8th > March > 2004 Archive

EDS to sue NHS over nixed email deal

Much-loved IT services behemoth EDS is to sue the NHS for cancelling an contract to manage email for 1m staff. An internal NHS email seen by The Register states: "The contractual relationship between the NHS Information Authority(NHSIA) and EDS as supplier for the NHS's centrally managed e-mail and directory services is to end." The email reassures users that continuity arrangements are being put in place and that the original contract included a description of 'exit' arrangements to ensure service was maintained. The NHS dropped EDS last week without compensation, citing difficulties with logging onto the system. Now EDS is seeking more than £10m in compensation to recover costs for the loss of the £90m contract, according to the FT. EDS is furious with the NHS for unilaterally terminating the contract. The usual practice is to resolve problems through arbitration, it says. Execs told the FT that Richard Granger, director general of NHS IT, had seemed determined to paint the service as failing. ® Related stories EDS job cuts on the way NHS pulls plug on ailing £30m IT system NHS wants another £2bn for IT mega project
John Oates, 08 Mar 2004

FTC appeals against Rambus ruling

The US Federal Trade Commission (FTC) is to consider reinstating anti-trust charges made against Rambus. Last month, a Federal judge tossed out such allegations. FTC lawyers now want the organisation's five commissioners to overrule the court's decision, and have given notice of appeal. On 17 February, Judge Stephen J McGuire, the FTC administrative judge presiding over the Rambus case, dismissed every element of an FTC charge which said memory maker was guilty of deceiving JEDEC, the memory industry's standards body. His judgment followed Rambus' appeal against the FTC ruling. Judge McGuire's decision was always potentially subject to review by the FTC's commissioners. The case may also be referred to the US court of appeals. The FTC filed suit against Rambus in June 2002. It accused the fast memory designer of covertly modifying memory patents to incorporate technology which it knew JEDEC was to build into the SDRAM standard. This was a violation of Federal anti-trust law and an attempt to "deceive an industry-wide standard-setting organisation, resulting in adverse effects on competition and consumers". However, Judge McGuire ruled that the organisation had not proved its allegations against the company. Rambus General Counsel John Danforth said the FTC staff's decision to appeal had come as no surprise. But he is confident the commissioners will allow the Judge McGuire's ruling to stand, thanks to the "large number of independent bases for dismissing the complaint". ® Related stories Judge throws out FTC case against Rambus Europe to revoke Rambus memory patent Rambus stuns world+dog with Infineon court victory Rambus euro patent ruling is Curate's Egg FTC declares war on Rambus
Tony Smith, 08 Mar 2004

Corpse pics earns cop the sack

A policeman has been sacked after taking photos of two corpses while visiting a hospital mortuary. The probationary Pc - who has not been named - used a camera phone to take the snaps while visiting Derriford Hospital in Plymouth as part of an induction course. He was rumbled after others heard the sound of the camera phone taking the pictures. A senior officer with the force told ITV's Westcountry News that the sacked officer had paid the price for "crass stupidity". Devon and Cornwall Police have apologised to the relatives of the deceased for the incident. The images have since been deleted. The use of camera phones is likely to become a hot topic as more people get their hands on these high-tech gizmos. By 2006, more than 80 per cent of mobile phones shipped in the US and Western Europe will have a camera installed as part of the handset. And as more and more people have these gadgets, companies and organisations will need to think seriously about protecting their security and privacy. According to analyst firm Gartner, many businesses are trying to ban camera phones from their premises to prevent industrial espionage and to protect their employees' privacy. But Gartner reckons that any attempt to implement a blanket ban of camera phones is shortsighted and would be hard to enforce. "Most organisations simply don't have the staff or money to mount effective inspections," said Ken Dulaney, research vice president at Gartner. "Instead, businesses should designate secure zones where restrictions on these devices are tight and can be enforced. For other workplace areas, staff should be given guidelines about what is acceptable." ® Related stories MP ejected for picture-phone abuse Samsung to ban camera phones
Tim Richardson, 08 Mar 2004

ATI to boost chip supply by month's end

ATI has pledged to ease the tight supply of its graphics chips by the end of the month. Company chairman and CEO KY Ho told reporters in Taipei last week that the shortage would be resolved shortly, according to DigiTimes. Mobility parts in particular should be widely available, thanks to the company's decision not to lower Q2 production targets, despite a Q1 dip in worldwide notebook sales, Ho said. He believes the dip in notebook demand will prove short-lived, with sales flat during Q2 but rising in Q3 and beyond. ATI will ship its first PCI Express chipsets next quarter, with the new interface reaching unit-shipment parity with AGP 8x by the end of the year, according to Ho. ® Related stories MSI to launch ATI-based graphics card line ATI touts low-cost HDTV tuner card ATI licenses 'dynamic logic' tech for faster, cheaper chips
Tony Smith, 08 Mar 2004

Psion shareholders are revolting

Psion's sale of its stake in Symbian to Nokia could be stopped by angry shareholders who remain unconvinced that the sale is a good deal for the business. One institutional investor, Phoenix Asset Management, which owns 13 per cent of the company, has already said it will vote against the proposed sale. David Sharman is a spokesman for the growing band of disillusioned private investors. He and other investors met Psion chairman David Potter and directors on Friday, but still believes the deal should not go through. He said: "The company has only looked at a small subset of possible options and has taken the approach of a highly risk averse investor." "We still say vote no, there are better ways of realising the value of Symbian and we believe the numbers are in our favour not the board's." Sharman believes 95 per cent of Psion's private investors will vote against the deal. He said Psion is unusual because half the company is in private hands rather than 5-10 per cent. He believes Psion shareholders are very knowledgable and understand that the shares are relatively high risk. Psion says the majority of proxy votes it has already received are voting in favour. The disgruntled shareholders are gathering online at http://www.pssion.com® Related stories Symbian sale is for the best, says Psion Symbian minorities to block Nokia sale Psion looks past Windows to Linux Related Products Check out the Psion & Symbian Department from The Reg mobile store
John Oates, 08 Mar 2004

Russian arctic boffins safe and sound

The 12 Russian scientists stranded on an arctic ice floe have been rescued. Two helicopters made the 1600km round trip from Spitzbergen to collect the dozen boffins - plus two dogs - after most of their base sank into the Greenland Sea last Wednesday. Operating at extreme range, the two choppers braved temperatures of -25 degrees C to successfully complete their mission. Base North Pole-32 had broken up because the ice on which is was standing floated too far south. It had travelled around 3,000km since opening in April 2003. ® Related stories Russian boffins in arctic base ordeal Russian arctic castaways await rescue
Lester Haines, 08 Mar 2004

