9th > August > 2001 Archive

Gateway pulls out of UK and Ireland

Gateway, the US PC maker, is shutting down UK and Irish operations, with the loss of 1,200 jobs. The company has confirmed its intention to cease manufacturing in Ireland and also to close down its European headquarters in Dublin. It is to repay in full IR£20m in grants made by the Irish government. The company has seen sales collapse in Europe this year - down 46 per cent, according to the Irish Times. This is a disastrous loss of market share, considering that UK PC shipments fell only 8 per cent in the first half of the year and that European sales to consumers (Gateway's key market) have fallen 15 per cent. Gateway's retrenchment to its US home territory is designed to restore the company to profitability. The company lost $20.8m in Q2. As a force in the PC industry, Gateway is in serious long-term decline. It intends to re-invent itself -again. We are sceptical of its chances. Mike Maloney, the head of Gateway Ireland, told the Irish Times that the "company will not survive by just selling personal computers. It is restructuring itself to develop and sell more services and solutions". But wasn't that the discredited strategy of Jeffrey Weitzen, the Gateway boss who was fired by founder Ted Waitt after, landing the company in a mess in the first place? To sell services on the back of making PCs, you need first of all to be able to make and sell PCs, preferably at a profit. To make lots of money selling services, you need to sell lots of PCs to corporates - rather than consumers or small businesses. ® Related story Gateway to outsource manufacturing - and leave Irelan?
Drew Cullen, 09 Aug 2001

Shooting Rampage disrupts Reg ops

Vulture Central is closed this morning, while police investigate a shoooting. Maddox Street, in London's West End, where our offices are based, is taped off while police await the forensics team. In the meantime, most Reg journos are milling about nearby coffee shops. Normal service should be resumed later today - that's if our new Cisco router doesn't collapse again. ® Related link Shooting Rampage in West End
Drew Cullen, 09 Aug 2001

Compaq accuses brokers of $20m rebate fraud

Compaq is sueing three dealer principals for the recovery of $20m in rebates allegedly defrauded from the company. Compaq accuses Harry Martin and Shafiq Ahhmed of Millenium Technology Group, a Virginia-based computer broker, and Stephen Pridemore, of South Carolina Creative Resources Group Inc, of conspiring to "defraud Compaq into paying millions of dollars in unearned rebates and special marketing support funds". The alleged scam was very simple: the brokers told Compaq that they had won a large government contracts that required special discounts from the computer maker. But no contracts existed: instead, the defendants trousered the Compaq kickbacks and siphoned off the kit into the broker market. Compaq is throwing the book at the threesome; as well as demanding the return of its money, it is filing claims for "conspiracy, fraud, breach of contract and tortious interference with its contractual relations". The company says it is committed to stamping out illegal brokering - so is this just the tip of the iceberg? And if Compaq was taken so easily to the cleaners, what about other big channel-led manufacturers such as IBM, HP or Sun? Certainly we have never come across this practice in the UK. Does anyone know different?
Drew Cullen, 09 Aug 2001

NTL and Telewest get close, real close

NTL and Telewest are preparing to snuggle-up closer together ahead of long-term plans to a create a monster cable operator, the FT reported today. The two cablecos are already jumping to bed together with a joint marketing campaign to push broadband services. It's just one of a number of initiatives being explored that will bring the two cablecos closer together. However, a formal merger - although not guaranteed - is still some way off since both companies have a combined debt mountain of more than £15 billion. Both companies would need to cut this before entering any formal merger talks. That though, is in the future. More pressing is their bid to join forces to help compete more effectively with the growing presence of satellite TV services. The companies are already looking into purchasing set-top boxes jointly in a move that could save them millions of pounds a year, the FT says. No one from Telewest or NTL was available for comment. ®
Tim Richardson, 09 Aug 2001

Germans out-sauce Brits in porn hunt

One in four UK home Net users visited porn sites in June, according to the latest stats from Internet monitoring company, NetValue. It found that 3.8 million home Net users spent more than 45 minutes sniffing round XXX sites. However, the UK was out-sauced by Net users in Germany. There, 5.3 million home Net users spent more than an hour visiting hot sites, while the research found that 40 per cent of Spanish home Net users visited a mucky site in June. Said NetValue's Alki Manias: "Pornography has become a lucrative online business, with many companies now recognising it as a valuable additional revenue stream." "And this would seem to be a stable business area - the popularity of online pornography continues unchecked," he said. And he's right. In the UK lastminute.com recently introduced adult material for sale and Germany's T-Online is also moving into the adult business. However, back to the UK figures. Closer inspection reveals that students make up the biggest single group of porn visitors. The second biggest group was, ho hum, "manual workers", which is handy. ®
Tim Richardson, 09 Aug 2001

Sun to resell Hitachi storage

As rumoured, Sun has struck a deal to resell Hitachi Data Systems storage kit. HDS already provides hardware for Hewlett Packard, but Sun is more reliant on its Japanese storage partner than HP, as the deal covers software too.
Andrew Orlowski, 09 Aug 2001

