27th > September > 1999 Archive

Confusion over Profusion, Coronary over Corollary

Intel has put on ice shipments of two flavours of 550MHz Pentium III Xeon chips after discovering a bug that caused eight–way servers to freeze. The bug disrupts communication between the processor and Intel's Saber motherboard. It is appears to affect only Xeons with 512KB and 1MB cache -- the 2MB beast has escaped unscathed from the bug, which causes machines to hang on boot up and serving up instead the dreaded Blue Screen of Death. Intel hopes to resume shipments of de-bugged Xeons (or maybe debugged Saber motherboards) in a couple of weeks or so. In the meantime, server OEMs could always give Compaq a call -- the PC vendor's own motherboards appeared to be immune to the Xeon bug. ®
Drew Cullen, 27 Sep 1999

Silence is golden for Samsung HDDs

Samsung is moving to 10.2GB per disk technology with its latest monsters, the SpinPoint V10200 Series. The new high areal density line offers 10.2GB, 15.3GB and 20.4GB capacity points. The spec also includes UltraDMA-66 interface, A/V-optimised firmware, and proprietary shock protection features. The V10200s also come with a new acoustic noise damper design, intended to "virtually eliminate noise when the drive is in seek mode". Samsung says the line will suit "consumer applications and Digital Video Recorder markets require high capacity, low acoustic noise, and low price". It has not published prices yet -- that will have to wait until October, when the V10200 Series is expected to ship. ®
Drew Cullen, 27 Sep 1999

IBM buddies with MS over Win2k server

AnalysisMore than four years on from white-knuckle IBM-Microsoft negotiations over Windows 95 and technology access, the pair are buddied-up again, and IBM has access to Windows NT source code at its Kirkland, Washington site (near Redmond). As Microsoft trial evidence made clear earlier this year, source access for Kirkland was a key issue for IBM in the run-up to 95's launch. These days the Kirkland facility is known as the IBM Center for Microsoft Technologies, and the focus is Win2k. IBM's vision is apparently to make IBM hardware "scream with Microsoft software", and some of IBM's code fixes have been incorporated into Microsoft's forthcoming product.. Pat Gibney, IBM director of competitive products and Windows 2000 systems, has handled the technical aspects of the Microsoft collaboration since November 1996. With 40 per cent of IBM's revenue coming via third parties, it is hardly surprising that IBM would not want some form of profitable relationship with Microsoft, but the seriousness of it is quite surprising. Who would have thought, after the revelations about the state of the IBM-Microsoft relationship in 1994 and 1995 in Gary Norris' rebuttal evidence in the Microsoft trial in June, that there would be a large scale Windows 2000 collaboration? But it's clear that in the last few years there has been a fundamental change in the Microsoft relationship. From Microsoft's perspective, OS/2 has been removed as a competitor, and IBM has signed a First Wave agreement for NT. Gibney says it is as though there were "a single team": there are site visits, regular meetings and "a wide-open pipeline ... with mutual respect, mutual interest, and a healthy dose of paranoia". Discussions between IBM and Microsoft technical staff are apparently free and uncontrolled, but with IBM employees being instructed to "stick to business". An NT product technology council meets on a regular basis. For its part, Microsoft only collaborated when it thought, with its usual arrogance, that IBM technical staff were up-to-scratch on Microsoft products. IBM says it is not two-faced in its relationship with Microsoft, but multi-faced. The transformation from the IBM of the 1960s, 1970s and 1980s is quite remarkable, but there can be no doubt that IBM is serious about this openness policy. For its part, Microsoft also pays a price in that it has to accept that IBM competes in several sectors. IBM evidently sees value in having a major NT support effort, designed of course to keep its lucrative customers happy. This means that IBM will not pass the buck to Microsoft, even if a problem is with NT. With access to the source code, IBM can often fix a problem or get quick assistance from Microsoft when needed. Office 2000 problems are also covered, since IBM has a premium service agreement with Microsoft that gives it priority for getting work-arounds or fixes. IBM's current slogan is to convert mindshare to market share. Since DB2 became its first Intel server product in 1995, the value of IBM's server business in the sector has risen to $2 billion/year in 1998. It is clear that IBM is now putting a great deal of effort into its server business, and expects this to increase considerably. Expects Win2k to ship in January Gibney believes that Win2k will be sent to manufacturing around the time of Comdex and delivered in January, but that very few people will use it initially. IBM has been offering a free upgrade to Win2k from NT4 with its hardware from August, it transpires, and will continue this until March next year. Significantly, IBM says it will not increase prices for when Win2k is loaded instead of NT4. It is evident that there have been considerable culture changes on both sides of the IBM-Microsoft relationship. Lest it be thought that IBM is totally beholden to Microsoft, there is a very interesting slide presentation (entitled "IBM has got it covered") that shows how IBM's product portfolio can systematically substitute for all Microsoft's offerings. The paranoia element in the relationship seems to be very much alive, and doubtless Microsoft, in its heart-of-hearts (some assumptions here) is aware that IBM, and others, are positioned to provide substitutes should Win2k be deemed a failure, or if the Washington court makes it impossible for Microsoft to proceed as it plans. It's a heterogeneous world for everybody but Microsoft, and IBM seems confident that the homogeneous player will never provide the connectivity that the industry requires. Even Microsoft cannot control whether a Web page is served by a Microsoft product (yet - Ed.), so some measure of de jure standards observance is necessary by Microsoft if it is not to be vilified for sabotaging standards. The relationship has apparently not given IBM significantly better prices for Win2k, but with the software being only a small percentage of the overall systems price for large servers, IBM is perhaps not overly concerned about this. The collateral opportunities for additional selling that IBM gets by being seen to collaborate seriously with Microsoft must be sufficient to make the loss of face acceptable, and profitable. IBM is not the only NT collaborator (HP is hard on its heels) but its seriousness is significant. Big Blue faces both ways It looks as though Big Blue sees loads of money coming from the relationship and the NT collaboration. It is particularly interesting that IBM has been separately ramping up its Unix efforts under Project Monterey, to be ready as Win2k either delights or disappoints in the server space. If the former, IBM plans to be there with all its kit and server software, but if Win2k server flops, lo and behold, IBM has rejigged its Unix and is ready for business with its magic boxes. The relationship between IBM and Microsoft does not appear to be merely the political correctness du jour. All IBM products will work with Windows Terminal Server (Hydra). IBM is not without its criticisms of Microsoft's Win2k effort. It has evidently found inconsistencies in the look and feel of Windows Web controls, for example. There are however limits to the collaboration. All IBM middleware will interoperate with COM, but not COM+. So far as component models are concerned, IBM is very serious about Enterprise Java Beans, and evidently hopes that EJB and CORBA will move closer together. In response to the natural question as to why IBM should in effect link its software to more than one component model, Gibney's response is that "IBM is big enough to do it twice", adding that this is the price for not owning the Windows platform. Gibney says that a component is a component is a component, and IBM evidently has no religion in terms of preference, pushing the idea that IBM is dropping religion and building components. He sees the future of software as very much being bound up with components. IBM is backing InstallShield (with money and some translation assistance, as it is a small company) rather than MS Windows Installer, although as it turns out, Installer has certain advantages such as the ability to re-install without a complete uninstall, and what Microsoft likes to call self-healing whereby missing or damaged code can be replaced. Factoid: there are 40,000 lines of code in DB2 InstallShield. IBM has not been talking much about why it favoured InstallShield over MS Installer, but this could well be connected with IBM's desire to make it easy to load IBM software, and to retain at least some control. The other reason is almost certainly that Active Directory is in too early a stage to be reliable and trusted. It is known that Cisco has had problems developing for it. So far as security is concerned, It looks as though IBM will not surrender the administrative user interface to Microsoft, and will insist that its customers can see the Tivoli console, for example. Active Directory presents something of a dilemma to IBM, since it would like to provide the directory service preferred by its customers. Microsoft has welded AD on to Win2k so that its security and replication depends on the use of AD. There is a problem that there is no de jure directory services standard, but just a few strong players wanting to force their own de facto standards. IBM has decided that it will not use Active Directory initially at least, in view of its decision to use InstallShield rather than MS Installer. Kerberos does authentication, but not authorisation, and IBM is finding it takes considerable work to get kerberos to interoperate, but this is one of the prices for of the Win2k relationship. IBM wants to have its whole software and hardware portfolio ready for Win2k from day one, but knows that it will be some time before it is taken up in volume as a server. A consequence for Microsoft could be that Win2k might not produce the revenue that many have been forecasting, at least on the server side. Few users are likely to install W2K on existing kit, in view of the considerable resources required. As a consequence, there must be considerable uncertainty as to whether Microsoft will generate the revenue that Wall Street expects in the current financial year (ending 30 June) at least, and probably for the latter half of 2000. Wall Street would be shocked if Microsoft's revenue for the current FY fell below that of the present year, but it may happen. But whether Win2k server succeeds or fails, IBM seems to have covered its bets. ®
Graham Lea, 27 Sep 1999