Acer Aspire 1705SCi

ReviewReview It's hard to know exactly where to start when reviewing the Acer Aspire 1705SCi, since it's such a strange mix of positives and negatives. A laptop the size of a suitcase, boasting some truly exceptional specifications and yet some basic errors. In fact, is it even a laptop? asks Gordon Kelly. After all, how do you define a semi-portable PC that measures 37.8 x 32 x 5.5cm and weighs over 7kg? It's nearly twice the size of a so-called desktop replacement, its charging unit is as big as my shoe and I could probably be as comfortable dragging an iMac around with me. So what, exactly, is Acer trying to do? Essentially, it's trying to go one step further than the desktop replacement by creating a giant laptop that you use as your main PC, which can also be transported between home and the office as necessary. How has Acer tried to achieve this, beyond building the biggest luggable known to man? Well a quick look at the specs will provide a better insight. For the Aspire 1705SCi is almost half desktop, incorporating a 3.06GHz P4 desktop processor, 512MB of DDR SDRAM and full size 3.5in 120GB 7200rpm ATA-100 hard drive. A dampener on this power-packed feature set is the SiS M650 integrated graphics chipset, although a variety of Nvidia GeForce chips can be specified at additional cost. But the highlight of this product, and certainly its biggest selling point, is the stunning 17in display. Now Acer isn't the first company to fit a 17in screen to a laptop. Apple impressively incorporated one into its PowerBook range last year and it weighs a lot less than the Aspire 1705SCi. That said, the display from Acer is truly stunning. The colours are bright and sharp right through to the edges and it can hold its own alongside most standalone TFTs. And if you play a DVD in the supplied eight-speed DVD-ROM/CD-RW combo drive, the picture will blow you away. There's also built-in 802.11b wireless LAN which worked flawlessly, and surprisingly, a set of integrated stereo speakers that are reasonably clear and loud. However... Of course, there is a 'but...' and in the Aspire 1705SCi's case it's a big one, because while its advanced features stand out, the basics are a bit of a mess. For a start, it is all well and good having a large, beautiful 17in screen but navigating around it when your touchpad has the two stiffest left and right selector buttons I've ever used is another matter. Pressing the right button two or three times to get it to respond is simply ludicrous, and successfully pulling off a simple drag and drop should not make you feel like you've just come back from the gym. Still, if any laptop was designed to be used with a separate mouse it is probably the Aspire 1705SCi, but I still find it incredible that such a fundamental part of the machine has been implemented so badly. But if the touchpad can be circumvented, the keyboard can't and like the touchpad it's a bit of a nightmare. At this point, I have to say I was actually looking forward to using what Acer claimed was a full-size keyboard which also includes a full-size numeric pad, but ironically the layout is where all the problems lie. For a start, Acer's wording is ambiguous as not all the keys are full size. Some have been shrunk to almost half size while others have mysteriously ballooned to nearly double their usual proportions. And what has Acer decided to shrink? Commonly used keys such as Full Stop, Return, Right Shift, Question Mark and the @ key, while on the left hand side of the keyboard the Caps Lock, Tab and the Left Shift are ludicrously big which knocks the whole alignment of the keyboard out. It is a disaster for touch typists, and each time you move for the tiny full stop key it feels like a lucky dip. Then there is the battery life, and while it may not be the most important feature on a product this size, I was disappointed to see it last under two hours. So both internally and externally the Acer Aspire 1705SCi is a mixed bag. It offers up excellence and nonsense in equal measures but what is annoying is that all its worst aspects should never have been issues in the first place. Acer got all the difficult bits right. Performance All of which pains me to tell you that the performance of the Aspire 1705SCi is superb. In PC Mark 2002, the Aspire 1705SCi's CPU and memory scores were among the very highest we have seen with scores of 7196 and 4690 respectively. But this was nothing when compared to the hard drive which scored an incredible 1265, more than doubling anything we have seen in a notebook to date. A remarkable achievement but not enough to offset the poor ergonomics. Naturally, the SiS integrated graphics in our review model do not match the latest mobile graphics chipsets from ATI and Nvidia but I can forgive this as it's clearly not designed for games. And with a retail price of £1387 you get a lot for your money (no pun intended), although I'm sure the use of so many desktop components has helped Acer to keep the price down. On reflection, however, I'm still not convinced. Had Acer got everything right, that there is much of a market out there for a 7kg hybrid laptop. To me the point of laptops and desktops are that they provide different functions. Sure, you can make a small PC using a Shuttle case, or lug around a 3.5kg performance-oriented laptop, but when the gap between the two blurs too much, as in the case of the Aspire 1705SCi, you create a machine that struggles to perform either task well. For example, had the Aspire been all it promised, it would still have lost the portability of a laptop and the comfortable spacing of a normal keyboard, and though the screen is superb, it can't be heightened or rotated like a normal TFT. All credit to Acer for trying something very different, but even without its faults, I'm not sure that the cost saving of having a single machine for office and home can justify the ergonomic compromises. Verdict A sumo-sized machine with plenty of kick, that falls over on the fundamentals. With the incredibly low price of basic desktop machines these days having two machines and some form of removable storage wouldn't cost much more than the Acer. Rating 60% Price £1387 More Info The Acer UK web site Related Reviews Acer TravelMate 661LMi IBM ThinkPad X31 IBM ThinkPad T41p Sony Vaio PCG-Z1RMP Rock Pegasus CTS Visit The Reg's Review Channel for more hardware coverage
Trusted Reviews, 08 Mar 2004

Inside the mind of the gay sheep

Absolute proof that scientific research budgets are not always squandered on sniffing around the Martian surface or making particles go really fast comes with the latest findings of a team from the Oregon Health & Science University School. Indeed, proponents of the theory that there may be structural differences between the brains of heterosexual and homosexual men will be delighted with the results of the latest research into gay sheep. The team's probing of the workings of the minds of these furry Friends of Dorothy indicate that they have smaller ovine sexually dimorphic nuclei (oSDNs) than their straight counterparts. These nerve cells are found in the hypothalamus, which is - among other things - responsible for sexual behaviour. Apparently, rams who prefer the company of ladies have larger oSDNs packed with more neurons. The team tested 27 adult, 4-year-old sheep of various breeds. The group comprised eight males who preferred girls, nine with a penchant for boy-on-boy and 10 ewes whose sexual proclivities are not noted. Animal experts reckon that around 8 per cent of domestic rams demonstrate homosexual tendencies. Team leader professor Charles Roselli said: "This particular study, along with others, strongly suggests that sexual preference is biologically determined in animals, and possibly in humans. The hope is that the study of these brain differences will provide clues to the processes involved in the development of heterosexual, as well as homosexual behaviour." So there you have it. Mankind takes another significant step on the road towards ultimate scientific enlightenment. ® Related link The Volume of a Sexually Dimorphic Nucleus in the Ovine Medial Preoptic Area/Anterior Hypothalamus Varies with Sexual Partner Preference Animal crackers Barging ants solve network congestion Mice grow monkey sperm
Lester Haines, 08 Mar 2004

