9th > February > 2004 Archive

US markets warm to Linux makers over SCO

Cash RegisterCash Register If you are looking for evidence proving SCO's success in slowing down Linux momentum, you won't find it in the financial markets. We are nearing the first anniversary of SCO's lawsuit against IBM over the alleged misappropriation of Unix code in Linux. Since March 2003, SCO's shares (SCOX) have rocketed from around $2 per share to more than $13 today. That's a fantastic 52-week gain and proof that a certain class of investors see at least short-term merit in SCO's pursuit of IBM, Red Hat and Linux. But while SCO has enjoyed a solid run based on the premise of future financial gain, the company's shares have not faired so well against those of the major Linux companies in the past six months. In fact, as the US markets have surged, the gap between SCO shares and those of Red Hat (RHAT) and Novell (NOVL) has narrowed. Take a look at what has happened to the major players in SCOgate. SCO was once trading well over $20 per share but has since been feeling the hurt of a fairly steady decline. A look over just the last six months makes the drop more clear. Investors often rush to react to announcements. Seeing a company try to sue a giant such as IBM with a figure over $1 billion attached to its claims is sure to draw attention and spark a need for action. Over time, however, there is a tendency among investors to bring a bit of reality into the picture. The dust dies down and a smidgen of analysis is applied to SCO or any other company's claims. You'll notice that Novell is benefitting from the very same rash motivation that sent SCO shares higher. The company's purchase of SuSE nudged it up from around $5 per share to $9 on news impact and then even higher to $13.50 per share over the past few weeks. Close watchers of Novell will know what an amazing surge this has been. Novell shares had languished at the $5 mark for many moons. This three-month chart gives a great picture of how much the SuSE has meant to Novell shareholders. Novell has nearly doubled in the last 90 days. And make note of how much SCO has fallen in that same period. But like SCO, Novell has a lot of work ahead of it. Novell must prove it can turn the SuSE operation into a revenue generating business. Looking back at Novell's track record, investors may get a bit nervous. In 2001, Novell made a save the company type of deal by acquiring Cambridge Technology Partners. With their combined might, Novell was meant to become a software and services powerhouse. Bit since the deal closed, Novell has hardly proved itself as a profit making machine. In fact, Novell reported a net loss of $162 million for 2003 on flat revenue. Betting on Novell for the long-term is a lot like betting on SCO. You have to believe in the promise of future gains. We would, however, argue that Linux lawsuit or not, Novell's potential for gain surpasses that of SCO. And we believe the market is reacting to this idea. The surge of Red Hat and Novell shares versus those of SCO is a bet on the Linux business model. SCO may win a large pay out and some revenue from its licensing operation, and we mean operation is the worst sense of the word, but Red Hat and Novell have their futures tied to the strongest operating system around. All of the major Unix makers appear to have willingly handed Red Hat and Novell the Linux market. The two companies are poised to cash in from a Windows exodus and customers turning in their Unix gear for cheaper kit. This is a business model and not an experiment in litigation for profit. Yes, Novell may have benefitted from irrational short-term enthusiasm as much as SCO, but you want to bet on the long term. The market is starting to show which way it leans in this debate. And this is bad news for the investors banking on SCO's gamble. ®
Ashlee Vance, 09 Feb 2004

Nokia bags Psion's Symbian stake

Shares in Psion fell 30 per cent in early morning trading today on news that the British company had sold its 31.7 per cent stake in Symbian to Nokia for up to £135.5m. Nokia is paying £93.5m in cash plus royalty payments for 2004 and 2005. Psion will get 84p for each Symbian OS license sale, which should divvy up to payments of £18m in 2004 and £31m in 2005. Nokia in turn will end up with 63.3 per cent of Symbian's stock compared to today's 32.2 per cent. Psion, the inventor of the Symbian OS upon which most of today's smartphones are based, was seen by investors as a cheap way into Symbian. However, the sum realised was significantly less than City expectations. In December 2003, Merrill Lynch valued Psion's stake in Symbian at £240m. David Potter, Psion founder and chairman, said today that the company's interest in Symbian had always been financial. He noted that the company had invested £35m in Symbian so today's transaction represented a huge rate of return. Alistair Crawford, Psion CEO, said it was time for the company to "realise our investment. We think it is a great deal, and we get a very good price. We’re very confident about the future of Symbian and therefore we’re happy to have two years of contingent payments so that we can benefit from the future success of Symbian." Psion was always the minnow among sharks: the company found it challenging to fund its alloted portion of funding for Symbian, unlike the top tier phone makers which comprised the rest of the share register. Now it too can be a shark: Psion is to re-invest the Nokia money in its Psion Teklogix industrial handhelds arm, its sole remaining operating business following last week's disposal of Psion Software for an undisclosed sum. Plans could include acquisitions in related vertical handheld markets, Crawford said. ® Related Products Browse the Psion & Symbian Department of The Reg mobile store
Drew Cullen, 09 Feb 2004

4.8m UK BB users by year-end – report

The UKiwill rack up almost five million broadband punters by the end of the year, according to Continental Research. With some 3.6 million broadband users in the UK at the moment, Continental Research's Spring 2004 Internet Report reckons that the UK's continued "strong interest" in broadband should result in 4.8 million connections by the end of the year. This is based on research which found that three in ten of the UK's population of dial-up users "expressed some likelihood" that they would upgrade to a faster connection within the next 12 months. Said Continental Research's Colin Shaddick: "With 12.6 million homes now connected to the Internet there is a still a huge opportunity available for telecoms companies to persuade people to up-grade onto faster connections, especially as we are seeing a strong interest and demand by consumers to do so." Elsewhere, the research found that one in three UK adults (13 million or so) has become "online-savvy" and are using the Net for things such as buying airline tickets, banking and downloading music. Which is nice. ®
Tim Richardson, 09 Feb 2004
Broken CD with wrench

NHS pulls plug on ailing £30m IT system

Scottish health bosses have pulled the plug on the launch of a £30 million computer system from McKessonHBOC after staff at the Edinburgh Royal Infirmary complained that they couldn’t access vital information on it. According to a report in the The Scotsman, deployment has been hit by a series of delays, leaving the hospital without the system it should have had up and running two years ago. One hospital insider described the system as ‘a shambles’. The planned system involves the computerisation of all records with the aim of ensuring access to more up-to-date information, and would have allowed staff to access patient information at their bedsides. However, unions said that staff had no faith in the system, and called on the Lothian Health Board to drop the project entirely. Tom Waterson, Unison branch secretary, said: "We have always had concerns about the HIS programme. We have urged, and will continue to urge, the management team to look at whether we need to go ahead with this contract or not. "The staff we have spoken to do not have faith in the system. It can’t deliver the system it promised to deliver. People raised concerns at the very start that this system has never been tested before anywhere in the world." In a statement, the Lothian Health Board said the changing nature of the technology infrastructure in the UK meant that it was "no longer feasible to realise the vision" that the project entailed. The Health Board also noted that no money has been paid to McKesson during the project so far. Consultation with staff affected by the termination of the contract has already begun. McKesson has strong links with the NHS: In 2001 the company signed a £13.5 million outsourcing deal to run all financial applications for consortium of 12 out of the 14 NHS trusts in Wales until 2009. It also runs an NHS-wide clearing service and is responsible for electronic staff records and payroll. ®
Lucy Sherriff, 09 Feb 2004

