3rd > July > 2001 Archive

Component price collapse takes toll on Bell Micro

Lower than expected sales "in all geographies" has propelled Bell Microproducts into a second quarter loss. In a preliminary report, the US-owned distie said it made an operating loss of $1.8m on sales of approximately$450 million. Sales were up 18 per cent on Q2 last year, but down 16 per cent on Q1's $534 million. The company estimates that half of the sequential fall can be attributed to declining ASPs (average selling prices) in computer components - disk drives, semiconductors, peripherals etc. Prices of some volume commodity products declined approximately 15 per cent during the quarter, the company says. On the bright side, Bell Microproducts' higher margin storage solutions distribution operations continues to bring home the bacon, showing "relative strength" in the quarter. The upshot was an improvement in gross margins from 8.5 per cent in Q1 to 9.2 per cent in Q2, reflecting the different sales mix. Bell Microproducts is taking an axe to its cost base. It plans job losses, warehouse consolidation in the US, and to scrap distribution contracts with 25 vendors, accounting for sub-one per cent of sales. The company has not announced what if any cost-cutting activities will take place at Ideal Hardware, its biggest European subsidiary. ®
Drew Cullen, 03 Jul 2001

Sony pulls PlayStation 2 production from Taiwan

The US and Japanese governments have demanded that Sony abandon its plan to outsource PlayStation 2 production to Taiwan. The reason? The console could be used for military purposes. So say sources cited by Taiwanese Web site DigiTimes, which also claims Sony has complied the with requests, halting contracts with local manufacturers Asustek and Acer. DigiTimes' sources are almost certainly from within one or both of those companies. Both manufacturers were due to begin shipping PlayStation 2s to Sony this month, with a plan to ramp up production to 300,000-400,000 consoles per month. The two governments' problem with the PlayStation 2 apparently centres on its DVD functionality. We're not sure how allowing co-called rogue states to watch Little Mermaid 2 will bring down Western Civilisation as we know it, but there you go. Or perhaps the DVD spec's Content Scrambling System provides the bad guys with too much crypto power? That would certainly put an interesting spin on the movie industry's attempt to suppress CSS decoding applications, specifically the open source DeCSS utility. Over to you, conspiracy theory wonks... In any case, some dodgy regimes already have PlayStation 2 technology. Late last year it was reported that Saddam Hussein had already ordered 400 PS2s, though whether for military applications or as gifts for the despot's large family isn't known. ® Related Story Iraq buys 4000 PlayStation 2s in world conquest bid Related Link DigiTime: Sony halts PS2 outsourcing to Taiwan
Tony Smith, 03 Jul 2001

DiData waves profit warning flag

The only question is: what took it so long? Dimension Data, the giant networking equipment reseller, issued a profit warning today, citing tough market conditions in the US, the UK and Germany - where it is "predominantly product-led". The company says it will speed up the transition from being a mostly product reseller, to becoming a mostly services-led business. The acquisition of Proxicom, the loss-making US networking consultancy snatched earlier this year from the jaws of Compaq, is cited as a key component of this strategy, which is expected to feed through into company's results in the next financial year. Dimension Data is one of the world's biggest Cisco resellers. When Cisco's sales are falling so precipitously - and other networking equipment vendors too - how could DiData be immune? The channel is awash with almost new networking kit - released at rock-bottom prices through liquidation sales of bust ISPs and CLECs. There is still some inventory overhang - and there is next to no new business. It may take another two or three years before networking equipment sales recover to their 2000 levels. It's never been a better time to be an active buyer - buy new, buy cheap and drive down those ludicrous maintenance charges. And while you're at it, negotiate hard on the consultancy fees as well. ®
Drew Cullen, 03 Jul 2001
Broken CD with wrench

State nixes GPS highway robbery

A lucrative scam run by a greedy auto rental agency called Acme Rent-a-Car of New Haven, Connecticut, whereby drivers were "fined" for exceeding speed limits in cars equipped with global positioning system (GPS) receivers, has been shut down by the state Department of Consumer Protection. The enterprising Acme included in rental contracts the stipulation that its GPS-equipped cars "driven in excess of posted speed limits will be charged a $150 fee per occurrence." The company then happily screwed its customers out of thousands of dollars, essentially fining them for putting pedal to metal though no harm had been done to their property. "There is no legal ability for them to charge a penalty when there has been no damage," Department Commissioner James Fleming said, quite rationally. The Department is rewarding Acme with a cease-and-desist order prohibiting it from charging customers for speeding, and by requiring it to make restitution to the twenty-five or so consumers who have thus far been robbed. Well done. Now, if we could just apply the principle of no harm = no foul to the criminal justice system.... ®
Thomas C Greene, 03 Jul 2001

Intel to launch first Xscale in September

Intel will unveil a new processor based on its ARM-derived XScale architecture in September. And the chip giant may have signed up Palm among its first major customers. The chip will ultimately take the chip's speed up to 1GHz, the chip giant's Taiwan subsidiary said yesterday. However, the version that's expected to be launch in September will run at just over 300-400MHz. Intel's current generation of ARM-based CPUs, the StrongARM family, run at 206-300MHz. That's around twice the speed of the ARM-based Dragonball MX1 Motorola intends to put into production during Q3, so it's no wonder that Palm, which has discussed taking its OS over to the ARM architecture as part of its next major revamp, might well be considering a move to Intel. Taiwanese industry sources yesterday reiterated rumours that Palm is indeed planning to switch to XScale. Such claims have been circulating for some time. ® Related Stories Palm looks to Intel for next CPU? Motorola unveils 200MHz ARM-based Palm processor
Tony Smith, 03 Jul 2001

Tiny Computers ditches AMD

Tiny Computers has ditched AMD to become a 100 per cent Intel-based system vendor once again. The company made the decision on 28 May and has since sold off all its remaining AMD Athlon based boxes. Tiny introduced Athlon and Duron machines in September 2000. Colin Greene, Tiny UK's marketing director, said the decision was made on the strength of Intel's roadmap. "It seems to be a very strong roadmap going forward. The P4 is a very strong product." What does this say about AMD's roadmap then? Why doesn't Tiny continue selling systems built around both vendors chips? "We could do both," said Greene. "We feel we just get better strength going with just Intel." Intel was certainly upset when Tiny introduced Athlon machines to its range, and there's no doubt it put a particularly persuasive deal together to get Tiny to be faithful. An offer it couldn't refuse. Richard Baker, AMD's European marketing manager, said the move was "part of the pendulum of doing business. We hope to be working with them again." ® Related Story Tiny goes AMD
Robert Blincoe, 03 Jul 2001

