The Online REPORTER
WEEKLY DISPATCHES FROM THE INTERNET FRONT
LOTUS READIES JAVA INTERFACE
Netscape's Constellation product (see page 3) wasn't the only attempt to replace the Microsoft GUI at Comdex last week.
Tucked away in IBM Corp's show booth Lotus was running a number of applets in a non-windows point-and-click interface it's calling "Lotus Desktop." According to VP Network Computing Phil Hester, the idea in a word processing application is that users would edit documents through the applets, but would do more complex functions, like page layout, outside of Java. It turns out that rather than do a whole re-write of SmartSuite in Java (OR 25), Lotus plans to create Java components of the more lightweight features of SmartSuite that would plug into a traditional non-Java application on the server. It will leave the guts of SmartSuite as it is. Hester said the company doesn't reckon Java's up to the whole job yet: somebody ought to tell that to Corel Corp. SmartSuite and Java applet products will be sold separately. The Lotus Desktop is presented in a windows-type interface but without the familiar dialog boxes and includes an in-box, calendar, to-do list, address book and new/recent document space, and a feature called Market Watch for news delivery. Hester says there is also a browser. The version being shown at Comdex took up just under 2 Mb RAM. Of course, since Desktop is written in Java, it could be run in a browser or on any OS that supports the Java virtual machine. Hester says Lotus is still testing to see which applets make sense in Java and which don't, but the word on the show floor is that everyone is waiting for Java 1.1 to make the language run decently. Lotus intends to officially unveil the Lotus Desktop applets along with a developers kit at Lotusphere in January. www.lotus.com.
NETSCAPE AGREED, BUT THEN SUN LAWYERS TORE
It looks like JavaSoft has decided to take Java to the European Computer Manufacturers Association for de jure standardization.
Despite internal debate about going to the Open Group, ECMA is at least an actual standards body and Sun has done work with it in the past. ECMA championed the Sun-driven initiative called Public Windows Interface to put a specification for Windows APIs into the public domain and it is is now an ECMA standard even if was eventually shot down by Microsoft Corp at the International Standards Organization, the mother ship of the standards world.
The notion of standardizing Java has been kicking around for some time - indeed JavaSoft's often said its intention is to put the Java technologies in the standardization process as they become mature - but it suddenly decided it had to do it right away and got the notion of piggy-backing on Netscape Communications Corp's JavaScript-ECMA meeting held last Thursday/Friday at Netscape's Mountain View, California offices.
Netscape agreed, but then Sun lawyers tore into the draft and realised ECMA's rules would require that ECMA get the Java name. Sun doesn't want ECMA or any other standards organization to have the Java name, and although this was reportedly the only objection Sun had, it decided at this point it should make sure all the i's are dotted and t's are crossed before it makes any formal submission. As a result, the question of Java's standardization never came up at the JavaScript meeting, which by all reports went swimmingly.
There was a greater turnout than is usual at these things - some 28 people representing about a dozen companies, big boys at that like Silicon Graphics, IBM and HP - so much so that it even surprised Netscape until its attention was drawn to the fact that more lines of code have been written for the web in JavaScript than in any other language. Even Microsoft turned up with JScript in tow and a brief to make it part of the JavaScript standardization effort, which miraculously - after it worried a bit that it might be taken for a ride - is exactly what's going to happen. Borland also turned up with an apparently unreleased JavaScript implementation of its own that it wants to throw into the pot.
People emerging from the meeting as we went to press still weren't quite sure what it was. One of them described it as coming from the server side though what exactly that means is kinda unclear too. One thing the meeting wasn't able to resolve was the name of the spec since Java is off-limits. Microsoft offered JScript, which isn't trademarked, but that was rejected because of its association. ECMA Secretary General Jan van den Beld thought
JAVASOFT STEERS JAVA INTO THE ARMS OF ECMA
It's Oww! not Wow! as CompuServe tries to halt slide
It was quite a week for CompuServe Corp. It turned in heavy half-year net losses, scrapped its Wow! family-oriented on-line service, and announced that it was having to move its German office out the country. Its recent well-documented problems have forced it into a re-think and it's hired consulting firm McKinsey & Co. CompuServe's reportedly drawn up a strategy and brought in McKinsey to pull it to pieces.
The Columbus Ohio-based provider has decided its best hopes lies with the US corporate market and its growing European business as its share of the US consumer market is slipping away.
So it's canning Wow! next January, having only launched it in April and is taking a $4.9m after-tax hit in the process. Its start-up cost have been one of the main factors behind CompuServe's financial dogs' breakfast this year (OR 10).
Ironically, it was Scott Kaufman, the general manager of Wow!, who was put in charge of the restructuring and finding new revenue streams. It had 102,000 subscribers as of October 31, and these will be invited to join CompuServe Interactive (CSi), the company's Internet and on-line service aimed at home and small business users. That only manages to hang on to 36% of its customers up to 12 months - 45% have left after just three.
Second quarter net losses were a hefty $58.0m or $0.63 a share after the $4.9m hit - at the operating level they were $94.5m - against profits last time of $14.0m. Revenues were up 14% to $214.3m. The First Call analysts average was a $0.25 per share loss before charges, CompuServe came in with $0.26 per share. The company had warned in October that the losses would be between $0.22 and $0.27 per share (OR 22).
The other main reason cited for the losses is the high distribution costs of the latest version of the CompuServe interface, version 3.0. The company expects to begin feeling the effects of the pruning it announced in August
BUSINESS MODEL IS THREAT TO INTERNET, NOT CONGESTION
While all around Internet Service Providers are standardizing on a $10 per month unlimited access rate and value-added online service providers going for a flat $20, their actions could be their undoing, dragging down the low-cost Internet access model with them.
With long distance telephone companies operating in an increasingly cut-throat world, which in turn forces them to look to local services - if they can offer them - to pay more of their way, letting consumers think they can have access at such low rates, which they must think can only go lower is the most likely reason this Internet thing will slam unceremoniously into the buffers.
And this warning comes not from an analyst with a report to flog, it's the gist of a letter sent to the Financial Times from Henry Birdseye Weil, senior lecturer at Massachusetts Institute of Technology (MIT), who specializes in corporate strategy in technology-based service industries. "The Internet as we know it may be a comparable pathfinder," he warns. In other words, it will end up being what CB radio is to today's mobile telecommunications market.
The argument is simple, and not really new, but needs to be repeated on a regular basis to try and temper the hysteria. It had been thought that Internet telephony - making calls over the net by only paying for a local call - could eventually wreck telecoms companies' pricing model, but that's clearly some way off becoming a viable technology.
Of course the telcos wouldn't let their model be severely undermined by the
Internet. The number of them complaining that net traffic is clogging up bandwidth, thereby disrupting voice telephony, has escalated in recent weeks. Maybe they are preparing us for a fall? MCI Corp said as much last week. Its lone voice - obviously fighting for its own long distance interests - dismissed the warnings from the various Bells as "scare tactics." It went on "the fact that the Bells are spending millions of dollars marketing second phone lines and millions more marketing their own Internet services, suggests network congestion is not really an issue."