Fewer children become regular chat users

Fewer children are becoming regular users of chat rooms, according to the interim results of a year-long study into young people's behaviour online. The University of Lancashire's Cyberspace Research Unit found that the number of primary school children becoming regular chat users dipped last year compared with 2002. The research also found that, overall, even more youngsters (nine out of ten, compared to eight in ten) were aware of basic online safety advice such as never giving out personal details when chatting online. This is encouraging for those keen to ensure that young people stay safe when using the Net, but the research also highlights a worrying trend. For despite these improvements, experts are concerned that a hardcore group of chat room users are unaware, or simply ignore online safety advice. What's more, an increasing proportion of these 8-11 year olds admitted to attending face-to-face meetings with people they've met online. In 2002 one in ten chat users admitted meeting people - last year it increased to one in four. Said report author Rachel O'Connell: "Overall, there is an increase in knowledge of safety guidelines. Worryingly, there are still people unaware of the risks associated with chat. And she warned: "The message is not getting through about meeting people." Indeed, this idea of the message not getting through was a theme that was repeated throughout the day. Ruth Hammond from BECTA (British Educational Communications and Technology Agency) echoed the experiences of other speakers by saying that some children do take risks online. But while she said that parents could do more to reinforce online safety messages, she also called on people to keep a sense of perspective. Citing official figures, she said some 5,000 children under the age of 16 die or are seriously injured on Britain's roads each year. Yet in the past two or three years, there were fewer than 30 cases of children seriously sexually assaulted by a man they'd met in a chat room, she said. "The biggest Internet danger is that we concentrate on the dangers and forget the benefits," she said. Friday, Feb 6 was "European Safer Internet Day", with sixteen countries taking part in a day of action to defend "children's right to a safer Internet". Elsewhere, in the US the National Center for Missing & Exploited Children (NCMEC) has announced that reports concerning the sexual exploitation of children are at an all-time high. Over the past five years reports to its CyberTipline, a Web site - backed by Government agencies including the FBI - have increased 750 per cent. Last year, reports concerning illegal images of children, child prostitution and other crimes against children soared to 82,000. Said NCMEC boss Ernie Allen: "This dramatic increase clearly demonstrates that child sexual exploitation is a major problem in the US and around the world. "The rapid growth of sexually abusive images of children can be attributed to the ever-increasing number of users on the Internet, more affordable technology, and a federal law requiring ISPs to report all incidents of child pornography on their systems to the National Center." ® Related Story Safer Internet Day
Tim Richardson, 09 Feb 2004

Vodafone leans towards AT&T Wireless bid

UK-based mobile operator Vodafone Group is reportedly leaning toward a bid for number three US mobile operator AT&T Wireless. That's according to several newspaper reports on Monday, reinforcing earlier speculation that the British giant is eyeing up the American company which put itself up for sale in late January. However, two main factors could complicate the UK-based company's bid - shareholder resistance and an existing alliance with AT&T Wireless rival Verizon Wireless. For its part, Vodafone has so far declined to officially throw its hat into the ring. "Vodafone Group plc announces that it continues to monitor developments in the US market and is exploring whether a potential transaction with AT&T Wireless is in the interests of its shareholders," the company said in a brief statement on Monday morning. If, however, the company does press forward with an acquisition proposal, which Vodafone CEO Arun Sarin is allegedly in favour of, it would make for the firm's biggest buy since its now-controversial purchase of German operator Mannesmann in 1999, a deal worth roughly €70bn. Vodafone currently owns about 45 per cent of Verizon Wireless, which the UK company would sell to Verizon Communication in the event of a takeover of AT&T Wireless. That minority shareholding in Verizon could bring in as much as $20bn or more, analysts say. Meanwhile, AT&T Wireless is pegged to sell for up to $35bn. Friday, 13 February, is the deadline set for proposals to be delivered to the company's board. Already SBC Communications' wireless arm, Cingular Wireless, has offered $30bn, or about $11 per share, in an all-cash bid for AT&T Wireless. Bell South has also expressed interest in making a bid for the company. With less than a week to go before bids are due, analysts are also watching to see if fifth-ranked US operator Nextel Communications, Deutsche Telekom-owned sixth-ranked player T-Mobile USA or NTT DoCoMo will make a move for AT&T Wireless. DoCoMo already owns about 16 per cent of AT&T Wireless. Resistance among shareholders could also hamper Vodafone's ambitions to buy AT&T Wireless. In the days after speculation began that Vodafone could enter the race, its shares sank from $27.20 to $24.43, as investors questioned the wisdom of such a large outlay of cash for a number three carrier. Traditionally, Vodafone has opted to buy a number one or number two player in new markets. Verizon, the top US carrier, has about 34.6 million subscribers, compared to around 22 million for AT&T Wireless. On Friday, 6 February, Vodafone shares climbed nearly 4 per cent in New York to close at $25.37. © ENN
ElectricNews.net, 09 Feb 2004

Free Software 2004

The International Free Software Forum today issued a call for papers ahead of its next annual meeting. Proposals are due by March 7. Billed as one of the largest Free Software events in the world, this will be the fifth meeting of the International Free Software Forum. Over the last four years, these events have seen more than 4,000 people meet to discuss software ownership, intellectual property issues and so on. Last year’s event attracted delegates from as far afield as Russia, Sweden, The Netherlands, USA, France and Paraguay. Speakers at previous events include HP's Bdale Garbee, Ximian's Miguel de Icaza, Linux International's Jon 'maddog' Hall, MySQL's David Axmark, FSF's Richard Stallman and TimotyNey, LTSP's Jim McQuillan. The organisation was set up to promote awareness of free software in developing economies, such as Brasil. This year's site is a work in progress still, but anyone wishing to submit work should contact Christiano Anderson through the general website. An understanding of Portuguese would be an advantage. ®
Lucy Sherriff, 09 Feb 2004
SGI logo hardware close-up

Public sector has IT companies ‘over a barrel’