Viking for sale

Life in the DRAM business is getting tougher, and the latest to feel the squeeze is Viking Components. The Californian memory assembler is exploring its "strategic alternatives"with a little help from an investment bank, The Orange County Business Journal reports. In other words the company is up for sale. Citing an unnamed industry source, the OCBJ says the DRAM firm has hired Los Angeles investment bank Murphy Noell Capital LLC to "find a suitor or something else". SimpleTech, a rival and bigger memory assembler, also based in Orange County could be a potential buyer, according to OCBJ's source claims. The paper notes that Simpletech is suffering production constraints. But is buying another company the best way to resolve this? Surely it would be cheaper and less risk to sub-contract assembly to one of the many companies with spare capacity? Viking is one of relatively few brand-name DRAM suppliers. The company would be worth more to a DRAM manufacturer to act as brand-name reseller, in the way Crucial acts for its parent company, Micron Technologies, than to a rival brand name. Viking currently employs 400 people in Orange County. How many people will be left if the company is sold Glenn McCusker, Viking co-CEO, wouldn't talk to the OCBJ about the investment bank or about any sale. But then why should he? ®
Drew Cullen, 09 Aug 2001

Corel buys SoftQuad, acquires XML brains trust

Corel is looking more perky than peaky these days, and after a long illness has regained its appetite for gobbling up small software companies. Corel has agreed to acquire SoftQuad, best known as the author of the venerable validating HTML editor HotMetalPro, in a stock deal worth $36m. SoftQuad actually made its first SGML product in 1987, and can claim a hand in shaping the SGML standard and its much-hyped kin XML, and in creating the XML Working Group and before it, W3C. The company employs Tim Bray as an advisor, and fellow XML luminaries Peter Sharpe and James Clark. Corel meanwhile has in WordPerfect the only mass market word processor that’s a fully grown up SGML and XML editor. Although it keeps this jewel well-hidden, it's one of the reasons for WordPerfect's enduring appeal in for example, the defence sector, which mandates use of SGML DTDs. How Corel intends to juggle the two is too early to say. But a statement issued by the pair promised that "this acquisition will enable Corel to enrich the existing XML capabilities within its WordPerfect product line, further extending the functionality that many of its customers in the government and legal communities currently enjoy" It's certainly got the best brains to work this little conundrum out. Three weeks ago Corel agreed to acquire Micrografx for a similar sum. ® Related Story Corel buys Micrografx
Andrew Orlowski, 09 Aug 2001

Dixons boss blasts ‘absurd’ EU and UK laws

Dixons' boss Sir Stanley Kalms has vented his anger at the government and EU legislation in his company's annual report. He is not happy about European waste recycling rules, UK Sunday trading laws, the UK Consumer Credit Act, and the Town and Country Planning Act. Sir Stan feels his retail group is hamstrung by "unworkable" rules. And when this bloke gets cross, he certainly knows how to let people know. He is well known for putting the wind up Dixons' suppliers at company dinners and strongly suggesting how they go about their business and who else they should supply. Kalms stated in the report: "We continue to grow the group against a background of the most severe and costly regulation the market economy has experienced both from Brussels and our own government." Using a company's annual report to make political points is an unusual step, but Sir Stan felt it was all relevant information for shareholders. And besides he is a well known eurosceptic, and he funds the Tory party. But, "Too often absurd demands are being imposed on industry, frequently with insufficient thought or consideration of either the additional cost or the practical implications. Some proposals are simply unworkable and merely add costs that must inevitably be borne by the consumer," he said in his statement. The EU waste recycling rules, which makes retailers responsible for disposing of old equipment when they sell new goods, has really wound up Sir Stan. He has fears of customers dumping their old crap in any Dixons, PC World, Currys, or Link store. Dixons wants the Sunday trading laws changed because it finds it a bureaucratic pain if it wants to change the hours its stores are open. The Town planning act restricts the way it can advertise outside and inside its buildings. ® Related Stories Dixons announces Kalms' replacement Sir Stanley Kalms' Desert Island Discs
Robert Blincoe, 09 Aug 2001

Ex-BT man to head Level 3 in Europe

Brady Rafuse has been named president of Level 3 Communications in Europe, the company confirmed today. Rafuse joined Level 3 as senior VP, European sales and marketing, in December 2000 having held a senior position with Concert. Previously, Rafuse was with BT, which he joined in 1986. In a statement Rafuse said: "Having completed the construction of our advanced, pan-European network, we are now shifting our primary focus to sales and operations, and to bringing service to more customers as we strengthen and grow our presence in Europe. "We are going to focus not only on sales, but on working to provide an unsurpassed level of customer service," he said. Which is nice. ®
Tim Richardson, 09 Aug 2001