IBM Global Services lays off 1,000

IBM's Global Services group is laying off 1,000 people who don't have the necessary skills to develop its business. Despite the involuntary redundancies, IBM will continue to hire people and a spokesman for the firm told the Wall Street Journal that the layoffs are no indication of the current health of its business. Last year, IBM hired 19,000 people to work in its Global Services consulting arm but still made 1,000 people redundant in May, the paper reported. "Periodically we do a review of people we have on board, resources and skills, what clients are asking for and what we think future needs are," a spokeswoman told the WSJ. The people being laid off didn't have the skills Global Services needed in its business, she added. Decisions of who will lose their jobs will be made locally and reports suggest the layoffs will take in Europe and other locations around the world, as well as the US. Those who lost their jobs will be able to apply for other positions in IBM. Global Services employs around 150,000 people, approximately half of who work in the States, and brings in around a third of IBM's revenues. IBM's combined workforce is around 315,000. Unlike the PC and networking markets the services market has emerged through the recent slowdown in the tech economy relatively unscathed. ® Related Stories IT services firms should be 'boring and profitable' 180-day plan to transform Compaq into services behemoth IBM performs as expected; shares up
John Leyden, 03 Jul 2001

Chris Gent's generosity continues – for himself

Chris Gent's generosity knows no bounds. Having announced a massive share option scheme for Vodafone staff yesterday, he promptly treated himself to the same. And just to deflect claims he was going soft, this immodest man awarded himself a disproportionate amount of shares. Eight million of them. Which, at the price of 157.5p, amounts to a tasty £835,000. But then he's going to need them - his current shareholding in his company is worth half what it was this time last year. You can't expect him to live like a pauper. Besides, the £10 million he awarded himself for pulling off the Mannesmann deal has already gone on furnishings. More interesting Gent finance factoids: under a previous deal, he will get another million or so shares at 151.5p; since Vodafone's share price went up by 10p yesterday, he has made £1.1 million in the last 24 hours; he earns just under £7 million a year for his work as CEO. Nice work if you can get it. Despite some crazy people suggesting that the award was a little excessive, the company gave a perfectly reasoned argument: "These options were approved at the last AGM," said a spokesmonkey. And of course they are reliant on him meeting performance targets. Which, er, he and his directors kinda decide themselves. Imagine the fattest cat you have ever seen. Now think Jumbo Jet. ® Related Story Vodafone employees get vast share options
Kieren McCarthy, 03 Jul 2001

Hynix warns it may cut chip production

Korean chipmaker Hynix Semiconductor has warned that the current downturn in the IT industry may force it to reduce manufacturing. "As the situation is bad we could consider (cutting production)", a Hynix spokeswoman told Bloomberg. "We understand other companies are also considering cuts," she added. Korean semiconductor makers, which account for around 40 per cent of world chip production, last reduced production in 1998, when they closed their factories for two weeks. As a result, supply stopped outstripping demand and prices increased. Bloomberg reports that every time chipmakers have cut production it has resulted in sharp price rises for memory chips. Hynix rivals Samsung Electronics and Micron Technology said they did not plan to chop manufacturing. Meanwhile, IDC expects chip sales to fall by more than 40 per cent in 2001. Last month Hynix announced it would convert two of its SDRAM production lines in Inchon, South Korea, to make DDR chips. The company, which is also trying to separate itself from parent company Hyundai, said it aimed to grab half of the DDR SDRAM market by the end of the year. ® Related Link Hynix May Trim Chip Production as Prices Tumble Related Stories DDR won't dominate until 2003 - Infineon Hynix profits plummet
Linda Harrison, 03 Jul 2001

Systems Union touts reverse profits warning

Systems Union Group, the UK supplier of mid-range accountancy software systems, is doing better than analyst forecasts. In a trading statement issued today, the owner of the SunSystems and Pegasus brands, said half-year profits before EBITDA will be "well in excess of £1 million". It has also banked a £1.5m profit from the sale of surplus property and its cash position at 30 June 2001 is up £4m to £14m. The group says that SunSystems has "turned the corner and is achieving excellent results". And Pegasus Software, its more downmarket operation, is "trading profitably with some 500 orders received for Opera II." ®
Drew Cullen, 03 Jul 2001

Napster still down

Napster's music sharing service remained unavailable this morning as the company struggles to implement the latest version of its software. Napster shut its service down yesterday. It said the suspension was temporary pending upgrades to the company's music databases. The shutdown follows the release of new Napster client code that not only implements the company's latest copyright protecting technology but deliberately breaks backward compatibility with earlier and unofficial versions of the software. The database upgrades are designed to add the audio fingerprint technology Napster hopes to use to block the transfer of copyright material it is not authorised to allow to exist on its network. Unfortunately, Napster seems to have also blocked material it is allowed to distribute. Hence the last-minute upgrades and the resulting shutdown. To avoid further legal entanglements - the company has already been chastised by the US District Court for its tardiness in implementing a successful file-transfer blocking system - Napster seems to be implementing an inclusionary rather than exclusionary system. Napster has not said when normal service will be resumed. ®
Tony Smith, 03 Jul 2001

UMC to put chip plants in stasis

UMC is preparing to suspend production at two 8in fabs while demand remains depressed. However, the company told employees that none of them will lose their jobs as a result of the move. And in a letter to the workforce, UMC chairman Robert Tsao encouraged staff to remain confident in the company's ability to cope with the downturn. Tsao's message to the troops is reminiscent of wartime leaders' pronouncements to the home front: just keep your chin up, and it'll be all over by Christmas. Tsao also said he would be dipping into UMC's NT$80 billion ($2.33 billion) cash reserve to prepare itself for the chip market's revival whenever it comes along. ®
Tony Smith, 03 Jul 2001

