« November 2004 | Main | January 2005 »

December 29, 2004

CAN-SPAM key events during 2004

Compiled by MX Logic

Posted by Chad Dickerson at 05:18 PM

December 22, 2004

IT salaries down last year

By Grant Gross

U.S. IT and electrotechnology professionals saw a 1.5 percent decrease in their salaries in 2003, the first decrease since the Institute of Electrical and Electronics Engineers-USA (IEEE-USA) began surveying members in 1972, the group announced Wednesday. The median income of IEEE-USA members surveyed dropped from US $101,000 for a full-time worker in 2002 to $99,500 in 2003. Until now, respondents' salaries increased even during the first years after the 2000 dot-com bust. Median income of survey respondents rose from $82,000 in 1998 to $93,100 in 2000, before topping out at $101,000 in 2002.

The Internet survey is based on actual tax forms, and the IEEE-USA will conduct a 2004 salary survey in 2005. The group conducted the survey every two years until recently.

The drop in income could be due to a variety of factors, including a sluggish U.S. economy, an offshore outsourcing trend among technology companies, and competition from foreign workers using immigrant worker H-1B visas to get U.S. jobs, said IEEE-USA spokesman Chris McManes. Rising health insurance costs and general competition from overseas workers may have contributed to the salary decrease, IEEE-USA officials said.

A dot-com hangover could also be a factor, McManes added. "A lot of people were finding employment (in the late '90s), and there was so much of a frenzy that things were going ballistic," he said. "Maybe salaries were going up so high that the drop now is a righting of the ship."

Bob Cohen, senior vice president at the trade group Information Technology Association of America (ITAA), questioned whether H1-B visas and offshore outsourcing made a large impact on IT salaries. The annual H-1B cap went from 65,000 in the U.S. government's fiscal year 1998 to 115,000 visas granted a year in 1999 and 2000, then up to 195,000 after 2000. The cap fell back down to 65,000 in fiscal year 2004.

But H-1B visa rules require employers to pay prevailing wages, Cohen noted. Most technology companies using the visa program hire workers with specific hard-to-find skills, he said.

An ITAA survey released in March estimated 104,000 U.S. software and services jobs were moved overseas in 2003, but that's a small number compared to the estimated 10.5 million [m] IT jobs in the U.S., Cohen said. While saving money on salaries may be part of the reason for offshore outsourcing, most jobs lost are "at the low end" of salaries, he added.

A more realistic cause of the salary decrease could have been a slow U.S. economy, Cohen said. "Companies have been slow to spend on top-line information technology programs and projects," he said.

The Internet-based survey of the IEEE's U.S. membership was conducted in late 2004. It is based on 2003 data from 12,584 respondents, the highest response rate IEEE-USA has recorded. The vast majority of respondents, 11,182, were full-time workers.

Job classifications included electrical and electronics engineers, computer hardware and software engineers, and computer scientists and system analysts, among others.

Posted by Chad Dickerson at 10:38 PM

December 21, 2004

Virtual Sims, real money

By Joris Evers

Electronic Arts (EA) reported revenue of US$2.96 billion for its fiscal year 2004, which ended March 31. "The Sims" was one of six of the company's product groups to sell more than 5 million units. Other products that did well were "Need for Speed," "Medal of Honor," "FIFA Soccer," "Lord of the Rings" and "Madden NFL."

Posted by Chad Dickerson at 04:25 PM

December 17, 2004

IDC predicts Linux market worth $35 billion by 2008

By Ed Scannell, InfoWorld

IDC on Wednesday painted an optimistic outlook for Linux over the next few years, predicting that overall revenue for desktops, servers, and Linux-compatible packaged software will reach $35 billion by 2008. The study reflects a measurement of shipments and the installed base of servers and PCs running Linux, which takes into consideration Linux shipped with new hardware deliveries, Linux running aboard redeployed systems, and instances where Linux is used as a guest operating system. With this new view, the server market for shipments and redeployments with Linux increases by 36 percent over net new shipments in 2004, according to IDC.

"When all manifestations of Linux operating systems are counted, Linux is clearly a mainstream solution," said Vernon Turner, IDC's group vice president and general manager of enterprise computing research. "We see a shift where Linux server operating environment deployments are moving to favor the use of enterprise server hardware. This transition is being driven by the increasing robustness of Linux and the increasingly critical nature of the applications deployed on Linux," he said.

Another finding in the report shows revenue growth for packaged applications and infrastructure software running on Linux growing at an annual compound rate of 44 percent for the years 2003 through 2008. The dollar worth of the packaged software market will top $14 billion, according to IDC.