Natwest loan cut floors EMH

European Micro Holdings, the broker of top brand computer hardware, borrows money from Natwest to buy its stock. But last week the bank reduced its exposure to the distie: in future it will lend only 25 per cent of the value of the inventory bought by EMH, unlike the past where it lent the entire amount. On Friday, August 3, EMH issued a press release in which it said the Natwest loan restructure would materially impair the firm's "ability to finance its operations and to purchase inventory". Furthermore, the loan restructure means the company could fail to meet certain financial obligations, including its obligations to the former shareholders of American Micro Computer Center". European Micro Holdings bought AMCC and former shareholders could be entitled to their stock back. John Gallagher, co-chairman of EMH. is one of the AMCC shareholders. The financial viability of EMH is coming under increasing question In July, CW360.com reported that EMH faced the threat of legal action from South Trust Bank for the repayment a loan. The distie had failed to comply with covenants attached to the loan, the site said. The deadline for the repayment is August 15. The company saiys that, if all else fails, Gallagher and co-chairman Harry Shields will personally repay the loan. Headquartered in Miami, European Micro Holdings operates in Europe only. The company hoovers up surplus inventory and also tries to exploit arbitrage opportunities i.e. it buys stock where it is cheap and sells it in a country where it is more expensive. EMH sells through resellers, at cheaper prices than they could buy through official distribution. And the company claims better margins than traditional disties. This is all well and good, if you have the money to buy the stock in the first place. Disties, at least, can buy stock on tick from their vendors. ® Related links European Micro Holdings press releas CW360: EMH given three weeks to repay loan Related stories EMH blames Y2K for selling too much European Micro Holdings buy Sunbelt UK
Drew Cullen, 09 Aug 2001

Robots learn greed is good

Wall Street traders have been forced to eat humble pie after computers wiped the floor with them in an experiment. In a trading simulation which pitted the wits of half a dozen of New York's sharpest operators against six robots, the machines came out clear winners. By close of trade the machines had made seven per cent more money. Boffins from IBM, some of whom developed the Deep Blue computer that licked chess grandmaster Garry Kasparov, said the study showed computers were now capable of coping with the cut and thrust of business. They said the results showed the speed and consistency of machines proved a better judge of when and how to trade than the gut instinct of traders. Jeffrey Kephart, of IBM, told New Scientist that robots were faster and made fewer errors. Machines, he said, were the future of markets. "We see robots working in the frenzy of the trading pit while humans are elevated to a managerial role," he said. So in the future will we see expensive, unreliable and temperamental traders running the finances of the City. Or will we stick to humans? ®
John Leyden, 09 Aug 2001

Police smash world's biggest child porn site

US cops have arrested more than 100 people for subscribing to a child porn Internet site, and expect more arrests to follow. The authorities have called it the biggest ever child porn ring, with more than 250,000 subscribed to the site. The site was run from Texas but hosted in Russia and Indonesia. After a two-year investigation, police decided to pounce on those who credit card numbers they had uncovered. Landslide Productions in Texas, owned by Thomas and Janice Reedy, posted pictures of children having sex on their site and charged a few quid a month for access. They netted close to £1 million a month, 40 per cent of which they kept and the rest went to their Russian and Indonesian partners who hosted the site. In a raid, police officers found a number of videotapes, which included children as young as four. Tapes went sent through the mail to customers. Thomas Reedy has been sentenced to life in prison (1,335 years) and his wife to 14 years. Arrest warrants are still outstanding for two Indonesians and a Russian. ®
Kieren McCarthy, 09 Aug 2001

ATI R200, R300 roadmap spied

ATI's roadmap has leaked out of the company and onto the Web, bringing details of the upcoming R200 chip, likely to ship as the Radeon 2, and its successor, the R300. As expected, the R200 is due to ship in September alongside a lesser version, the RV200. The R200 will be fabbed at 0.15 micron, support DirectX 8.1 and provide four parallel rendering pipelines. The roadmap, leaked to Web site ElecticTech, confirms the RV200 contains only two rendering pipelines. Curiously, it's described as a DirectX 7 part, which would seem to confirm hints we've received that the part is not based on the R200 but the original Radeon core. The RV200 will ship on an AGP 4x board with 16, 32 or 64MB of DDR SDRAM, and is set to replace Radeon 32MB DDR and 32MB SDR cards. The R200 will also ship on an AGP 4x card, in 32MB and 64MB DDR SDRAM configurations. It is a replacement for the Radeon 64MB DDR card. Both boards will support multiple displays and display connectors through Hydravision and DualHead technology. As we say, the R200 and RV200 are set to ship in September, confirming earlier ATI comments that the R200 will have a "late summer" release. However, before that, in August, ATI will tape-out the R300 - and probably be released, we reckon, in mid-2002. Previous rumours' claims that R300 will support eight rendering pipelines and DirectX 9 are confirmed. We'd heard that the part will have a 350MHz clock speed, but the roadmap simply puts it at "300MHz+". Like the R200, the R300 will be fabbed at 0.15 micron. The roadmap notes that two other parts, the RV300 and RL300, will tape-out in Q4. Both are cut-down R300s, offering just four rendering pipelines. The R300's "4x" geometry engine, is reduced to "2x" in the RV300 and "1x" RL300. The RV300 is set to clock at "300MHz+"; the RL300's clock is not specified. All three parts support DirectX 9, suggesting that, unlike the R200 and RV200, they derive from the same core. How the R300 will supersede the R200 in the marketplace isn't known, but it's pretty clear from the roadmap that the R200 will completely replace the Radeon, leaving just the Radeon VE card to address the mainstream PC market and various Rage 128-based boards covering the value arena. For the rest of 2001, at least, Radeon 1 will not simply be pushed downmarket to replace the ageing Rage 128 Pro. Which makes particular sense if the RV200 is based on Radeon, not R200. ® Related Story ATI Radeon 200 debuts on Web ATI Radeon 2: more specs leak ATI Radeon 2, 3 details leak Related Link ElecticTech: ATI Roadmap Until First Half of 2002
Tony Smith, 09 Aug 2001