Intellect, the trade association of the ICT industry, will tell the House of Commons Work and Pensions Committee that government and IT companies must take more partnership-based approach to IT contracts, when it gives evidence before MPs this afternoon. According to Nick Kalisperas, head of public sector at Intellect, the government has IT companies over a barrel when it came to negotiating terms of contracts. He acknowledges that this provides value for the purchasing parties now, but argues that this is an unconstructive approach in the long run. “The money is in the public sector at the moment, while the IT companies are having a much harder time of it. The result is that the public sector feels that it is a position to dictate terms and is imposing some pretty onerous clauses on suppliers. In the long run though, when the market picks up, this kind of practise will deter people from going for public sector business,” he said. In its evidence submission, Intellect also called for the government to stop publicly blaming companies when projects ran into trouble. When public money is being spent, transparency and accountability are paramount, but nothing was gained by finger pointing, according to Kalisperas. "We feel that a better balance between accountability and commercial confidentiality needs to be struck,” he said. The select committee began its inquiry "to examine the DWP's management of information technology (IT) projects" last week, following several high profile public relations disasters over large scale IT deployment in government agencies. a sub-committee will hear evidence from industry bodies, like Intellect, from IT journalists, users, trade union representative and ministers. The inquiry will take two phases. The first will seek to establish what the ideal IT contract should look like. The second will look at the particular agencies’ records in IT procurement. A spokesman for the Department of Work and Pensions said the inquiry was established to determine best practice, but that it was too early to say what this might look like. The select committee will hear evidence for several more weeks, if not months, before drawing conclusions. ®
Lucy Sherriff, 09 Feb 2004

Linksys touts for Euro resellers

Linksys has kicked off a campaign to expand its share of the lucrative European small business networking market with a channel putsch and the launch of a low end VPN router offering. The Cisco subsidiary's VAR accreditation, snappily-dubbed the Linksys Partner Connection Program, aims to sign up resellers by offering "special benefits", training, and tools that will help them sell the firm's kit to SOHO and Small Business customers. Resellers who sign up via the Linksys VAR website will qualify for the incentives including additional discounts on some kit bought from authorised disties, special reseller-only deals, demo program pricing, sales training and marketing tools. Special pricing, will also be made available for dealers selling into education and government end users. These sweeteners are the first phase of the Linksys channel charm offensive. Phase II and III benefits and additional features will be rolled out later in the year - but only to resellers who have signed up for the initial offer. David Kelly, Linksys director of sales, EMEA, said the SME channel programme will draw inspirations similar reseller schemes run by Cisco, but it will run autonomously from those of the parent company. The company made it clear that its hearts and minds exercise is only targeting VARs: "Linksys is aiming to qualify network resellers that have a face-to-face selling model, provide pre and post sales to support their customers, provide networking design, configuration and troubleshooting for their customers, sell complementary products and obtain a significant portion of their overall revenues from sales of complementary products and services," the company said. Linksys today began shipping the RV082 10/100 8-Port Virtual Private Network (VPN) Router, aimed at the SME/SOHO markets, for the first time in Europe. The device, like any router, allows multiple office computers share a single broadband Internet connection, but the firm was keen to talk up its "unique" dual Internet port configuration which allow users to connect a second Internet line - in the event that they had one lying around - for backup connectivity. In addition to its routing functionality the unit has a built-in 8-port full-duplex 10/100 Ethernet switch and VPN support. ®
Robert Jaques, 09 Feb 2004

People want services with IQ, says IB

Information Builders’ UK MD has called for the Government to expand its view of the kind of services it should be offering people online. Speaking at the eGovernment conference in London last week, Jim Irving said that although the government’s plans to get its services online by 2005 were well underway, it needed to go beyond merely offering services like drivers licence and passport applications over the Net. “I can pay for my council tax online,” he said “And I can complain if my bins are not empty. But what I would also like is an analysis of recent crime activity. Not just by county, but right down to street or even post code level.” Unsurprisingly, this is exactly the kind of information processing and analysis that Irving’s company offers, and although raising this issue may be a little self serving, Irving has an example of what he means: In New York, Information Builders has built a portal for the Department of Health that allows the public to access the results of recent health and safety inspections for over 19,000 restaurants in the city’s five boroughs. According to Irving, this access has improved public confidence in the DOH. He argues that providing this kind of information to the public is crucial to the success of eGovernment. “Corporate organisations have used business intelligence systems for many years to analyse trends, report on exceptions, embrace corporate performance management, customer relationship management, targeted marketing and business activity monitoring,” he said. “This has led to improved efficiency, competitiveness and provided more timely information upon which to make decisions. Ultimately this needs to be the next phase for online government services in the UK.” ®
Our correspondent, 09 Feb 2004

Is the mood changing towards the legitimate use of P2P networks?