And the whole congestion issue does smack of bandwagon-jumping to us. Sure, there's the difference between packet and circuit switching to consider, whereby data packets transmitted over the Internet take up on average around 20 minutes, whereas the average voice call lasts just three. But there are enough networking answers to relieve congestion at switches and plenty of fiber under the oceans to cope with it all. It's often more a case of bottlenecks at the ISPs. But the problem is one the ISPs have brought about by insisting on the flat rate model. Customers are now used to it and it would be a brave company to be the first to step out of line and resort to the old model, and more importantly, previous higher charges.
But if that doesn't happen we are likely to be left with just a handful of enormous telecoms concerns and choice will be just a memory.
LUCENT SHOWS INFERNO OFF TO JAPANESE ELECTRONICS FIRMS
Lucent Technologies Inc's Inferno operating system was introduced with great fanfare back in May of this year (OR 1) but since then the volume of hot news has not lived up to the software's name.
Now, however, the Nippon Keizai Shimbun reports that Lucent has distributed a test version of Inferno to at least 50 Japanese manufacturers of home electronics equipment, hoping to persuade them that it's just the thing for consumer products such as Personal Digital Assistants and telephones.
Inferno, now due out in the first quarter of 1997, takes up less than 1Mb memory, and has facilities for secure transmission and caller identification. The wire mentions Nippon Telegraph & Telephone Corp, Toshiba Corp, and Oki Electric Industry Co as among the Inferno recipients. Lucent comes from the ex-Bell Labs team that wrote Unix, including Dennis Ritchie and Rob Pike.
Meanwhile, free binary distribution kits of Inferno for Plan9, Windows 95, NT, Irix and Solaris 2.5 were made available in September. They are aimed at programmers that are interested in developing networked applications, and can be downloaded from Lucent's Web site. The kits, which are currently at beta 0.2, with beta 1 promised by year end, take up 25Mb, and include the Dis interpreter, two windowing systems, the Limbo compiler, a multi-threaded debugger, Unicode font set and a Unix-like shell, among other things.
HP ADDS WEB TO NETMETRIX
Hewlett-Packard Co plans to add some Web-based management tools to its NetMetrix monitoring product for OpenView this week.
HP will integrate Web technology with its InternetWork Response Manager and NetMetrix Reporter, allowing network-response information to be viewed from a browser.
Other features include network-wide Web-based performance viewing, rather than segment-by-segment, and exception reporting software that filters out relevant network information from a plethora of data.
NetMetrix InternetWork Response Manager is out now at $4,000, Reporter at $5,000 and Enterprise Manager 4.7 at $21,000. The network-viewing feature will be available for free in January. www.hp.com
VIEWCALL PLAYS DOWN ITS PROPRIETARY TV-HTML
Fledgling TV on-line service provider ViewCall America was showing off a buffed-up user interface for its ON-TV service at the Comdex Show Stoppers event last week, but played down its proprietary TV-HTML extensions.
Initially, a ViewCall spokesperson even denied that the product used anything but regular HTML - a key feature they were planning to develop as an "open standard" back in September (OR 17). Two months ago ViewCall was promising a conference to open up TV-HTML through an industry consortium within 60 days.
Now the party line has changed from open standard through consortium to open standard through industry consensus. ViewCall says Sega plans to bundle its online service in its NetLink product. Deals have recently been announced with Boca Research Inc, for its as-yet-unnamed consumer Internet device, and Motorola, who will be including ViewCall in their Internet appliance reference design. www.viewcall.com
CHECKPOINT'S OFFERS ONE-STOP SHOP SECURITY PLATFORM
CheckPoint Software Technologies Ltd has created a framework of security APIs and protocols plus an Inspect scripting language it says will allow organizations to create enterprise-wide security management systems by integrating third party access control, address translation, authentication, auditing, accounting, encryption and content security applications with its CheckPoint FireWall.
CheckPoint will publish its proprietary content vectoring, suspicious activity monitoring and URL filtering protocols in the Open Platform for Secure Enterprise Connectivity (OPSEC). It will also support Radius authentication and a veritable acronym soup of standards such as SNMP Simple Network Management Protocol, LDAP Lightweight Directory Application Protocol, ODBC Open Database Connectivity, Fortezza hardware token authentication, IETF IPsec ISAKMP key management and SKIP Simple Key Management for Internet Protocols.
MERISEL FIRST WITH WEB-ORDERING
Reseller Merisel claims it's got the first national Web-based order entry system. The El Segundo, California-based company's system offers US and Canadian resellers the ability to place orders via it's Web site, download daily price lists, check on order status and availability of products, and link to FedEx and UPS tracking sites. Ingram Micro touted a similar system this week that starts next month. But its Order Status system only enables resellers to check on an order which has been placed over the telephone. Ingram says it should be able to take orders via it's Web site by the second quarter of next year.
W3C CORBA-TO-DCOM MEET LOADED IN CORBA'S FAVOR
We hear that pro-Corba types and fencesitters out-numbered the pro-Microsofties at last week's W3C meeting (OR 25). There were about 65 present. It was originally planned for a conference room housing up to 200 people, but it was moved to a hotel room when it became apparent late last week that attendance was going to be a bit on the thin side.
It was apparently a very technical session, and Microsoft wasn't allowed to make its Active Group progress pitch as previously thought (OR 25); there was a pro-Corba speech from Iona Technologies Ltd's Anrai O'Toole and Microsoft's Nat Brown did his bit for DCOM, but no side could claim to have 'won'; it was said to be non-confrontational.
The tecchie stuff got pretty deep at times, with a long session on DCOM transport and Internet Inter-ORB Protocol (IIOP). Apparently DCOM's garbage collection technique raised a few eyebrows. If the last object attached to a server is either partitioned or down for more than six minutes, then the server is garbage-collected. Microsoft also said it doesn't reckon that TCP is a scalable transport, so that's why DCOM is UDP-based. Other topics covered included programming models, including Microsoft's Interface Definition Language, VB, C/C++ and so on, change management and multiple interfaces per object, both issues were said to be slightly confused. Those attending has already made up their minds for the most part, and there's no follow-up planned yet apparently.
REDMOND PLANS TO OUT-JAVA SUN
Saying that it will better address problems that Sun has been unable to resolve, Microsoft will have its Official Win32 Reference implementation of the Java virtual machine in beta by the end of the year.
Internet platform program manager Charles Fitzgerald says Microsoft will be able to better execute on things like a class library and Just-In-Time (JIT) compiler.
Meantime, Microsoft said it would honor all parts of its contract with JavaSoft, under which, Microsoft, like all licensees, has to keep all the APIs up to date on their Web site. Redmond now says it will do as much, but will push its own where it has an alternative.
But it's all a bit confused right now as to how far this will go. One part of Microsoft last week suggested it would use the JavaBeans API for instance, and another said it wouldn't.
Microsoft also plans to release a Java virtual machine plug-in for Netscape Navigator which, it claims, can execute 30 percent faster than Navigator. Netscape scoffs at this move, saying that Microsoft's Java execution speed advantage will be forgotten in about three months. Of course, Netscape may stop its scoffing if Microsoft gets its way and slaps some widely-adopted ActiveX or DCOM extensions onto Java that would be accessible only to Netscape users through the plug-in.
Fitzgerald says Redmond plans to do such an integration with, for example, its Viper transaction processing stuff.