Opportunity knocked by Martian rock

Mars rover Opportunity has ground to a halt on the Red Planet's surface after failing to drill into an interesting-looking rock. NASA scientists will run tests today to investigate the problem. The drilling target, known as Flat Rock, was not even scratched when the rover tried to bore out a sample. All its tools appear to be working well, according to the Nasa/JPL website, so the team will have another go on Sol 44 (the 44th Martian day of the mission). While they wait, the scientists will try to analyse the rock using an alpha particle X-ray spectrometer. Opportunity will put the sensor against the rock overnight, and should get a breakdown of the its chemical make-up. While the NASA teams get on with the serious science, and both rovers report positive indications that water flowed on the surface of the planet, the black helicopter brigade gets on with the business of spurious sightings. Since the rovers began sending pictures back, helpful members of the public have been calling and emailing NASA with news of their discoveries. The Arizona Republic reports a bewildering variety of finds: a white bunny, stone tools, plants and letters of the alphabet have all been reported to NASA. A New Jersey resident, George Filer, told the publication that he had spotted letters similar to E and G written on Martian rocks. His attempts to alert NASA have (so far) failed. A member of MUFON (Mutual UFO Network), Mr. Filer believes these letters were written by sentient beings. "They keep a lot from the public," he said. Of course they do, George, of course they do. ® Related stories Fireflies aid hunt for ET Black helicopters hover over Martian surface
Lucy Sherriff, 08 Mar 2004

Carphone Warehouse buys Spanish telco

The Carphone Warehouse is to bring its own brand of discount telephony services to consumers in Spain following the acquisition of alternative fixed-line telco Xtra Telecom. The residential service is to be modelled on The Carphone Warehouse's talktalk service in the UK and should be up and running in Spain within the next six months. Just like in the UK, The Carphone Warehouse is to use its chain of high street stores - The Phone House - to flog services to consumers in Spain. Xtra supplies technical and network support, providing a "sound platform for its entry into the Spanish fixed line market". Said Carphone Warehouse chief exec Charles Dunstone: "With the deregulation of the European telecoms market, carrier pre-select services offering business and residential customers a seamless and lower cost alternative to incumbent telcos are becoming a natural and growing trend. "We see opportunities to enter this market in a number of countries where we already have well-established operations, replicating and adapting the successful model we have developed in the UK with Opal and talktalk. "The Spanish market is particularly attractive as our first fixed line step abroad, because of the critical mass and momentum of our retail business and the relatively high market share of the incumbent provider." Carphone Warehouse is to stump up €11.5m (£7.68m) over the next two years for Xtra and could pay a further €12.2m (£8.14m) over the next two years if certain financial targets are met. Xtra is an alternative telecoms carrier with national coverage in Spain and currently serves the business and wholesale market. Last year it generated revenues of around €34.9m (£23.29m) and made a marginal EBITDA profit. By late morning shares in The Carphone Warehouse were up 2.25p (1.6 per cent) at 143.25p. ® Related story Ryanair, Stelios in telecoms departure
Tim Richardson, 08 Mar 2004

Virgin to open music download service

Virgin is to launch a music download service in August. Richard Branson will join Apple, Napster, MusicMatch, BuyMusic et al when he opens Virgin Digital (VD)- the front end for online distribution company MusicNet. MusicNet was formed in April 2001 by Sony, Bertelsmann Music Group (BMG) and Warner Music Group as a digital music distribution operation supplying online retailers in much the same way their physical distributors supply the labels' High Street retailers. Since then, MusicNet has signed distribution deals with the remaining 'big five' record companies, EMI and Universal, along with a large roster of independent labels. To this day it sells music through AOL, though an early deal with Real Networks ended last year after Real's acquisition of rival supplier Listen.com and its Rhapsody service. MusicNet also signed Yahoo!, but according to the distributor's web site, AOL remains its only online retail partner. MusicNet has always offered songs on a subscription basis, though the exact retail approach is left to the retailer. VD president Zack Zalon said that the service will offer both a subscription service and pay-as-you-go downloads. He would be drawn into detailing the company's pricing strategy, saying only that it would be "hyper competitive". However, it's unlikely to be radically below the 99 cents a song price point established by Apple and followed by its rivals. Instead, VD is likely to compete on the strength of the Virgin brand and the mindshare it has among music buyers, thanks to the Virgin Megastore chain. Virgin's V2 music label and its Virgin Radio broadcasting operation are likely to be used to promote the service, too. Indeed, its online Radio Free Virgin Internet stations will be explicitly linked to the VD service, through the latter's iTunes-style jukebox software front end. The software, which will be available for download or offered on CD in the various Megastores, will use Microsoft's Windows Media 9 format. ® Related Stories Real Networks drops MusicNet for Listen.com AOL intros US-only music service EMI, BMG, AOL define universal Net music scheme Wippit preps 'EasyJet-style' music d'load scheme Universal builds 20TB digital music archive Napster schedules UK launch
Tony Smith, 08 Mar 2004

March is crunch time for Mobile-Fi

This week's IEEE meeting will be critical for the future of the proposed 802.20 Mobile-Fi standard for IP-based mobility. The group will elect a new chair, and the choice is widely expected to determine the speed of progress of the specification and its potential to develop alongside the increasingly overlapping mobile WiMAX, 802.16e. Joe Barrett, vice president of marketing in the EMEA region for Flarion, one of the key supporters of 802.20, said: "The speed of progress of 802.20 depends on the voting for the new chair and who that person is backed by." Political coup Last time such an election was held, last June, the politics holding Mobile-Fi back became clear. At the June IEEE meeting, senior executives from Lucent and NTT DoCoMo became heads of the 802.20 Working Group, replacing executives from Flarion, Navini and smart antenna pioneer ArrayComm. Navini claimed that the new chiefs, particularly NTT, had staged a "political coup" to wrest control from 4G technologists and ensure that 802.20 did not gain ground against either 3G or 802.16e. WiMAX presents a slightly lower threat to 3G than 802.20 because it is mobile within a metro area, rather than supporting hand-off at high speeds like Mobile-Fi. According to Navini and its supporters, members of 802.16e and representatives from cellular companies attained voting rights and used them to install their own candidates and sabotage the process. Such in-fighting and conspiracy theories abound in standards bodies, but they do hold back both technological progress and confidence in evolving standards. Barrett claims "the standards issue is not slowing us down," but agrees that "the industry wants to have a standard. The operators will decide how that plays out, if they have the money and the spectrum they have the power now". Burst of confidence Flarion's burst of confidence rests on its recently-announced trial with Nextel, and older pilots in South Korea. It says it is gaining ground with operators in other areas too, even Europe, where regulatory issues complicate the picture. Flarion will go to great lengths to make its Flash-OFDM technology appealing to the large operators. "We can work to be 3GPP compliant if the operators ask for it," said Barrett. However, 802.16e is advancing more rapidly than 802.20 and with more aggressive backing from powerful companies like Intel and Nokia. Recently, Navini, which once shunned WiMAX, said it would support 'e' as well as Mobile-Fi and Nextel is trialling 802.16 as well as 802.20, and has made it clear it will only back technologies that have a clear route towards a standard. All this makes the March meeting a pivotal one for 802.20 and for Flarion perhaps more than any other of the Mobile-Fi supporters. Its Flash-OFDM is more truly mobile than the implementations of Navini and other players like IPWireless, which gives it an advantage with cellular operators - but no place to run in the fixed wireless world, if it fails to demonstrate the convincing path to a standard that cellcos will demand. © 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.
Wireless Watch, 08 Mar 2004

