the beginning of last year ETSI (European Telecommunications Standards Institute) started speccing out UMTS as the European standard, the general European idea being to repeat the success of GSM. This was defined by ETSI, and having a single basic standard meant digital wireless services rolled out across Europe fast. US policy is however 'let the market decide,' and from a US perspective the European approach can be seen as being the opposite of this. Encouraged by Qualcomm, which is currently trying to leverage a good position for itself in UMTS and IMT-2000, the proposed global standard, the US officials in December expressed concern at the prospect of Europe adopting a "single, mandatory standard." Bangemann's response is that ETSI standards are set by the industry, and the EU isn't going to intervene in this process. Which might be interpreted by the more bellicose US interest groups as get lost. Meanwhile the battle between Ericsson and Qualcomm over W-CDMA rages on. The ITU issued an ultimatum threatening to bar CDMA from consideration for IMT-2000 if intellectual property squabbles weren't settled by the end of last year. Qualcomm however continues to place stringent conditions on the licensing of its IP, and although Ericsson's demands are somewhat less extreme, it's still imposing conditions too. Largely concerning sharing IP with Qualcomm, we understand. Although technically the pair, plus the whole CDMA circus, ought now to be out of the running for IMT-2000, it would appear that they've got some kind of extension - but that doesn't mean the quarrels are anywhere near resolution. ®
John Lettice, 19 Jan 1999
The Register breaking news

A year ago: FTC won't give up on Intel

It just seems merely one week ago that we received a cock-a-hoop email from Santa Clara telling us (incorrectly) that the Federal Trade Commission (FTC) had given it a clean bill of health. This was to do with the famous Chips & Technologies acquisition which had been a mouldering in some federal office waiting for the go-ahead which it now seems to have... Rivals to Intel had complained that the chip giant wanted everything including the kitchen sink if that made money. And now we spot that just a couple of days after Intel's favourite government agency has given it the green light, it is quite possibly up to its tricks again. Intel has bought a 20 per cent stake in Lockheed Martin's company Real 3D and co-incidentally, that company is helping to develop Intel's famous i740 graphics chip (passim). But all is not necessarily hunky-dory as far as the US FTC is concerned, The Register is given to understand. In fact, there is still considerable head-scratching about the Intel-Digital deal last year, so famously misreported by every man and his chihuahua. And we are also given to understand that a close perusal of Intel's yearly results shows that when its famous senior VP stood up at the end of last year and said his company was going be tres aggressif about the networking market too, the Great Stan was not joking. According to our friends at Infoworld, Lockheed Martin will allow Intel to have a non-voting observer present at its board meetings. This reminds us that when Microsoft had a 19 per cent stake in SCO some years ago, it also had a non-voting member of the board but he was made to go out for a walk during critical discussions about the future of operating systems. And look what's happened to SCO... * Register HairStyleTip 213. Heads I win, tails you lose is a useful phrase which describes a one-sided relationship -- possibly a little like having your hair shorn by a stylist who wants to trim the back of your neck with a cutthroat razor.
Mike Magee, 19 Jan 1999
The Register breaking news

Matsushita slams DVD+RW gang of three

A senior executive at Matsushita-Panasonic has hit out at the DVD+RW group of three, made up by Philips, Sony and HP, for failing to produce anything but press releases. According to Steve Murakami, manager of storage product marketing at Matsushita: "The +RW proposal was announced more than a year and a half ago. Six months later it was 're-announced'. At Comdex, it was not only 're-announced' but they announced their plans for second generation products before shipping the first generation product." Murakami said: "The common format was established more than two years ago by the 200 members of the DVD forum. That forum is DVD-RAM. Common format products are shipping." He claimed that DVD-RAM already reads all CD and DVD formats. "Can anyone send you a production +RW drive that will do the same?" ® He said: "Perhaps the Group of Three accountants who developed the +RW standard should put aside their bottomline self-interest and listen to what the market says it wants to do." Meanwhile major DVD organisations are organising a "summit" at the end of March in a bid to resolve some of the issues which currently plague the platform. The summit includes representatives from the DVD Video group, Philips, and Divx and will discuss regional encoding, audio standardisation, copyright and copy protection. ®
Mike Magee, 19 Jan 1999
The Register breaking news