AMD makes up with Alcatel

AMD has settled its legal dispute Alcatel over the latter's attempt to pull out of a Flash memory supply contract. AMD had claimed that Alcatel's move was a breach of contract and having failed to reach a compromise sued the French company on those grounds in April. The two-year supply contract was signed last year. The terms of the settlement, reached out of court, were not made public. However, AMD said it was happy with the outcome and that it looks forward to supplying Alcatel with Flash memory in future. Obviously it got at least some of its supply contract maintained. ® Related Story AMD sues Alcatel over Flash cash
Tony Smith, 03 Jul 2001

Agfa ePhoto CL34

ReviewReview The popularity of digital cameras appears to know no bounds at the moment, with many PC owners trading in their film cameras for digital models. The latest film-free snapper vying for your custom is Agfa's ePhoto CL34, a 1.3Mp (megapixel) unit with a top resolution of 1280x960 pixels. What's more, it can capture short bursts of video and double up as a Webcam. Taken as a basic digital camera, the CL34 presents very little to complain about. It takes reasonable pictures at all resolutions, including the lowest 512x384 mode, has a built-in flash, self-timer and macro modes, as well as offering the option to frame images in either the 1.8in LCD screen or a traditional viewfinder. The trouble is, Agfa pitches the CL34 as being more than just a 'basic' model, going so far to describe it as "superb quality" - something that's certainly not true of the build. The twist-off cover concealing the camera's USB connector socket is appallingly designed; removing it with the turn of a two-pence coin we managed to mangle the slot with next to no force applied. Moreover, as it comes away, it dangles limply from a thread of plastic - ripe for snapping. The CL34 has a CompactFlash slot, but its 2MB internal memory seems mean, and it can store only four images at the camera’s top resolution. Agfa also reckons that the CL34 can be used for out-and-about (low-resolution) video capture, but without a meaty - not to mention costly - CompactFlash card inserted, there would be little point. The supplied software - Photowise 3.0 - is simple enough to operate, and it automatically downloads thumbnails from the camera upon attachment. VideoImpression, another extra, isn't as easy to use and acts as a basic video-capture program. While the Agfa is not a bad camera, there are so many better options that we’d be hesitant in recommending the ePhoto CL34. ® Info Price: £169 Contact: 020 8231 4903 Website: www.agfa.co.uk Specs 1.3Mp CCD (1280x960 max resolution) 2MB internal memory 1.8in colour LCD viewfinder 2x digital zoom This review is taken from the August 2001 issue. All details correct at time of publication. Copyright © 2001, IDG. All rights reserved.
PC Advisor, 03 Jul 2001

Dotcoms still falling like flies

Dotcoms are still falling like flies, with 53 dropping dead in June. This figure, which brought the total so far this year to 330, compares to 17 shutdowns in June 2000. A total of 36 Net outfits shut their doors in the first six months of last year. There has been a steady stream of major dotcom closures this year, with around 50 deaths worldwide tallied each month, according to a report by Webmergers.com. This month's victims include ISP PSINet, which has filed for Chapter 11, and an increasing number of other business-oriented Net outfits. Business to consumer (B2C) companies accounted for 73 per cent of shutdowns during 2000, and 49 per cent in the first half of 2001. In total, 555 Internet companies have fallen since January 2000. Almost a third of these were located in the dotcom heartland - California. ® Related Stories 147 dotcoms die in Q1 Dotcom Death Race 2000 Dotcom job deaths jump in May The first Titsups of Spring
Linda Harrison, 03 Jul 2001

RIP Lotus

Despite IBM's water-tight-lipped approach to queries regarding Lotus, we have fairly conclusive proof that Lotus has finally succumbed to Big Blue's paternal protection and from July will be little more than name. What proof? Well reader Ben Rose has pointed out that all the people he knows at Lotus have started dishing out new email addresses, which, far from ending @lotus.com have opted for the far catchier and slightly more corporate @uk.ibm.com. The modern-day truism: email addresses never lie (well, apart from spoofed ones of course). Interestingly, (purposefully?) all the PR people at Lotus have retained their lotus.com addresses. At the moment anyway. Fill in the conspiracy theory blanks. The sucking in of Lotus into the bigger Big Blue started at the beginning of the year when it announced a "restructuring". It pointedly refused to answer questions on whether that meant the end of Lotus' independence. IBM bought Lotus in 1995 but allowed it virtual free reign to develop its own software products. Microsoft got a little irked with IBM about two years ago, insisting that big deals could only be done if it got rid of Lotus - which was challenging the Beast of Redmond on groupware. IBM refused to budge. Microsoft still hates Lotus. Which, we suppose, is one reason to like it. But now it looks as though it had been swallowed lock, stock and barrel. Apparently it will still have its own sales and marketing teams. So that's alright then. ®
Kieren McCarthy, 03 Jul 2001