How XP WPA will squeeze more money out of businesses

Microsoft has published a "technical" bulletin on Windows Product Activation technology, but it's essentially a piece of PR fluff that doesn't tell us anything new, and that's light years away from the detailed expose Fully Licensed published a while back. Microsoft's effort was promised after that, and turns out to be just an apologia for WPA. But it does shed some light on Microsoft's thinking; WPA is aimed at casual copying, i.e. 'normal' people sharing their software rather than professional pirates, and the document quotes estimates that this accounts for up to 50 per cent of piracy. Clearly Microsoft therefore wants to stop you lot just buying one copy of Office and then installing it on all your home PCs, giving your friends copies, etc etc. And then the money will roll in... Perhaps. We can probably assume, it being the case that users don't have a whole lot of choice these days, that WPA will be grudgingly accepted over the next year or so. It'll come with Microsoft's main products, and most users won't bother circumventing it, particularly as it isn't actually that great a hassle. Aside from the cases of professionals and enthusiasts who need to swap hardware out a lot, Windows XP WPA will quite possibly be barely visible to users. Most operating system shipments come in the form of preinstallations on new PCs, most people don't bother upgrading these in between PC purchases, and quite a lot of the PC vendors will preactivate WPA on their machines anyway. That does kind of make WPA on WinXP look singularly pointless. Microsoft won't make significantly more money out of OS sales, but Microsoft will piss off large numbers of techies, who'll therefore make it their business to rip the protection out and, er, won't need to buy extra copies of XP because of that. It's a bit different when it comes to Office XP and Visio 2002. These are pricey items that don't generally come with the PC, so they're prime targets for casual copying. But their price bracket makes it far more likely that the original licensed version that's copied will have been bought by a business rather than at retail, and the volume licensed business versions of Microsoft products won't require activation in the way the retail ones do. So, as is the case today, you're running Office at work, you figure it'd be useful to have it at home, so you take it home and install it. Again, Microsoft doesn't stop much, doesn't make much extra money, so what's the point? The company will wind up ticking off the odd home user who does buy Office at retail and discovers he's got to buy another two copies if he wants the kids' machines to have it as well, but is he then going to do so? Get real - he's a lot more likely to become a Corel or StarOffice customer, so no more money there either. But there is a point to WPA, one that isn't directly concerned with casual copying, but that does give Microsoft the ability to squeeze many more dollars out of us. For businesses the quid pro quo of not having to submit to WPA is participating in one of Microsoft's volume licensing schemes, and doing so could be seen as the equivalent of putting your head in a noose. Retail copies of software have the vitrtue of anonymity, whereas if you put your foot onto the Microsoft volume licensing escalator (the first step is as little as five copies), then Microsoft knows who you are, where you live, and how many copies you're supposed to be running. You therefore become eligible for one of those audits Microsoft has been getting more enthusiastic about lately; you'll have noted instances where audit victims have insisted that as far as they know they're entirely legit, but as the cost of proving it would be greater than paying up, they have paid up. By making retail copies harder to deal with, Microsoft is also beating smaller businesses with a stick, encouraging them to go for volume licensing. That gets them into the net too, and allows Microsoft's enforcers to operate a lot further down the food chain than has so far been the case. Lastly, by forcing more people into volume licensing deals Microsoft is putting greater channel power into its own hands, meaning it can call the shots and chop and change the Ts & Cs when it likes, without much opposition. Distributors, software dealers and resellers will have less power (and less retail sales too), and the scope for unofficial and semi-unofficial sales of Microsoft product will be massively decreased, while Microsoft will have an even greater lock on pricing than it already has. So, troubled by WPA? Sorry friend, but actually you're just collateral damage... ®
John Lettice, 09 Aug 2001

Welsh politician resigns over newsgroup rantings

A senior politician in Welsh nationalist party Plaid Cymru, Gwilym ad Ioan, has been forced to resign following racist remarks posted on two Welsh newsgroups. Mr ab Ioan, vice-president and a member of Plaid Cymru's National Executive, had to step down when his comments - including that Wales had become a "dumping ground for England's oddballs and misfits" - were called "entirely unacceptable" by Plaid Cymru's chairman, Elin Jones. The postings took place on two newsgroups, soc.culture.welsh and uk.local.north.wales, at the start of the month and included such gems as: "If we don't [wake up soon] we'll be so full of foreigners in our own land that our voice will be drowned out forever - along with our language and culture"; "our language and culture is wilting at an alarming rate because of the over powerful and unbalanced effect and influence of the alien culture has within our nation"; "In my experience the vast majority of people who settle in Wales are either: 1.Past their working age... 2. Are unemployed and/or suffering from long term illness... 3. Are social dropouts from the cities of England." Mr ab Ioan was less than pleasant when other posters disagreed with his strongly-held views. He asked one: "Are you an indigenous native from Wales or a foreigner?" The story comes on the back of more anti-English sentiment from Plaid Cymru politicians. Earlier in the year, Simon Glyn said he felt Welsh-speaking areas were being overrun by a "tidal wave" of English-speaking people. He also claimed English migrants were "a drain on resources". The Plaid Cymru leadership is very sensitive about such racism, and condemns it. But, like the Conservative party in England, it recognises that many of its members hold similar views. In response to Mr ab Ioan's remarks, a colleague on the Today programme on Radio 4 argued that unless Mr ab Ioan persuades Welsh-speaking people to stop selling their houses at a greater price to English-speaking folk, then he should keep such inflammatory language to himself. ® Made in Wales LibDems pull illegal Plaid Cymru Web site LibDems cybersquat on Plaid Cymru New Labour's Internet dirty tricks campaign exposed
Kieren McCarthy, 09 Aug 2001