US mobile phone consolidation – five and counting

ColumnThe hectic pace of mergers, acquisitions and strategic alliances among the American mobile operators shows no signs of letting up. Let's do a short recap. Half a year ago there were three mobile operators widely regarded as national players: Sprint, AT&T and Nextel. All three use a different digital standard, all three have a different marketing strategy. Sprint is currently launching a heavily advertised mobile data initiative to gain a technological edge over AT&T. AT&T is relying on an extensive analogue network and tri-mode phones to offer the widest possible roaming coverage by combining the AMPS network with two types of digital mobile networks. Nextel is going after professional people and offering a unique phone-to-phone radio link in its models in addition to the plain vanilla mobile phone features. So far, so simple - relatively speaking. But there are also literally dozens of regional players in USA, formerly dismissed as also-rans, but now rapidly consolidating into new coast-to-coast operators. Consolidation among GSM operators was triggered earlier this year by the Voicestream take-over of Omnipoint, resulting in a good West-East match of network assets. Earlier this month, the newly bulked-up Voicestream made another move by taking over Aerial. The most likely next target is Powertel with its strong Southeast presence; but even without that, Voicestream is now a national player. Unlike the original Big Three, Voicestream lacks coverage in some major cities such as New Orleans, though. The most important missing piece is California, where Pacific Bell is running a successful GSM operation. The weakness of Voicestream lies in the piece-meal fashion it has chosen to build its coverage - but this is also the main advantage of the company. Sprint and AT&T went directly for nationwide coverage and ended up being mile wide and inch deep. They currently have coverage problems even in some of the five largest cities. Voicestream has achieved relatively good coverage in those markets it has targeted - and zero elsewhere. So far, the strategy has worked. Voicestream's subscriber growth towered above AT&T and Nextel during the last quarter and came comfortably ahead of Sprint. The big question is now how well the company can translate the successful regional operations into a national brand. California is another enigma; can Voicestream merge with Pacific Bell's mobile operations at some point to achieve a genuine national status? Not long after Voicestream had staked its claim as the fourth national operator, the expected merger between the mobile operations of Airtouch and Bell Atlantic Mobile took place. This is another good West-East fit ... but on a ten times bigger scale. The subscriber base of these two CDMA operators combines into a 20-million sub behemoth that seems like the real gorilla of the US mobile market. Or does it? Actually, over 85 per cent of the BAM subscribers use analogue phones. The real battle for US consumers is the one fought over digital subscribers. And here the new Airtouch-BAM faces a formidable dilemma. How to convert the existing analogue customers into digital subscribers and still keep the overall subscriber expansion going on? This is the problem AT&T has been grappling with. Its Digital One Rate plan has been a smash success despite the quality problems. But because AT&T keeps shuffling its own AMPS customers into the new digital plan, the overall subscriber growth has been stuck around a rather sluggish 40 per cent. That's fairly bad compared to Nextel's 70 per cent - and disastrous compared to Voicestream's 180 per cent. So the purely digital operators seem to hold a clear growth advantage over chimera operators trying to juggle a fading analogue customer base with a booming digital unit. Airtouch/BAM probably can't wait to get rid of the AMPS users and lure them into the digital programs, where they can be seduced into using bill-busting mobile data features. Among Voicestream's main growth advantages are the absence of the analogue customer burden and the so far elusive promise of international roaming as a future market. Some of the hottest new phones announced recently work not only in the Voicestream networks - but also in 100 other GSM markets around the world. Both Ericsson and Motorola have hit on a new strategy of launching GSM-1900 handsets. Since this frequency is only used in North America by less than 5 million subscribers, it hasn't made economic sense to launch high-end GSM-1900 models before. But the new Ericsson and Motorola phones bundle GSM-1900 with GSM-900 - making it possible to sell these phones both in USA and in GSM-900 markets around the globe. This has enabled the companies to start selling genuinely cutting-edge items in GSM-1900 format for the first time. Until now, Voicestream customers have had to make do with Nokia's highly popular, but rather bourgeois 6100 and 5100 series. Ericsson's T28 and Motorola's L-series are now opening a new era in the US mobile phone market. They are shameless, indulgent luxury items weighing little, costing a lot and featuring exotica like voice-dialling, infra-red link-up and predictive text-input. This year's surprise popularity of pricey miniature models in Europe bodes well for this sales tactic in USA, where in-your-face luxury products have always done better than in the tightly egalitarian EU markets. Whether Voicestream can translate the appeal of these phones into acquiring coveted business subscribers remains to be seen. ® Tero Kuittinen is the Vice President of Wireless Telecommunications, an investment firm based in New York. The firm may hold positions in companies featured in his columns. The opinions expressed in the columns are personal views of Mr. Kuittinen and they should not be interpreted as investment advice.
Tero Kuittinen, 27 Sep 1999