Wireless industry intellectually challenged

AnalysisAnalysis The wireless industry has reached that stage where intellectual property issues threaten to overshadow real technology debates. Too many bright start-ups, many facing shake-out and failing to gain significant market presence through effective sales, are turning instead to their patent portfolios and the 'Qualcomm model' of deriving revenue from other companies' licensing fees. Actions range from the ludicrous - T-Mobile seeking to patent the word 'hotspot' - to the sweeping: Nomadix patenting the splash page mechanism that WISPs employ to redirect users to a log-in page. Last week, Calypso joined the crowd, seeking to enforce a newly-granted patent surrounding Wi-Fi/cellular roaming. Via attempts to unify Wi-Fi patents Now Via Licensing is aiming to bring together patent holders in a unified system that will streamline the process of licensing Wi-Fi technology and collecting royalties, but there are fears that such a move could increase prices in the extremely cost-sensitive WLan market. Via, a subsidiary of Dolby Laboratories, formed similar groups for the MPEG 2, MPEG 4 and H.264 consumer electronics standards. It says an 802.11 program would bring together organisations with patents considered essential to the Wi-Fi standards, and these as-yet unnamed companies will meet for the first time on 14 April in Tokyo. The objective is to cut down on destructive lawsuits between competing holders of 802.11-related patents, such as those between Proxim and Symbol, Agere and Intersil, and Standard Microsystems and Wayport. Of course, the success of such a initiative would depend on most of the key patent holders agreeing to join. The main carrot is lower litigation costs, since the group will provide a one-stop shop for patent licenses, saving the holder having to get protection from each vendor individually. For vendors, such a system reduces the fear of being sued when they launch products. This fear is very real and can be a make-or-break factor for a smaller supplier in the increasingly low margin wireless market - especially as more and more companies seek to build a Qualcomm-style revenue stream. Calypso's claims The latest to enter the fray is Calypso, with its new patent on a technology for roaming between cellular, Wi-Fi and Bluetooth networks. There are no details yet of how Calypso's patented technology, which is included in its own ASNAP platform, differs from the host of other seamless roaming solutions being developed by large and small suppliers. Calypso claims it enables users' mobile devices automatically to connect to the fastest or cheapest available network though it is targeting its products not at end users but at carriers that have cellular systems and hotspots, allowing them to offload capacity from one to the other. Calypso is best known for its cellular/Wi-Fi videophone, the C1250i. It also plans a handset that uses television cable as backhaul for voice over Wi-Fi services, giving cable TV operators a new source of revenue. The C1250i, and its accompanying video-optimised access points, use its ASNAP technology, which supports real time video at 20Mbps. The company believes it has achieved the holy grail of the patent holder - the ability to go after the biggest names, with a strong enough case to encourage them to dig into their deep pockets for licensing fees, not lawyers. It has named Ericsson, Motorola and Nokia as vendors infringing on its patent and aims to start chasing them soon. However, other companies offer alternative roaming mechanisms - Birdstep is one that claims its technology does not use any Calypso IP - and so some suppliers may decide to get round Calypso by adopting a different platform. Birdstep says its approach is based on mobile IP, as standardised by the IETF eight years ago. The risks of patent chasing In other words, Calypso is taking a huge risk, one probably borne out of a need for quick revenue. Its videophone and other technologies, while attracting some interest - notably in China - have failed to secure significant operator support as yet and the market for roaming is fledgeling. But in the quest for cashflow the company risks alienating large vendors and driving them towards other technologies. Few companies ever got rich on patents alone. UltraWideBand pioneer Pulse~Link, which has a wide collection of patents surrounding long distance UWB, expects to make revenue from this IP but is convinced that it could not make a strong business without launching products too. Qualcomm itself would not have a successful business model were it to drop its actual chips and rely just on its CDMA portfolio, and it does not just license patents but adds significant value to its licensing program in the shape of know-how and methods, which only come through real experience of a market. Patent law may exist to encourage innovation by protecting inventors' rights, but it can often have the opposite effect, embroiling companies in expensive and bitter - and often frivolous - legal battles to the detriment of their real business. We have seen Synchrologic, the strongest of the enterprise wireless middleware independents, being acquired by rival Pumatech as a direct result of losing a patent lawsuit. Research in Motion has frittered piles of cash and shareholder value on a string of lawsuits, both suing competitors such as Good and being sued by the intellectual property company NTP, which has no products at all but subsists entirely on licensing fees associated with a collection of patents (but which could, conceivably, put RIM and its much-loved products out of business). Of course, it is important to defend IP from theft. But too often, companies are fending off rivals in the courts because they have been unable effectively to do it on the open market, with the old-fashioned techniques of strong product development, robust channels to market and good marketing. Such battles raise prices and postpone, rather than avoid, shake-out and may even lead to the 'wrong' players - from the user's point of view - surviving. © 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 Wi-Fi Department of The Reg mobile store
Wireless Watch, 08 Mar 2004