The Code Red hype Hall of Shame

Lemme tell ya 'bout The snakes, the fakes, The lies, the highs....    --Tribe We've had no end of entertainment these past weeks with the Code Red and Code Red Junior IIS worms. Vast battalions of 'security experts' paraded themselves eagerly before the press, trotting out their finest doomsday quotes for a shot at fifteen minutes of fame. Meanwhile, legions of well-groomed, academically-inclined twinkies armed with tape recorders and Masters' Degrees in journalism greedily sucked them up, and obediently generated the most laughable headlines predicting that Code Red would break the Internet. Yes, it's been fun, but all good things must come to an end. Now that the worm has slowed and the US military has reluctantly stood down from DEFCON ONE, those amusing headlines, sadly, are drying up. So we thought this a good moment to review the fabulous claims that our esteemed peers have been disseminating. But first things first. Internet survives triple threat While Code Red was making headlines it never deserved, two concurrent threats to Internet stability went largely unreported. These were the 'Sircam' Outlook worm, which gobbled up a tremendous amount of bandwidth, and an underground fire in Baltimore which obliterated a fat swath of Internet backbone on the US East Coast. I personally received over 200 copies of Sircam, which often included large files -- many over 5mb, and two whoppers over 20mb. So while Code Red was reportedly bringing Western Civilization to its knees with its Net-destroying scans, the Internet was also fighting off Sircam and a major backbone fracture. And it handled all three assaults simultaneously with just the sort of resilience it was designed to have. Snakes and Fakes We're still at a loss to explain how eEye Digital Security, which discovered and publicized the .ida hole that Code Red and Code Red Junior exploit, has managed to escape questioning by the press for its part in the whole fiasco. Indeed, their role is tantamount to a pharmaceutical company unintentionally releasing a disease germ. Company staff pick apart IIS on a daily basis looking for obscure holes which their 'Secure IIS' product can fix, and then publicize them aggressively to market their products. It's an awkward situation: they profit from security holes, yet they publicize security holes. And as usual, eEye 'Chief Hacking Officer' Marc Maiffret was making a gigantic fuss on every security list I subscribe to about the .ida hole just weeks before Code Red appeared. It's possible that Code Red would never have been developed if eEye hadn't made such a big deal about the .ida hole. Of course we'll never know if a more modest approach to putting the word out would have altered the course of events, but the possibility certainly exists and is worth considering. The fact that eEye profits from the very security holes it discovers should have been an issue in the media's Code Red coverage; but to date only The Register has seen fit to raise it, as we did from the beginning of our Code Red coverage, here, and again here. For the most part Maiffret has been a media darling, explaining Code Red to the rest of the IT press in terms which they can understand and which neatly avoid controversy. And that's perfectly natural; he'd be a fool to blow the whistle on himself. The disgrace here is the utter lack of imagination and technical savvy among the IT press, who ought to have challenged eEye's strange combination of threat discovery, publicity seeking, and solution marketing. Next we have the Computer Emergency Response Team (CERT) Coordination Center at Carnegie Mellon University, and the FBI's National Infrastructure Protection Center (NIPC). While both deserve honorable mention for not hyping the Code Red danger half as badly as the press, they clearly emphasized the wrong aspects of the worm. As we've pointed out several times, the .ida hole which the worm exploits can yield system-level access to an intruder. This is a far more important threat to Internet security than the fact that it scans aggressively and packets Whitehouse.gov once a month. Unfortunately, CERT and NIPC decided to push the scanning and packeting (DDoS) threats a lot harder, probably because they realized that most media twinks would simply fail to recognize the significance of the real threat. It was a bad call. While they did need to mobilize the press to publicize the worm in hopes of reaching sleepy admins who hadn't yet patched their machines, they let a very significant security problem go largely unreported, while emphasizing a puff item which the press would be more likely to run with. People depend on CERT for hardcore security threat assessment; and NIPC's new Director, Ron Dick, has his hands full restoring the Center's credibility, after his predecessor, Michael