Sir Stanley Kalms' Desert Island Discs

Sir Stanley Kalms, executive chairman of the Dixons Group, appeared on the Radio 4 institution Desert Island Discs on Sunday morning. Kalms is preparing to stand down and take a non-executive position with the company at its AGM in September 2002. He'll then be two months short of his 71st birthday and he's spent all his working life building up the high street giant. In fact he might say: And now, the end is near; And so I face the final curtain Well he let Frank Sinatra say it for him as one of his desert island choices. The song which best sums up the position he's reached in life is 'My Way'. If you don't know, the point of the radio show is to choose the eight records you'd most like to have with you if you were stranded on a desert island. Based on his choices, you wouldn't want Stanley to come round and DJ at your party, but he had some interesting things to say about his company. Sue Lawley, the show's host, probed him on Dixons' reputation for aggressive behaviour towards the competition. "You don't have to kill them," said Stanley. "There's plenty of room for others." But what about Dixons' cold, hard, business like approach asked Sue. I did what I had to do And saw it through without exemption. "We are not cuddly. You may not get love and affection, but you get good value and service. I assume customers want to buy that way," said Stanley. Sue also asked about the times when Dixons is accused of not behaving properly. We assume she meant the rap on the knuckles it got for hard selling its warranties. "There'll be moments when someone will not observe the philosophy of the company. We have rules and punishment for those who break the rules," said Stanley, a bit ominously. Have there been times when everything didn't go as well as planned with the rise of the Dixons Group? Yes, there were times, I'm sure you knew When I bit off more than I could chew. But through it all, when there was doubt, I ate it up and spit it out. I faced it all and I stood tall; And did it my way. Three years after going public the company wasn't performing well and Kalms agonised for six months thinking he was a failure. He was 33 at the time and describes the period as a breakdown. "I felt I wasn't a success, but having that breakdown made me much more resilient," he said. Has Kalms ever learnt to delegate? I planned each charted course; Each careful step along the byway, But more, much more than this, I did it my way. "I have learnt to delegate, but I have always been at the centre. I've been the pilot," was his answer. Will the Internet threaten Dixons' market position? My friend, I'll say it clear, I'll state my case, of which I'm certain. "I don't think the Internet is a serious form of business," he said. He feels the overheads are too great, such as customer delivery and IT infrastructure, to support the pricing models of the online firms. "Like all discounters they'll have short sweet lives." How would Sir Stanley manage on a desert island, as he admits he's rubbish at DIY. And may I say - not in a shy way "I'd be the ideal castaway. I'm very resourceful, I'd find a way to be rescued," he said. For what is a man, what has he got? If not himself, then he has naught. To say the things he truly feels; And not the words of one who kneels. The record shows I took the blows - And did it my way! My Way was written by Revaux/Francois/Anka. Sir Stanley Kalms appearance on Radio 4's Desert Island Discs will be repeated on Friday 5 July at 9.00am. ® Sir Stanley Kalms Desert Island Discs Waltz of the Flowers from the Nutcracker Suite by Tchaikovsky La Mer by Charles Trenet Kol Nidre - something a Cantor sings before Yom Kippur The Thieving Magpie by Rossini My Way sung by Frank Sinatra Air on a G String by Bach Beim Schlafengehen sung by Elisabeth Schwarzkopf E lucevan le stelle from Act 3 of Tosca by Puccini Book choice - The Wealth of Nations by Adam Smith Related Stories Dixons confirms Kalms retirement Dixons doesn't dominate UK PC market How does PC World make its money?
Robert Blincoe, 03 Jul 2001

GMTV Mac competition site excludes Mac users

British breakfast time TV channel GMTV has five Apple iBooks up for grabs in a competition hosted by its Web site. The only snag: Mac users who fancy one of the new portables and want to enter online are excluded from doing so. Actually, the compo isn't too friendly to PC users either. Clicking on the appropriate button causes your modem or ISDN line - the only connection methods supported; ADSL and cable modem users need not apply - to drop its connection and initiate another one on GMTV's premium rate line. Dialling in to enter the compo costs 50p. Unless you're a Mac user, of course. Says the site: "Entry is only valid from a home PC (not a Mac) using Internet Explorer." Fortunately, anyone unwilling to pay up - and those who are but aren't allowed to - can post their entry to GMTV Web Competition, PO Box 12789, London SE1 9EW for the cost of a stamp. With each laptop costing GMTV around 935 quid, we reckon the company will need over 9400 entries at 50p a go to pay for the five machines on offer, one each day this week. It's hard to see the company getting them if it insists on shutting out the folk most likely to enter. ®
Tony Smith, 03 Jul 2001