AnalysisAnalysis The mood of the media and the entertainment industry used to be very clear that file sharing equals bad and that copy protection equals good. During the past two weeks we have been told that piracy is about to be beaten and that CD sales will soon be on the rise again. Faultline chose not to tow that party line and perhaps we have sensed in the last week that this could anyway be about to change? Just as the file sharers are in court once more duking it out in a life or death legal battle that could see them as a permanent fixture, or eliminated from the scene forever, evidence has arisen from various parts of the industry to suggest a new lease on life for file sharing networks. The Distributed Computing Industry Association (DCIA), the association of the P2P file sharers, has proposed that a series of new business models for the legal distribution of music and film over the networks of its members. At the same time we have heard some praise for a new DRM lite system that does not lock out file sharing, but just makes it easy to trace back to who did any illegal file sharing. Also a UK peer to peer file sharing system has finally managed to license some major record label content and Reprise records has come up with another way around the file sharing networks, by releasing an online digital version of one of its band’s albums three months before it is in the shops. That way Reprise customers can’t copy a CD, and their only way of getting hold of the new song, during its early, most popular days, is via paid online service. And finally this week a UK company was acquired that has technology that plugs what it calls the analog hole, stopping the swapping of music over file sharing networks without reducing playability on other devices. When a track is legally copied on a DRM controlled digital system, it allows normal copying, but when it is copied to analog devices or goes through an analog-to-digital converter or undergoes conversion to MP3, a hidden watermark suddenly becomes audible ruining the track. It strikes us that finally technology and the music labels are learning to live with P2P networks, instead of trying to crush them. Filing suit Just as well really, because if the appeal that began being heard this week, does not go the way of the RIAA and the MPAA, then file sharing is most certainly here to stay. This appeal was filed back in August when the Recording Industry Association of America representing the music industry and the Motion Picture Association of America, representing the film industry, jointly filed an appeal with the US Court of Appeals in San Francisco, aiming to overturn the April decision that file sharing networks such as Grokster and Morpheus do not infringe copyrights themselves and should not be shut down. The judge at that time pointed out that it is the customers of these networks that are committing the crime, not the network or networks owners themselves. It is this ruling that has led to the RIAA going after individual file sharers, those who actually make copyrighted material available, rather than the services that offer the file sharing infrastructure that makes it possible. At the time of the original finding, the judge compared file sharing networks with photocopiers, saying it is not their existence which is illegal, but the purposes they are put to. The appeal has also had the weight of the National Music Publishers Association added to the original two protagonists. Grokster has always said that there is little or no new evidence for the appeal to consider, and this really looks like these organizations just want a different verdict, regardless of the law. A statement referring to the file sharing services as “businesses that were built for the exclusive reason of illegally exchanging copyrighted works, and they make money hand over fist from it. The Court of Appeals should hold them accountable," came from RIAA president Cary Sherman as the appeals were filed. Now the courtroom argument is little different and the three-judge panel for the US 9th Circuit Court of Appeals in Pasadena are being asked for a second time to close down all file sharing networks and make them effectively illegal. The logic is that they ONLY exist for trading copyrighted works, and that if they are allowed to stay in existence, then they should at least be made to filter out copyrighted works. The riposte from the file sharers has been that it is not possible to filter out all copyrighted works, and to refer back to what is known as the Betamax finding and be treated as it they are VHS or DVD devices. In a case heard way back in 1984 the US Supreme Court upheld Sony’s view that it was not liable for copyright infringement by selling VCRs which could be used to tape the TV. The case hinged on whether or not the devices had other, legitimate uses, which they were found to have. Changing the filter If this court is satisfied that file sharing networks have other uses, then it would be powerless to overturn a Supreme Court verdict, and the RIAA and MPAA would either have to accept it or try to get leave to take it up with the Supreme Court. The ideas of putting in blocks and filters appears to be a non-starter, given that the Appeal Court would have to make an effective change in the law by precedent, and has been urged to leave that to the legislature. A new bill could be brought making it the responsibility of a file sharing network to filter the content that is shared using its software, but it is unlikely that the Appeals Court will take that on itself. When asked why this suit was different from Sony’s case, the counsel representing the RIAA and the MPAA said that Sony had no way to prevent unauthorized copying on VCRs, but that Morpheus and Grokster, the two file sharing networks named in the suit, could apply the filters. This is not technically true. Sony could have placed a file listing every piece of copyrighted work in existence on every VHS device and made it impossible to copy them. However this would have made the product economically impossible. But that’s what the RIAA is now asking the file sharers to do now. And we don’t think a court will impose a sanction on file sharing networks that makes it economically infeasible to carry out their business. We don’t want to tempt fate, or pre-judge the Courts, but our guess is that the File sharing networks, in one way or another, will remain in business for some many years yet to come, so it is the other direction, that of co-existence that has become more interesting this week. Previously media reporting almost solely focused on the unimaginative approach to file sharing that the RIAA has offered – extinguish it, don’t negotiate with it – but these other events seem to see the networks themselves growing up and beginning to realize that if they are to have a place in the universe, then they need to do some of the thinking to create a use for them and at the same time put an eventual end to illegal copying. The DCIA is backed by Kazaa parent Sharman Networks, and its close ally Altnet and its new business model projection may have some legs. Take a look at the P2P Music models presentation at http://www.dcia.info. It begins its pitch acknowledging that sales of CDs are going down at 2.1 per cent per year and yet it should be going up in line at least with US Gross Domestic Product, at around 2.7 per cent - a discrepancy of 4.8 per cent. It asks why the music industry is resisting overtures from P2P networks and yet encouraging online music services and asks why the RIAA hasn’t courted a marketplace that has 80 million active music lovers. Embracing it would lead to sales going up by 10 per cent per annum for the next four years, the presentation says. What the DCIA wants to see happen is that Digital Rights Managed files are made available over the file sharing networks for purchase, that they could have pride of place in a file sharing environment a little like paid advertisements on Google are the first that anyone sees. Initially, customers would buy these by credit card billing which is already in place at the file sharing networks, then later through their phone bills or better still their monthly ISP charges for convenience. In this environment, presumably with a cut going to the delivering network, the file sharers would promote the benefits of legitimacy and quality of content to users and the result would be 600 million legitimate paid downloads a month rising to 1.7 billion representing $900 million a month. If those figure are right, then they would dwarf the online music sales of Apple and Rhapsody and would just about mean that P2P sales were bigger than retail sales. By using the ISPs to bill for the service, a cut could be extracted for allowing their networks to be used for delivery, the DCIA argues, perhaps an additional monthly ISP fee for anybody having downloaded a P2P, making everybody happy. But the DCIA warns that without a micropayments billing system in place, this won’t take off. And places the responsibility for that with Telcos and ISPs. To backfill over the existing collections that individuals have built up over the years, the DCIA asks for the labels to offer some kind of conversion of the legacy file shared music to authorized copies, carried out automatically via software so that it doesn’t involve anyone being identified or prosecuted. Of course in order to do all of this, a Digital Rights Management regime has to be brought into play that doesn’t rely on locking down music. The one that has been suggested by the DCIA is a watermarking system. You're all lightweights It just so happens that such a system was described this week by the Fraunhofer-Institute, in Germany. The Light Weight DRM (LWDRM) relies on locking tracks to a PC at the stage that it is downloaded, but then using LWDRM compatible software to convert tracks into any codec of their choice including MP3. But at the same time an inaudible signature is placed on the track, in effect what we call a watermark. This watermark can be traced back to a particular PC or copy of the LWDRM software easily and if it is found on the internet, prosecution would become a formality. The nice thing about this simple system is that personal copies can easily be made, and as long as they are not distributed over the internet, then they are ok. Even the most ardent rip and burn fan is going to think twice about even cutting a CD for his best friend, if he knows that the tracks can be identified immediately with him. Content holders would have to have a permanent ear on file sharing content, but that could be managed by a central administration system out of a central fund, and this type of system would only be effective in countries where the local authorities could be relied upon to act when a pirated watermark is identified. But it would certainly decimate file sharing without locking down music. Locked CD protected music is not something that has not yet appealed to US purchasers of CDs, who so far have point blank refused to buy copyright protected music. Another form of copy protection also emerged this week, with SunnComm’s distributor arm Quiet Tiger, buying UK based DarkNoise Technologies. This is a similar system to the one described above, which places watermarks on CDs. But in this system, when the tracks are illegally copied it makes the watermark audible, ruining the track. We don’t think this approach will be quite so popular with users as the one from the Fraunhofer-Institute, because it will lock down the music so that there are no personal use copies, but it shows that the copy protection companies are at least thinking about the problem. SunnComm plans to use the technology inside its own CD copy-protection system, going to beta in just 60 days. Wippit up Along the same lines, EMI made headlines this week when it licensed Wippit, a UK based P2P file-sharing service to carry most of its portfolio, to start in February. EMI is the first major label to sign up, but Wippit has over 200 independent labels signed already. It hopes to license its service for just $50 per year and allow customers to download any of Wippit's tunes and save them in as many places they like. Wippit also reckons it has the ear of a further four major labels and expects to sign at least two of them. But that word, file sharing, may still scare them off. And finally, just to throw a note of caution into anyone that thinks that perhaps Grokster and Morpheus will lose their court case and never be heard from again. Streamcast networks, distributors of Morpheus, has released a new version of the program that connects to other file sharing networks. In effect this is middeware for P2P. So requests to share files can now be picked up on other networks and the results of their search transferred back, effectively melding the entire global P2P community into a single community. So if the law closes one down, then its customers can still link to another, and another, and so on. So far the networks included are just Kazaa, Grokster, eDonkey, Gnutella, LimeWire, iMesh and Overnet, but that should do for now. The new version of Morpheus also includes Voice over Internet Protocol software like Skype, that lets its users place phone calls over the Internet for free, so pretty soon too, VoIP traffic will move freely between all the networks. A chilling thought if you are thinking of using a courtroom to suppress either file sharing or VoIP piggybacking. © Copyright 2004 Faultline Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of events that have happened each week in the world of digital media. Faultline is where media meets technology. Subscription details here.
Faultline, 09 Feb 2004