Other forecasts coming from the new study include the prediction that new and redeployed desktop systems running Linux will grow to $10 billion and 17 million units by 2008 and have an overall installed base of 42.6 million units. Also, the study says that Linux-based servers running as either a primary or secondary operating system are expected to go over the $11 billion mark and 3.3 million units by 2008.

The installed base of servers running Linux is 37 percent larger than the installed base for net new systems shipped with Linux as the primary operating system alone in 2004, according to IDC.

Data for the study was based on existing IDC research conducted on server and PC hardware, software, and other research programs in concert with new primary research. Some of the data inputs used in conjunction with IDC's syndicated research came from a study funded by the Open Source Development Labs (OSDL).

A summary of the IDC report is available at http://www.osdl.org/docs/linux_market_overview.pdf.

Posted by Chad Dickerson at 12:00 AM

December 16, 2004

Gartner's Top 10 resolutions for CIOs in 2005

By Scarlet Pruitt

Reassess your role, embrace change and make a backup plan. That's the advice Gartner Inc. analysts are giving to IT professionals on how to approach the coming year. Predicting that 2005 will be a year fraught with change, Gartner analysts speaking at a roundtable discussion in London Thursday laid out a list of "must do" resolutions to help chief information officers (CIOs) navigate the turning tides of IT.

Recovering economies, globalization and regulatory demands will create a business need for IT, but technology professionals will have to redefine their roles to show that they are as savvy at business as they are with technology, the analysts said.

This means that IT professionals will have to become more involved with the business side of operations, and make technology decisions that are aligned with the strategies and financial goals of their companies. The actual technology they use is unlikely to change over the next few years, but the way it is leveraged will change, the analysts said.

"IT leaders have to be shifting their focus away from simply managing technology and to look to managing business information, processes and relationships," said John Mahoney, chief of research and IT management for Gartner in Europe.

The advice comes as more companies look to slash their IT budgets by outsourcing functions and reducing internal IT staff. If IT professionals fail to show their usefulness in the board room as well as the server room, the could face possible extinction. In fact, Gartner predicts that by 2008 most IT departments will employ half as many staff as they do now, Mahoney said.

Given this, IT professionals face some serious decisions over the next year about what kind of role they want to have in their field, the analysts said. They must decide if they want to be technology managers, or business managers with IT expertise, according to Mahoney.

"There's a fork in the road, and because business IT leaders are more rare, we see more of a demand there," Mahoney said.

The news may jar IT workers, but signifies how important it is for companies to be able to quickly steer change in their business, as they face growing competition and unpredictable macroeconomic and political forces, analysts said.

"Chief executives see technology as a barrier to change. This is the most important finding Gartner has made this year," said Mark Raskino, Gartner research director of business process and applications.

Legacy systems, and legacy attitudes about how IT staff should function -- as separate from business decision making -- are seen by corporate chief executives as blockades to business agility, the analysts said.

Technology complexity is viewed as another hindrance to companies' ability to quickly change directions, and Gartner predicts that simplification of IT systems will be yet another line on CIOs' to-do lists for the coming year.

The analysts suggested creating policies to foster simplification, such as requiring that when a new application is added an older application is killed. Gartner also advised IT staffs to cap the amount of vendors they contract, reducing management time and making sure that out-of-date relationships are eliminated.

The analysts also predicted that companies will continue to have a broad array of IT suppliers, and that the days of having one single partner or supplier are over, as businesses look for specific solutions to meet their needs and budgets. However, they urged caution.

"Our advice is to challenge best of breed unless it is critical to your business. Otherwise, good enough is good enough," Mahoney said.

Outsourcing will continue to be a significant trend in the years ahead, the analysts said. This will simplify internal operations, but put more of an onus on IT workers to prove their worth, they said.

To help technology workers meet these challenges, Gartner is releasing a list of top 10 2005 resolutions for the CIO, advising that they:

  1. Create alternative plans for the unpredictable year.
  2. Decide whether they want to be technology managers or business managers with IT knowledge, and invest in the appropriate skills.
  3. Use regulatory compliance demands to invest in related, strategic areas.
  4. Get the IT staff media-ready and try to foster external public relations.
  5. Drop "on time and on budget" as a key performance indicator for IT staff, noting that this a basic requirement. Set new performance indicators above and beyond that.
  6. Get hands-on experience on some new key technologies.
  7. Combat IT complexity by creating simplification policies.
  8. Elevate business process thinking to the management level, by deciding the process first and applications second, for example.
  9. Build a relationship and collaborate with the human resources director on strategy for IT staff changes.
  10. Critically review the capability of your IT organization and it leaders.
"Despite the fact that IT is a difficult place to work already, it's going to get a lot more difficult and a lot more complex," Mahoney said. Gartner will formally release its CIO "Must Do" resolutions for 2005 next week.