Merger makes Excite feel @Home

@Home, the high speed US Internet service provider, is to buy Excite, the world's second largest portal, for $6.7 billion, The Register can confirm. In a joint statement, the companies said their customers would get the most personalised, open Internet services available and at any speed they wanted. Although the deal still needs regulatory approval the tie-up appears to be a match made in cyberheaven. It's widely believed that one of the biggest barriers to the widespread adoption of the Net by consumers has been the sluggishness of Net access. While @Home has the infrastructure to overcome this, it doesn't have a sufficient profile or the content to attract new users. Excite does. The companies hope to accelerate the adoption of broadband technology by showing Excite's narrowband users the benefits of a fat pipe service. If it succeeds, it will give advertisers one of "the most powerful interactive marketing solutions available," said George Bell, CEO of Excite. Either way, the tie-up will give @Home access to millions of Net users and help the company market its cable television-based Internet access services to an even wider audience. By providing multimedia-enriched and compelling content, @Home hopes more and more people will adopt its broadband Net services over traditional copper wire links. The deal -- which is believed to be one of the largest Net mergers so far -- underscores the importance of content on the Net and highlights the ever-growing appetite Net users have for broadband applications. The final elements of the deal were brokered during the Martin Luther King Day holiday in the US catching many observers by surprise. Only last week @Home said that it had more than 330,000 cable modem subscribers across the US -- an increase of more than 50 per cent in just three months -- and a sevenfold increase on the year. In a bullish trading statement, the company said that page views of its @Home content had increased by almost 100 per cent in just three months. To view similar multimedia-rich content using a copper wire would simply drag phone connections down to a finger-drumming crawl, a spokesman said. ®
Tim Richardson, 19 Jan 1999
The Register breaking news

Pentium III out of the bag

A hardware site has blown the gaff on the Pentium III, having managed to obtain a pre-production processor from an Intel partner. Firing Squad has posted a review which reveals details of the processor ahead of its official launch at the end of February. Intel admitted that the review did appear to be of a genuine part, but said: "We don't comment on unannounced products". The review shows that the Pentium III will ship with 32Kb of cache, the same as the Pentium II, so putting an end to rumours that it would ship with 64Kb. It also gives full details about the much-hyped instruction set which comes with the Pentium III, formerly known as KNI but now called Streaming SIMD. The review says that one of the instructions, a new processor state, allows data between x87 and MMX instructions to be shared. But, according to Firing Squad, this ability will mean that software will have to go through extensive rewrites. That means most Pentium III ready software will have to be written from the ground up. And that also means AMD will still have a window of opportunity to continue sellings its 3DNow! K6-2 parts. ®
Mike Magee, 19 Jan 1999
The Register breaking news

Apple's FireWire licensing – the debate rages

Our coverage of Apple's latest policy on licensing FireWire (see Apple caught charging crafty FireWire fee), prompted a number of interesting comments from Register readers. In particular, we were interested to receive information on Apple's original licensing scheme. Apparently, Apple initially charged $7500 for a one-off, non-exclusive, royalty-free licence for that aspect of FireWire which isn't covered by IEEE 1394 -- according to reader David Wooten, "1394 only covers the way bits are sent between devices, it does not cover the important stuff that lets devices know what those bits mean". The point some readers, have made is that after encouraging companies to invest in FireWire, in the hope of accelerating its adoption, Apple isn't justified in changing the terms of its licence once those companies have made the technology worthwhile. "Any value that is in the patents has accrued because of the investments of other companies in 1394, not because of any value that Apple has added to 1394 over the past few years," is how Mr Wooten, for one, puts it. Of course, the other way of looking at it is to say that Apple, by adopting FireWire as its standard device connection mechanism, has made it possible for those companies who coughed up the $7500 to begin capitalising on their investment to an extent that simply hasn't been possible until now. Given the terms of the original FireWire licence, these companies must be spared ongoing royalties, saving them the added cost that other vendors must take on board to cover what they have to pay to Apple. It also allows them to move ahead while the rest of the industry umms and aahs over whether to sign up for the royalty scheme or not (the almost certainly will, eventually, since the royalties are so low, and such is the momentum behind FireWire in the consumer electronics world). This gives a useful fillip to the technology's 'early adopters' (at least from a vendor standpoint). And, as reader Steve Kan pointed out, the royalty programme is likely to give Apple more control over FireWire compatibility than it might otherwise have. Ensuring compatibility has always been an Apple watchword right from the time it introduced the Macintosh User Interface regulations. ®
Tony Smith, 19 Jan 1999
The Register breaking news

Nvidia to IPO on 22 January

Nvidia is expected to offer its shares on the stock market on 22 January. The company, which makes high performance 3D processors, has made a number of significant wins with its customers in 1998. Reports said that 3.5 million shares will be offered with the pricing expected to be in the $7 range. Said Roy Taylor, joint managing director of VML UK: "This is a hot technology and everyone wants a part of Nvidia." ®
Mike Magee, 19 Jan 1999
The Register breaking news