CallServe launches Net telephony service

New UK company CallServe is about to launch what it calls the first commercial Internet telephony service in Europe. It says it will offer higher quality than has previously been the case, and at "rates vastly lower than those of conventional telecom suppliers", quoting 3p per minute to the USA "compared with BT's 20p". It would perhaps have been better had the rate quoted been closer to the rate actually obtainable with normal BT discounts. CallServe seems to be pitched at consumers rather than businesses, so will find itself in competition with cut-throat pricing from the many pre-paid card services. Another problem will be that many potential CallServe customers will already using Internet telephony without paying any fees beyond the cost of accessing their ISP. At the launch on Friday, MORI presented some data about Internet access in the UK and made some highly optimistic estimates of take-up for such a paid service ("Eight-in-ten Internet users think they would benefit from Internet telephony" and "If 40 per cent of current British Internet users were to adopt CallServe, they would have 4.2 million users."). It does seem more likely that "students and teenagers" will use email or free Internet telephony services rather than subscribe to CallServe. A £20 credit or debit card deposit is required, which sounds like a capital way of financing the development. CallServe hope that OEMs will bundle the service, but no deals have yet been inked although announcements are expected in the next two weeks. The minimum PC spec will not be problematical for new kit, but the majority of the installed base will have PCs below the minimum recommended - and most would need to buy microphones or headsets. The software can also be downloaded. What CallServe cannot control - and the stumbling block with existing services - is Internet network congestion. It remains to be seen whether CallServe has indeed found a way of significantly improving the quality of Internet voice. ®
Graham Lea, 27 Sep 1999

Tandem founder Treybig holds forth on e-business

Tantau Software, formerly the Tektonic Software Business Unit within the Tandem Division of Compaq, has raised $11 million of venture capital through Austin Ventures, and Techno Venture Management of Germany. Jimmy Treybig, a founder of Tandem and CEO until he retired in 1996, is a partner of Austin Ventures and the chairman of Tantau. Compaq retains 8 per cent of Tantau, 45 per cent belongs to venture capitalists, and the remainder to employees. Perhaps not surprisingly, Treybig does not believe that most Internet companies can be judged by traditional criteria. He points out (very much from a US perspective) that the e-business revolution is changing the nature of retailing. This makes amazon.com a sub-$100/item retailer, for example, rather than a bookseller. He attributes the success of e-business to the possibility of reaching a billion customers with a one-to-one relationship, at half the conventional cost and a fraction of traditional start-up costs. The business model is now different, and it hasn't taken venture capitalists long to come to terms with the market need and opportunity. People with e-business vision are more likely to get backed than those with a technical dream. It's a case of spending money to win market share, and not to get short-term profits. Treybig noted that there have been three VC start-ups in the last few weeks in Silicon Valley, with each having more than $1 billion in their pots. Treybig, who has 30 years VC experience, doesn't think that new start-ups can be valued in the same way as used to be the case. Tantau has been set up to help with the data integrity problem that Treybig reckons is endemic in most e-business. He claims that most new entrants to e-business hardly know what data integrity is, noting that data can become irrecoverable. Expansion has generally been too quick to allow systems to be properly architected, and the consequences of systems failure can cost many millions, or drive a company out of business: eBay ("no idea of availability, data integrity, or scalability," Treybig says) and Schwab come to mind. A problem with e-business is that it requires designers to work five times faster, because of the time compression that characterises the sector. It is very hard or impossible to test a system, since scalability problems become apparent suddenly. Tantau's methodologies include modelling rather than testing. Tantau is not tied to Tandem fault tolerance kit, Compaq's products, or NT ("there's a problem with NT - it fails a lot," notes Treybig, an advocate of open systems). Tantau has the software it obtained from Tandem/Compaq initially, which Treybig values at $25 to $30 million, including some data mining products, and - not least - the people. There are 36 developers in Germany and Scotland. Tandem veteran Harald Sammer leads the technical team, with Peter Robinson heading the European office from St Albans. Not everything that Treybig touches has worked out: he has a hobby farm near Austin with five cows that were bought for tax reasons, rather than with a view to his becoming a farmer, but one of the cows was pregnant when he bought it. Whether this mounts to a cash cow, and whether Tantau has the right formula to grow as fast as the companies it helps is an open question, but there is likely to be a place for smaller, specialised companies able to offer expertise in avoiding the pitfalls that are being found as a result of the time compression in web site development, and the minimal attention to scalability that is often the case with Web start-ups. ®
Graham Lea, 27 Sep 1999