Other features Microsoft plans for the IE 4.0 virtual machine are a "supercharged" Abstract Windowing Toolkit (AWT), multimedia and database class libraries, the ability to circumvent Java's sandbox security, some admin tools, and Viper support. Microsoft will do IE versions of the virtual machine for Solaris, HP-UX, Linux and it is working with Metrowerks on a Mac version. www.microsoft.com
IBM PERSONAL SOFTWARE GROUP SPINS OUT JAVA AND WEB UNIT
IBM Corp's Personal Software Products (PSP) group said at Comdex last week that it will announce in the next few days the formation of a separate group to work with its customers to develop and tailor Web-and Java-enabled applications.
The new Network Computing Projects group will embark on a 40-city tour of the US early next year, Donn Atkins, director of marketing for IBM Personal Software told InfoWorld. It'll be based alongside the PSP group in Austin, Texas, which had apparently been doing so much Java stuff recently that the move became essential to avoid hurting the remainder of its business.
Meantime, the company introduced a beta version of Java 1.0.2 last week: the new version features a new Just-In-Time (JIT) compiler that the company claims improves CaffeineMark 2.01 and 2.5 scores by up to 40% compared with the version of Java that IBM shipped in OS/2 Warp 4.0 in September. It's at www.ncc.hursley.ibm.com/javainfo. Version 2.0 of the JIT compiler will be out in December and Java support is planned for OS/2 Warp Connect, Warp 3.X, Warp Server and SMP.
CONSTELLATION IS NETSCAPE'S LATEST STAR
It's a bit of a sad day when the biggest product announcement at Comdex is a new look front-end to sit on top of existing operating systems, but that is what Netscape Communications Corp's CEO Jim Barksdale described with the company's new desktop user interface code-named Constellation.
Netscape is calling it a Communicator component and says it could be used on any client machine, but the technology seems, in particular, to make sense as the user interface for all those Intel Network Computers for which Netscape's Navio subsidiary is quietly writing the browsers but not saying anything about. Developed, according to Netscape, with user interface ideas, rather than technology from its Papersoft acquisition last year, Constellation, which Netscape stresses is not an operating system or a "Windows killer", is layered on top of existing operating systems (something, Netscape says, like Windows on DOS, but remember: it's not an operating system).
Constellation information is "pushed" in HTML, Java, or JavaScript form, from the server to the client, via a "notification engine". There it is displayed in what Netscape considers to be a more intuitive non-browser format; essentially without the familiar gray Microsoft GUI.
Personal preference information is stored, using LDAP extensions on the server, allowing clients to log into the network from any site and restore their preferences on "home-ports".
Netscape says that Communicators' features could all be wrapped into a Constellation environment, if that were required. Information or applications could be pushed from the server and Netscape has signed deals with Marimba Inc (OR 19) to use its Castanet technology to push applications and PointCast Inc for data delivery.
This type of information could be displayed on an "infoscreen", which took the form of a banner of images along the bottom of the screen.
Constellation elements like the infoscreen could be mixed and matched on top of the OS interface as desired. Netscape would not reveal the financial details of the Marimba or PointCast deals.
Navio will be integrating constellation technology into its stuff but the company was evasive about its product plans, admitting that nothing much had been said since Navio's rushed launch back in August (OR 14), and saying that an announcement would come in the next few months.
Constellation is expected to ship in mid 1997 as part of Communicator, which is due in the first quarter. www.netscape.com/comprod/tech_preview/index.html
TIVOLI READIES JAVA PLUG-INS
IBM subsidiary Tivoli Systems Inc is developing technology called the Lightweight Client Framework (LCF) to do management for its Network Computers.
Details are sketchy, but LCF is software implemented on the client side that would allow NCs to plug into existing Tivoli Management Environment frameworks.
IBM says that LCF will do systems management functions like end-user monitoring and alert generation. No word on when it will be available.
NETMANAGE LAUNCHES MAXIMUM WEB MANAGER
If San Jose, California-based NetManage Inc is to be believed, the market for Web site management tools is going to be huge - $900m over the next three years. The company has launched its IntraChange product to cash in on that market.
The technology behind IntraChange comes from NetManage's acquisition of San Francisco-based Maximum Information Inc back in June: Maximum was just about to launch the product at the time of its acquisition. As well as a range of management functions, IntraChange has a kind of workflow system that is said to enable a team to work together more efficiently to keep a Web site - and associated intranet - up to date. It uses widely-used SQL database servers, such as Oracle, Sybase and Microsoft. There's no pricing details yet.
According to NetManage, the only competition is Lotus Notes and various document management systems, but these, it says, can't cope with managing Web sites kept current by hundreds of contributors.
FORCES RALLY AGAINST OFF-SHORE INTERNET CASINOS
Some unlikely bedfellows are rounding on Internet gambling, reports the Los Angeles Times. Internet casinos have been springing up fairly regularly over the past 18 months or so, nearly all of them off-shore, requiring a local bank account in whatever, usually exotic location the server is located.
There are federal and state laws preventing sports betting over wires, which was initiated to stop inter-state sports betting. Critics of the Internet casinos think similar measures should be enforced once more. Republican Senators Jon Kyl of Arizona and Orrin Hatch of Utah will campaign to ban Internet gambling when Congress reconvenes.
Minnesota Attorney General Hubert H. Humphrey III has sued Granite Gate Resorts of Las Vegas, which operates its WagerNet site, www.wagernet.com, out of Belize, arguing somewhat grayly, that the state of Minnesota decides what is legal entertainment for Minnesotans, and as the site advertises that the site is legal for Minnesotans to bet through, it is fraudulent. Ironically, the site is operating on a points, not cash basis at the moment. But it does include a warning to "consult your local, county and state authorities regarding restrictions on off-shore sports betting via telephone before registering."
Senator Jon Kyl's position is more straightforward, all gambling is morally bad according to him, regardless of the medium. Internet gambling is also opposed by the American Gaming Association, not a body that would normally find itself allied with the likes of Kyl. Its objection is that there are no checks and balances on the off-shore sites, although they obviously have none of Kyl's moral objections.
It gets more complicated still, as Native American nations are exempt from most federal gambling legislation. The Foxwoods casino and resort on a reservation at Ledyard, Connecticut is touted as the largest in North America.
Those supposedly in the know say the most likely result of a two-year gambling review that Congress began this year is a call to limit on-line gambling, by which time it could have snowballed. And legislators say the underlying issue is gambling, which is legal in one form or another in most parts of America. But if Congress feels it's right to legislate against Internet gambling - having seen the Communications Decency Act blocked by a federal appeals court - then why not go after controlling general Internet access as well?
ACTRA AND MASTERCARD PUT ORDEREXPERT WEB TO THE TEST
Actra Business Systems, a joint venture between Netscape Communications Corp and GE Information Services, and MasterCard International have formed a consortium to bring financial institutions, corporations and suppliers together to pilot the Actra OrderExpert System.
It's an electronic catalog-based order management system which is supposed to provide a secure Internet system for corporate purchasing. Ray Rike, VP marketing for Actra, says it's built the OrderExpert application software on top of its Business Document Gateway electronic commerce infrastructure.
A buyer can have a localized OrderExpert system where s/he can add suppliers information and create a shopping cart for employees. They're given passwords and authorization according to what management specifies the employee is allowed to buy, including specific items and budget. If an employee needs authorization the system will e-mail the person who can authorize the purchase. OrderExpert will send the order to the supplier. The payment module provides line item detail of all merchandise purchased. Suppliers can also buy OrderExpert and design their own Web catalog.