EC to fund Euro 45nm process with €24m grant

The European Commission (EC) is to grant €24m ($29.7m) to Europe's semiconductor makers to aid the development of CMOS process technologies at 45nm and beyond, it was announced today. The EC funding will be used to launch NanoCMOS, a project which aims to "pioneer the necessary changes in materials, processes, device architectures and interconnections to keep pushing the limits of semiconductor performance and density", the organisation said. That will allow the European chip industry to "keep its place among the few worldwide leaders in the field". NanoCMOS is backed by Europe's largest chip makers: Infineon, STMicroelectronics and Philips. It has strong links with a wide range of research institutions from across Europe, from academia and from a number of small, specialist chip technology firms. The partners are also investing in the project, though the extent of that funding was not disclosed. The R&D project's charter calls for the demonstration of a 45nm logic technology on 300mm wafers some time next year, with 32nm to follow in 2007. The project's 22nm will follow in due course. Validation of the 45nm technology on 300mm wafers is expected to be achieved in 2006. Essentially, it is building a standard 45nm process - a "CMOS backbone" - which can be shared throughout Europe's semiconductor industry through to 2010. "Because of its ambitious objectives and committed resources that are mobilized for a common goal, NanoCMOS represents a unique opportunity for Europe to become the leading center for nanoelectronics, while supporting academic research and helping its indigenous industrial players to hone their competitive edge," said Dr Guillermo Bomchil, NanoCMOS' project leader, in a statement. NanoCMOS will be headquarted at STMicro's Crolles, France facility, which is likely also to host the 45nm on 300mm wafer development fab. That fab will be jointly owned by STMicro, Philips and Infineon. Infineon is currently partnering with IBM, Chartered Semiconductor and now Samsung on the development of 65nm CMOS logic technology. That project, based in IBM's East Fishkill, New York facility is expected to explore 45nm processes in due course. ® Related Stories Samsung joins IBM 65nm R&D team IBM to partner with Infineon on 65, 45nm tech
Tony Smith, 08 Mar 2004

Toxic PCs destroy life as we know it

A United Nations research group has called on member states to reduce the environmental damage caused by computer kit. Gram for gram, computers create more pollution than cars according to the UN research, they contain many toxic chemicals and because of the short life of much of the equipment, create mountains of waste. The pollution begins before a machine even leaves the factory: The UN research group estimates that manufacturing a 24kg PC (with a monitor) takes energy equivalent to 240kg of fossil fuels, needs 22kg of chemicals and 1.5 tonnes of water. The environmental damage does not stop once the machine in binned. Discarded kit typically ends up in landfill (still cheaper in the UK than much of the rest of Europe) where it can pose significant health risks. Manufacturers and computer users need better incentives to upgrade or re-use computer hardware instead of throwing it away, the report's authors told The BBC. In the UK, the DTI is consulting with industry on the implementation of the WEEE (Waste Electrical and Electronic Equipment) directive. This is intended to divert all electrical and electronic equipment from landfill, and ensure it is safely recyled. Intellect, the trade association representing the UK's ICT sector, urged the Government to quickly give clear guidance, so that companies can start to plan, and invest in the right areas to meet their obligations. According to Dudley Ollis, Intellect’s head of environmental Services, the UK hi-tech industry is committed to the protection of the environment. But implementation must be flexible both for financing arrangements, and the way in which producers meet their obligations. Computers contain chemicals such as brominated flame retardants and heavy metals like lead and cadmium. In theory, these chemicals can leach into the ground where they are dumped, contaminating local water supplies. Several law suits are pending from semiconductor fab workers who claim a link between their work and birth defects and cancer. ® Related stories PC disposal: recycle or build for durability? Retired Pentium PCs wanted for developing world (not landfill) Recycling is so PC
Lucy Sherriff, 08 Mar 2004

EC rejects MS claim over OEM T&Cs

The European Commission has dismissed claims by Microsoft that it had approved a no-sue-on-patents clause in OEM Windows contracts with PC makers. In 2000 the EU looked at contracts between Microsoft and manufacturers. It decided that, because Microsoft changed the offending clauses, there was no need to take further action. But when Microsoft Japan was raided last month over similar agreements with Japanese OEMs, the software giant said its contract terms had "passed muster under a competition law assessment conducted by the European Commission in 2001". A spokeswoman for the commission told Reuters that it had simply decided to drop the case when Microsoft changed its behaviour - there was no approval of its business practices. Microsoft says it told Japanese PC makers that it would drop the clauses, shortly before its Tokyo offices were raided. Japan's Fair Trade Commission is still collecting evidence to investigate the OEM claims. ® Related stories Japanese watchdog raids MS Tokyo MS tears swastika from roof of Office US inspired copyright laws set to sweep the globe – for fun and profit
John Oates, 08 Mar 2004

Beware sober worm bearing gifts

Watch out for a virus which poses as a security fix for the infamous MyDoom worm. Sober-D arrives in the form of an email with the subject line "Microsoft Alert: Please Read!" and an attached Zip file with a malicious executable. Users who are duped into running this payload get their PCs infected by the virus and contribute to the further spread of the worm. If the worm determines it is being sent to a German email address, it presents itself in German. Sober-D, first spotted this morning (8 March), is spreading, albeit on a modest scale. Most anti-virus firms rate it as a low-to -medium risk. Once again, this is a Windows-only menace. The worm is far less of a problem than its predecessor, Sober-C, which spread extensively last October. Germany was hit particularly hard because people were fooled by the unusual use of their native language in the message accompanying the worm. Last week, Magdeburg University research group AV-Test.org published research to establish the reaction time of anti-virus developers to new malicious code. It focused on activity surrounding the Sober-C outbreak. The research found AV vendors took between 10 hours to three days to produce signatures to detect the virus. Sober-D is a medium-level outbreak and AV vendors would doubtless react quicker to another MyDoom. But Magdeburg University's research, the first of its kind we've come across, illustrates once again the reactive nature of AV technology. Until supplementary or alternative technology is widely adopted to combat fast-spreading worms, Windows viruses will continue to be a daily nuisance. ®
John Leyden, 08 Mar 2004

Kazaa fails to overturn music biz data seizure orders

An Australian court has rejected an application by Kazaa owner Sharman Networks to overturn information seizure orders granted to music industry anti-piracy investigators. On 6 February, Music Industry Piracy Investigations (MIPI), an organisation sponsored by the Australian Recording Industry Association (ARIA), raided the Kazaa HQ and a number of Internet companies and Australian universities. MIPI was seeking information relating to the legal proceedings it subsequently launched against Kazaa the following week. At the 10 February hearing, Kazaa's lawyers asked Federal Judge Murray Wilcox to overturn the Anton Piller orders granted to MIPI. Those orders made the raids possible - overturning them would prevent MIPI from using information grabbed during the raids. The Kazaa legal team claimed that MIPI had not provided the judge with all the pertinent background information when the organisation had applied for the orders. The lawyers allege that MIPI did not tell Judge Wilcox that Sharman had already agreed to submit to depositions and co-operate fully with US Court of Appeal proceedings. The appeals court case centres on an attempt by the movie and music industries to overturn a US Federal Court decision that Grokster, Morpheus and by implication other P2P software suppliers are not liable for acts of copyright violation committed by their users. Kazaa believes that MIPI's case againstg it will collapse, if the content companies fail in their appeal. It has asked Judge Wilcox to suspend the Australian action until the outcome of the US case is known. "Although the detail of the US proceedings was not disclosed to me on 5 February 2004, I have reached the conclusion that the non-disclosure was not material," Juge Wilcox wrote. "The non-disclosed material would not have affected my decision to make the Anton Piller orders. Accordingly, there is no occasion for me to set aside those orders." His ruling paves the way for MIPI to use material acquired during the raids. However, it doesn't go fully the music industry's way. "In the rush of that day," he said, "it seems likely that some material was taken that fell outside the authority of the Anton Piller orders." He ordered that the two parties determine "a regime for custody, inspection and analysis of the material that was authorised to be taken (to) minimise intrusions into personal privacy and commercial confidentiality". The case resumes on 23 March. ® Related stories Kazaa trial judge delays hearing Kazaa demands Oz trial delay Music industry raids Kazaa's Australia HQ Dutch Supreme Court rules Kazaa legal
Tony Smith, 08 Mar 2004