IBM 1GHz 64-bit PPC to deliver 11,000 MIPS

More information is leaking out about the next generation IBM PowerPC Power4, the 64-bit chip line formerly known as Gigaprocessor, and due next year at clock speeds of over 1GHz. The first chips will be sub-0.18 micron, with 200 million transistors or more. Power4 will have two microprocessors on a single piece of silicon, and at 1.1GHz should be able to deliver 11,000 MIPS. The architecture comes out of Austin, and chips will be fabbed at the Fishkill Semiconductor Center. With microprocessor performance still increasing much faster than memory hierarchy performance, DRAM latency will grow and bus speed will not keep pace with increases in microprocessor speed. Likewise, circuit density will continue to increase faster than circuit speed. To leverage the circuit density increase, faster uniprocessors with superscalar designs or VLIW and derivatives such as EPIC (explicitly parallel instruction computing, favoured by Intel) are needed. More systems functions and multiple processors on a chip (SMP, co-processors and redundant processors for error detection and fault tolerance) seems to be IBM's preferred route. Whatever the architecture or design, processors spend most of their time waiting for cache misses, so the optimised feeding of processors is the main performance challenge. Software design trends such as OOP and JIT compilation will increase the memory hierarchy load, so the design challenge is to deal with the memory hierarchy bandwidth. IBM says it believes that its approach to parallelism (Ultra SMP) is superior to Intel's EPIC since EPIC increases the demand for memory hierarchy bandwidth and low latency. IBM also claims that EPIC is less suitable for JIT Java compilation as it needs lengthy compilation and a large optimisation window. Another difficulty that IBM identifies with EPIC is in future binary compatibility, resulting in a probable need to recompile. Could it be that a JavaOS will rise again? Explicit parallelism -- Ultra SMP -- is IBM's answer, which it claims exploits existing parallelism in code (and particularly SMP-enabled server applications with multiple threads). The approach allows multiple threads per chip with multiple physical processors, or multiple logical processors with hardware thread switching. Above all, the memory hierarchy would be used more efficiently, IBM says, with less bandwidth for each useful instruction, as well as less cache latency. As a consequence, IBM will preserve PowerPC and S/390 binary compatibility, and optimise for SMP and cluster performance with multiple RISC "cores" per chip, while Intel creates a new IA-64 instruction set architecture and optimises uniprocessor performance. IBM won't have the fastest uniprocessor, but it should do a better job of preserving the software investment. Intel is left with some sticky problems, such as software migration; performance issues with the new architecture; x86 compatibility mode performance; and SMP performance. These puddings aren't yet ready for eating -- and there are other chefs too -- so we'll just have to wait and see which proves tastier. ®
Graham Lea, 27 Sep 1999

Vocalis deal brings email via the phone to the masses

Voice recognition telephony company Vocalis Group has signed contracts with ten ISPs to offer its SpeechMail service to Net users in the UK. Ace Internet, Airtime Internet, Aviator Networks, Cherryblue Ltd, Croxsons New Media, Cyberscape, INC Internet Services, Madasafish, Strongnet and Telinco have all inked agreements with the Cambridge-based company. It means that an extra 650,000 Net users will now be able to access their email from any telephone, wherever they are using simple spoken commands. This latest announcement follows hard on the heels of a similar deal with the UK's leading ISP Freeserve which will soon be offering its customers SpeechMail. The company intends to generate its revenue by taking a cut of the call charges when users phone in for their email. A spokeswoman for Vocalis said the company was also preparing to introduce the technology to the US in October. ® For more ker-ching tune in to Cash Register and turn on to our daily Net finance news
Tim Richardson, 27 Sep 1999

MSN swims against the tide with price rise

Microsoft has increased the cost of its MSN Net service in the US by $2 a month in a move that is set to raise eyebrows among industry watchers. Only last month discount e-tailer MyShoppingClub announced it was to give new club members access to MSN for nothing. Consumers joining the $59 a year discount shopping club would not have to pay a cent to get online using MSN -- a saving of $19.95 a month. This was quickly followed by another discount store Costco Online offering MSN access to its members for just $11.99 a month. There was much speculation that MSN would cut the cost of its service after the Wall Street Journal claimed Microsoft bosses were looking into low-cost Net access for the US. "We intend to be aggressive with access," said Brad Chase, VP of Microsoft's new consumer and commerce group, at the time. This latest move appears to show that MSN has completed a U-turn on its pricing strategy. The Satan of ISPs said that users would get a better service and improved content as a result of the price hike. ®
Tim Richardson, 27 Sep 1999