OrderExpert will link customers who use the MasterCard Corporate Purchasing card electronic payment method, to their financial institutions and suppliers. The pilot program is using the same card for all transactions but expects to accept any card when the system rolls out in June next year. The pilot will run from January to May. Pilot participants include Actra Business Systems, American Material Resources Inc, Bank of America, Boise Cascade Office Products, Citibank, First Chicago NBD, First Data Corporation, GE Capital Financial, General Motors, Hamilton Hallmark and Avnet Co, Hoffmann La-Roche, Hughes Aircraft, MasterCard, NBC, and Netscape.
The system has full EDI support, comes bundled with Netscape Enterprise Server, Navigator Gold, LivePayment, LiveWire Pro, and Relational Database Management System, takes up 8GB of disk space, and requires a CD ROM for installation. It currently supports Sun Sparc/Ultra Servers and anticipates support for Windows NT, HP-UX, and AIX. Actra says the system is designed to increase a suppliers sales, simplify purchases and sales and reduce purchasing costs by reducing human error and providing a full audit trail. www.actracorp.com
MICROSOFT SNAPS UP RESNOVA MAC WEB SERVER BRAINS
Microsoft Corp has acquired Macintosh Web server technology and five employees from ResNova Software Inc on undisclosed terms.
The two products Redmond has bought are WebForOne and Boulevard, and they will be integrated into future versions of the Mac version of Internet Explorer, which will eventually be packaged with the forthcoming Personal Web Server for Mac, due out by the year-end. It's meant for small workgroups, takes up less than 1Mb memory and enables any Mac to act as a low-end server, rather than having a dedicated machine. The quintet leave a few employees behind in their Huntingdon Beach, California base as they go to work in Microsoft's San Jose offices.
AT&T WORLDNET USERS TO BE COMPENSATED AFTER FAILURE
Around 50,000 AT&T Co WorldNet Service electronic mail customers were recently hit by a problem that stopped electronic message delivery. It was caused by a server failure which damaged a database and the back-up database that contained messages for delivery. The service was down for almost 32 hours and AT&T has offered compensation to customers affected. It has also set out to reassure its users that that new processes have been put in place to reduce the probability of a similar situation arising again.
HDS PORTS NETOS TO POWERPC
HDS Network Systems Inc has ported its netOS network computer operating system to PowerPC, and is offering it as part of Motorola Inc's Semiconductor Products Sector's WebRef reference design boards, which are built around the PowerPC MPC800. HDS is Motorola's sole OEM for the product, which Motorola will not be manufacturing itself. HDS claims a few signatures for the product already, with announcements in the next few weeks.
MASTERCARD TAKES MAJORITY STAKE IN MONDEX
As expected, Mastercard International Inc announced its purchase of 51% of Mondex International Ltd. (OR 25). The credit card giant now controls what appears to be the leading electronic payments system using smart cards and so-called electronic wallets.
Financial terms were not disclosed, but MasterCard CEO Gene Lockhart said last weeks figure of $150m quoted by the New York Times was "vastly in excess" of what was paid. When Mondex was established as an independent company away from the its founder National Westminster Bank Plc last July, it was capitalized at £100m ($167m) and is owned by National Westminster and 16 other companies, mostly banks, including Wells Fargo & Co, the Midland Bank and Hong Kong and Shanghai Banking Corp units of HSBC Holdings Ltd, AT&T Corp, Canadian Imperial Bank of Commerce and ANZ Ltd.
MasterCard has taken any outstanding equity and diluted the existing holders' stakes. Mondex is now a subsidiary of MasterCard and Lockhart expressed his wish that the Mondex brand will appear on as many cards as possible - not just MasterCards - as does two of MasterCard's other subsidiaries, Cirrus and Maestro. The Mondex card can store monetary values, and users can download cash from ATMs and spend it in participating shops, as well as checking their balance using the electronic wallet. It is on trial in Swindon, Exeter, and York in the UK, Guelth, Ontario, Christchurch and Wellington in New Zealand, San Francisco with Wells Fargo employees and, following a launch last month in Hong Kong, Mondex has received more than 20,000 applications, according to Mondex CEO Michael Keegan. Lockhart said the Peoples Bank of China had been "very impressed" with Mondex, but stressed that no decision had been made yet. Lockhart left for China after the announcement to try a little more persuasion. With the exception of Hong Kong, the trials are all live, "real money, real cards, real cash," said Lockhart. Lockhart stressed that it wasn't just the card's stored value element that MasterCard was interested in, it appears to have an advantage over other smart card payment technologies in that it can be used across currencies, is downloadable from ATMs or Point of Sale systems and can access other bank account functions. Users can make card-to-card transactions as well as buy things, so people can lend each other money electronically, for instance. And the most obvious application of this would be the Internet. Lockhart said the Internet was a "major factor in the decision" to go with Mondex, because of its access security. He envisioned a day when money could be downloaded through a phone or television fitted with a card reader, pointing out that Mondex already works with AT&T, Hitachi Ltd and British Telecommunications Plc. All MasterCard members - there are 22,000 issuing almost 370m credit and debit cards - will be able to apply for a license to use the Mondex stored value product. MasterCard will participate in the development of the Mondex platform for other chip-based products, but will not invest in any other electronic purse products as a result of the deal. The original trial in Swindon now involves around 700 merchants and 13,000 individuals. The average transaction amount has been £6.50 ($10.85) and the average "withdrawal" £25 ($41.75). Mondex will continue to be headquartered in London, with Keegan in charge: "I know which card will become the worldwide standard," he said confidently.
HP FINDS ITS WAY ROUND THE ENCRYPTION EXPORT BAR
Another piece of the Hewlett-Packard Praesidium security architecture fell into place last week, with the adoption of its International Cryptography Framework (ICF) by US, British and French governments, and the promise of products from Intel and endorsement from Microsoft Corp. Companies adopting the ICF could export their products, which are compliant with new US export regulations.
There has been concern among the encryption community following one of WebTV Networks set-top boxes being classified as "munitions" because the encryption was so powerful, which also happened to Lotus Notes earlier this year, when Lotus had to grant the US government the key to unlock it's 64-bit encryption if necessary in return for an export license.
The International Cryptography Framework separates the encryption capability from the actual encryption algorithm used, so that software incorporating it can be exported without an encryption algorithm, and have one inserted at the other end. It is designed to support current and future cryptographic algorithms, and can support keys of any length. The ICF units are exportable because they require a policy activation token - a software module or Smart Card to function, and the activation token, obtained from an accredited agency, enables encryption to be carried out for a specific application or need that adheres to appropriate government or corporate regulations.
Two weeks ago President Clinton signed an executive order changing the stringent export rules to allow products with strong encryption to be exported, provided part of the key be submitted to enable the government to have access if acting under a court order. HP went to the RSA Data Security Inc arm of Security Dynamics Technologies Inc for its BSafe and TIPEM software developers tool kits to incorporate security into the new framework. BSafe offers software developers multiple algorithms and modules for adding encryption and authentication features to applications. Intel said it will manufacture and distribute cryptographioc hardware that will include ICF technology and Microsoft's export-approved Crypto-API programming interface.