Vatis, squandered it in pursuit of headlines and photo-ops. Instead, they helped fuel the Code Red hysteria, though, we sense, with some reluctance and possibly with a touch of some very redeeming embarrassment. We also heard a great deal of FUD from Security outfit TruSecure's 'Surgeon General', Russ Cooper, who claimed hysterically to any twinkie journo who would listen that Code-Red-infected machines would scan so aggressively that the Internet would experience "a meltdown." "If it does slow down as I expect it will, then you won't even be able to get to Microsoft's site to install the patch," Cooper said. "I expect that to happen." Well, it didn't. Over a million users successfully downloaded the patch, and the rest of the Internet kept humming right along. And what has TruSecure got to sell us? Why, network security services, of course. We mustn't forget GRC founder Steve Gibson, who warned in hyperbolic multi-colored lettering that Code Red's "'growth line' is actually exponential!" We have to point out that only numbers can increase exponentially and infinitely. Worm infections can't. Since there's a finite number of unpatched IIS machines, the worm eventually keeps hitting already-infected boxes. After a while we get a diminishing return. Gibson tried to argue that the infection's growth would be immense and sustained. But as early as 3 August the rate of its spread had begun to decline sharply, because the likelihood of finding a fresh (i.e., unpatched and uninfected) target had fallen off -- well -- 'exponentially!' It didn't take long for veteran tech columnist Robert X. Cringely to get infected with Gibson mania. "Some experts believe nothing will happen at all but I believe that's just plain wrong," Cringely writes. "The information I will use to support this assertion was acquired either from those, like Steve Gibson, who have disassembled and examined the Code Red worm or from the officials charged with fighting it, including sources at the CERT data security coordination center at Carnegie-Mellon University, eEye Digital Security, in law enforcement, and at several very large corporations." Funny how most of those sources are enshrined here in our little Hall of Shame.... "And what happens on the 20th, when the attack cycle begins," Cringely asks rhetorically. "It depends on the number of infected machines and the nature of the chosen target, but the worst case says the Internet simply comes to a standstill and we go back to watching TV and talking on the phone until the 28th day of the month and potentially until every 28th day of the month thereafter." Yeah, right. Finally -- saving the best for last -- we have well-known security hustler Carolyn "Happy Hacker" Meinel, who actually got a most amusing piece of Code Red flatulence published by Scientific American, which, if anyone's wondering, is a middlebrow publication which prides itself on its cutting-edge technical savvy. Naturally, Meinel hits all the hot buttons, from bio-warfare analogies to terrorism to DDoS attacks, to cyberwar with China: "According to the official Chinese publication People's Daily, 'Soon after the mid-air collision was an all-out offensive on Chinese Web sites by US hackers.... By the end of April over 600 Chinese Web sites had come under fire or totally broke down.... Many hackers' organizations known as China Honkers Union and Hackers Union of China promptly responded in an all-out cyberwar against their US counterparts May 1 to 7. Clearly People's Daily was eager for China to take credit for attacks through May 7. But it has been silent on Code Red." Now that's some Grade-A FUD. All that background clearly meant to get us thinking that China had something to do with Code Red, followed by a little caveat, which, by its placement, is calculated to suggest that the Chinese are only being sneaky with this one, rather than beating their chests as they normally do. Meinel even went so far as to suggest that eEye created and released the Code Red worm as a publicity stunt, as this editor's note explains: "An earlier version of this story included a quoted speculation that eEye Digital Security might have been involved in the creation of the Code Red worm. EEye denies any such involvement. We apologize for including that inadequately supported statement in our report." Yes, The Register is skeptical of eEye's peculiar role in the .ida hole/Code Red debacle, but to suggest that they actually created and released the worm is pure sleaze journalism -- or Classic Meinel, if there's a difference. ® Related Stories Son of Code Red is born Code Red hysteria - $8.7bn in damage estimated Code Red Tribulation is nigh, Steve Gibson warns Washington mobilises against Code Red resurgence Internet survives Code Red IIS worm made to packet Whitehouse.gov
Thomas C Greene, 09 Aug 2001