32-way WildFire Alpha servers poised for rollout

Compaq is to take the wraps off its next generation "WildFire" high end Alpha servers in the next two weeks, with one of the first major outings being - significantly - Telecoms 99 in Geneva. The servers have been a long time in the making, but Compaq intends them to blitz the top end of the Unix server market, and the phone business is a good place to be looking for this class of customer. The AlphaServer GS320 WildFire will support up to 32 733MHz EV67 processors, and in the opinion of Terry Shannon of Shannon Knows Compaq, should be able to deliver more than 140 tpmC. WildFire is currently around a year late, due to problems with custom ASICs, and plans for 72- to 120-way systems seem to be on hold. But the 32-way versions are now out with beta sites, and all seems to be well. ®
John Lettice, 27 Sep 1999

Intel comes clean over i820 delay

Intel today confirmed the indefinite delay of its i820 chipset, while launching the i810 chipset and two new Pentium III processors. Chipzilla came clean this morning -– when everyone had been expecting the i820 to put in its first appearance -– saying there were errors in the memory configuration. Reports of the delay started to leak out on Friday. In a statement, Intel said: "[Intel has] delayed the introduction of its Intel 820 chipset due to platform validation issues that may result in memory errors. "Intel is working to identify and validate solutions to these issues and will introduce this chipset after they have been resolved," it added. An Intel spokeswoman said the issue involved the three memory slots in the chipset. Faults, discovered late last week by Intel, occurred when all three slots were at full capacity. According to the Intel Insider, root of the problem is proving elusive: "We are working round the clock to fix the problem," she said. She then came out with one of the year's best under statements: "This happened at the very last minute -– which we weren't expecting." "We don't know the cause of the errors. But we want to resolve the problem as soon as possible." Some systems builders in the UK have been warned the delay could last for months, sources told The Register. Intel was unable to give a date when the chipset would start shipping. It would not confirm if the delay would extend beyond Christmas. However, The world's favourite chipmaker, today launches two new Pentium III processors, the 600MHz and the 533MHz., each supporting the 133MHz bus. Intel also launches a new chipset, the i810E. This features built-in, better graphics performance. It supports 133, 100 or 66 MHz front side bus. And it runs on PC100 SDRAM for main memory. The two microprocessors, priced in 1,000-unit quantities at $615 for 600MHz and $369 for 533 MHz, and the 810E Chipset are now shipping in production volumes. The Intel 810E chipset is priced at $39.50 in 10,000-unit quantities. ® Related stories Cam in no 820, your time is up What the hell is...Camino and Rambus all about i820 derailed as Intel goes Rambust UK system builder in a right Mesh over i820 delay
Linda Harrison, 27 Sep 1999

IBM to build crypto-on-a-chip into all its PCs

IBM will tomorrow launch an all-in-one encryption chip designed to protect documents stored on desktop PCs and servers. The chip, as yet unnamed, will be initially installed in IBM's 300PL PC, but will soon be built into the company's full line of desktop systems. Actually, the 300PL may not feature the new chip since it's based on Intel's i820 chipset and, as Intel revealed today, the i820's release has been delayed indefinitely. IBM said users will pay no more for a hardware encryption-enabled PC than they will for a machine without the chip. In addition to handling key encryption -- the technology most usually associated with document protection -- the chip will also generate and verify digital signatures. IBM's plan is clearly to make its machines more appealing to the growing number of computer users buying desktops solely to surf the Internet at do a little online shopping. The move should also make its PCs more attractive to companies performing business-to-business transactions over the Net. Of course, Big Blue is keen to be seen as acting in everyone's interest here, which is why the company's general manager for desktop systems, Anne Gardner, told Reuters: "We want this to become an industry standard. We want this on as many desktops as possible." However, IBM clearly wants to retain a lead, which no doubt explains Gardner's reluctance to discuss any plans the company may have to licence the technology to motherboard vendors. All she would say on the subject was a vague "you may see something along those lines in the future". Probably IBM will first want to see how attractive the technology is to punters. At least the approach of using an ancillary encryption chip should keep IBM safe from the nightmare Intel faced when it attempted to railroad CPU ID numbers on users. ® Related Stories Christmas online shopping bonanza predicted White House cypher proposal could upstage Congress US crypto export controls are bunk
Tony Smith, 27 Sep 1999

BT blasted over ADSL pricing

UUNET has hit out at BT's method of charging competitors for business-based DSL services adding to criticism about the telco's handling of the roll-out of broadband technology. The business ISP said BT's approach means it will make it too expensive for many service providers to offer broadband services, which in turn will inhibit the take-up of the technology. UUNET said it that BT's charges for purchasing the value-added Datastream product are priced so that it will be "prohibitively expensive for anyone to offer a competitive service". In a statement issued on Friday, it claimed that anyone looking to introduce a nation-wide wide service would have to invest at least £10 million. This makes it extremely difficult for UUNET to offer the cost effective alternative service that it wishes to provide to customers, the company said. Richard Heyes, UK MD of UUNET, said: "We are currently pressing BT to confirm our interpretation of the charging structure they are imposing and intend to urgently lodge a formal complaint with OFTEL should our worst fears be correct. "It is vital that access is priced fairly if we are to unlock the benefits of commerce for smaller enterprises and consumers and drive the e-conomy forward. In fact, heavy-handed control of the market runs utterly against the wishes of the government to make Britain a world class platform for the Internet e-conomy," he said. Elsewhere, Freeserve said it had no idea when it would be able to announce pricing arrangements for its trial of consumer-based ADSL trial which starts on 22 November. Predictably, the trial has proved very popular with Freeserve users even though the UK's number one ISP cannot yet say how much the service will cost. It can't even say when it will be able to publish its tariff because BT refuses to be more specific. A spokesman for BT said that an announcement would be made on consumer ADSL pricing before year-end. "We're keen to make it a mass market product," he said. ®
Tim Richardson, 27 Sep 1999