We want a Sony media server

Home Networks research company Parks Associates has delivered a damning verdict to PC based suppliers of media servers, with a survey which shows that US families are looking to buy such a device from CE brands like Sony, Panasonic or Pioneer, and not from Microsoft, Hewlett-Packard or Gateway. Over 70 per cent of households which already have broadband lines picked out consumer electronics brands, over their PC counterparts, in Parks Associates' Broadband Networked Households project. Over a half of them (51%) picked Sony as their brand of choice for any device, which would store and distribute content to networked devices within the home. “With unit sales flattening, PC OEMs hope digital consumer electronics will be their next big opportunity,” said Michael Greeson, vice president of research and strategy for Parks “Yet it is far from certain that a PC leader such as HP or Dell can cross over to consumer electronics and compete with the likes of Sony. The CE players have been selling dependable and inexpensive devices for decades, and consumers will gravitate toward category-specific brands due to positive prior experiences. This ingrained brand preference will be hard to break.” Parks Associates' most recent consumer research initiative, Broadband Networked Households, features data collected from a survey conducted in Q4 2003 of more than 3,300 broadband households. The company is also preparing to launch Consumers & Emerging Multimedia Platforms, a Q1 2004 primary research project designed to examine consumer perceptions of reliability, brand preference, feature sets, and applications unique to these media platforms. © Copyright 2004 Faultline Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of events that have happened each week in the world of digital media. Faultline is where media meets technology. Subscription details here.
Faultline, 09 Feb 2004

Powergen sets legal attack dogs on security whistle-blower

Powergen and a customer who highlighted a serious breach in consumer security at the utility more than three years ago are still locked in legal dispute. John Chamberlain earned the enmity of the British utility company for leaking to Silicon.com a list of credit cards left unprotected on the utility's Web site. He is fighting a breach of confidence suit from Powergen. This civil lawsuit, which arises out of an accusation that Chamberlain failed to keep a promise to destroy customer data obtained from Powergen's site, is to be tried in the Chancery Court at Birmingham on March 12. Without any legal aid, Chamberlain has been forced to conduct his legal defence in the case. He is searching for a lawyer who is prepared to work on the case pro-bono (without a fee). Leicester-based former IT consultant Chamberlain described the experience of going through the courts without legal support as "bewildering" and "frustrating". What’s in a domain? In a separate action initiated last month, Chamberlain is involved in a domain name over the site Po Wergen.tv. This site was "registered in bad faith" and originally (for a time in October 2003) contained content critical of Powergen, according to Powergen's complaint to ICANN. At the time of writing the site contained only material about mountain biking. Chamberlain said the site is derived from the Chinese word 'Po' and the German word 'Wergen'. Chamberlain previously ran a site called www.powergensucks.com and www.powergen.me.uk. Chamberlain transferred ownership of the domain powergen.me.uk to Powergen after reaching a settlement with the utility after Powergen complained to Nominet but before a hearing had taken place in the case. Powergensucks.com is also an ex-parrot. So why has Chamberlain registered a series of domains that could easily be seen as having a dig at Powergen? "I'm only exercising my right to freedom of expression. Powergen is a generic term in the electricity industry anyway," Chamberlain told The Register. Power struggle The bad feeling between Powergen and Chamberlain began after he found a serious security hole on its site back in July 2000. Rather than thanking him for pointing out that customers' financial details were easily obtainable through simple URL manipulation, Powergen at first denied anything was wrong. After Silicon.com was able to prove the security breach via information turned over to it by Chamberlain Powergen upped the ante by threatening to obtain an injunction against Silicon.com and by branding Chamberlain as a 'hacker'. But no prosecution was ever brought against Chamberlain. Chamberlain is highly critical of Powergen's initial denials as well as its subsequent aggressive stance. "Powergen had no procedures in place. They came gunning for me and my career," Chamberlain told El Reg. Chamberlain concedes that he may have acted "irrationally" when he found his debit cards details left on Powergen's insecure servers. But the subsequent actions of a company he formerly trusted have left him bruised and bewildered. "It's had a negative effect on me - I haven't worked in two years. I'm sorry I ever went online that day to pay my bill," Chamberlain told The Register. Neither Powergen nor its lawyers in the domain name dispute, Wragge & Co of Birmingham, responded to our repeated (phone and email) requests for comment in the case. ® Related stories Powergen credit card security cock-up Powergen gives lessons on stupidity Powergen stems flow to bloody nose Powergen denies ties with powergenitalia
John Leyden, 09 Feb 2004

Checking on .eu names: want the job?

ZurichZurich . The href="http://www.eurid.org">EURid, the consortium appointed by the EU to manage the .eu domain, tries to keep smiling. Still, Fay Howard, project manager of the registry, could not restrain herself at last week's Digitial Pulse conference in Zurich, when a representative of the German Government said there certainly would be no Internet without Governments. "I would just show you how long this has been going on," she said, referring to still-unfinished task of launching a European Top Level Domain, .eu, in accordance with official EC regulation. Howard presented the complicated two-phase sunrise structure.at Digital Pulse, a regular meeting of the three German-speaking registries Switch (.ch), Nic.at (.at) and Denic (.de). The domain is now said to be up and running Q1 next year, which means another slight delay compared to the state of play at the end of last year. One major step is to be the expected approval of the Public Policy Rules (PPR) by the Communication Committee of the EU (CoCom) on March, 10. The last changes for the rules of engagement are currently being drafted by the EC. Still there is some way to go before you can get "your European identity on the net", for the price of about €10. The domain is exclusive: it's only for Europeans. While you can sell domains as non-EU-company, you cannot register a name. Sue'em all "We hold trademarks for well-known companies which have no office in a EU member state and therefore cannot register .eu-domain," said a Swiss registrar in Zurich. "So do we only have the possibilty to go on and sue everybody who tries to register the trademark, throw him out and then sue the next one?" This is one of many tricky questions that EURid and its master the Commission must still tackle. .eu will see the first two phase sunrise period. The first two-month registration will be reserved for trademark owners, the next two months will allow the owners of all other naming rights to register in advance of the official start. This sounds good, because not only the big players with their registered trademarks can apply, but also owners of common law marks and protected names, but this make the process really complicated. First, one must navigate tghe different trademark laws in EU member states. After applying for the domain with EURid, the potential registrant has to bring proof for his claim on the name in front of a "validation agent". If he is the first to register and can prove his rights with documents, he wins. To check registered trademarks will be the easiest task; but what about family names -protected in one member country and not another? "We just published a call of interest for a validation agency," Howard says. "You want a href="ttp://www.eurid.org/News/documents/ValidationAgentspeci5300104.doc">the job?" Slow, slow, quick, quick, slow Early ideas for .eu date back to the mid-nineties; and launching has been said to be iminent since 2000. The idea was to have an European competitor against the-then monopoly NSI's .com-domains. At the time its seemed so tempting. But a quick start was out of the question, once The Commission decided to adopt a formal regulatory framework. Member states and EU parliament and its committees got involved. This is the "normal" procedure: not fast, not slow - only too slow for Internet competition. Other newcomers to the TLD market have long outrun .eu. .eu will be nearly perfect, sure. It will start only when every citizen of the EU can find a registrar company which speaks the official native language of his country. "We have to find for example somebody who offers registration in Maltese," says Howard. As soon as the PPR are finalised, the EURid Consortium members - the Belgian, the Italian and the Swedish country code registries - sign a five-year contract with the Commission. Then they start to accredit registrar companies. ® Related article EURid wins .eu domain contract officially
Monika Ermert, 09 Feb 2004