Red Hat guns for MS database space

Red Hat European VP Colin Tenwick called in to the IT-Analysis HQ to fill the company in on the impending launch of Red Hat Database. It seems that the firm is gunning for Microsoft. I understand you've got a database coming out, can you tell us a bit about it? The database will be shipping on July 10th. In essence it is another fillip to the Red Hat architecture, it's open source (based on the PostgreSQL database) and offers a whole range of advantages to organisations wishing to deploy a database solution. We have ventured down this road because we see an opportunity to take our disruptive business model into other tiers of the technology architecture. It simply made a lot of sense for us to move down this route. So how will this compare with other offerings in this space? It will compare very favourably. Organisations will be able to take the Red Hat Database and implement it into their departments and draw their own comparisons with current proprietary solutions and I think they will be very pleased. Why so pleased exactly? The reasons for buying a Red Hat Database are very compelling. Our unique selling point is based around the open source principles and the considerable cost benefits that can be experienced by making such a choice. Add into that the global support that we provide and Red Hat Database is a very strong solution. But will that convince serious businesses to buy the product? I think it will, yes. We are increasingly seeing technologists at all levels of the business, and through all levels of business, making the philosophical decision to follow an open source path. They are having that debate with themselves - do they go open source or stick to proprietary - and we are winning a great deal of mind share. But the philosophical argument is only a part of the proposition. The economics of the Red Hat Database quite simply make a lot of sense. We offer a very low total cost of ownership, an open source GPL and a subscription model that makes the price package very reasonable indeed. We estimate that we will coming in at around 25% of the cost of proprietary solution and that gives organisations a very attractive, cost effective, route into open source. So you're going head to head with Microsoft? Certainly we will be operating in a very similar space to Microsoft yes. But that isn't our target market just yet. We have a product that is perfect for departmental use, anything less than 100 seats essentially, and we will be looking for wins in this space. The first people that we will be targeting will be the existing Linux and open source users. We already have a customer base of thousands - everyone from current Red Hat users to Apache users. After that we will be looking to scoop up some of the migration from SCO and, particularly, Solaris. We see more and more people migrating from the proprietary Unix systems and, once again, we can provide them with a very cost effective solution. We are uniquely placed in this market in that we have absolutely no reliance on Microsoft whatsoever. That means we can come to market with innovative solutions that challenge existing beliefs and offer organisations new opportunities. There has been an awful lot of very hard work gone into this solution. And it continues as we speak through open source and our own dedicated development team, which was about 10 or 11 last time I looked. Presumably a great deal of the success of the database is going to be inextricably linked to the VAR community. But that means going up against the likes of Progress, IBM and Oracle. How are you going to manage that - this lot have invested very heavily in the VAR community? The success of any database is, in many ways, linked to the availability of applications and we will be launching a number of initiatives to target the VAR community. Already though we are making gains and have gathered a lot of support. Our argument is simple, developers need scalable, robust, strong solutions that are cost effective. That is precisely the solution that we can offer - and that is already swaying the VAR's. And Oracle and IBM? To be honest I don't think these two have got a lot to fear. We've obviously had conversation with these two and especially IBM and they have known about this release for some time. However, we were never going into their space. If you look at DB2 for instance they operate in the top tier enterprise space, we will be operating just below that. I think what you will find is that our database will provide a very attractive upgrade path for users moving from departmental to enterprise databases - it certainly makes a lot more sense than a proprietary solution. But what about the Informix solutions? Again, I don't think that there is very much overlap between the products. Do we take it then that Oracle and IBM are using Red Hat as a stick to beat Microsoft? I think it is fair to say that we are being successful against a number of things. At the top end we are beating proprietary Unix solutions, especially Solaris, and becoming a very attractive platform for people looking to standardise their architectures. At the low end we are undoubtedly slowing down the penetration of NT. The desktop is Microsoft's. But when it comes to servers and workstations we are making a lot of wins. All of this does mean that we are seeing a lot more focus and more partnership opportunities from IBM; if that hurts Microsoft so be it. We noticed that your recent financial results were well received. Does that mean Red Hat is maturing as a business, or that it has figured out how to manage the financial analysts? The results showed that we can profitable and cash flow positive. We've beaten the financial analysts for the past seven quarters and we are showing that this open source movement works. We have major companies buying into this movement and that justifies the hard work and justifies the principle of open source. Further to that though, it shows how well this company is being managed. When we started this company we took the view that to be successful we need experienced managers and that is a principle we stick to. We are making money, we are making contract wins and, step-by-step, we are making major gains in this industry on the basis of a whole new business model. It is of course worth bearing in mind that we are going up against some of the most successful companies the world has ever seen, but that hasn't stopped us so far. So where do you see Red Hat nowadays? The launch of the database suggests a possible new approach - now you have the perfect infrastructure for applications, can we expect Red Hat Office on the horizon? No. We have no ambition to do that. Certainly we know that it is a hugely successful area, as we have seen with Sun's recent StarOffice win in the Department of Defense, but we already support a number of suites. Overall Red hat is working its way around the architecture. To date we have the compiler technologies, which we acquired from Cygnus, the operating system and now the database - as well as plenty of other solutions. Further to that we've got the Stronghold security solution, from C2, which is actually doing very well indeed. We've found a lot of the European financial institutions turning to this for their needs. And of course we've got the Red Hat network (the electronic maintenance and testing suite) which holds the whole thing together, providing pivotal support for all of the Red Hat solutions. But we do still see gaps in the technology architecture that need addressed. Such as? The general file system (GFS) is something that we believe could do with some work. GFS could do with a solid open source solution and we are working very hard on this. We already support a number of GFS but we may look to develop or support further initiatives over time. It's certainly an area we are looking at very closely. But what about the future of Linux as a whole. We read an interview recently where Linus Torvalds said it is still very much a hobby for him. Is that a good message to be going out to would be business users? I think Linux is very much a hobby to Linus, but that doesn't mean it is for everyone else. You have to remeber the structure of the developments. Beneath Linus there are ten core maintainers, seven of which work for Red Hat. Beneath them there is perhaps another 100 and beneath them you get into the tiers of thousands of maintainers. This means that Linux is just about Linus anymore, he is undoubtedly a critical figurehead, but developments on Linux are enormous. There are very strong development teams out there working on Linux, and I really do mean exceptionally strong development teams. There are companies that have Linux now so engrained in their organisation, and the activities of their developers, that it really is a very serious environment. © IT-Analysis.com. All rights reserved.
IT-Analysis, 03 Jul 2001

Unicode bug restyled as DoS tool

The infamous Unicode IIS Web server exploit can also be used as a denial of service attack tool. Gray hat hacker Big Poop has published a site on the Internet explaining how the Unicode bug, which permits the execution of commands on a Web server, can be used to tie up system resources so that legitimate users can't access a site - a classic DoS attack technique. Mark Read, a security consultant at MIS Corporate Defence Solutions, who has reviewed Big Poop's site, said the exploit works by running up a number of processes on a server that do not terminate, such as comp.exe (which will wait indefinitely until the filenames of files to be compared are entered). "Since the program doesn't terminate, IIS keeps the connection open assuming that something is going to be passed back to the browser," said Reid. "After so many connections though, IIS will stop any further connections in an attempt to stop the server from crying itself to sleep." The exploit would give a s'kiddie a good chance of bringing a Web server exposed to the Unicode bug down to its knees using a web browser and a simple three part procedure (which we won't publish here). Restarting a machine will, at least, interrupt (if not curtail) the denial of service, but the issue still gives serious cause for concern, particular given how easy it is to exploit. As Big Poop said: "If you still don't get it [the exploit] give up hackin' cause it ain't going to get any simpler, maybe relax and play the classic old school game chuckie egg, you know it makes sense. "I don't think you are going to find an easier DOS attack for a while, well not until WindowsXP comes out anyway," he added. Some security experts said the Unicode DoS attack, which can be automated through the use of scripts, is "more efficient" that more familiar network-based DDoS attacks, which commonly rely on installing Trojan horse programs on a range of compromised "zombie" clients. Under the control of a cracker, these zombies then fire off a batch of spurious commands against target servers with the intention of making sites unavailable. Despite the possibility of mounting denial of service attacks on vulnerable servers using the Unicode bug, MIS's Read still reckons s'kiddies are still more likely to deface a site than mount a denial of service attack against it. "This is a DOS attack, but to be perfectly honest if the sys admin hasn't applied the patch for the Unicode vulnerability then it goes without saying that the server is going to be wide open," he said. ® External Links Patch to fix Unicode exploit CERT advisory Related Stories Yet another IIS exploit reported Intel hacker talks to The Reg MS hacked once, twice, three, FOUR times
John Leyden, 03 Jul 2001