Info'Products staff keep in touch via Web

Ex-Info’Products staff are banding together thanks to a dedicated Web site as some of their number prepare for possible legal action against their former employer and its new owner, Compel. Started a week ago, the site’s chat page is being used to add the names of employees laid off earlier this month to a growing roll call of former Info’Products staff. Simon Michie started the site as a way of keeping in touch with people from his old workplace. But it is now being used to add weight to the lawsuit expected to hit the resellers by the end of the month. According to Michie, the site had 9,000 hits in the first day alone. Michie, ex-Info’Products partner programmes manager, has a target of 250 people to get registered on the Who’s Who Contact Directory, with details of where they are now. There are currently 88 names on the site, including Howard Dickel, ex-Info’Products business development director. Michie stressed the site was nothing to do with the lawsuit, he said it was simply a way of old colleagues maintaining contact with one another. Michie, who left Info’Products in May after 10 years with the Chelmsford-based reseller, said the response from both former and existing staff had been substantial. The interest in the lawsuit coincided with George Fodor, former Info’Products legal manager, yesterday taking a group of ex-employees to Mullis & Peake, solicitor for the case. The group of 20, including some of this month’s redundant staff and Info’Products employee representatives, saw the Romford-based employment specialists late on Monday afternoon. Fodor said he had yet to see Michie’s Web site, www.metaweb.net/infores/, but was extremely pleased that it was being used to inform people about the lawsuit. Fodor wants to recruit the majority of the 150 people laid off to take part in the joint case. He is currently co-ordinating the claim for around 60 ex-Info’Products staff. ®
Linda Harrison, 19 Jan 1999
The Register breaking news

Linux user wins refund for unwanted Windows 95

A loophole in Microsoft's end user licence agreement -- and a little perseverance -- has allowed an Australian user to be refunded for not to use Windows on his Toshiba laptop. However, it's clear the PC vendor has to bear the cost -- not Microsoft. Notebook owner Geoffrey Bennett spotted a clause in the End-user Licence Agreement (EULA) for Microsoft Software which was included with the pre-installed copy of Windows 95 that shipped with his new Toshiba. The Agreement (ungrammatically) said: "If you do not agree to the terms of this EULA, [the] PC manufacturer and Microsoft are unwilling to license the software product to you. In such [an] event, you may not use or copy the software product, and you should promptly contact [the] PC manufacturer for instructions on [the] return of the unused product(s) for a refund." (our italics) An enthusiastic Linux supporter, Bennett had already decided to install that version of Unix in place of Windows, so he figured he should return the Windows 95 CD to Toshiba. Initially, Toshiba's Australian wing was unhelpful. It would accept return of the notebook, reports Bennett, and issue a refund, but not for the software alone -- its contractual obligations to Microsoft prevent them unbundling the software from the hardware. One Laurie White, a Toshiba Australia product manager wrote to Bennett saying: "Toshiba is required by Microsoft contract to provide and purchase a valid operating system. Toshiba cannot get a refund from Microsoft... so we cannot refund you." With costly legal action the only way to secure his refund, Bennett now decided to give in. However, at this point the story starts to get murky, with Toshiba apparently trying to show that Bennett had de facto agreed to the EULA by using his notebook, which had just been discontinued by Toshiba. In response, Bennett claimed he had immediately installed Linux via a boot floppy, and thus had never activated Windows. And so Toshiba finally agreed to pay Bennett A$110 in return for his Windows 95 CD and all the documentation that accompanied it, which he did. ® Full details of Geoffrey Bennett's refund victory can be found on his Web site
Tony Smith, 19 Jan 1999
The Register breaking news

Hyundai rejects LG contract demands

The Korean press is reporting that Hyundai has dug its heels in, and refuses to accept LG demands on employee rights. Hyundai is taking over LG's semiconductor business. According to the Korean Herald, Hyundai has rejected LG demands that it re-employ workers and give them seven year contracts to protect their jobs. A statement from Hyundai said that these contracts would not be good for its own employees. LG also wants more money from Hyundai for its semiconductor business than it is willing to pay. Towards the end of last week, rumours were circulating that LG Semicon workers were threatening strike action. ®
Mike Magee, 19 Jan 1999
The Register breaking news