Peoplesoft spurns Oracle's final final offer

Peoplesoft's board of directors has unanimously rejected Oracle's revised offer of $9.4bn -$26 a share -on the astonishing grounds that it's not enough money. But don't take Peoplesoft's word for it: this too is the considered opinion of its gold-plated advisors, Citibank and Goldman Sachs. The Peoplesoft board is on surer ground when it notes the likelihood of antitrust action in both the US and the EU which would scupper any takeover. But we shouldn't have too long to wait in the case of the US: Oracle says it expects a ruling from the Department of Justice before March 12. Today's Peoplesoft board vote can be seen as a paean to altruism on the part of CEO Craig Conway, who will trouser a whopping $62 million in severance pay, options and stock if Oracle wins the day. But is Peoplesoft's attempt to play the anti-trust card really in the interest of its shareholders? Oracle's offer on the table represents a premium of $4 a share on Peoplesoft's closing price on February 3, the day before it made its latest offer. It is difficult to see how Peoplesoft shareholders can resist. It's a different story for Oracle shareholders. Oracle currently has approx. $8bn in the bank - while Peoplesoft has $1.5bn. Oracle will, as some analysts have pointed out, have a net sum of just $100m (cash minus bank debt), following a successful takeover. Not much for the inevitable lay-offs. Both businesses are cash-generative, but Oracle would really need to make the assets sweat to restore such a huge financial cushion. ® Related story Oracle hikes Peoplesoft bid to $9.4bn
Drew Cullen, 09 Feb 2004
server room

EMC floods market with new hardware

As expected, EMC rolled out a sweeping set of hardware upgrades today (Feb 9). Just about every product line was touched by the refresh, including Symmetrix, Clariion, Celerra and Centera systems. EMC's attention to the hardware side of the house comes as good news for customers, after the company spent the last few months refining its software strategy. First up, EMC retooled the Symmetrix DMX box to come up with the DMX-2. The new system has twice the processing power and cache memory capacity as its predecessor. With the new kit, EMC beat out Hitachi with a new high-end system. One of the key feature additions to the DMX-2 is EMC's introduction of AutoSwap technology. This tool is similar to IBM's Geographically Dispersed Parallel Sysplex (GDPS) software, which lets users redirect mainframe storage workloads without interrupting application processing. The list price for AutoSwap is $200,000 for a typical configuration. On the Clariion front, EMC replaced its current line of CX200, CX400 and CX600 systems with the new CX300, CX500 and CX700 boxes. EMC has kept prices for the new kit the same but expects users will see anywhere from 25 percent to 100 percent better performance. For both the Symmetrix and Clariion servers, EMC has also released the new Celerra NS700G and NS700 NAS (network attached storage) gateways. These products help add network attached storage functions to the higher-end Fibre Channel-based kit from EMC. EMC additionally tuned its Centera fixed content storage systems to work in tandem with mainframes. The Centera systems also received a major performance boost and improved data replication speeds. EMC knows how to conduct a product launch in style. The broad nature of this launch is an impressive feat for EMC to pull off and a challenge to competitors. EMC has managed to align the release cycles of its high-end, midrange and low-end gear, making it easier for customers to plan upgrades. In addition, the company proved it has not been distracted by the busy software side of the house. If EMC can unite the software lines of newly acquired Documentum, VMware and Legato, it will start sending shivers up rivals' spines. ®
Ashlee Vance, 09 Feb 2004

EC probes mobile sports right sales

The European Commission has launched an inquiry into the sale of sports rights to Internet companies and 3G mobile operators. The review will look at the availability of audiovisual sports rights in the European Union amid concerns the market might become the subject of anti-competitive practices. As the first broad investigation in the area of new media rights, the results of the probe are likely to send ripples throughout the sport, media and technology industries. Getting the formation right The Commission notes that sports rights - and in particular football rights - are powerful drivers for the sale of pay-TV subscriptions. The same will apply when sports coverage is made more widely available on the Net and 3G phones, the Commission reasons, hence a need to set up an open competitive marketplace. Competition Commissioner Mario Monti said: "As the launch of 3G networks enters into full swing and the success of the service weighs heavily on the operators' ability to deliver attractive audiovisual content, it is the task of competition regulators to ensure that access to sports rights remains open and non-discriminatory." Offside The Commission's experience so far in this field has "highlighted possible anti-competitive commercial arrangements and conduct across the whole industry". "Such behaviour would chiefly take the form of refusals to supply, the bundling of TV rights with new media/3G rights, the existence of embargoes favouring TV coverage over new types of coverage or the purchase of new media/3G rights on an exclusive basis," it adds. According to the Commission, arrangements for the sale of the rights to the English and German Premier Leagues and the Champions League have already given rise to concerns. But the Commission is there to ensure fair play, it says, in what looks like a prelude to an argument for greater regulation. Did you see that, Ref? As Internet and 3G rights become more important, the Commission argues for the need to develop a sector-wide approach which would clarify the application of competition rules in content markets opened up by technology advances. The Commission is sending out questionnaires to a number of representative sport organisations and other holders of sports rights, including agencies, broadcasters and mobile network operators in order to better understand market evolutions and practices. The aim of the Commission's inquiry is to establish whether current commercial practices infringe European competition rules, in particular the prohibition of restrictive practices and abuses of dominant position (Articles 81 and 82 of the EC Treaty). Game of two halves So how will the industry respond? Beyond saying it will contribute to the EU inquiry, 3UK, an early entrant in the provision of next generation content services in UK, gave no indication of what it would say. Other parties in the consultation are also playing their cards to their chest, as well they might when the stakes are so high and important deals are already falling into place. Last October, 3 and Vodafone UK announced that they had jointly secured mobile content rights for the FA Premier League for the next three seasons starting next year. Running from 2004/05 through to the 2006/07 season, the rights will give both Vodafone and 3 customers access to all 380 FA Premier League matches a season by their mobile phones. The rights package enables Vodafone and 3 to offer customers a number of mobile services including exclusive video match highlights, previews, archive footage and Premiership round-ups as well as other services such as audio bulletins, 'near-live' picture messages and match scores. A spokesman for 3 said the deal was an example of how mobile content rights could be shared. "We'll be competing very vigorously with Vodafone," he added. According to industry figures, there are currently just over 500,000 subscribers of 3G services in Europe. 3G services have been introduced in five EU countries Sweden, Denmark, United Kingdom, Italy and Austria but 40 new networks are expected to be launched in Europe in the next 12 months. The provision of a range of new services and, in particular, the transmission of images and sound from sports events or the like is expected to be one of the main selling points for high speed mobile (3G) services in Europe. ® Related Stories Content is king for 3G. But what content? Playboy gets into the Hutch Tech savvy are gagging for 3G Hutchison 3G unveils prices, services BTo scores own goal Orange jumps into mobile gambling market Football. Culture. Everything in between
John Leyden, 09 Feb 2004