Web proves New Labour has turned back on socialism

Here's a new use for the Internet and Web sites - an efficient lie-detector for politicians. You won't have failed to notice that the Labour party, sorry New Labour party has become a little more right wing than it used to be. Hence the word "new". Of course, it has never been daft enough to say it is turning its back on Marx and socialism - it's just done it and managed to pull off a second Labour term for the first time ever. But it you wanted proof that New Labour no longer holds these beliefs, you need only visit its Web site and ask. As such, we taped in Labour's URL, went to the search engine and asked about Marxism. This was the result: Proof, were it needed, that Tony Blair is a reincarnation of that mad old bat Margaret Thatcher. ®
Kieren McCarthy, 03 Jul 2001

Checkpoint Software misses sales expectations

Check Point Software has announced its Q2 sales have missed expectations. The firewall firm said revenue for the period ending 30 June was $140 million to $142 million, below the predicted $149.5 million. Sales for the period a year earlier were $90.7 million. The full results will be posted on 23 July. Maybe its sales were affected by the arrival of Finnish security firm Stonesoft. Stonesoft has lodged a complaint to the European Commission alleging Checkpoint Software has abused its dominant position in the firewall software market. The pair were partners until March this year when Stonesoft released a software firewall and VPN product, which competed head-on against Checkpoint products. ® Related Stories Checkpoint 'abuses dominant position'
Robert Blincoe, 03 Jul 2001

Intel ships 1.8GHz P4, 900MHz Celeron

Intel released 1.6GHz and 1.8GHz Pentium 4 processors yesterday as we'd been expecting for a while and the company broadly signalled last week. The chip giant also shipped a 900MHz desktop Celeron and an 850MHz Mobile Celeron. The two P4s are priced at $294 and $562, respectively, in 1000-unit batches. The 1.8GHz price point is the one we had down for the forthcoming 2GHz part, so expect the 1.8GHz part to fall rapidly when the faster chip ships. Essentially, Intel is charging a premium for the top-speed CPU - having hacked back P4 prices so much last April, it needs as much margin as it can make. How keen punters will be on a part that will soon be superseded by a faster chip at the same price remains to be seen. We should say that as yet we can't confirm that the 2GHz chip will be priced at $562 and not higher. The 900MHz Celeron comes in at $103, the 850MHz mobile version at $134. ® Related Stories Intel speeds Pentium 4 ramp with 1.9, 2.2GHz chips Pentium 4 to be upped to 1.8GHz on 2 July Intel Tualatin to replace Coppermine, fast Intel's Mobile Roadmap
Tony Smith, 03 Jul 2001

Broadband Britain: the inside truth

Who would want to be in Peter Radley's shoes today? In the FT yesterday the Government advisor and head of Alcatel UK aired his views about the future provision of broadband services in Britain. He said nothing new in his suggestion that broadband infrastructures - be it DSL, satellite, cable or wireless - could be run by just a handful of companies. After all, the capital costs of creating and maintaining such huge networks exclude all but the most committed players. Competition, he said, would occur with different companies employing different technologies providing broadband services directly to consumers. He told the FT: "Maybe for any specific infrastructure there would be only one or two players. You can argue about monopoly or duopoly, but what matters is competition at the retail level." Today, the FT rounded on Mr Radley warning the Government to ignore any move to a monopoly or duopoly. "Mr Radley's comments should not be a blueprint for wider broadband policy," said the FT's leader column. "Tony Blair's government has been a vocal champion of competition in the broadband market. So far, it has had little success. If Downing Street now adopts Mr Radley's faith in regional monopolies, it will look like policy-making after the fact. The government will appear to have caved into BT." "...endorsing a national policy to create a handful of broadband champions smacks of old-style industrial policy. In the interests of consumers, government should still be seeking a competitive market, not monopolies," it said. Unfortunately, the premise of the FT's argument is flawed since Tony Blair's government has not been a vocal champion of competition in the broadband market - only part of it. Instead, the Government has concentrated its efforts almost exclusively on seeking competition among the provision of DSL services over fixed lines. As the FT quite rightly points out, local loop unbundling (LLU) has failed to deliver the promise of competition. Foot-dragging, obfuscation, bureaucracy and high costs - courtesy of BT and Oftel - have helped to reduce the number of operators interested in providing DSL services direct to consumers from 30, to under ten, with some of the biggest names in the telecoms industry throwing in the towel. The current cash problems at Redstone and the decision to call in the liquidators at OnCue last week is yet more proof for those who believe that LLU in Britain has been little more than a costly mistake. Mr Radley's comments effectively acknowledge this. As someone charged with coming up with proposals and solutions for the broadband problem, Mr Radley and his other advisors in the Broadband Stakeholder Group would be remiss if they failed to examine other avenues of thought, even if these were seen to be politically backward by some observers. However, this is not the case. If broadband services were only delivered via one technology - ie DSL - then Mr Radley's critics would have a point. Except that DSL is not the only broadband technology on offer. The choice for consumers shouldn't solely be about a choice of DSL providers. It should be about choice of broadband services - whether it be satellite, wireless, cable or DSL - and which of these offers the best value for money. After all, once BT has finished the planned upgrade of its exchanges in September, by its own admission 40 per cent of the UK population will live outside a DSL-enabled area, unable to get broadband. What choice do consumers have then? Last week Tiscali announced it would be launching broadband services over satellite in the autumn. Dutch company, Aramiska , will announce details of its satellite offering later this week. Apart from the fact that both these services are not hamstrung by geographical limitations, once up and running both will be providing competition against the cable companies and providers of DSL. Companies such as Reading-based Tele2 are beginning to offer broadband services using its fixed wireless broadband network. As these technologies and sub-sets of the broadband market develop so too will consumer choice - and with it, competition. Are we really expected to believe that if BT operated a monopoly of fixed line DSL services, say, it would keep its wholesale prices artificially high - even though it might be undercut by broadband over satellite or fixed wireless? After all, if you take the FT's argument, BT would be a monopoly supplier of DSL services and therefore free to charge what the hell it likes. It would have no need to cut costs. And if, for the sake of argument, it maintained this pig-headed, high-priced monopolistic approach, would not consumers simply move to other, cheaper broadband services? Is that not competition - and the market - at work? Far from expressing an opinion that "smacks of old-style industrial policy", Mr Radley's views show an understanding of the broadband market and a willingness to attempt to solve the broadband problem. When the Broadband Stakeholder Group delivers its findings to the Government in September it will have some interesting issues to report. It will, no doubt, lament at the failure of LLU (although that's not to say that it might not provide an option for the longer term) and perhaps advise that Government intervention is necessary to kick-start broadband. Whatever the outcome, it seems the Government will be faced with some challenging decisions. Faced with a series of difficult scenarios to kick start broadband in Britain, it may even decide that the simplest way out this mess is to ditch its goal for the UK to have the "most extensive and competitive market in the G7 by 2005". It remains to be seen if the Government still has an appetite for broadband. ® Related Stories Broadband start-up goes titsup.com OnCue Dutch co to offer broadband via satellite in Europe Tiscali to launch European broadband service in Autumn Redstone CEO resigns
Tim Richardson, 03 Jul 2001