Musicians demand EU protect copyright on the Net

Proponents of the MP3 digital music encoding system who argue that artists support the format because it takes the power of distribution out of the hands of the records labels and places it in theirs may have to think again. French composer/performer Jean-Michel Jarre today presented to the European Parliament a petition signed by 400 of European leading musicians demanding full copyright protection for music distributed via the Internet. "We want to use new digital technologies like the Internet to create and deliver our music," said the petition, quoted by Reuters. "But we will only feel confident doing so if we know that the laws are there to stop our works falling victim to pirates." That is likely to be a dig at MP3, which is the most widespread digital music format as much because it makes copying music easy as because it's an open standard. The petition itself was provoked by the latest proposals on amending the European Union's copyright legislation. The process of updating European law has drawn fierce debate from all sides of the Internet music distribution debate, with artists and record companies on one side, and consumer electronics and Internet firms on the other. The former seek better protection against copyright piracy, made easier by digital technology, while the latter are keen to ensure the new laws don't limit consumer choice. Like much of the debate over MP3 in the US, it's a battle between vested interests and new ventures over the highly lucrative business opportunities the Internet offers, with the musicians themselves stuck somewhere in the middle. The European Parliament is set to vote on new laws tomorrow. ®
Tony Smith, 19 Jan 1999
The Register breaking news

Ecommerce sites ignore customer satisfaction

E-tailers are being warned not to get carried away by the hype surrounding e-commerce and instead focus on keeping customers happy. New media research firm, Jupiter Communications, is worried that while much of the talk among e-tailers is how to increase their market share, many are simply forgetting to look after their Web sites or their customers. According to Jupiter things are getting worse. Fewer people were satisfied with their online shopping experiences this year compared to last, the research firm claims. Problems with the availability of merchandise, excessive shipping and handling charges, and sluggish Web site performance were just some of the bugbears voiced by consumers. It appears that unless e-tailers start to take customer satisfaction seriously they cannot hope to build up any form of loyalty among consumers. The combination of retailers launching or relaunchng their sites in time for Christmas, coupled with the massive increases in Web traffic reported over the last quarter, may explain some of the apparent dissatisfaction. But according to analyst Nicole Vanderbilt, the time for excuses is over. "Companies spent considerable dollars to acquire the customers that visited their sites, " she said. "If they do not shift their efforts to alleviate technology issues and improve customer service in the coming months, they risk losing the customers they spent so much to acquire." ®
Tim Richardson, 19 Jan 1999
The Register breaking news

Transmeta chip to arrive by Q4

Sources said that the long-awaited Transmeta processor is set to arrive in the fourth quarter of this year. And details have emerged about what type of chip it will be. The sources said there will be x.86 compatibility built into the chip, and it will also function in Java devices. The source said: "It will be a mobile chip sold by IBM Microelectronics and when it launches, it will announce customers for it." Clock speeds of the part are expected to start at over 400MHz, according to reliable sources. ® Related Transmeta Stories Transmeta transmogrified by Linux founder Transmeta letters to the editor Transmeta to use IBM fabs after Cyrix loss 615 it still alive in a Transmeta way
Mike Magee, 19 Jan 1999
The Register breaking news

Lotus announces Notes, Domino for Linux

Lotus is to support Linux and release versions of its Domino and Notes software for the free Unix-based OS later this year. However, it's unlikely the company will also embrace the open source movement of which Linux is the flagship. Speaking at Lotusphere 99, the US Lotus users' conference, CEO Jeff Papows said he expects the Linux version of the server software would be made available this year. "But this doesn't mean we're going to provide open source or any freeware," he added. While the point was made to win a laugh, it's unlikely he would have said it at all if the company had not rejected the traditional Linux software model. Commercially licensed Linux applications are not non-existent but they aren't commonplace. Applix, which announced a version of its ApplixWare productivity software suite for Linux PPC at MacWorld Expo at the start of the year, charges for its software. Even Corel offers WordPerfect for Linux free of charge to those willing to download it, though it charges for the retail release. During his speech, Papows also promised versions of the collaboration technologies for other platforms would ship next month. That represents a delay of "two to three weeks", according to Papows -- hardly excessive by the software industry's standards. Papows effectively said the delay was due to the company's efforts to ramp up production -- to make sure "we have the product". He also said the Lotus had agreed to work with AOL to tie Notes 5 and Lotus Sametime, its real-time collaboration software, in with AOL's Web search systems and Instant Messenger facility. ®
Tony Smith, 19 Jan 1999
The Register breaking news

Serious Fraud Office gives Azlan clean bill of health

Networking distributor Azlan has been given the all clear by the Serious Fraud Office (SFO). The SFO was called in to investigate the company following allegations of financial impropriety when Azlan revised its financial results The company lost £14.1 million on sales up from £196.5 million to £293 million, compared with the £14.8 million profit forecast in April 1997 and its shares were suspended in June of that year. As reported by The Register back on 14 April 1998, the SFO teamed up with North Yorkshire police’s fraud squad to investigate the allegations. Azlan’s warehouse facility falls with the North Yorks coppers’ patch. At the time the company issued a terse press statement, in which it said its revamped management team would "give its full co-operation" to the SFO. Previously, chairman Barrie Morgans had said there was a "theoretical" case for action against the old management team. ® More Azlan stories can be accessed via The Register's old site.
Team Register, 19 Jan 1999
The Register breaking news