Netscape Communications Corp and CeriFone Corp are exploring uses for ICF, which also includes RecoverKey technology from Trusted Information Systems Inc. HP's own Domain and HP 9000 Enterprise Servers, and HP NetServers will incorporate the ICF stuff by early next year, according to the company. The Praesidium architecture comprises Authorization Server (OR 25), an applications security server, smart card technology, VirtualVault Trusted Gateway and electronic commerce system and the ICF. Separately, HP said at the opening of Comdex that it will announce a broad Internet strategy, and the kind of products it will be coming out with, early next month.
AOL'S NEW PRICING GETS IT INTO LEGAL HOT WATER
America Online Inc's publicity machine has come off the rails somewhat in the past few weeks, just at a time that Dulles, Virginia online services provider must have thought it would be making hay while the sun shined.
The latest calamity is a letter from the attorney generals of 15 states expressing their concern over AOL's new unlimited-access-for-$20-per-month pricing model; not the prices themselves, for they will actually save many AOL customers money, but the imposition of the model come December 1, unless the customer specifically requests the alternative plan of $5 per month for three hours with each additional hour at $2.50 each.
Microsoft and Prodigy both introduced similar pricing models just ahead of AOL, but they don't seem to be in similar legal hot water. Microsoft rolled over its Frequent User members to its unlimited access $20 per month model without giving them another option, but they were already paying $20 per month. With its other two plans Redmond gave the users till the end of next June and their first anniversary respectively, before automatically being rolled over to the new pricing (OR 20). Presumably so few people use Prodigy nobody could be bothered to cause a fuss about it. AOL's defense is that it sent out postcards as well as posting on on-line forums, and customers can stick with the $10 monthly plan for 90 days by calling a toll-free number. The company is confident that it can overcome any legal hurdles placed in its path by this news.
After Web-enabling its Developer/2000 application development tools, Oracle Corp is doing the same to the complimentary Designer/2000 modeling and design software. Version 1.3.2 still enables developers to publish in HTML but applications created using it can now also make changes to the database from a browser. Up on Windows95 and NT it will sell for $4,000.
NET-SCENE LETS YOU ZIP POWERPOINT PRESENTATIONS TO THE WEB
Net-Scene has introduced a Universal Java Viewer version of its PointPlus product, that enables users to share their Microsoft PowerPoint presentations over intranets and the Web.
The San Francisco company already offers a PointPlus Viewer and Maker, but the Java version obviously has wider applications across multiple platforms. The existing Maker costs $200 and converts the PowerPoint files into readable formats. The Java Maker is now in beta, and will be out around the year-end. The Viewer will available for free from this week, downloadable each time a presentation is required, or as a Netscape plug-in. The company is also working on a virtual seminar environment.
Net-Scene made a separate announcement of its Intranet Applications Suite, comprising the same Viewer, Navigator plus a bunch of templates designed for specific tasks, such as human resources, corporate training, procedures and regulations and so on. It also compresses the presentations for sending over the net. The suite costs $500 for a single license www.net-scene.com
Using a feature called tele-prompter, Webmasters can describe images on their Website and embed them for telephone callers. NetPhonic president Ken Rhie says the product is really targeted toward corporate users who have a sales force that may need Web-based information, but may not have Web access. Web-on-Call software is available now for $1,000 per voice modem port serviced. www.netphonic.com
Wave Systems Corp signed a memorandum of understanding for Creative Technology Ltd to incorporate Wave's electronic commerce system in its multimedia products. Wave has developed a digital content metering system. designed to ensure payment when information publishers transmit material to customers over networks.
AT&T MARKET TESTS WEB-TELEPHONE INTEGRATION
As part of its Web Call Center customer trials, AT&T Co is testing a feature called Page Push, which allows vendors to manipulate Web pages via the telephone.
The Web Call Center is targeted at vendors who want to solicit an immediate and direct response from potential clients surfing the Web. The customer calls a toll-free number displayed on the Website, which then initiates a call to an AT&T server on the Internet. The server then delivers a short, pre-recorded voice mail explaining what the call is about and then connects the vendor's sales force with the customer. The vendor, while talking to the customer, uses proprietary AT&T technology to "push" Web pages to the customer by pressing buttons on the touch-tone phone. Trial customers now include pharmaceutical company Hoffman Larouche and Stahls Printing Equipment. AT&T is examining different pricing models and transaction options for Web Call Center, including an online processing system or a direct call center. The service will be generally available in April. www.att.com
NETPHONIC BRINGS WEB ON CALL
Mountain View Start-up NetPhonic has taken a different approach to Internet-telephone integration. Its Web-on-Call Voice Browser, which sits on the server, converts HTML pages into audio and plays them back over the telephone.
Surprisingly, NetPhonic claims there isn't much tinkering that needs to be done in order to make Voice-on-Call work on existing Websites. Webmasters plug a voice modem into their server and install the Voice Browser and the software takes care of the rest, translating existing HTML into audio for whomever calls in. If words on your Website are not recognized by the Voice Browser, well, it does its best phonetically. The pound key selects a hyperlink and the asterix brings up a menu of system options.
WINDOWS CE REARS ITS HEAD
Microsoft's Pegasus project, formerly WinPad, now Windows CE finally showed its head at Comdex last week with a slimmed-down version of Internet Explorer 2.0.
Microsoft says that there is no special reason it went with an obsolete version of IE, just that it had to start cramming the software into the CE environment before 3.0 was ready. It says that IE for CE required a fair deal of software customization and the product will have its own development schedule.
ONEWAVE WEB START-UP IS TRANSFORMED TO A HOT PROSPECT
Spurred on by strong hardware support - Casio, Compaq, HP, Hitachi, LG Electronics, NEC and Philips are all doing products - the CE SDK proved to be one of the hottest pieces of software at Comdex, making Apple's Newton booth seem even emptier.
How can a company once notoriously derided by Forrester Research as 'The Easel of the Web,' after Easel Corp, the now defunct supplier of graphical user interface screen-scraping tools, be a hot prospect? Easy, if that company is Boston, Massachusetts-based OneWave Inc, and its chief executive officer is Klaus Besier, a former high-level executive at SAP AG, one of the software industry's all-time success stories.
OneWave is a provider of client and server software for Web-enabling business applications. Its proposition is that by adding Web functionality to existing mission-critical systems, corporates using secure TCP/IP can do EDI over the Internet instead of investing in expensive private networks. The technology clearly has appeal, and there is little doubt that most of OneWave's 80 customers would have bought the product even if they had not heard that the new CEO at the 160-person, two-year old start-up is also the man who built up SAP America, which shot from revenues of $20m to $710m in the space of four years.
But Besier's involvement will certainly make a difference. Luring such a high-flyer to such a small start-up demanded a hefty mortgage on OneWave's balance sheet. 'Compensation to CEO' appears as a line item in all OneWave statements of operations. The figure is $7.5m for the first six months of 1996. Given that the company lost $9.3m on sales of $5.5m in the same period, Besier was an expensive buy. But OneWave is convinced that he will be worth it.
His first action on joining in January (after changing the name from Object Power to Business@Web, before changing it again in June to OneWave) was to sign up Baan International NV, the Dutch manufacturing software supplier, as a business partner. Others now include systems vendors NEC Corp and Hewlett-Packard Co, Informix Corp (which has invested $1m in the company), and application providers SAP AG and PeopleSoft Inc.