API winds down Alpha ops

API Networks, the Alpha processor design firm, pink-slipped 30 per cent of its staff yesterday. The company retains 55 people, just 10 of whom - "for now" - will handle Alpha support. No more Alpha products from the company are planned. Instead it will concentrate on developing the firm's network silicon business; this centres around some proprietary high-speed technology, called HyperTransport (find out more here. Just as well it another game to play. API's decision to wind down Alpha operations could be regarded as another nail in the coffin for the processor, although the hammer belongs to Compaq and Intel. And API can be regarded as a victim of Compaq's decision in June to junk its 64-bit processor platform in favour of Intel Itanium. Next question: when does Samsung throw in the Alpha towel? Bootnote It all looked so different in December 1999 when Compaq, API and Samsung jointly announced that they would invest $1.5bn in Alpha over five years. Here is the press release for the nostalgic among you. ® Alphacide Farewell then, Alpha - Hello, Compaq the Box Shifter http://www.theregister.co.uk/content/3/19942.html">Intel takes Alpha from Compaq's hands http://www.theregister.co.uk/content/7/19933.html">180-day plan to transform Compaq into services behemoth
Drew Cullen, 09 Aug 2001

Journalists to be replaced by robots

A new fancy robot, called Author, is to take the place of human journalists within several years. At least according to some boffins from North Carolina. Yabbering on about the robot in New Scientist magazine this month, they reckon they have designed an intelligent being which can take stories from news wires and turn them into snappy stories, thereby removing the need for alcoholic upstarts and wages. What Author actually does is produce new stories from a store of characters, plots etc. However, by tying it to other intelligent systems which are designed to pick out the most important facts in a text, it could end up producing factual news stories, say Charles Callaway and James Lester. In a desperate attempt to save their jobs, journos have been trying to find reasons not to be sacked. "It just regurgitates information from elsewhere. No? Er, it can't write properly. Yes, okay. Well, er, it doesn't draw a distinction between fact and fiction. Oh I give up, I'll get my coat." The Register has asked Messrs Callaway and Lester for a prototype as soon as they produce one. If, once writing stories, we don't lose many readers, we propose to put it to work full-time and live in the pub. don't tell the bosses, okay? ®
Kieren McCarthy, 09 Aug 2001

Stelios ads slam AOL

easyEverything is turning up the heat on AOL UK, urging people to "tear up their AOL accounts" and opt for unlimited use of its Internet cafe chain instead. On Monday, easyEverything is expected to run with more ads urging people to ditch AOL. These are expected to feature a picture of Easy Group boss, Stelios Haji-Ioannou, ripping up his AOL account. And just to rub it in, the ads will also appear on high-sided vans driven around the capital. At least one is expected to make its way to AOL UK's HQ in London and conveniently "break down" outside the Internet giant's offices. Some reports claim easyEverything believes its mischievous actions could see it facing legal action from AOL. Even so, the chain is set to go ahead with its plans. A spokesman for the company said: "AOL realises that this represents a serious threat to their business." An AOL UK spokeswoman declined to comment on whether the company would be taking legal until she had seen the new campaign. However, she said: "If legal action is appropriate or necessary, then we would take it." AOL UK says it welcomes competition but believes easyEverything is being unfair since its ad does not compare like with like. The offer - only applicable for its Tottenham Court Road cybercafe - gives people unlimited usage of the Net for just £15 a month. AOL UK also offers its subscriber base - many of whom don't live anywhere near London - unlimited Net access for £15 a month. easyEverything says it has already introduced its monthly season tickets in its cybercafes in NewYork, Brussels and Tottenham Court Road in London. Other locations are expected to follow in due course. So what's this all about? Easy. easyEverything has picked on AOL to stoke up some press interest for its new cybercafe season-ticket. It's good knockabout fun - but it has little real substance to the wider picture what's going on. Merely a storm in one of easyEverything's coffee cups. ®
Tim Richardson, 09 Aug 2001

Moody's Blues knacker Marconi shares

Marconi is back to its lowest ever share price, currently sitting on 86.75p (down 2 per cent today), courtesy a second downgrade on credit status this week from Moody's Investors Service. The downgrade from Moody's on the £2.2 billion of Marconi debt is a bad blow for the former giant and will mean significantly higher interest repayments if the company borrows more to dig itself out of trouble. Earlier this week Standard & Poor also ratcheted Marconi's credit rating downwards a couple of notches. At the beginning of July, Marconi announced a huge profit warning which saw its share price halve, its future chief exec John Mayo resign and furious shareholders almost riot. Before the profits warning, shares stood at 245p. They hit an all-time low of 86p, but had managed to recover slightly to around 94p. ® Related Stories Marconi agm kicks off; Simpson holds firm Oracle aided Marconi collapse Oracle didn't help Cisco see the precipice Marconi drops even further; everyone suffers Massive fall-out from Marconi share collapse
Kieren McCarthy, 09 Aug 2001

Code Red worms into Hotmail servers

Microsoft has admitted that some of its Hotmail servers have been infected with the Code Red worm. But no user email accounts or personal data have been compromised by the attack, Microsoft spokesman Jim Desler said, according to reports. Nevertheless, he promised that Microsoft would conduct an audit of its Hotmail systems to make sure they are safe. The embarassing security blunder is made worse for the software giant because it has campaigned so vigorously to patch the now well-known hole in its IIS Web server software that the Code Red worm exploits. Last month Microsoft's Windows Update site (which among other things gives links to security patches) was also hit by Code Red. It's not clear if Hotmail was hit by the first Code Red virus or a more virulent strain of the worm, Code Red II, which first appeared last week and has the potential to give attackers system level access to vulnerable machines. Paul Rogers, a network security analyst at MIS Corporate Defence, said it was unlikely that individual e-mail accounts had been hacked into because of the attack. Hotmail is configured with a Domain Name Server system that features round-robin load balancing. This means that every time a user logs in they do so through a different IP address which means, according to Rogers, that it be "difficult to resolve" a url associated with a user's account, making it hard to hack into email accounts. At the time of writing, Hotmail appears to be up and running and there's nothing on the site giving any indication that an attack has taken place. ®
John Leyden, 09 Aug 2001

Rogue WLANS – the next security battlefield?