Rockall Times back with a bang and a new shirt

Cash'n'CarrionCash'n'Carrion UK satire site The Rockall Times has, we gather, finally addressed its content management issues and re-entered the Web stage left to a slightly discordant fanfare of trumpets. To celebrate this momentous occassion - and presumably to shamelessly rattle the tin in aid of their new CMS - they have expanded their popular smoking warning range with an all-new offering. Warming to the theme of the hidden dangers of lighting up - as exemplified in the original "Smoking leads to heroin addiction, paedophilia and suicide bombing" - the voice of the world's remotest islet has decided to offer guidance to those who have, despite the inevitability of their eventual decline into sexual perversion and drug addiction, been unable to kick the habit: Good, solid advice to be sure. The new shirt is available right now at Cash'n'Carrion, is available in a range of sizes from medium to XXL and costs £12.76 (£14.99 inc VAT). What's more, this slogan is delivered on a premium 100 per cent black cotton shirt guaranteed free of nicotine, benzene, nitrosamines, formaldehyde and hydrogen cyanide. So, if you'd like to do your bit for both British public health and UK satire, here's your chance. ®
Cash'n'Carrion, 09 Feb 2004

Nokia wins mobile network deal in Iraq

Nokia has secured a deal for building a GSM mobile telephone network in the south of Iraq, Finnish daily Helsingin Sanomat reports. Iraq's interim administration has divided the country into northern, central, and southern areas, each of which are primarily getting one mobile operator. Last autumn a consortium led by the Kuwait-based mobile operator MTC won a licence to provide GSM service in southern Iraq, including Basra. Nokia will deliver the network to Atheer Telecom, which is owned by the Kuwaiti mobile operator. The mobile network in the north has been divided between Siemens (Germany) and China's Huawei, and the southern core network in Iraq will be built by Nokia and its Kuwaiti partner FCCI. Nokia's network will extend to the outskirts of Baghdad, but not to Iraq's capital. France's Alcatel and Motorola have been named as potential suppliers for the central zone which is 'owned' by Orascom Telecom Iraq Corporation. Service provider Iraqna, part of Orascom last week launched a pre-paid service in the capital. Customers are required to pay a deposit of $US 650, far beyond the means of most in the country. Mobile phones were strictly banned under Saddam Hussein's dictatorial regime. ® Related Products Find your next Nokia in The Reg mobile store
Jan Libbenga, 09 Feb 2004

Californian sues penis pill spammers for fraud

A Californian man has put his manhood on the line by suing the spam-vertisers of penis enlargement pills. The dicky medicine sold to Jeffery (sic) Horton failed to have the desired effect, prompting his decision to file a lawsuit against Leading Edge Marketing of British Columbia, shipment agent TechniPak of Greeley, Colardo and several others. The lawsuit - which seeks class action status - claims the oils and herbal supplements marketed by Leading Edge under the brand name VigRx are ineffective. These 'snake oil' supplements - costing an average of $110 apiece - are a "blatant fraud", according to New York lawyer Brad Corsello, who filed the lawsuit in Denver on behalf of Horton. The lawsuit accuses the defendants of fraud, theft and money-laundering. Leading Edge markets its penis enlargement products through email, radio ads and television - including a half-hour ad featuring pornstar Ron Jeremy - as a way to permanently increase the size of a man's penis or cure erectile dysfunction. Horton vigorously disputes these claims. The Californian handed over $160 for a batch of VigRx Oil in response to an unsolicited email touting the product, according to the lawsuit. "I used the products, but the products had no effect whatsoever," Horton wrote, the Denver Post reports. "I now feel that I have been cheated out of my money by the sellers of the products. If possible, I would like to prevent the sellers of the products from cheating others as they have cheated me." Other defendants named in the lawsuit are Unipay Processing of Cyprus, DM Contact Management of British Columbia and Advanced Botanicals of British Columbia. It comes as little surprise that spam-advertised "penis enlargement" pills fail to satisfy customers. These 'medicines' might even be contaminated and therefore harmful. Now someone has come forward prepared to testify to the abject failure on these products in court. But you have to wonder how many men will follow him. Lawyers doubt the action will achieve class-action status. ® Related Stories US man threatens anthrax attack on spammers Sp@m: the myst.eries xp1ained!!! By Stob Man auctions advertising space on penis AOL's Steve Case shafted in penis hoax
John Leyden, 09 Feb 2004

‘Crackpot’ VAT laws aid offshoring – Tories

"Crackpot" VAT laws are being blamed for encouraging British firms to outsource jobs to foreign countries. So says Shadow Chancellor, Oliver Letwin, who claims a tax loophole is providing an extra incentive for companies to outsource jobs overseas. He accused the Government of effectively "providing a subsidy of 17.5 per cent to people who want to go offshore". His comments follow remarks made by Foreign Secretary, Jack Straw, over the weekend. On an official visit to India, Mr Straw said that "offshoring" jobs, such as calls centre positions, could boost the UK economy. Separately, some of the UK's largest unions - which represent office staff and call centre workers - are to carry out an independent public investigation into the offshoring of UK jobs abroad. The enquiry will invite evidence from the Department of Trade and Industry (DTI), among others, into the issue. In a statement Amicus said: "The unions do not want a protectionist solution but believe that the DTI has needs to do more to address the offshoring phenomenon which has resulted in 15,000 UK jobs being offshored since October 2003." The issue of jobs to India - or Argentina, in the case of Lastminute.com - is gaining increasing momentum. Only last week, for example, there was an outcry after it was revealed that following a new deal up to half of calls made to the UK's rail enquiries would be handled by operators in India. Recently, one BT call centre worker was suspended after putting himself up for sale on eBay in what appeared to be a protest to offshoring. Related Stories Lastminute.com culls IT jobs BT call centre worker suspended over eBay ad Sending jobs overseas could boost UK economy
Tim Richardson, 09 Feb 2004