Intel to hire White House lobbyist

A report on Newsbytes claimed that Intel has hired a lobbying team to help it fight its case against the US Federal Trade Commission (FTC). According to the report, a spokesman for Intel confirmed it had hired White House Counsel John Quinn and congressman Butler Derrick to help it out. One wag said: "If these guys do any work for Clinton, maybe it's not such a good idea". Preliminary hearings are set to start on the 23rd of February. ®
Mike Magee, 19 Jan 1999
The Register breaking news

Intel takes $30.5 million chunk of PictureTel

Intel said it is to invest $30.5 million in PictureTel in a push designed to boost its video conferencing technology. The companies said they will jointly develop products to leverage emerging markets including broadband, cable modems, XDSL and the next-generation Internet. Intel will license PictureTel to distribute its ProSare Video System 500 and its TeamStation system. The results of the collaboration are expected to arrive in the year 2000. Products will be marketed under the PictureTel brand name. ®
Mike Magee, 19 Jan 1999
The Register breaking news

Intel, chip-set vendors prepare for Rambus shortage

Third-party chip-set vendors look set to reject the Intel-backed Rambus Direct DRAM in favour of the next iteration of 133MHz SDRAM. And even Intel itself appears to be preparing alternative technologies to ease the transition to the new memory technology in case supply fails to meet demand. The PC133 SDRAM option is currently supported by chip-set makers VIA, Acer Labs and SIS, according to reports on the US newswires. The standard's backers claim it will be easier to adopt than Direct DRAM because its an evolutionary development rather than a revolutionary one. VIA sources has even been quoted as saying that it has worked with AMD to ensure PC133 SDRAM works with the forthcoming K7 processor. AMD has officially thrown its weight behind Rambus' technology. PC133 is likely to appeal primarily to lower-end PC vendors, keen to make as few changes to their systems as possible. But it may also be selected by suppliers of high-end machines if a predicted severe shortage of Direct DRAM occurs leading to high prices. Several observers have suggested such a shortage is very likely, given the DRAM industry's record on getting new technologies out of the door in sufficient numbers. Intel's solution is its S-RIMM technology, which allows PC100 SDRAMs to be used on a Direct DRAM card, known as a RIMM (Rambus Inline Memory Module), through the use of an ASIC. S-RIMM will be made available "roughly" when Intel's Direct DRAM-supporting chip-set, codenamed Camino, become available, according to an Intel spokesman. ®
Tony Smith, 19 Jan 1999
The Register breaking news

Onsale flogs new PCs at zero margin

Onsale is to sell new PCs at zero margin over the Web. The loss-making Internet auctioneer will sell PCs and accessories for the same prices at it pays Tech Data, its wholesaler. The company reckons its can carve out an operating margin from banner ads on its Web site, flogging service contracts and leases and by charging small handling fees for each order, according to the Wall Street Journal. We can also assume operating cash flow benefits for Onsale, achieved by playing off credit card payments properly against supplier credit. This is really setting the cat among the pigeons. Here are most PC builders struggling by on early teen margins, and along comes a company that says it will do it for free. Or to be more precise -- at cost. Onsale appears to have the run of Tech Data's warehouse -- the company says it can supply 35,000 SKUs. Channel conflict rears its ugly head once again. Trade-only distie Tech Data is effectively selling PCs direct to the general public -- with Onsale providing the retail veneer for 35,000 SKUs sold at cost. It is a given that Tech Data handles all the pre-sales logistics -- configure to order, courier services, delivery and so on. It does this for any number of resellers. But what are the financial terms of the deal struck between the two companies? We suspect that Onsale is acting more as a rep, or sales agent, as opposed to reseller. Sensibly, Onsale should account for only the agent element--the bit that generates the operating income -- of each PC sales transaction as turnover. But with Internet stocks trading on heady multiples of turnover, it will be very tempting for company to record each PC sale in its entirety as revenue. ®
Drew Cullen, 19 Jan 1999
The Register breaking news

End of the line for fine.com

Internet services company fine.com -- which lists Burger King, Intel and Microsoft Corporation among its blue chip clients -- has confirmed it is to close its UK operation less than a year after it was first opened. The company said it was part of a strategic initiative to restructure the organisation and will result in "significant cost savings." The Seattle-based outfit, which provides e-commerce solutions, recently announced a restructuring initiative to focus on its core business of developing interactive Web sites. It is unclear how many people will lose their jobs at the Hawley Manor offices in Kent. Nor is it clear why the office had to close after only being opened last April. A pre-prepared statement from Tim Carroll, executive vice president of finance and operations said: "The UK office was relatively small and hadn't built a sustainable economic business model for itself." This sombre statement is in stark contrast to the hoopla that accompanied the opening of the UK operation only last year. Not only was the "dynamic team of London professionals" going to service the UK market, its "in-house MA qualified linguist in Spanish and French" was also going to help the company launch an offensive into Europe. Repeated attempts by The Register to contact the company today failed to produce any response from fine.com. ®
Tim Richardson, 19 Jan 1999
The Register breaking news