No Xbox 2 revelations at GDC

Reports suggest that Xbox Next's hardware will not be unveiled at the forthcoming Game Developers' Conference. Microsoft's chief Xbox officer, Robbie Bach, will take to the stage at the GDC on 24 March to discuss the new console - but may limit himself to games and some technical aspects of its format. The suggestion comes from Microsoft Japan's Asako Miyata in an interview with Bloomberg, who noted that a decision had not yet been taken to as to when the technical specifications of the system should be released. Microsoft has already discussed its hardware plans with a number of key developers - leading to the leaking of information regarding the system's CPU and graphics configuration - but it's thought that certain vital aspects such as the quantity and type of RAM to be used have not yet been decided. Some commentators have suggested that Microsoft is holding back from a final decision on the RAM, and possibly on the inclusion of a hard drive, until it finds out what Sony is planning to do with the PS3 - so that the spec for the Xbox Next can be adjusted to out-perform Sony's system, at least in these areas. It's already known that Xbox Next will feature six next-generation IBM PowerPC processing cores, spread across three discrete CPUs, and an advanced graphics hardware solution provided by chipset manufacturer ATI. It's expected that the system will dispense with the hard disc drive in favour of a high capacity removable flash memory solution - effectively a large memory card. Copyright © 2004, GamesIndustry.biz
gamesindustry.biz, 08 Mar 2004

Teens get classes in Tolkien's Elvish

British parents today face a terrifying new obstacle to understanding their children: JRR Tolkien's Elvish. Students at Turves Green Boys' Technology College in Birmingham can now avail themselves of courses in the language, which are said to "boost their self-esteem" and "develop some very complex skills", according to special needs co-ordinator Zainab Thorp. "A couple of the boys are very into role-playing games. Knowing Sindarin is useful when giving orders to their Elvish armies," Thorp offers. God preserve us all. Sindarin is, of course, one of the two dialects of Elvish developed by Tolkien. Quenya is the other, more formal branch - presumably used mostly for Oscar-acceptance speeches. This initiative will strike fear into Midlands parents' hearts. For starters, their offspring already speak the local - virtually indecipherable - Brummie argot. Add to that the propensity for all modern teenagers to gibber away in an outlandish bastard offspring of the English language - based almost exclusively on the adjective "phat" - and you've got, well, a recipe for confusion. So, in the spirit of learning, and in order to better arm parents for the coming linguistic ragnarok, we suggest that the correct response to anything other than the Queen's English emitting from a polyglot pubescent's mouth is: Antolle ulua sulrim, usquener. ® Related links Learn Elvish The Elvish Linguistic Fellowship
Lester Haines, 08 Mar 2004

Victim's mother seeks ban on violent Net porn

The mother of murdered schoolteacher Jane Longhurst has today launched a national petition calling for tighter regulation of pornographic content on the Internet. Seventy-two-year-old Mrs Longhurst wants certain adult pornography, such as that showing violence towards women and necrophilia, outlawed in the same way as images of child sexual abuse. Mrs Longhurst has recently held talks with home secretary David Blunkett, in a bid to lobby for a change in the law. Unveiling the campaign today Mrs Longhurst told ITV.com: "We are not asking for everyone to become perfect little angels without a dirty thought in their minds, but we do feel these violent images should be stopped." Schoolteacher Jane Longhurst, 31, was murdered last year by Scottish musician Graham Coutts. Coutts, 35, who was a voracious consumer of web sites devoted to snuff movies and necrophilia, was sentenced to life imprisonment earlier this year. More than 800 pornographic images were found saved on Coutts' home computer - over three quarters of which showed acts of violence against women. The court also heard that Coutts had accessed violent images the day before Ms Longhurst was murdered in March 2003. ® Related Story Net fuelled killer's necrophiliac lust
Tim Richardson, 08 Mar 2004

UK drivers flout mobile ban

One in ten drivers still routinely use mobile phones while driving, despite being well aware of the ban introduced late last year. The law on mobile use changed in December and drivers caught making a call while driving face a £30 fixed-penalty fine or up to £1,000 if taken to court and convicted. Although 99 per cent of drivers are aware of the ban, and three quarters of people agreed that using a mobile phone severely impaired their ability to drive safely, some continue to chat with impunity. Companies could do more too - only a quarter of people had received updated company policy on mobile use. The survey, carried out for breakdown and insurance firm Green Flag, questioned 700 people between 16-18 January 2004. Only two respondents had been warned by the police for using their phones and only one had received a formal caution. To read the whole press release click here ® Related stories Park and pay by mobile comes to London Bosses tell staff to hang up when driving Reader flak brings down flying car Related Products Find yourself a bluetooth headset in The Reg mobile store
John Oates, 08 Mar 2004