Flash, bang, wallop -– what a memory shortage

Mobile phone and handheld computer production is being held-up as Flash memory chip suppliers fail to keep up with demand. Benny Ginman, a director of Intel Europe, said the vendor was still able to meet its production commitments, but that was "not in a very good position" to take on extra orders. According to the Financial Times, mobile handset makers, including Alcatel, said production was being limited by the shortages. Alcatel said it could have sold more GSM handsets this year had chips not been in such short supply. Nokia and Ericsson maintained they had enough chips for production this year. Intel estimated that worldwide demand for Flash memory chips soared from 160 million units in last year's fourth quarter to 240 million in the latest period. Meanwhile, AMD has sold out of Flash memory chips. Sales are expected to rocket to $3.24 billion in 1999 from $2.49 billion last year. IC Insights, a chip market research group, predicts this revenue to reach $4 billion in 2000. Joe D'Elia, senior microprocessor analyst at Dataquest Europe, said: "Mobile phone growth keeps outgrowing all predictions. This shortfall of Flash memory chips is likely to get worse before it gets better." According to D'Elia, it is a serious threat. He said Flash memory chips had a similar history to that of DRAM memory chips. "Flash went through an equally dramatic drop in price, so people didn't invest in production capacity. "They've now been caught short." D'Elia said it was unlikely that end users would see a shortage of handsets in general because other manufacturers would step in to expand the market. "But customers may not be able to get their preferred brand 'X' handset with the services they require, such as GSM," he warned. "Some manufacturers haven't seen this shortage coming." ®
Linda Harrison, 27 Sep 1999

Freeserve hops on board the free calls bandwagon

Freeserve has jumped on the telecomms bandwagon and is to offer limited toll-free access to the Internet. The offer comes on the same day AOL UK announced it is to offer a new pricing plan that gives users Net access at off peak rates all the time. Despite hyping Freeserve Time as "good news for gas-bags and surfers" the deal is a you-scratch my-back-I'll-scratch-yours initiative that should help Freeserve's telecomms partner Energis generate more cash for its business. By routing national and international voice calls through Energis, users will receive a 10 per cent discount on usual BT rates and receive toll-free access to the Net. Users who spend between £3 and £9.99 a month on national and international calls will receive three hours of free Net access. If they spend £10 or more per month on calls and the Net users will be entitled to 10 hours of free Net access. And in instead of switching telco - as with Screaming.net and GreatXscape - all Freeserve users have to do is dial 162 before making their voice calls. Freeserve will announce its first set of results tomorrow after floating in July. ®
Tim Richardson, 27 Sep 1999

Cost of UK Net access drops by 75 per cent

AOL UK has cut the cost of dial-up daytime Net access to just 1p a minute in a move to establish the service as something for the whole family. The normal cost of a peak-time local rate phone call from BT is 4p a minute. The announcement comes the same day Freeserve said its users could get 10 hours of toll free calls a month in return for routing national and international calls through its telecomms partners Energis. AOL' s new 'Off-Peak All The Time' pricing plan means cost conscious Net users don't have to restrict their Net usage to those periods where the cost of dial-up Net access is reduced. And in a sideswipe at Freeserve and other subscription-free ISPs, AOL said its members will be able to make the Internet more central to their everyday lives, "without any of the hassle and hidden costs that users of self-proclaimed 'free' ISPs experience with large Internet telephone access and customer support charges." Karen Thomson, managing director of AOL UK, said: "We believe our new AOL Off-Peak All The Time pricing plan delivers exactly what UK families want: the freedom to go online day or night for the same low Internet telephone access cost. "Now, AOL is not only the easiest service to use, but we also are taking all the guesswork out of the cost of families going online, and all costs will appear on the same AOL bill. "We are able to make this attractive offer because our scale gave us the opportunity to negotiate favourable agreements with our telecomms providers -- savings which we are passing on to our members." In an attempt to recruit more members AOL UK has confirmed that its new user trial will offer 10 hours of subscription and toll-free access to the Net. ®
Tim Richardson, 27 Sep 1999

SDMI juggles to quash copy protection confusion

The Secure Digital Music Initiative (SDMI) attempted on Friday to convince the music and IT industries that its plans weren't in tatters after it emerged the body's scheme for protecting data held on portable music players was hopelessly confused. The SDMI responded with and an announcement that it would soon make an announcement on this issue. At that point, it will reveal exactly what watermarking technology will be used and how that technology can be licensed by consumer electronics companies. The confusion in the SDMI's scheme centres on its plan to offer a two-stage process. The first, Phase I, was supposed to allow players to handle any kind of compressed music file, even the music business-hated MP3. At some point down the line, Phase II would kick in with users being prompted to upgrade their machines (presumably through a downloadable free firmware patch) to support SDMI-compliant music tracks. Phase II devices would continue to play old music files, again MP3 files would be included, but would reject pirated versions of SDMI-compliant files. So far, so good, but some SMDI members apparently wanted the Phase II screening to be built into Phase I systems, replacing Phase I's planned 1-bit switch -- is the track pre or post-Phase II? Yes or no? -- in the file header with a 3-bit watermark system that allows music publishers to specify rules for what the user can do with the content. Typically, the rule is 'no copies allowed'. In other words, does the SDMI spec. allow compatibility with old, pre-SDMI music files or not? The SDMI originally won the concession from the music industry that everyone should put the past behind them and concentrate on preventing piracy in future -- ie. live with people ripping tracks from existing CDs, but make sure they can't copy upcoming copy-controlled media, such as DVD-Audio. However, the push for a 3-bit system appears to have been an attempt by the music business to get copy protection -- ie. to eliminate MP3s -- back on the agenda. And it seems to have succeeded. The SDMI's Phase I screen will now be 3-bit system, presumably with one bit used as the Phase II detector, and the other two for copy control information. The issue for the SDMI now is to ensure that hardware suppliers who have been building systems based on a 1-bit Phase I watermark can now rejig there devices to support the 3-bit watermark. It also needs to ensure that they can actually get that technology from Aris Technologies, the company supplying the 3-bit system, which, of course, was originally assumed not to be needed until the Phase II timeframe. Aris' system is also the basis for DVD-Audio content protection. The SDMI is now saying the 3-bit technology "will be made available under a licence for shipping after 1 October" -- with an "it is anticipated" caveat. The SDMI isn't going to ratify the licensing procedure and costs to licensees before 19 October, the date of its next meeting. That's cutting things very fine for the SDMI's oft-stated schedule of getting everything ready for manufacturers to ship SDMI-compliant devices in time for Christmas 1999. Arguably, the whole two-step process was a fudge to ensure that some degree of SDMI compatibility could be offered by the end of the year, but it's now looking like that very time-saving approach, and the confusion it has caused, will cause the deadline to be broken. ®
Tony Smith, 27 Sep 1999