Mr Net Nanny awarded by online angels

The CyberAngels -- the advocates of Web-based do-goody vigilantism -- are to recognise the achievements of Gordon Ross, the man behind the filtering software Net Nanny. Not content with simple recognition, these online good guys believe Ross' contribution to Net life is so important, they're naming him the 'Internet Humanitarian of the Year'. Net Nanny blocks or screens objectionable adult material on the Internet and also prevents the user's address, phone and credit card numbers from being given out on the Internet. The presentation will be made next month at the Guardian Angels' 20th Anniversary Celebrations in Central Park, New York City. "Gordon has always considered people more important than technology," said Parry Aftab, CyberAngels' executive director. "He is a strong advocate for free speech on the Internet while still lobbying for parental choice. "[Because of this] he has become one of the most caring, generous and innovative individuals in cyberspace today," he eulogised. Ross designed Net Nanny to let parents decide what their children should or should not see on the Net. ®
Tim Richardson, 19 Jan 1999
The Register breaking news

Microsoft piracy buster trashes software and reputation

Pictured here is David Gregory, anti-piracy manager at Microsoft UK. He is celebrating a £20 million haul of illegal software in Reading. Funny thing is, the Oracle HQ is bang next to the MS building. So what disks is the steamroller trashing? What is that furry thing between his legs?
Linda Harrison, 19 Jan 1999
The Register breaking news

AMD to make Compaq Alphas?

Chip company AMD today declined to either confirm or deny that it will take over manufacture of Compaq's DEC Alpha chips. As reported here earlier, a common motherboard will allow K7 users to upgrade to faster Alphas, as and when they become available. Rana Mainee, European market research director at AMD Europe, said: "We have no plans for producing Alpha chips that I know of. We have enough demand for our K7 chips on their own." According to sources close to Compaq, AMD's Dresden fab, which opens in Q3 this year, has the technology to produce fast Alphas. The deal is a strange echo of a situation some years ago in the UK. Then, AMD was interested in Digital's fab in South Queensferry, near Edinburgh, Scotland. However, it could not afford to buy the fab as AMD was then going through troubled times. ®
A staffer, 19 Jan 1999
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Cash boost for CHS

IBM today said it will extend its CHS Electronics credit facilities totalling $250 million, according to Reuters. IBM will provide working capital for additional inventory and accounts to several CHS companies. These include the Central European region, the German, Austrian and Swiss distribution companies of CHS and Karma BV and Karma Latin America. The article said the extra cash will be used for the Miami-based broadline distributor’s growth. ®
Team Register, 19 Jan 1999
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DoJ quizzes MS ‘expert’ economist