UK credit card fraud down 8%

UK credit card fraud has fallen for the first time in eight years, thanks mostly to a clampdown on European counterfeiters. Losses to credit card theft fell 5 per cent to £402.4 million in 2003 (2002: £424.6m), the annual Association for Payment Clearing Services (APACS) survey reveals. The headline figure hides uneven progress in stamping down on various forms of credit card fraud. Cardholder-not-present fraud (a category which covers e-commerce transactions), for example, increased significantly, and fraud committed within the UK rose slightly. Snakes and ladders Counterfeit card fraud saw the largest reduction, down by 28 per cent (£106.7 million in 2003, compared with £148.5 million in 2002). The bulk of this reduction comes from mainland Europe where counterfeit fraud fell £26 million on the previous year. Fraud on lost and stolen cards also dropped by two per cent (£106.1 million last year compared to £108.3 million in 2002). APACS said much of this reduction is a result of increased use of "sophisticated fraud intelligence systems" that help to spot fraud more quickly by tracking unusual cardholder spending patterns. Banks and retailers hope the rollout of chip and PIN - the system to replace signatures with PINs for verifying payments - will further reduce fraud from lost, stolen or counterfeit credit cards. CNP fraud grows in importance Cardholder-not-present fraud - which involves Web, phone and mail order transactions - is now the biggest fraud category. This increased six per cent to £116.4m in 2003. Areas which traditionally have involved smaller losses also continued to grow. The largest percentage increase in fraudulent activity was in identity theft which grew 45 per cent to £29.7m, while fraud at UK cash machines grew by a third (34 per cent) to reach £39 million. Sandra Quinn, APACS director of communications, stressed the importance of reducing cardholder-not-present fraud (CNP) even more important. When credit cards were first introduced it was never thought they would in an environment where neither the card nor the cardholder would be present, she said. "Criminals have used this fact to their advantage primarily by stealing people’s card details through such techniques as skimming or ‘bin raiding’." The CC industry has launched a number of initiatives designed to tackle clamp down on CNP fraud, for example, rolling out an address and security code checking system to check the validity of online transactions. Despite high fraudulent losses, the chances of becoming a victim are still low: fraudulent transactions accounted for just 0.13 per cent of UK card transactions last year. ® Related Stories Chip and PIN hits 8 million cards Retailers warned on Chip and PIN Shoppers warned of £110m card not present fraud Chip and PIN goes national Joe Public blames banks for credit card fraud External Link APACS’ fraud prevention website is at Cardwatch.org.uk
John Leyden, 08 Mar 2004
Broken CD with wrench

McData and Brocade puff patent peace pipe

McData and Brocade have flipped an existing disagreement over switch technology on its head by agreeing to refrain from suing each other on patent matters for three years. The two storage switch companies signed a confidential agreement last week, which puts an end to McData's 2002 lawsuit against Brocade. At the time, McData claimed that members of Brocade's Silkworm switch line infringed on a patent for "filtering and measuring frame traffic" - technology used to boost network traffic speeds. McData has now dropped this claim filed in a Colorado court. "Under the confidential settlement agreement both parties preserved their respective rights, no licenses were granted and they agreed to a three-year standstill during which neither party may initiate litigation against the other party with respect to their respective patents," McData said in a brief SEC filing. Any of the finer details of the agreement remain under seal. Both McData and Brocade are probably better off concentrating on new kit rather than old squabbles. The companies face an oncoming threat from Cisco in the SAN (storage area network) market. Cisco's SAN switch revenue is still just a fraction of what McData and Brocade pull in, but its presence clearly has rivals concerned. McData's CEO last week warned that the market may not be big enough for all three vendors. ® Related stories Cisco's SAN biz bores McData CEO Brocade and Quantum toot their own horns Storage switch users place McData and Cisco ahead of Brocade
Ashlee Vance, 08 Mar 2004

Tesco offers online DVD rentals

Supermarket chain Tesco is to rent DVDs via a website. The business will run along similar lines to Netflix - the US company which has picked up over 2m customers. The Tesco project is in partnership with Video Island. Customers will have a choice of 15,000 titles. For a fixed monthly fee they can choose two, three or five DVDs. When they send back a DVD, Tesco will dispatch the next film from the wish list. Discs are returned in Freepost envelopes. Tesco refused to give prices for the service which launches at the end of the month. Laura Weade-Gery, CEO at Tesco, said in a statement: "DVDs by post has revolutionised the way people watch film in the States and we're confident by moving into the market we can do the same in the UK." Saul Klein, CEO at Video Island, said: "Getting anything on DVD from the High Street except for the latest releases is all but impossible. If you want anything a bit more exotic or esoteric it is really hard." Tesco's brand will help it win customers, he adds. Tesco's website will let customers rate and review films. Seven out of ten rentals from High Street stores are of new releases, while DVD-by-post customer tend to favour older films - seven out of ten rentals are 'back catalogue' titles. Netflix has dominated the US market despite competition from the likes of Wal-Mart. Netflix made a profit of $6.5m last year on sales of $270m. ® Related stories Netflix: the fly in the ointment of VoD Judge bans DVD X Copy software Of penises and paranoia...
John Oates, 08 Mar 2004

Blunkett appoints police IT supremo

Home secretary David Blunkett has appointed Chris Earnshaw chair of the Police Information Technology Organisation. Earnshaw will immediately succeed the outgoing chair, Sir Edmund Burton. Home Office minister Hazel Blears thanked Sir Edmund for his work over the last three years. In January, Blears ordered a review of PITO. She said that Earnshaw brought substantial experience to the role: "Under his leadership, I am confident that PITO will become even more effective in delivering ... high-quality information and communications technology and helping bring about an electronically joined-up criminal justice system." Earnshaw was at BT from 1989-2002. He is now an independent adviser to a number of IT companies and is MD of Oakleigh Ventures Ltd. He also serves on a number of professional industry boards. He faces considerable challenges in his new job. Police IT has been under intense media scrutinty recently. This is thanks largely to the government's drive to introduce identity cards, but also because of cases such as the Soham murders, which have exposed failings in the current system. Sir Edmund, who was reportedly paid between £120,000 and £150,000 annually during his three-year stint in the part-time role, retired in late 2003. ® Related stories Home Office to centralise police intelligence Hampshire police deploy e-warranting E-crime costs UK business billions
Lucy Sherriff, 08 Mar 2004

S&P drops Sun to junk status

Standard & Poor's Ratings Services last week dealt Sun Microsystems a blow by cutting its corporate credit rating to junk status. In a research note, the credit rating company warned that Sun will have trouble boosting revenue in the near-term and that it faces tougher competition that ever before in the server market. "The downgrade reflects weak and inconsistent profitability, and our expectation that Sun will be challenged to profitably expand its market presence," said Standard & Poor's credit analyst Martha Toll-Reed. Word of the cut appeared to hurt Sun shares, during Friday's trading. After enjoying a recent run to more than $5 per share, Sun's stock dropped seven per cent on Friday to $4.80. Sun has close to $1.3bn in outstanding debt but also boasts more than $5bn in cash. The move was a surprise to some analysts who noted that Sun appears to have put the worst behind it. "We're projecting them to show their first year-over-year revenue growth in the March quarter," Brent Bracelin, an analyst with Pacific Crest Securities, told the New York Times. "Sun certainly has several challenges ahead of it, but we're at the start of things getting better. They're in a better position now than they were last year at this time." Still, Standard & Poors warned that Sun faces serious challenges in keeping its position as the leading Unix vendor. "Sun Microsystems has a good but not leading position (based on all operating systems) in the highly competitive global server market, a relatively narrow revenue base - particularly in comparison to major competitors, and inconsistent profitability," S&P said. ®
Ashlee Vance, 08 Mar 2004