City goes to work on a £3bn Egg

Egg, the Internet banking arm of Prudential, could be worth more than £3 billion post IPO, valuing it at an astonishing £6500 per customer. The Pru, the UK's biggest life assurer, has appointed Goldman Sachs to advise on the IPO, slated for the first half of next year, according to Sunday Business. Launched in October last year, Egg has signed up 550,000 customers and taken £7.4 billion in deposits for its direct banking service, by the simple expedient of offering much better interest rates than its rivals. On average, each customer holds £17,000 on deposit with Egg, compared with £3000-4000 for building society customers. But better rates come at a hefty price for heavily lossmaking Egg. Nevertheless, the Pru is so heartened by the first year performance that that it is increasing next year's investment in Egg to £140-£150 million, up from £69 million this year. Egg is seeking 2.4 million customers by 2004, and expects to break even in 2001. Last week, Egg launched an Internet credit card and an online shopping mall in which customers earn an extra one per cent cash back on their purchases from 80 retailers. Egg is also launching an "online unit trust supermarket", according to Sunday Business. Egg is not a pureplay Internet bank. In April, the company forced new applicants to join by the Internet only. But once signed up, customers can continue to use the company's telephone banking service. ®
Drew Cullen, 27 Sep 1999

Taiwan chip makers scramble for spare parts

Taiwan's chip makers are working round-the-clock to repair damage from last Tuesday's earthquake, but many are now scrambling to locate vital spare parts. "I think the main problem now for all the companies in the Hsinchu science park, including TSMC (Taiwan Semiconductor Manufacturing Co.) and UMC (United Microelectronics Corp.) is getting replacements for the broken quartz tubes in the furnaces," said Winbond Electronics assistant vice president, Hander Chang yesterday. Power and water supplies to the park were functioning normally, Mr. Chang said. Winbond is a major manufacturer of DRAM and other chips. The hard-to-find tubes hold partially-completed silicon chips, in wafer form, inside furnaces. Quartz glass is one of the few materials that can withstand the high temperatures required to fix the surface layer of chips, while not releasing impurities; it is also extremely brittle. "They're looking for something like 400 to 500 sets, and I think there's only about 200 sets in Taiwan," said Andrew Lin of Jardine Fleming Securities in Taipei. Finding all the tubes needed might take two to three weeks, he estimated. In press statements, Taiwan's largest chip makers, TSMC and UMC said that a significant proportion of chip making equipment was functioning normally, 50 per cent at TSMC, and 90 per cent at UMC. It was not clear if these figures indicated production capacity, however. Industry sources said that a small proportion of damaged equipment was causing bottlenecks at most chip makers. UMC has allocated NT$300 million to replace damaged equipment, including quartz furnace tubes. The company estimates the quake will reduce its revenue approximately 25 percent this month. "I think about 30 to 40 percent of our production capacity has been recovered," said Celia Yang of DRAM maker, Powerchip Semiconductor. "We are waiting for the most important part, the quartz tube. Actually our senior vice president has gone to Japan to inquire about the supply." Powerchip has a private power supply, Yang said, allowing the company to commence repair work earlier than most of its competitors in Hsinchu. If Powerchip is able to quickly find all the spare parts it needs, production should be back to normal at the beginning of October, she predicted. ®
Simon Burns, 27 Sep 1999

Official: Microsoft doesn't know which Millennium it is

Confusion over Microsoft's on/off Millennium Beta 1 announcement has echoed around the Web over the past couple of days, but that's scarcely surprising, considering how confused Microsoft itself is about it. Microsoft announced Beta 1 accidentally (MS announces Millennium beta by mistake) on Friday, then rapidly pulled the release. It was, apparently, a mistake, and Redmond had only meant to send out the routine weekly build of Millennium, and not issue a press release at all, honest. But if you turn to the original release, which you still can, thanks to Paul Thurrock of WinInfo (Escaped beta release), you can see how awesomely confused Microsoft really is. Tear down to the bottom of the bulletin, to the links to other information, and look at the one that says Millennium promises to revolutionise computing as we know it. Doesn't sound like it's what you'd expect from an operating system that's intended to be a rev of Windows 98, does it? Matter of fact, it doesn't sound like an operating system Microsoft has the slightest chance of shipping this side of doomsday either. Those in the know are of course aware that there are two projects within Microsoft codenamed Millennium. One of them is the next generation/iteration consumer operating system developed on the Win9x base, and the other is the space cadet distributed OS research project that Microsoft Research announced in March. One might of course observe that whoever was responsible for codenaming the Win9x project "Milennium" obviously wasn't in the know, but considering what Microsoft Research has come up with so far in the way of shippable product (not a lot), it's probably understandable that hardly anybody on the operational side pays much attention to what it's up to. Whatever, it appears that whoever was responsible for putting together the Millennium Beta 1 press release just did a quick search and grabbed a pile of stuff about anything called Millennium, without actually reading and understanding it first. Still, as the release itself was apparently only an alpha, it'd be unreasonable to expect heads to roll. ®
John Lettice, 27 Sep 1999