The first area that the DoJ's David Boies explored in his cross-examination of Dean Richard Schmalensee, as is usual in antitrust cases, was the relevant market. But Schmalensee "didn't see any particular purpose in investigating" whether there was a relevant market. "Market is not relevant or necessary to answer the questions posed," said the man with the vast CV. This led Boies to bring up Caldera versus Microsoft, and ask about market definition in that case. Of course it also signalled to Judge Jackson that there was a another private antitrust case against Microsoft. The reason for Schmalensee wishing to avoid agreeing to the DoJ's definition that the relevant market was for PC operating systems on Intel-compatible processors was that market share effectively provided the evidence that Microsoft is a monopolist. The usual trick is for the defendant monopolist to try to extend the market to make the market share seem smaller, by including the Mac and Unix workstations on any processor, for example. Saying a relevant market definition is not, er, relevant is a risky stratagem. Every operating system still be sold or offered was a potential serious competitor for Windows, according to Schmalensee, including AOL, Netscape and Palm. Platforms were as threatening as proper operating systems, it seemed according to the expert. He also thought that a "high" proportion of the 7.5 million Linux users were using Linux as a server, but an hour or so later said that the majority of Linux sales was for desktops, not servers. In one response Schmalensee was prophetic. Boies asked: "Is it your belief and opinion that at the present time, except for specialized applications, Linux is not a viable competitive alternative to windows for OEM manufacturers because of the lack of applications?" Schmalensee replied: "By 'competitive alternative', I take it you don't mean it might make sense for a Hewlett-Packard or a Dell to offer a line of Linux machines in addition to its Windows machines, because the answer is it might." By the next day, Schmalensee had found out during a break, from the NERA bag persons (Dr Evans, Dr Nichols and Ms Holbrok), that Dell was offering Linux to corporate customers who bought more than 50 PCs. Schmalensee suggested market conditions had changed since his October deposition, in which he said that "I'm not aware of anything at present that would count as viable competition" for Windows. He wanted to add the new release of BeOS, and noted the "ploy" that Be used to make it possible to use two operating systems, since it could also stand alone. In response to Boies' question, he didn't know who the CEO of Be was. The judge asked him if Be was making any money, but although he didn't know, he said he "would be stunned if they were". It seems that quarterly accounts are like cattle food to economists, something not fit for them to consume. Boies asked Schmalensee if he was seriously trying to suggest to the court that Palm's operating system was a competitor to Windows. Schmalensee had to admit it was "the germ of a potential competitor". Clearly he did not know much about Windows CE. Boies drew attention to an apparent inconsistency in Schmalensee's evidence in Bristol vs Microsoft, where Microsoft was arguing that Bristol did not have the standing to sue because it was outside the market, although according to an earlier question, Schmalensee agreed that Wind/U was a product that enhanced Unix, a competitor of Windows. Microsoft counsel Urowsky jumped up to object, but when the judge sided with the DoJ, he did not object to the question, saying that it was a different question, perhaps to save his face. The transcript shows it was the same. Boies managed to wring the relevant market definition he wanted out of Schmalensee, after he had been shaken up by the possibility of more inconsistency in his testimony in previous cases. Schmalensee also fell back on his reserve position of wanting to include the Mac operating system in potential threats to Windows. For once, Boies missed the chance to slap him down for not keeping to the agreed relevant market definition. Schmalensee maintained the Microsoft line that there were no significant barriers to entry in the market, and no applications barrier. At least this was consistent with his view that Microsoft did not have monopoly power to discourage potential entrants. Responding to a question about ISVs (developers in the context), Schmalensee said he had "seen absolutely no evidence that suggests that in fact, 15 years ago, the ISV community was much smaller than it is today". He could have looked at the Microsoft Web site where Microsoft is always congratulating itself on increasing the number of ISVs, but evidently his bag persons at NERA had not done this. As a last resort he could even have read his own testimony where on page 20 he said: "More than 2000 firms have entered the market since 1991." When asked about the applications barrier to entry, Schmalensee slapped Apple CP Avie Tevanian, because he wasn't an economist, for saying: "As Apple has learned through experience, when one company has monopoly power in the operating system market, the symbiosis between operating system and applications programs creates significant barriers to the introduction and growth of competing operating systems." Tevanian probably wasn't an expert on breakfast cereals either, but at least he really does know about the operating system market. Schmalensee reached the bottom of the barrel when, on the subject of serious future threats, he identified "the bright undergraduate with a great idea". From time to time, Schmalensee strayed into making technical value judgements that he had no expertise to make. Microsoft would have filed a Motion to have such parts of his testimony ignored, but Boies let them go, to enrich the record with such remarks as "Mac has a good operating system technology". He also tried to make judgements about the NC. At times it was hard to tell the difference between Schmalensee's ill-founded, non-expert technical opinions and Microsoft marketing speak: "The inclusion of Web browsing software in Windows has enabled ISVs such as Intuit to write better software for Windows users." Judge Jackson referred to an article in Newsweek about Linux and its developer, Linus Torvalds. It became clear that the judge had not absorbed the real situation, since he referred to Torvald's "franchise". Boies encouraged Schmalensee to sound off what a great threat Linux was, and was then confronted by a trade press extract [not identified in the testimony] dated 25 June 1998: "'The competition,' Mr Gates said, 'is the status quo and staying with what you already have, and that popular newcomers such as Linux pose no threat to Windows. Like a lot of products that are free, you get a loyal following even though it's small. I have never had a customer mention Linux to me,' he said." Schmalensee then went on to try to disagree with Gates, and became very confused: "I can't imagine he said no long-run threat to Windows ever." Schmalensee became less confident after this and other body blows to his arguments, and said that "Microsoft began to invest in improving its platform as it relates to the Internet 93-94." -- but what's two years in nearly two thousand? Schmalensee tried to maintain that Microsoft priced Windows lower because of Netscape and Java, which controverted Microsoft internal email that made it clear that psychological barriers in pricing were more important, at least for the retail version. The OEM prices are negotiated in a cock pit. Schmalensee's cross-examination is likely to last all week. ®
Graham Lea, 19 Jan 1999
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So who is this Schmalensee guy anyway?