Such deals have helped turn the company very rapidly in the right direction. After securing nearly $44m from its public offering earlier this year, OneWave's first quarter showed $2.4m sales with a net loss of $8.5m, second quarter $3.2m sales (up 32% sequentially) with a loss of $793,000, and a third quarter of $5.3m (up 69% sequentially) and losses of only $379,000. Losses as a proportion of sales were already down to 16% last quarter from 25% the one before.
Goldman Sachs & Co, one of the bankers who took OneWave public, estimates that revenue for 1996 will reach $16m, rising to $34.7m in 1997. It views the stock as a "core holding" for long-term investors and believes that OneWave is well poised to win in Internet services and software. What could go wrong? For a start, OneWave competes with many of the companies it currently partners. Then there is the whole question of the unpredictable impact of Java (which Besier sees as a complementary technology) and ActiveX on distributed computing.
Besier, however, says the company's biggest opportunity lies in intranets. "People who've spent hundreds of thousands of dollars on their Web sites - but who haven't done anything to add value to the information they have access to - will be in trouble. There will be a 'cool Web site' backlash," he says. Besier clearly stands by what he said on joining OneWave in January: "The market opportunity for this company is as great as the one I saw for SAP America in 1992 when I became its chief executive officer."
COMPUSERVE LOOKS TO STOP ROT
It was quite a week for CompuServe Corp. It turned in heavy half-year net losses, scrapped its Wow! family-oriented on-line service, and announced that it was having to move its German office out the country. Its recent well-documented problems have forced it into a re-think and it's hired consulting firm McKinsey & Co. CompuServe's reportedly drawn up a strategy and brought in McKinsey to pull it to pieces.
The Columbus Ohio-based provider has decided its best hopes lies with the US corporate market and its growing European business as its share of the US consumer market is slipping away.
So it's canning Wow! next January, having only launched it in April and is taking a $4.9m after-tax hit in the process. Its start-up cost have been one of the main factors behind CompuServe's financial dogs' breakfast this year (OR 10).
Ironically, it was Scott Kaufman, the general manager of Wow!, who was put in charge of the restructuring and finding new revenue streams. It had 102,000 subscribers as of October 31, and these will be invited to join CompuServe Interactive (CSi), the company's Internet and on-line service aimed at home and small business users. That only manages to hang on to 36% of its customers up to 12 months - 45% have left after just three.
Second quarter net losses were a hefty $58.0m or $0.63 a share after the $4.9m hit - at the operating level they were $94.5m - against profits last time of $14.0m. Revenues were up 14% to $214.3m. The First Call analysts average was a $0.25 per share loss before charges, CompuServe came in with $0.26 per share. The company had warned in October that the losses would be between $0.22 and $0.27 per share (OR 22).
The other main reason cited for the losses is the high distribution costs of the latest version of the CompuServe interface, version 3.0. The company expects to begin feeling the effects of the pruning it announced in August in the third and fourth quarters in the shape of lower costs. Like America Online Inc before it, CompuServe has had to change the way it reports, and accelerate its amortization period. This cost it a further $28.6m hit in the half, and it now expenses its subscriber acquisition costs at 50% in the first three months, 30% over the next nine and 20% in the following year. That's against 60% in the first 12 months and 40% in the year after. At the quarter end there was still $50.2m of outstanding unamortized costs. It's a more realistic reflection of the company's high churn rate.
Overall subscriber numbers were flat compared to the previous quarter, at 3.313m. The growth areas are international subscriptions, up 56,000 to 1,120m and Japan, where NiftyServ saw numbers rise to 2.0m from 1.9m and the end of the first quarter. North American subscriptions fell 57,000 to 2,192m.
To try and stop the exodus, CompuServe is abandoning mass consumer marketing and going after each segments separately: "we were bringing in new users in the front door and seeing many go out the back," admitted president and CEO Bob Massey in a statement accompanying the numbers.
It will launch CompuServe for Business early next year in the US built on the CSi service. CompuServe's other division, Network Services grew its revenues in the quarter by 33% to $63.6m.
CompuServe Corp reported second quarter net losses of $58.0m after a $7.7m pre-tax charge for the termination of the Wow! online service, against profits last time of $14.0m, on revenues that rose 13.8% to $214.3m. Half-year net losses were $87.7m, after a $25.6m pre-tax restructuring charge, against profits of $40.8m in the same quarter last year, on revenues that rose 12.8% to $423.0m. First Call estimates a $0.10 per share loss for the third quarter, and a stonking $0.61 per share for the year. And that's before any charges.
COMPUSERVE MAY QUIT GERMANY OVER CENSORSHIP BILL
Meantime, CompuServe looks likely to be driven out of Germany by the country's forthcoming strict on-line censorship law.
Its CompuServe GmbH unit says it may transfer its administrative operations out of Germany because of government moves to force Internet access providers to control pornography on their networks.
It would continue to offer services in Germany, but would shift its headquarters to a country that does not hold on-line companies responsible for obscene material on the Internet. The law under consideration in Germany's Bundestag would require on-line operators to block access to child pornography, neo-Nazi materials or other extreme pictures or writing on the Internet. CompuServe says such measures would require it to patrol and censor vast parts of the network. CompuServe claims 500,000 subscribers in Europe, 335,000 of them in Germany, where it employs 250 people. www.compuserve.com
BALLMER BOASTS OF MICROSOFT LOSSES, TCI PULLS MSN STAKE
The profits that Microsoft Corp makes on its operating software and core applications are so vast that it can afford to squander vast sums of money developing Internet content, and VP Steve Ballmer was recently
boasting that the company has spent $400m this year on the Microsoft Network (MSN), the MSNBC Internet news and cable television service, and vertical market applications such as the Expedia travel service.
And the company intends to spend the same sort of sums in each of the next three or four years -"MSN - it's a loss; Expedia - a loss; MSNBC - a loss," Ballmer boasted, adding that he didn't expect the company's on-line media efforts to stop spouting red ink until three years from now - "We're going to lose a lot of money before we break even," he declared proudly.
Comdex's Internet pavilion seemed rather high on the widget and wireless dohickey content last week and lower on ground-breaking Internet products. But though the connection between disk drive locks and the Internet is tenuous at best, nobody was complaining. Deals were clearly being made. Conventioneers seemed to agree that Internet technology had simply become more ubiquitous. Microsoft's ActiveX booth, for example, was not even in the Internet pavilion. Tom Wong, who was hawking Empac Unix Webservers on the show floor was typical, saying that people have a better grasp of the value of the Internet this year. Working the floor is "much easier", he says, "Now I don't have to explain the whole Internet to them."
Microsoft has acquired Macintosh Web server technology and five employees from ResNova Software Inc on undisclosed terms.
The products Redmond bought are WebForOne and Boulevard, and they'll be integrated into future Mac versions of Internet Explorer, which will be packaged with the forthcoming Personal Web Server for Mac.
JAVA IN ECMA
It looks like JavaSoft has decided to take Java to the European Computer Manufacturers Association for de jure standardization.