Steve Gibson picks a fight with Microsoft and The Register

Security consultant Steve Gibson - whose claims that Microsoft's latest OS, Windows XP, will destabilise the Internet we have covered extensively - has posted another DDoS diatribe following a conference call with the Beast of Redmond's security team. In an extremely rare occurrence, however, The Register has been clumped with Microsoft and both received a barracking at his hands [isn't that our job? - Ed]. Well, more precisely Thomas C Greene has been clumped with MS. Claiming that his concerns and complaints about XP have fallen on deaf ears, Steve Gibson states: "and thanks to many other loud and equally security-ignorant voices which are attempting to confuse the industry on this topic, Microsoft shows no intention of responding to this now very visible threat" with part of the text hyperlinked to one of our stories. Which one? Er, that'll be the "Steve Gibson really is off his rocker" story. This reporter (me) extensively covered Gibson's claims that XP would enable huge denial of service attacks over the Internet due to its implementation of raw sockets. This will enable hackers to direct spoofed IP packets at particular sites. The theory runs that since XP will have such a huge uptake with technically illiterate people, hackers will be able to load Trojans onto hundreds of machines and then direct them at will. Hence XP will bring down the Net. Thomas - who does know a thing or two about security - remains utterly unconvinced by this argument however. As he puts it: "malicious kiddies can already take over Windows machines with Trojans like SubSeven and use them for heavy packeting without the owner's knowledge. Raw socket functionality does not in itself make a machine more or less vulnerable to such infection. "Furthermore, malicious operators can already do heaps of packet damage using Windows clients without spoofing. Gibson is right that spoofing makes packets nearly impossible to filter, but filtering isn't the answer to a severe packet attack, as anyone who's had to deal with one can attest." In short, Gibson is "talking absolute bollocks". So, what does Steve have to say about Thomas' comments. Not much, sadly. The inclusion of the story does seem to calm him down however. Starting with a very angry "Microsoft knows nothing about security and are a bunch of idiots" stance, by the time The Register makes an entrance, Steve has put on his reasoned hat and concluded: "Even though perfect security may be - and probably is - impossible to achieve, increasing the difficulty of criminal exploitation is a worthwhile and effective deterrent." So there you have it. Check it out for yourself here. Ironically, we found out about this latest installment from receiving an email from Steve sent to email group "My press friends". ® Related Link Steve Gibson's latest diatribe Related Stories Steve Gibson really is off his rocker Windows XP will make Internet unstable - top security expert Everything you wanted to know about DDoS attacks Security expert waves DDoS white flag Network ICE CTO responds to further BlackICE criticisms Network ICE hits back over Gibson jibes Security expert waves DDoS white flag Everything you wanted to know about DDoS attacks
Kieren McCarthy, 03 Jul 2001

More Easy riders on the domain name storm

Well, it would seem that the Easy Group's attempt to take over domains beginning with "easy" has not found favour with a number of readers who have taken it upon themselves to register "easy" URLs and then email us with the details. As such, we have Matthew Blades saying he has registered www.easylitigation.com (and noting that all other TLDs for this are available). We have Dave Costa registering www.easy-protest.com as a, er, protest. He says .net and .org are also available but he couldn't afford to pick them all up. Why hasn't Easy Group already registered them itself, he queries. Then we have Damien who has registered www.easytodo.co.uk and the patently ridiculous www.easy-awordnotatrademark-pettyurlbullies.co.uk. However, it's not all bad news. Pat O'Shea has been in touch to stand up for Easy Group. Pat writes: "I have recently had business dealing with Stelios and EasyGroup and our efforts in producing a new air travel business product have, I think, been fruitful for both parties concerned. During my negotiations and discussions with Stelios, it emerged that a domain name 'easytransfer.co.uk' was registered in my name, and Stelios and his staff never bullied me into tranfering the ownership to his group, but as any clever business man would, he opted for the amicable agreement between the two parties." Of course the fact that Pat was embarking on a business with Easy Group may make this case non-typical. Would you wish to send nasty legal letters to a future business partner? Well, not at the start anyway. Still others have queried Easy Group's efforts. Will it go for www.easypic.com? Not only is it obviously trading under Easy Group's name but also has the audacity to offer hundreds of snaps of women with little on under headings like Cheerleaders, Housewives and Toys. And then another reader questions whether once Easy Group owns all domains beginning with "easy" whether it will move onto all domains starting "ez". Seems possible. And why not? People that try to rip off big companies deserve everything they get. ® Related Stories The Easy way to donate money to charity This is how Easy Group enforces its domain name 'rights' Easy now: Stelios calls to explain his company's behaviour We're not stamping on Web dissenters, says Easy Group The Easy way to crush dissenting voices The Easy way to beat the URL bully Cybercafe domain war all a storm in a coffee cup
Kieren McCarthy, 03 Jul 2001

Cellphone giants launch mobile gaming initiative

Ericsson, Motorola, Siemens and now Nokia have launched their joint programme to develop a standard format for cellphone-based multiplayer games. The first three partners announced last March their intention to announce that that they were going to develop such a standard last. Desperate to drive interest in 2.5G and 3G networks - on the back of which the three are desperate to sell more cellular handsets, now that world+dog have plenty of 2G, ie. digital, ones. At the time, Nokia showed little interest in the plan, but it's interesting to see that the Finnish company is now a member of the consortium, having at last experienced the financial problems the other three had earlier this year. The Mobile Games Interoperability Forum will essentially provide a framework for "games developers to produce and deploy mobile games that can be distributed across multiple game servers and wireless networks, and played over different mobile devices", the companies said today. And: "The MGI Forum will also work closely with tool developing companies to develop Software Development Kits (SDKs) and other necessary tools for game developers. One initial company is Metrowerks, with whom work has already begun." Metrowerks is, of course, owned by Motorola, so the revenue model nicely extends beyond handset sales. ® Related Story Motorola, Ericsson, Siemens team on cellphone gaming
Tony Smith, 03 Jul 2001