Dean Richard Schmalensee of the MIT Sloan School of Management freely admits "my 1978 article on the ready-to-eat breakfast cereal industry is probably my best known" so what a pity that it's software this time around for Microsoft's expert economist. In common with many US academics, Schmalensee has a sesquipedalian (OK, foot and a half) CV, although it doesn't say much about the amount of lecturing to students that he does, any tutorials he holds, or what happens to his salary while he's working for somebody else. Schmalensee was put up by Microsoft to swear that the software giant was not a monopolist, which is a tough assignment. We thought he might have had a team from Microsoft breathing down his neck while his direct testimony was being prepared, but assiduous study of the document shows that this was unlikely. He must have run out of nails when trying to hammer his nine conclusions to the door of the court, because this latter-day Luther has only eight numbered conclusions in the executive summary -- two of which are labelled '1'; in the full version there are two numbered '4', but out of sequence. A disadvantage for him in the present case is that the DoJ's David Boies has had his people (nobody seems to do the work themselves) look at Schmalensee's work in detail, so that he can be confronted with inconsistencies between his testimony and previous writings. Musing in the abstract for a moment, incompatibilities between published views, and views published in consultancy reports and testimony, suggest that views can be bought. Schmalensee is a committee rather than a person. It turns out that he was a remarkably selective reader of the trial record: "I have had colleagues read it all and suggest parts to me that I should look at." It turns out that he is backed up in court by a team of at least three people, young Boswells one might muse, from National Economic Research Associates, a private Cambridge, Massachusetts-based consultancy to whom Schmalensee has been a special consultant since 1981 (with just one break of a year in 1990). Microsoft is paying for his team, although Schmalensee makes the same claim. Of course Professor Fisher had his backup group too, but it was rather less overt than Schmalensee's. Judge Jackson asked Schmalensee what NERA was, which proved the judge had not read the direct testimony. Schmalensee is arrogant about the alleged expertise of economists, and scornful of computer scientists. His opinion would not matter were it not for the fact that he thinks he is an expert in computing. He is a Mac user at home and at the office, which makes his views even more strange, and has used Microsoft software with PCs, as is evidenced from his comment that "I have spent many days wrestling with computer software and peripheral devices for my family". As a declared reader of PC Magazine "since the early 1980s" he is clearly well-informed about industry issues. So when Boies asked him about Linux, Schmalensee said he had bought Red Hat. On further enquiry, he said that in fact "one of my associates at NERA" bought the copy, and all Schmalensee did was look at the box, and not install it. He said he was "fascinated to find it was on sale two blocks away" from his office [in Cambridge] which shows how very out of touch he is with the computer industry, if that surprised him. He didn't know about the 300-page installation manual. Schmalensee has been retained by Microsoft since 1992 "on antirust [sic - it's that Word spelling checker playing up again] matters" as he claimed in his testimony, advising on the FoxPro acquisition (not a great success), the Caldera litigation (now scheduled for June) and various other litigation, including the Bristol case. Richard Urowsky, Schmalensee's legal minder during the cross-examination by Boies, mentioned that there would be a request for a closed session during his redirect, so that Schmalensee can attempt to shoot down Fisher's analyses in the secret sessions. Boies cross-examination style is infinitely more interesting than that of any of the Microsoft legal team. He is able to persuade a reluctant witness to give the answer he wants. Boies works very much on the fly, listening carefully to responses and following up, rather than relying on a list of questions, as was the case in much of the Microsoft cross examination. Schmalensee had apparently been briefed during a coffee break by David Heiner, a Microsoft in-house lawyer, about his mistake with the number of Linux servers ("most" Linux was for servers, according to the breakfast cereal expert). Judge Jackson ordered that there be no briefing of witnesses during cross examination. Another briefing that Schmalensee had had was from Gates. He was clearly overawed, since he could not remember much about what was discussed, and made no notes, nor prepared a subsequent memorandum ("I don't remember whether we talked about Linux or clones or Palm..."). He did remember Gates giving him his version of how IBM was such a powerful competitor. Schmalensee was faced with a desire not to miss a plane back to return to the East Coast, it turned out, and so the conversation with Gates was shorter than it might have been. John Warden, Microsoft's lead counsel, asked for a conference with Judge Jackson to discuss how witnesses may be confronted with documents they had not seen before, or were not expecting. Judge Jackson was adamant that he did not want witnesses under cross-examination to confer during recesses or overnight "to improve the quality of their testimony". The judge said that Schmalensee could talk to the President of MIT or in-house counsel for MIT, but not party lawyers. He emphasised that he did not want "any witnesses to be wood-shedded". ®
Graham Lea, 19 Jan 1999