Indadequate security measures will leave 30 per cent of enterprise exposed to security risks from wireless LANS by the end of next year. That's the conclusion of a Gartner study of wireless networking security. The analyst firm advises users to formulate a security policy for WLAN deployment now, even if they have no immediate plans to use the technology. Gartner estimates at least 20 per cent of organisations already have "rogue" WLANs attached to their corporate networks, installed by users looking for the convenience of wireless and unwilling to wait for the sysadmins to take the lead. Hackers can easily break the over-the-air security built into today's 802.11b WLANs - according to Gartner, this is primary risk associated with WLANs. Few WLAN installations operate with even a minimal level of protection, the analyst firm claims. "Wireless LANs are broadcasting secrets of enterprises that have spent millions on Internet security," said John Pescatore, a research director at Gartner. "Because WLANs are on every executive's wish list, CIOs (chief information officers) should make sure they have security measures in place now. Fixing the exposure after a hacking attack cannot recapture lost intellectual property and sensitive customer information." Gartner recommendations for implementing WLANs securely include: At a minimum, always activate the default level of product security available. Use IPSec (IP Security) virtual private networks on all WLAN connections, until next-generation security standards are defined, tested and implemented in WLAN products, which Gartner estimates will happen late next year. Take measures to detect unauthorized WLAN installations, which may be opening up huge security holes. Define and distribute security policies on WLAN and educate employees on the risks of wireless networking. Wireless networking opens up a wave of fresh security risks and users would do well to consider Gartner's sage advice on this. ®
John Leyden, 09 Aug 2001

How Microsoft's file system caper could wrongfoot the DoJ

A wag last year suggested to us that since Oracle was the only competition Microsoft had left, its next step would be to bundle SQL Server with the operating system. If current briefings are correct - and Microsoft has evidently been briefing pretty heavily - then that's exactly what the company intends to do, and then some. It's a move could not only wrong foot the Beast's wealthiest antagonist, but antagonise the Department of Justice. A fortnight ago it emerged that Blackcomb, the successor to WinXP, was to be put back with an interim release, currently dubbed 'Longhorn' (but we're not sure how much traction this codename really has) performing the evolutionary upgrade. Then on Monday IDG attributed the delay, via Gartner, to antitrust concerns about revolutionary file system changes in Blackcomb. The Beast has a couple of goals for future Windows storage. Let's start at home. As Jon points out, it currently maintains a scrappy mixture of file stores in Jet, Exchange folders and SQL Server itself. Exchange would benefit from running on a real database, and we suspect few would grumble from the benefits he points out. But building SQL Server into the OS - effectively making the file system a relational database - opens a whole new ball game. Several have set out to put file system semantics over a raw native RDBMS before, rather than the other way round - and you can argue that Pick and the IBM AS/400 follow this example in its most tightly coupled form. Less tightly enmeshed are the real big iron databases which eschew native OS calls for raw I/O. (Ironically enough Oracle's 'Raw Iron' 8i database which ran on a modified version of Solaris was a lot less 'raw' than it's other offerings). That's what Blackcomb would be doing. But what's prevented a commercial OS from delivering this is practical performance. Be Inc was the last to try, and gave up quite early on for the next best thing, a fast native file system that relies heavily on extended attributes for database-like features. Right about now you're wondering about what kind of issues this raises for folk who need to interoperate with the Beast. Jeremy Allison of the SAMBA team recently expressed concern that future versions of Windows would contain proprietary technology. Making NTFS essentially a device driver layer add-on drives Windows compatibility into a whole new ballpark. It doesn't have to - but it could. It's a pretty cute idea. Cairo may have stopped being touted as soon as it was obvious that OS/2 and OpenDoc were dead, but Bill's never quite given up the idea of unifying disparate PCs as a giant distributed database. Check out our coverage of the 'Digital Dashboards' initiative a couple of springs ago here and here , or the MegaServices (as it was then) .NET announcement in May 2000 here Bill's vision of thousands of desktop databases all unified as one distributed Windows information system pre-empted the peer-to-peer hype of last year, although the scalability issues that beset a truly distributed architecture such as Gnutella as soon as it began to be used don't really vanish for a Windows version. Never mind, you can probably imagine Bill thinking, people will buy thousands more Windows boxes as caching servers. And simply having a database on every desktop doesn't make centralised data centres obsolete overnight: there's reliability, bandwidth and administration to think about. You don't want to go looking for an invoice only to discover it's on a distant PC that's been turned off too cool down after a particularly heavy fragging session. But it has the almost accidental bonus of annoying Larry Ellison immensely. Isn't this what Oracle's Internet File System and Raw Iron were really about? Yes, indeed. Finally, and by way of a bootnote, what a shame that basic file system semantics never made it into the hardware for all developers to exploit. They almost did: Object Based Storage was much fancied by the hardware manufacturers, who of course could charge more for the smarter disks than today's zero margin commodity drives. Drives would have enough knowledge to back themselves up, or replicate for example. That adventure seems to have stalled, and Microsoft has picked up the initiative with a vengeance. "Cunning and it may even be legal," we concluded when Gates sketched out his pre- .NET vision for XMLised data stores. We don't share Gartner's point of view that Microsoft is truly and deeply concerned about the antitrust implications. For a start, Oracle claims the lion's share of enterprise databases, and Microsoft is far from being in a monopoly position in the server market. That isn't going to change overnight. Really, there's little more reason for a delay other than that more time is needed to complete the experiment. We're not sure if the lawyers have even clocked the magnitude of this one just yet. Related Stories MS poised to switch Windows file systems with Blackcomb MS mounts major bid for soul of knowledge worker How MS can hold onto the market while embracing XML MS opens NexGen Windows Megaservices kimono
Andrew Orlowski, 09 Aug 2001