Apple preps standard, special edition iMacs

Specifications for the next version of Apple's iMac continue to emerge on the Web, with the latest specs. coming from Mac-oriented Web site Apple Insider. With so many attempts to nail down just what Apple's next iteration of the iMac will contain, it's hard to be sure what's real and what is arguably clever obfuscation put out by Apple spin-meisters -- the difference between a leak and a company-sponsored leak is very narrow. However, some consistencies are beginning to emerge. AppleInsider's latest iMac spec. features a basic model derived from the current machine. Instead of a new, 17in display, we have a 15in CRT screen but with a larger viewable area. That's in marked contrast to recent reports that the next iMac would feature LCD an LCD screen -- a neat idea, but one that fails to take into account the current shortage of LCDs. According to AppleInsider, Apple will offer three versions of the new iMac. The first will ship with a 350MHz PowerPC 750 (aka G3) CPU, CD-ROM drive (apparently a tray-less model), and will be available in a single colour, blue. The site doesn't offer memory and hard drive specs. The second model will come in the five colours of the current iMac, sport a 400MHz G3, tray-less DVD-ROM drive, 64MB RAM, 10GB hard drive, 2x AGP Rage 128 graphics card, two USB and two FireWire (for the first time on the iMac) ports, 56Kbps modem, 10/100 Ethernet, AirPort radio networking support (via a slot for the AirPort add-in card) and, oddly, video out and two headphone socket. The third configuration ups the RAM to 128MB and the drive size to 13GB and comes in the Power Mac G4's silver colour scheme. While we can neither confirm nor deny what AppleInsider's sources have suggested, we're a little concerned about the number of models this latest spec. entails. There are seven machines in all: one 350MHz model, five standard colour 400MHz and the silver 400MHz machine. Apple had a tough time getting its channel to handle the five colours of the current iMac -- and they were all the same machine. Increasing the number of colours to six and offering multiple hardware specs. strikes us as a distinct step away from the original iMac's 'keep everything simple' approach. Indeed, having three configurations doesn't mean three configurations will ship. It's perfectly reasonable to have the five-colour version as the main release replacing the current iMac line-up, with the silver version perhaps being offered either as a limited edition model or as a demo model for shows and showrooms. The 350MHz version could well be a cut-price, diskless release aimed at schools who want to hook up cheap terminals to a NetBoot MacOS X Server system. Whatever the plan, it's certainly hard to imagine Apple putting all of these models out in the main retail channel, if only because the whole point of the iMac is that it's cheap to make, and if you start offering too many configurations that advantage is soon lost. ®
Tony Smith, 27 Sep 1999

Bill Gates is more important than the Pope

If power is an aphrodisiac, there's little wonder Melinda Gates always has a smile on her face. In a survey of the people who exert the greatest influence over the UK, Bill Gates weighed in at number two. The Microsoft founder beat media mogul Rupert Murdoch, who came in at number four, and home secretary Jack Straw, who netted only 12th place. Top of The Sunday Times Power List was our very own PM, Tony Blair. Among the IT heavyweights listed were Barclay Knapp, CEO of NTL, and Sir Stanley Kalms, Dixons chairman, at numbers 16 and 58, respectively. Amazon.com CEO Jeff Bezos was 13th in the survey, miles ahead of the Queen. The telecomms world was also well represented, with BT CEO Sir Peter Bonfield and Colt Telecom CEO Paul Chisholm both in the top 40. Chris Gent, Vodafone CEO, secured a position in the top 100, beating both David Beckham, Posh Spice and the Pope. The Sunday Times appointed a specialist team to assess those most influential on the nation over the 12 months from September 1998. The survey looked at who had fulfilled their contracts or done their duty, people's personal reputations, the outcomes of their decision making on the year's most critical issues, and their cultural power. A full list of The Sunday Times' list of the 100 most influential people in the UK can be found here. ®
Linda Harrison, 27 Sep 1999

UK system builder in a right Mesh over i820 delay

Ever had the feeling that the left hand didn't know what the right was doing? London-based system builder Mesh today (Monday) announced the launch of an upgrade to its Elite range of PCs. Nothing unusual about that -– PC builders often announce that they're updating existing lines. Except that in this case the new line was meant to be based on the Intel i820 chipset. This infamous chipset was delayed indefinitely today, its launch date, by Intel. Mesh said it was only informed this morning that that the i820 had been withdrawn. Paul Kinsler, Mesh general manager, said he first found out about the delay from The Register. Needless to say, the upgraded i820-based Elites will not be putting in an appearance after all. ® Related stories Cam in no 820, your time is up What the hell is...Camino and Rambus all about Intel comes clean over i820 delay i820 derailed as Intel goes Rambust
Linda Harrison, 27 Sep 1999

Acer follows TSMC's lead with quake fund donation

Taiwanese PC and components giant, Acer, is to donate US$625,000 to the relief fund set up in the wake of the earthquake which devastated the island last week. While Acer anticipates it will be back in full production this week, it is looking for employees to dig deep to help boost disaster relief funds. In a statement issued today, Stan Shih, Chairman and CEO of Acer said: "The earthquake caused extensive damage and trauma to those who have lost their homes and families. "Acer extends its deepest sympathies and shares the victims' sorrow for this terrible tragedy. We are pleased to contribute $625,000 towards the rescue and recovery operations." ®
Sean Fleming, 27 Sep 1999

Unfinished monkey business

Howletts Zoo opened the bars to its new Web site today -- three weeks after it had to postpone the launch because the animals had eaten the cables and trashed the Web cams. The site allows animal loving Net users to roam virtually around the animals' enclosures seeing at first hand how wild animals live in captivity. Six colour Web cams show a number of rare and endangered species including the world's largest captive gorilla colony. Other animal attractions include African elephants, Siberian tigers and bongos -- a species of antelope. ®
Tim Richardson, 27 Sep 1999

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