Posted by Chad Dickerson at 07:38 PM

December 11, 2004

Phishing Web sites grew by 33 percent in November

By Paul Roberts

The number of phishing Web sites associated with online identity theft scams grew by 33 percent in November, after dropping off in September and early October, according to data compiled by the Anti-Phishing Working Group (APWG) and shared with IDG News Service. The group received reports of 1,518 active phishing sites during November, up from 1,142 in October. Reports of phishing Web sites have grown by an average rate of 28 percent monthly since July, as scam artists broadened their efforts to lure customers of companies that do business online, according to Peter Cassidy, secretary general of the APWG. The APWG is an industry group of representatives from law enforcement and private sector companies, including leading Internet service providers, banks and technology vendors.

Phishing scams are online crimes that use spam to direct Internet users to Web sites that are controlled by thieves, but designed to look like legitimate e-commerce sites. Users are asked to provide sensitive information such as a password, bank account information or a credit card number, often under the guise of updating an account.

Customers of 51 online brands were targeted by phishing scams in November, compared with 44 brands in October, Cassidy said. However, just six companies drew more than 80 percent of all phishing scams, he said.

The APWG no longer identifies the organizations that were the most popular targets of phishing scams, citing resistance from the group's industry members, he said. However, eBay Inc. and Citibank NA were phishers' top targets in past months, according to previous APWG reports.

The creation of phishing Web sites in October and November resumed the torrid pace it reached in mid-August, after dropping off for much of September.

Phishing attacks have emerged as a potent threat in 2004. More than 18 million e-mail messages linked to the attacks have been stopped this year by e-mail security provider MessageLabs Ltd.

Industry groups, including the APWG, responded by calling attention to new attacks and working to shut down Web sites used in the scams to harvest personal information from unsuspecting Internet users.

Recently, leading companies and law enforcement agencies unveiled a new antiphishing initiative. Digital PhishNet brings together companies such as Microsoft Corp., America Online Inc. and VeriSign Inc. with the U.S. Federal Bureau of Investigation, U.S. Secret Service and U.S. Postal Inspection Service to improve coordination when identifying and shutting down phishing sites.

As in past months, the U.S. was again the most frequent host of fraudulent Web pages used in the attacks, Cassidy said.

While phishing attacks may spike during November and December, which are busy shopping months in the European Union and the U.S., the increasing number of antiphishing tools and initiatives will hopefully bring the number of attacks down in 2005, according to Neil Creighton, chief executive officer of GeoTrust Inc., a provider of online digital certificates.

Like other companies, including Internet service provider Earthlink Inc. and eBay, GeoTrust distributes a free Web browser plugin that warns users when they visit phishing Web sites. Such utilities, coupled with the efforts of groups like the APWG and Digital PhishNet, will make life harder for online scam artists, and prompt consumers and merchants to become more aware about online identity verification, Creighton said.

Posted by Chad Dickerson at 03:47 PM

December 09, 2004

Researchers warn laptop users of infertility risk

By Laura Rohde

Laptops should be used as desktops if men want to protect their reproductive health, according to a new study published Thursday. A combination of the heat generated by a laptop and the position of the thighs that is needed to balance the computer leads to higher temperatures around a man's genitals and over time can result in decreased sperm production, according to the study "Increase in scrotal temperature in laptop computer users," published in the U.K. journal Human Reproduction.

Though further research is needed, teenage boys and young men should limit the use of computers on their laps, said Dr. Yefim Sheynkin, the leader of the State University of New York at Stonybrook research team responsible for the article. "It's possible that external protective devices could help," Sheynkin added.

There will be 60 million laptops in the U.S. and 150 million worldwide by next year, Sheynkin said. Laptops have become more popular with teenage boys and young men due to continued improvements in power, size and price, and are currently outselling desktop computers, he added.

Twenty-nine volunteers between the ages of 21 and 35 took part in the study. Researchers measured their scrotal temperature, with and without laptops, during two one-hour sessions performed on different days, in a room where the temperature was about 22 C (degrees Celsius) or 71.6 F (degrees Fahrenheit).