Linux kernel vuln reloaded

Security researchers have discovered a potentially serious security vulnerability within a Linux kernel memory management module. The vulnerability is not remotely executable but it does allow privilege escalation. A hacker who obtains access to a local PC could be able to root a box. At fault is a bug with the mremap(2) system sub-process, which was subject to an unrelated (but also significant) security problem a few weeks ago. At risk this time around are versions of the Linux kernel from 2.2 up to and including 2.2.25; 2.4 up to and including 2.4.24; 2.6 up to and including 2.6.2. Exploitation of the latest flaw is straightforward, according to Polish white hat hackers iSec, which unearthed both problems. But don't get too alarmed - there's no evidence that the vuln has been used in anger. Users should patch all vulnerable systems as soon as appropriate vendor patches are released. Debian, for example, put out an update on the same day as iSec's advisory on Saturday (6 March). ® Related Stories Linux kernel security vuln fixed Linux kernel backdoor blocked Linux worm attempts to take over insecure servers
John Leyden, 08 Mar 2004

Dell deepens ties to VMware

Dell has expanded an agreement with VMware to ship more of its software with Dell servers and storage. Dell will now offer a broad portion of the VMware product line on various pieces of hardware, adding to a previous reselling agreement. This move is an obvious nod to EMC, which recently acquired VMware. And Dell is never one to miss out on an opportunity to aid its favorite storage partner. In a broader context, EMC's purchase of VMware gives Dell a nice, direct path to server and storage management software. In this case, Dell again looks ready to benefit from the research and development work done elsewhere. In 2002, Dell quietly started reselling VMware's Workstation, GSX Server and ESX Server products for dividing Windows and Linux servers into different partitions or virtual machines. The ESX Server product has also been popular with IBM and HP for some time. Dell will step up the VMware program with three new pre-tested bundles. The first includes a Dell PowerEdge 6650 server equipped with the new ESX Server Version 2.0.1, VirtualCenter and VMotion. The latter two products are aimed at making the management of applications on partitioned servers easier. A second bundle will have the VMotion software included with Dell's CX300 and CX500 storage systems. These boxes are just two of several that make up the Dell/EMC storage partnership. The third bundle includes Dell's PowerEdge 1750 server and VMware VirtualCenter Management Server product. Close ties When EMC first acquired VMware, executives from both companies were quick to stress that VMware would cater to the server industry as a whole and not to just EMC's own interests. This was the obvious road to take, given VMware's very close ties to IBM and the decent amount of business the two companies share. But now Dell has a chance to become VMware's best ally. Without question, Dell has the closest ties to EMC of all the server vendors - a relationship which already includes complex sales agreements. In addition, Dell is the only major vendor not to have a serious management software story of its own to tell. As a past investor in VMware, Dell must have given a glancing thought to acquiring the company. But such a move would buck Dell tradition. Instead, it's easier and no doubt more effective to see EMC - and its large research and development budget - mature the VMware product line. Don't forget that EMC has high hopes to quickly push VMware from a limited place on the server to much broader applications managing multivendor servers and storage systems. ® Related stories VMware?s virtual software gets ever more real EMC eyes the server with $635 million VMware buy Checking out Virtual Machines
Ashlee Vance, 08 Mar 2004

IBM – EDS: merger report dismissed

Reuters reported early on Friday, 5 March that Electronic Data Systems "was in talks to sell all or part of itself" to IBM. IBM and EDS spokespeople refused to comment on the report. EDS is most likely to dispose of its product lifecycle management software unit (PLM) and IBM is already a prominent player in this sector. The report of a possible acquisition failed to excite the investment community. Shares in EDS fell 1.47 per cent in early trading on Friday to $20.10, and shares in IBM fell 0.2 per cent to $96.18. The timing of the speculation seems strange. If IBM is serious about acquiring EDS outright, it had a much better opportunity 12 months ago when a series of profit warnings at EDS triggered the departure of former CEO Dick Brown. EDS' shares traded at $14.4 in March 2003, and it has recovered some significant ground since then under the leadership of Michael Jordan, who has overseen a major cost-cutting program. However, the company remains vulnerable with the SEC conducting an investigation into its contract with the US Navy, and any negative fallout later this year could make its market valuation more attractive to suitors. But the reasons for IBM to steer clear of its main rival seem more compelling than those in favor of a takeover. IBM Global Services made a pre-tax profit of $4.49bn in full-year 2003, whereas EDS made a comparable loss of $123m. Analysts also suggest that antitrust issues could also block an outright takeover of EDS by its larger rival. IBM Global Services made revenue of $42.6 bn in 2003, making it almost twice the size of EDS with sales of $21.5bn. But their combined 2003 sales of $64.1bn would give it a share of 11.5 per cent of the market - some way short from the 50 per cent level that typically constitutes a monopoly position. The most likely part of EDS for disposal is its product lifecycle management (PLM) software unit, about which it announced it was in discussions with potential buyers earlier this year. Although IBM is a prominent player in the PLM sector already through its partnership with French software vendor Dassault Systemes, it would be strange for it to buy the EDS unit and in doing so, hand over some much-needed cash to its closest rival. Source: ComputerWire/Datamonitor
Datamonitor, 08 Mar 2004

EU funds to fuel Eastern Europe tech boom

the IT market in Eastern Europe will grow three times faster than in Western Europe until 2007, according to Gartner. Eastern Europe currently accounts for less than 8 per cent of the European IT market, but this is to increase to around 10 per cent in the next few years. Gartner says that this will be made possible by increased EU financing for accession countries, which will plough much of the funding into major IT projects. Andrea Di Maio, vice president of research at Gartner, said: "The IT markets in EU accession countries will grow primarily because of an influx of financing from the EU will result in a virtuous circle that will transform local economies." The largest growth area will be software as some of the less-developed economies will be compelled to comply with EU corporate governance regulations. This, combined with a predicted increase in customer management software, will drive software revenues. Hardware spending is also set to increase. Accession countries are expected to focus on replacing older systems and investment in telecommunications, including broadband and enterprise networking. Gartner recommends that IT users in the accession countries should work to evolve traditional procurement practises such as purchasing; and that vendors should concentrate on the more competitive niche markets, rather than established markets already provided for by larger vendors. "IT users will benefit directly and indirectly by forming relationships with vendors to receive EU funding while reducing the costs of procured goods and services," said Di Maio. "If IT vendors haven't started to think about how this issue will affect their business, they need to do so immediately." Gartner points to complications that will result from the lifting of barriers to workers. The firm says that securing key personnel will be important for local players, and that solutions should be localised as far as possible. It also warns against focusing on "easy" targets in the developing market, such as corporate governance or agriculture. Lastly, it recommends that countries should encourage private sector investors to match investment from the EU, and to foster strong partnerships between the public and private sectors. ®
ElectricNews.net, 08 Mar 2004