Public offering for Opera, Mozilla renames browser

Who says the browser is dead? Norway's Opera, with a loyal base of eight million users, says it plans a stock market listing in March at the Oslo Stock Exchange (OSE). "After developing and refining the technology and commercial side for nine years, Opera Software is now ready for public listing," CEO Jon S. von Tetzchner said in a statement. Opera Software develops browsers for desktop, smart phone, PDA, iTV and vertical markets. Partners include IBM, Nokia, Sony, Motorola, Macromedia, Adobe, Kyocera, Sharp, BenQ and Sendo. The company makes most of its money in the mobile phone Internet browser market. Opera's browser for desktop PCs has only a two per cent market share against Microsoft's 96 per cent. Financially, the company is doing surprisingly well. The Norwegian company today reported revenues of NOK28.8m , for the quarter ended December 31, 2003 compared to MPL13.8m, for the same period in 2002, a growth of 108.7 per cent. In related news, The Mozilla Foundation yesterday announced the immediate availability of a new preview release of its next generation web browser, Mozilla Firefox. It is a new name for the open source stand alone browser that was previously available as Mozilla Firebird. The new release for Windows, Linux and MacOS X has a new download manager that makes tracking multiple downloads easier, numerous improvements to bookmarks handling, improved handling of extensions and a new default theme for Mac OS X users that integrates flawlessly with the OS X desktop environment. Along with the new name, Firefox sports a new logo and the Mozilla Foundation says it is kicking off a grass-roots Get Firefox campaign to spread word about the new browser. Yesterday also saw the release of Mozilla Thunderbird 0.5, a new preview of Mozilla’s email application. The development of its mainstream browser Mozilla, which combines browsing, HMTL editing, news, email and IRC chat in one application, will also continue. ®
Jan Libbenga, 09 Feb 2004

Nokia leads bid to control mobile DRM standards

Nokia, Intel, Samsung and Matsushita have formed a non-profit group called the Content Management License Administrator to license and oversee digital rights management (DRM) technology on mobile devices. The companies will adopt new specifications from the Open Mobile Alliance (OMA), which are optimized for multimedia content, and aim to establish these as a de facto standard. The ostensible aim is to encourage more content providers to make their products available for cellphones, thus driving sales of high end, multimedia handsets. But Intel and Nokia, in particular, are also following a now common pattern of behavior, seizing control of critical areas of technology by putting themselves in a position to drive the standards process. Nokia has been widely accused of using the OMA as an apparently open smokescreen for its own ambitions to dominate the direction of the mobile sector. Nokia clearly has another agenda too – to sideline Microsoft’s own DRM software, which it supports for its Windows Mobile cellphone operating system (even though it, too, is a member of OMA). The OMA has released the DRM 2.0 Enabler Release, which allows content producers to protect premium content with enhanced security for audio and video streaming and for content shared over multiple devices. Nokia, Motorola, Sony Ericsson and Siemens all use the earlier version of the OMA DRM software in their high end handsets, while Ericsson and Openwave have created servers that support it. However, other DRM technologies from Sony, Microsoft, IBM, RealNetworks and Apple are also vying for the mobile sector. © Copyright 2004 Wireless Watch Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here. Related Products Buy your next Nokia from The Reg mobile store
Wireless Watch, 09 Feb 2004

Alcatel buys in wireless routing, shops around in Wi-Fi

The suppliers of mobile infrastructure are increasingly looking to penetrate Cisco’s enterprise networking territory as voice and data converge, and that means taking a new interest in Wi-Fi. Motorola has already set out its stall, and now Nokia and Alcatel are both heavily tipped to be on the WLAN acquisition trail in a bid to spread their wings beyond the carrier base. Alcatel has been moving steadily into the enterprise sector, but lacks a major 802.11 offering. Although it has an OEM deal for Colubris access points, this is mainly focused on hotspot-in-a box products for carriers. As Colubris itself expands out of its ISP base into the enterprise, it could be a natural fit for Alcatel, but the French giant has reportedly been talking to a range of start-ups. NEC has stolen a march by allying closely with Airespace, which makes voice-optimized Wi-Fi gear. This would seem to protect Airespace from Alcatel’s or Nokia’s advances, though there are rumors that the French company has approached this switchmaker. Another switch start-up heavily focused on voice is Meru Networks, which claims to have outdone the upcoming 802.11e quality of service standard with its own access points. On its more traditional cellular infrastructure turf, Alcatel has acquired WaterCove Networks, which makes GGSN (GPRS Gateway Support Nodes) for 2.5G and 3G networks. This wireless router technology provides the main interface between the carrier’s radio and packet networks. New generation ‘intelligent’GGSNs also can handle IP traffic management and various types of billing, including charging subscribers based on content type. As multiple services differentiated by content become the way forward for the operators, and as the broadband wireless networks converge on IP, this element of the mobile infrastructure is gaining a whole new significance. Hence Nokia’s acquisition last year of the intellectual property and key personnel of another start-up in this sector, Tahoe Networks, and Alcatel’s decision to take control of this technology itself, rather than buying in Cisco GGSNs as it has in the past. WaterCove was founded in 2000, with backing from Comdisco Ventures, Orange Ventures and inOvate Communications Group. Other start-ups in the field include Megisto and Starent, both of which must now be counted as takeover targets for the big equipment vendors in this space, and for wired IP router suppliers that look set to expand into wireless, notably Juniper. Megisto has accepted that wireless routers will be the preserve of the big guns and is now focusing heavily on the services delivery aspect of this product sector, trying to distance itself image-wise from the wireless router shakeout, and says it will announce the first customer for its Mobile Services Delivery System at the 3GSM conference later this month. The company says it has moved away from GGSNs and is now focused on value added services, enabling operators to manage content charging and packaging and pricing schemes such as prepaid. As in its original territory, however, there is always Cisco to contend with. The giant recently launched its 7609 and 7613 Mobile Exchange platforms for enhanced billing, and is threatening specialist start-ups such as ProQuent and P-Cube. Announcing Alcatel’s fourth quarter results, CEO Serge Tchuruk said that two areas of growth in 2004 are expected to be 3G build-outs and the company’s strategy of supporting multimedia applications over mobile and fixed networks, a sector where it hopes for 20% revenue growth this year, and where WaterCove will be significant. The French company narrowed its fourth quarter loss to €524m from €1.12bn in the same period last year, mainly because of cost cutting, but revenues fell to €3.77bn from €4.51bn, with the strong euro the main factor. Operating profit leapt to €331m from €20m. For the full year, net loss narrowed to €1.94bn from €4.75bn, on sales that fell back to €12.51bn from €16.55bn. © Copyright 2004 Wireless Watch Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here. Related Products Visit the Wireless, 802.11 & WiFi Department of The Reg mobile store
Wireless Watch, 09 Feb 2004