BBC publicly mulls idea of charging for Internet programmes

The BBC has reported on itself suggesting that it may adopt a pay-per-view approach to future Internet content. In a classic piece of testing the water, Auntie has written various stories on the idea, sparking the rest of us idiotic press to follow suit. Hence this story. Basically, the BBC has said it may have to charge in the future for content downloaded from the Internet in order to cover the heavy costs of putting it up there in the first place. The frontman for this is BBC director of new media Ashley Highfield. He said that those that "make heavy use of Internet broadcasting when it becomes more common in the future may be asked to pay an extra fee on top of the existing annual licence fee". This is then tempered by a spokeswoman saying this is only "one possible way" of covering increased costs and governmental pressure. But, hey, this is all unlikely to happen for ten years or so. Of course all this has very little to do with the Internet and everything to do with the BBC's repositioning. It is desperately trying to find a way in which it can charge people for its programmes without losing the TV licence fee that makes the BBC so unique and also allows it maintain a high standard of viewing without going for the lowest common denominator. It could never float the idea of charging people for content over the TV - people would go ballistic - so it has used the Internet as the battleground for a debate on the organisation's future funding. It would cost "several billion dollars" to put all BBC content on the Web, says Highfield. And if we weren't allowed to charge for it, well then the licence fee would have to go up. What can we do, we want to keep the BBC the best in the world but it costs so much these days. Of course, there is a perfectly valid argument here but since when did the BBC ever consider putting everything on the Web anyway? Yes, the BBC Web site is probably the best in Britain but the concept of putting Food and Drink on the Net is a little daft. The BBC wants to start competing commercially - and with some things like sport, it needs big sums of cash to get hold of the coverage - but it also wants the security of the licence fee. We don't have a problem with that but plenty do and Auntie is going to have to tread a fine line for the next decade. The debate has started. ®
Kieren McCarthy, 03 Jul 2001

Gameplay sells subsidiary for $1

Gameplay has sold off its subsidiary, which developed multi-player/multi-platform technology, for $1. This represents a new record for Gameplay. It managed to sell its UK-based boxed games business for £1 in May. An Israeli investor group is buying the Toga Holdings unit, which contains the gaming technology developer Gameplay Technologies. The investor group includes members of Toga's management. Gameplay will own an initial 10 per cent of the reconstructed business and the investor group will assume the company's liabilities. ® Related Stories Gameplay non-exec directors 'resign' Gameplay knocks itself off Net Electronics Boutique gobbles up Gameplay Gameplay puts the For Sale sign out again as losses soar Gameplay: What they got for their £1 Gamplay division sold for £1 44 Gameplay staff face the axe Gameplay up for sale
Robert Blincoe, 03 Jul 2001

BT to target gamers

BT is looking to target online gamers with two Net access services, according to internal documents seen by El Reg. The telco is looking to offer BT Together Gaming, which is believed to be an unmetered narrowband offering specifically targeted at gamers. It is also looking at a faster 128Kbps service dubbed "Project Pistachio" that it claims would help meet demand for speedier access until current "broadband issues are resolved". Exact details of both initiatives are not known. Nor is it known when BT intends to launch the services. When we tried to find out more a spokesman for BTopenworld said he hadn't got a clue what we were on about. ®
Tim Richardson, 03 Jul 2001
server room

Caldera offers licence olive branch

Caldera has further loosened its pay-to-play policy. Non-commercial users won't need to pay the $59 per seat license, at all, as free ISO images of OpenLinux 3.1 will be made available on Caldera's FTP site. Caldera introduced per-seat licensing with the introduction of its latest distro last week. The situation was never as bad as originally reported - although Caldera took long enough (twenty four hours) to clarify the situation for a considerable backlash to brew. There was no intention of making developers pay: admission to Caldera's official developer program, which includes a Workstation license, is free. "I know this is SO late in coming, however better late than never. I want to offer my thanks to those who adopted a "wait and see" position. Even so, it's hard to blame those who jumped to conclusions because the timing on this was... well bad," notes Caldera tech support chief Porter Olsen. The news comes as Americans take time off to set fire to their traditional Labor Day turkey [are you quite sure about this? - ed.], and a tech support update also reported at LinuxToday suggests that the ISO images will be available after the holiday. ® Related Stories Caldera drops license bombshell Caldera defends pay-to-play license
Andrew Orlowski, 03 Jul 2001

Apple clubs Cube

Apple has canned the Power Mac Cube, the company finally admitted today. The 8in square computer was launched less than a year ago. In a terse statement, Apple certainly said it has decided to "suspend production of the Power Mac G4 Cube indefinitely". But the company also said that there is a "small chance" that it will ship an "upgraded model" at some point in the future. We'd be surprised if it ever does. Apple's comment smacks of a company desperately trying to spin news of the decision so it doesn't sound like an admission of failure. 'Failure' is not too harsh a word. We're rather fond of the Cube, but a design flaw in the power switch mechanism, what seemed to many observers like crakcs in the plastic moulding - more of an aesthetic issue this than a real problem - and the difficulty Apple had selling it against the cheaper iMac and the more powerful and more expandable Power Mac minitower doomed the machine from the start. A shame, perhaps, given the Cube's leading edge design and aesthetics (at last, a computer that doesn't look like a computer). Hints that the Cube was not long for this world emerged last month when numerous Apple resellers claimed the product was in very short supply. That it was unlikely to be updated followed from not only very poor sales but, ultimately, because the Cube's bad reception persuaded Apple to disband the computer's design team. Still at least Apple's decision has ensured Cube owners have a profitably future flogging their 'limited edition' computers to willing buyers for huge sums on eBay. ® Related Stories Apple kills Cube? Apple abandons Cube?
Tony Smith, 03 Jul 2001