Despite internal debate about going to the Open Group, ECMA is at least an actual standards body and Sun has done work with it in the past. ECMA championed the Sun-driven initiative called Public Windows Interface to put a specification for Windows APIs into the public domain and it is is now an ECMA standard even if was eventually shot down by Microsoft Corp at the International Standards Organization, the mother ship of the standards world.
The notion of standardizing Java has been kicking around for some time - indeed JavaSoft's often said its intention is to put the Java technologies in the standardization process as they become mature - but it suddenly decided it had to do it right away and got the notion of piggy-backing on Netscape Communications Corp's JavaScript-ECMA meeting held last Thursday/Friday at Netscape's Mountain View, California offices.
DOT Gossip
IBM Corp is renovating a building in Manhattan's Silicon Alley - Broadway between the Flat Iron building - right by our office - down to SoHo, to house its Web site developers and maintenance people. They're being moved down from their up-state location. General manager of the Internet division, Irving Wladawsky-Berger reportedly wanted to come too from his office in up-state Somers, but top management nixed that. IBM recently totted up the number of pages and got a shock when it came to 91,000.
Comdex says 210-225,000 came this year.
The "city" of Redmond, Washington (pop: 41,473) is creating 15,000 jobs over the next two years, about a third of them at its biggest employer, Microsoft, reports the Seattle Times. The company's also expanding four of its sites, including the HQ from a total of 2.5m square feet to 4m square feet. City planners reckon Redmond will have more office development going on by the year-end than Washington DC or Miami.
Web hoster Best Internet Connections Inc now supports CyberCash Inc's CyberCoin for low-cost purchases. www.best.com
Conversation overheard between two Apple employees in an elevator at Apple's wing-ding in the Las Vegas Stratosphere casino: the Stratosphere recently filed for Chapter 11 bankruptcy protection. "I can't believe this company's going out of business," said one. "Ohhh, I don't really think that's going to happen," said the other. After a minute: "No. I'm not talking about Apple. I mean the Stratosphere," said the first employee.
With version 1.1 of Microsoft's FrontPage, Redmond has been boasting of tighter integration with Microsoft Office applications like Excel, so when does FrontPage get swallowed by Office? Microsoft won't rule out the possibility, but the company says that right now the life cycle of FrontPage - currently at around six months - is a wee bit accelerated for Office use. Incidentally, Microsoft says that 150,000 copies were sold in the first four months it was on the shelves.
EveryWare Development is shipping its Bolero Web logging, analysis and reporting tool for Unix, Mac OS and Windows from $1,000. www.everyware.com
Who knows how many people use the Internet? Pollsters Louis Harris & Associates reckon they have a good idea, and reckon that 18% of Americans were using it as of September, up from 15% in April and 14% in January, while about 21% subscribe to an on-line service; a January poll also found 21% subscribed to an on-line service.
AlphaBlox Corp, Mountain View, California, is going to integrate Active Software Inc's ActiveWeb communications software with its forthcoming Blox suite of interoperable Web application building blocks.
Microsoft says it has not forgotten how to count. Responding to rumors that Redmond had abandoned Internet Explorer 4.0 and was instead going to roll everything it could into 5.0, Internet Platform program manager Charles Fitzgerald says there will be a 4.0, and it will be out in the first quarter of 1997, as planned. The rumors got started, he says, simply because 4.0 will include the dynamic HTML technology (code-named Trident) that had been scheduled for 5.0. End of story.
Bill Gates beat out Andy Grove and Jim Barksdale to win the battle of the fans at Comdex this year. His keynote was the only one to fill the 7,500 seat Aladdin theater.
At least their not wasting our taxes: the US Government, including the President's office logged more than 5,000 hours on Jumbo!, a Website that offers shareware and free computer applications and utilities, in a three month period. In addition to downloading business-related software and utilities, it seems government workers spent hours pulling games and multimedia files with stuff like Homer Simpson belching. NASA Ames Research Center topped the list with 950 hours but the office of the President only logged 4.8 hours, but they obviously had bigger fish to fry.
If you ask anyone from IBM's Network Computing group whether they plan to do an Intel-based Network Computer, the pat reply is "what does it matter what chip we use?". It matters quite a bit in fact. Phil Hester, the NC VP says IBM doesn't currently have plans to market an Intel box within his division. It doesn't look like Big Blue is any too interested in the Wintel NetPC either. Hester says because the specs are too general right now.
Though it assures us that it'll never be as fast as the Windows 95 version, Microsoft Corp is finally putting the Java virtual machine in Internet Explorer for Windows 3.1. IE 3.0 for Windows 3.1 is now up in beta at www.microsoft.com/ie/. Unlike the recently announced IBM VM, Microsoft's is 16-bit. Redmond says that this will make it quicker.
China will have a total of 100,000 Internet accounts by the end of 1996, up from the current 40,000, Business News said: a Chinese-language network, connecting eight major cities, will open by year-end, it added.
Worldwide Directory Online (WWDO) will launch its eponymous service this week, which is a business directory using information from Dun & Bradstreet and database stuff from O2 Technology Inc. The plan is to make money purely from advertising and it will carry banners for "good causes" for free. The first two are Greenpeace and Save the Children. It also has a CyberDelight shopping mall. www.justdo.com
It looks like Netscape is looking to Microsoft these days for cutting edge coders. Netscape CEO Jim Barksdale did two product demos in his Comdex keynote with the assistance of Netscape tecchies. Both demos began with Barksdale asking, "Now where did you used to work?". The answer both times was Microsoft.
Virtual World Wide Web, a collection of more than 40 3D virtual reality worlds, went live last Tuesday. Superscape Inc, Intel and Nortel are represented among the 3D pages. Superscape expects the VWWW to grow to 200 worlds within six months and 2,000 within the year. VWWW is "owned" collectively by the participants. http://vwww.com.
Matsushita Electric was recently preparing to launch new PCs targeted at the Internet market in Japan, reports EE Times. Its Panasonic unit developed a Japanese Web browser, complete with the cartoon character Woody Woodpecker as the "Internet guide" for first-time users. The launch was set for October but was pulled at the last minute. The reason? The ads ran the slogan "Touch Woody - The Internet Pecker." An American staff member explained to the stunned and embarrassed Japanese what "touch woody" and "pecker" meant in American slang.
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WEEKLY DISPATCHES FROM THE INTERNET FRONT
LOTUS READIES JAVA INTERFACE
Netscape's Constellation product (see page 3) wasn't the only attempt to replace the Microsoft GUI at Comdex last week.
Tucked away in IBM Corp's show booth Lotus was running a number of applets in a non-windows point-and-click interface it's calling "Lotus Desktop." According to VP Network Computing Phil Hester, the idea in a word processing application is that users would edit documents through the applets, but would do more complex functions, like page layout, outside of Java. It turns out that rather than do a whole re-write of SmartSuite in Java (OR 25), Lotus plans to create Java components of the more lightweight features of SmartSuite that would plug into a traditional non-Java application on the server. It will leave the guts of SmartSuite as it is. Hester said the company doesn't reckon Java's up to the whole job yet: somebody ought to tell that to Corel Corp. SmartSuite and Java applet products will be sold separately. The Lotus Desktop is presented in a windows-type interface but without the familiar dialog boxes and includes an in-box, calendar, to-do list, address book and new/recent document space, and a feature called Market Watch for news delivery. Hester says there is also a browser. The version being shown at Comdex took up just under 2 Mb RAM. Of course, since Desktop is written in Java, it could be run in a browser or on any OS that supports the Java virtual machine. Hester says Lotus is still testing to see which applets make sense in Java and which don't, but the word on the show floor is that everyone is waiting for Java 1.1 to make the language run decently. Lotus intends to officially unveil the Lotus Desktop applets along with a developers kit at Lotusphere in January. www.lotus.com.