When the men held their thighs together in order to balance a laptop that was turned off, their scrotal temperatures rose by 2.1 C. But when the laptop was in use, temperatures rose by 2.6 C on the left of the scrotum and 2.8 C on the right. The laptops were turned on and allowed to run for 15 minutes before being placed on the subjects' laps.

"The body needs to maintain a proper testicular temperature for normal sperm production and development," Dr. Sheynkin said. "Portable computers in a laptop position produce scrotal hyperthermia by both the direct heating effect of the computer and the sitting position necessary to balance the computer." Scrotal hyperthermia leads to decreased fertility, known as clinical subfertility, in men.

The study found that scrotal temperature in the men had risen by 1 C in 15 minutes of computer use. After one hour of use, the surface temperature of the laptops rose from around 31 C to nearly 40 C.

Sheynkin said it was unclear just how much additional heat could cause scrotal hyperthermia, but past studies suggest that a scrotal temperature increase of more than 1 C above baseline temperatures could have negative effects.

Sheynkin warned that years of heavy laptop use "may cause irreversible or partially reversible changes in male reproductive function."

Posted by Chad Dickerson at 03:22 PM

December 06, 2004

Gartner: Consumers dissatisfied with online security

By Paul Roberts

The results of a survey conducted by Gartner Inc. and shared with IDG News Service show that online consumers are growing frustrated with the lack of security provided by banks and online retailers, and feel that passwords are no longer sufficient to secure their online transactions. The findings are the latest conclusions drawn from a survey of 5,000 adult Internet users, which concluded in April and show that online consumers want providers to offer more than just passwords to protect online accounts, and that concerns about a lack of security may be hampering the growth of online commerce, according to Avivah Litan, a vice president and research director at Gartner.

According to the data, almost 60 percent of those surveyed by Gartner said they are concerned or very concerned about online security. Even more important for online retailers: Over 80 percent of those surveyed said they would buy more from an online vendor who offered them more than just a user name and password to protect their accounts, she said.

"The data shows that consumers want more than passwords," she said. However, there are limits to how far consumers will go to secure their online activities, Litan said.

When asked to choose among technologies to supplement password protections, respondents gave high ratings to low-tech options such as challenge and response features that ask shoppers to provide responses to tailored questions, or shared secret technology that displays shopper-selected images on Web pages to prove the authenticity of e-commerce Web sites. More complicated solutions like security software downloads or so-called "multifactor authentication" that couple smart cards or USB (Universal Serial Bus) tokens with user names and passwords were less popular, Litan said.

The most popular choice for fixing the security of online shopping and banking sites is for providers to be made legally responsible for strict security measures, she said. Also, those surveyed by Gartner indicated that they want the choice of using stronger authentication, but do not want to be forced to use it.

"Our data shows that consumers think the system is easy to use, but they want something that gives them added protection," she said.

Banks and online retailers in the U.S. have lagged behind their counterparts in the European Union and Asia in using strong authentication to secure online transactions, including smart card technology and one-time passwords, she said.

Gartner predicts that by the end of 2007, more than 60 percent of banks in the U.S., but fewer than 20 percent of banks worldwide, will rely on simple passwords for retail customer authentication.

But that may change, especially as retailers and banks contend with a wave of sophisticated online scams known as "phishing attacks" that lure customers to phony Web sites and steal their account and financial information, she said.

Recently, U.S. Bancorp. said that it will use a hardware-token based authentication service from VeriSign Inc. to secure access to commercial banking services for its customers, and may soon introduce a similar service for consumer banking customers.

"We're getting more calls from banks and other providers that are looking to protect their customers and give them added security. They're worried that consumers are losing confidence in the online channel," she said.

Gartner will publish a research note on consumer authentication options in the near future, Litan said.

Posted by Chad Dickerson at 05:50 PM

December 03, 2004

IBM's PC business up for sale (Update)

By Paul Kallender

IBM Corp. has put its PC business up for sale, according to a story published on Friday on the Web site of The New York Times. IBM is discussing selling the business to Lenovo Group Ltd. (formerly Legend Group Ltd.), China's largest maker of personal computers, and at least one other potential buyer, according to the article. The price of the sale and the status of the negotiations were not mentioned.

A spokeswoman for IBM in Japan declined comment on the story and a spokeswoman for Lenovo in Hong Kong had no immediate comment. A U.S. spokesman for IBM, Clint Roswell, also declined comment.

A sale would take Armonk, New York-based IBM out of the home computing market it popularized with its 1981 release of the IBM Personal Computer. Hardware was the foundation of IBM's business until Lou Gerstner arrived as the company's chief executive officer (CEO) in 1993 and revived its fading fortunes with a transition to software development and services work. Beginning in 1998, IBM's revenue from software and services eclipsed hardware.

IBM has already pulled back from the commoditizing PC market. In 2002 it signed a US$5 billion, three-year agreement to outsource most of its desktop PC production to San Jose, California-based Sanmina-SCI Corp.; late that year it sold its hard disk drive business to Hitachi Ltd. But while financial analysts called for IBM to entirely shed its low-margin PC business, executives including CEO Sam Palmisano resisted, arguing that IBM's strength comes from its sweeping product portfolio. Retaining a presence in the PC market helps IBM better serve customers seeking end-to-end providers with broad expertise, the company's management said.

If IBM is going to alter that strategy and leave a challenging market, it appears to have timed the move well. In a Nov. 29 report, Gartner Inc. predicted that three of the world's top ten PC vendors would sell their businesses or pull out of the market by 2007 because of slower growth rates and reduced profit margins. It specifically cited IBM's PC division, along with Hewlett-Packard Co.'s, as vulnerable to being spun off.

"We forecast at least three lean years for the global PC market after 2005," Gartner wrote. "In these years, unit growth will fall below the double-digit rates the market is accustomed to, and revenue growth will come to a virtual standstill."

Research firms Gartner and IDC both place IBM in the number-three spot, by unit shipments, among PC makers. Leading the pack is Dell Inc., the only consistently profitable PC vendor over the last several years. HP holds the number two position. IDC pegged IBM's shipments in the second quarter of this year at 3.2 million PCs globally.

"IBM likes to be number one and sometimes number two in a business. They don't like number three very much," noted analyst Rick Doherty of The Envisioneering Group.

IBM CEO Palmisano has promised investors he will continually monitor IBM's business units and repair or get rid of those that don't fit into IBM's strategy of only competing in markets where it can dominate or innovate, Doherty said. Leaving the PC market would fit into that overall corporate strategy. Also, IBM has for years had manufacturing ties to Lenovo and other Chinese companies.

"It's not such a stretch to make their largest partner the owner," he said.

Financial analyst Steve Fortuna of the Prudential Equity Group LLC also sees the potential change as a logical one. "We believe that the PC business is absolutely not strategic to (IBM's) long-term core strategy," he wrote Friday in a research note. "Over time IBM's strategy has focused more on a services and software push. To the extent that IBM does remain in hardware, they have focused their attention on areas in which they are able to differentiate themselves and add value."

If IBM does leave the PC business, it will -- as IBM's executives previously argued -- suffer some customer resistance to its diminished portfolio, Doherty predicted. Corporate customers appreciate being able to rely on IBM-quality products for all their IT needs, he said.

"There are some performance expectations. If you want to recommend a consumer laptop today, nobody beats IBM, in any geography. You can literally drop a ThinkPad and not lose data on it," Doherty said. "Corporate customers are going to be looking for an assured supply. IBM doesn't want to have to go to CompUSA to buy ThinkPads."

Merrill Lynch & Co. Inc. financial analyst Steven Milunovich also cited risks to IBM's corporate accounts quality control, should it sell its PC unit.

"We think that IBM may still want to distribute an IBM-branded PC. In other words, Lenovo could provide IBM with a PC that says IBM on the front," Milunovich wrote in a Friday report.

After several rocky years and substantial restructuring, IBM's personal systems group, which include its PC business, has shown strong year-on-year sales growth for each of the first three quarters of this year. Revenue increased 17 percent compared to the three-month period a year ago, to $3.3 billion, on strong sales of mobile PCs during the third quarter, the company said in October. Similarly, strong sales of mobile PCs contributed to 16 percent year-on-year growth for the second quarter and 18 percent year-on-year growth for the first quarter, the company said previously.

Current Analysis Inc. analyst Sam Bhavnani cited those gains as support for his dissenting view: he believes IBM would be foolish to sell its PC group. IBM's ThinkPads are considered to be among the most well-designed notebooks available, and customers appreciate the company's advances in security and other high end features, he said.

Bhavnani thinks IBM is more likely to deepen its Chinese manufacturing and product development partnerships than it is to exit the PC business entirely.

"To me, (selling the business) really doesn't make sense," he said. "While the PC business is not a huge profit center for IBM, it's not something that's absolutely dragging them down, either. Customers want the IBM brand."

Posted by Chad Dickerson at 03:06 PM