NETSCAPE AGREED, BUT THEN SUN LAWYERS TORE
It looks like JavaSoft has decided to take Java to the European Computer Manufacturers Association for de jure standardization.
Despite internal debate about going to the Open Group, ECMA is at least an actual standards body and Sun has done work with it in the past. ECMA championed the Sun-driven initiative called Public Windows Interface to put a specification for Windows APIs into the public domain and it is is now an ECMA standard even if was eventually shot down by Microsoft Corp at the International Standards Organization, the mother ship of the standards world.
The notion of standardizing Java has been kicking around for some time - indeed JavaSoft's often said its intention is to put the Java technologies in the standardization process as they become mature - but it suddenly decided it had to do it right away and got the notion of piggy-backing on Netscape Communications Corp's JavaScript-ECMA meeting held last Thursday/Friday at Netscape's Mountain View, California offices.
Netscape agreed, but then Sun lawyers tore into the draft and realised ECMA's rules would require that ECMA get the Java name. Sun doesn't want ECMA or any other standards organization to have the Java name, and although this was reportedly the only objection Sun had, it decided at this point it should make sure all the i's are dotted and t's are crossed before it makes any formal submission. As a result, the question of Java's standardization never came up at the JavaScript meeting, which by all reports went swimmingly.
There was a greater turnout than is usual at these things - some 28 people representing about a dozen companies, big boys at that like Silicon Graphics, IBM and HP - so much so that it even surprised Netscape until its attention was drawn to the fact that more lines of code have been written for the web in JavaScript than in any other language. Even Microsoft turned up with JScript in tow and a brief to make it part of the JavaScript standardization effort, which miraculously - after it worried a bit that it might be taken for a ride - is exactly what's going to happen. Borland also turned up with an apparently unreleased JavaScript implementation of its own that it wants to throw into the pot.
People emerging from the meeting as we went to press still weren't quite sure what it was. One of them described it as coming from the server side though what exactly that means is kinda unclear too. One thing the meeting wasn't able to resolve was the name of the spec since Java is off-limits. Microsoft offered JScript, which isn't trademarked, but that was rejected because of its association. ECMA Secretary General Jan van den Beld thought
JAVASOFT STEERS JAVA INTO THE ARMS OF ECMA
It's Oww! not Wow! as CompuServe tries to halt slide
It was quite a week for CompuServe Corp. It turned in heavy half-year net losses, scrapped its Wow! family-oriented on-line service, and announced that it was having to move its German office out the country. Its recent well-documented problems have forced it into a re-think and it's hired consulting firm McKinsey & Co. CompuServe's reportedly drawn up a strategy and brought in McKinsey to pull it to pieces.
The Columbus Ohio-based provider has decided its best hopes lies with the US corporate market and its growing European business as its share of the US consumer market is slipping away.
So it's canning Wow! next January, having only launched it in April and is taking a $4.9m after-tax hit in the process. Its start-up cost have been one of the main factors behind CompuServe's financial dogs' breakfast this year (OR 10).
Ironically, it was Scott Kaufman, the general manager of Wow!, who was put in charge of the restructuring and finding new revenue streams. It had 102,000 subscribers as of October 31, and these will be invited to join CompuServe Interactive (CSi), the company's Internet and on-line service aimed at home and small business users. That only manages to hang on to 36% of its customers up to 12 months - 45% have left after just three.
Second quarter net losses were a hefty $58.0m or $0.63 a share after the $4.9m hit - at the operating level they were $94.5m - against profits last time of $14.0m. Revenues were up 14% to $214.3m. The First Call analysts average was a $0.25 per share loss before charges, CompuServe came in with $0.26 per share. The company had warned in October that the losses would be between $0.22 and $0.27 per share (OR 22).
The other main reason cited for the losses is the high distribution costs of the latest version of the CompuServe interface, version 3.0. The company expects to begin feeling the effects of the pruning it announced in August
BUSINESS MODEL IS THREAT TO INTERNET, NOT CONGESTION
While all around Internet Service Providers are standardizing on a $10 per month unlimited access rate and value-added online service providers going for a flat $20, their actions could be their undoing, dragging down the low-cost Internet access model with them.
With long distance telephone companies operating in an increasingly cut-throat world, which in turn forces them to look to local services - if they can offer them - to pay more of their way, letting consumers think they can have access at such low rates, which they must think can only go lower is the most likely reason this Internet thing will slam unceremoniously into the buffers.
And this warning comes not from an analyst with a report to flog, it's the gist of a letter sent to the Financial Times from Henry Birdseye Weil, senior lecturer at Massachusetts Institute of Technology (MIT), who specializes in corporate strategy in technology-based service industries. "The Internet as we know it may be a comparable pathfinder," he warns. In other words, it will end up being what CB radio is to today's mobile telecommunications market.
The argument is simple, and not really new, but needs to be repeated on a regular basis to try and temper the hysteria. It had been thought that Internet telephony - making calls over the net by only paying for a local call - could eventually wreck telecoms companies' pricing model, but that's clearly some way off becoming a viable technology.
Of course the telcos wouldn't let their model be severely undermined by the
Internet. The number of them complaining that net traffic is clogging up bandwidth, thereby disrupting voice telephony, has escalated in recent weeks. Maybe they are preparing us for a fall? MCI Corp said as much last week. Its lone voice - obviously fighting for its own long distance interests - dismissed the warnings from the various Bells as "scare tactics." It went on "the fact that the Bells are spending millions of dollars marketing second phone lines and millions more marketing their own Internet services, suggests network congestion is not really an issue."
And the whole congestion issue does smack of bandwagon-jumping to us. Sure, there's the difference between packet and circuit switching to consider, whereby data packets transmitted over the Internet take up on average around 20 minutes, whereas the average voice call lasts just three. But there are enough networking answers to relieve congestion at switches and plenty of fiber under the oceans to cope with it all. It's often more a case of bottlenecks at the ISPs. But the problem is one the ISPs have brought about by insisting on the flat rate model. Customers are now used to it and it would be a brave company to be the first to step out of line and resort to the old model, and more importantly, previous higher charges.
But if that doesn't happen we are likely to be left with just a handful of enormous telecoms concerns and choice will be just a memory.
LUCENT SHOWS INFERNO OFF TO JAPANESE ELECTRONICS FIRMS
Lucent Technologies Inc's Inferno operating system was introduced with great fanfare back in May of this year (OR 1) but since then the volume of hot news has not lived up to the software's name.
Now, however, the Nippon Keizai Shimbun reports that Lucent has distributed a test version of Inferno to at least 50 Japanese manufacturers of home electronics equipment, hoping to persuade them that it's just the thing for consumer products such as Personal Digital Assistants and telephones.
Inferno, now due out in the first quarter of 1997, takes up less than 1Mb memory, and has facilities for secure transmission and caller identification. The wire mentions Nippon Telegraph & Telephone Corp, Toshiba Corp, and Oki Electric Industry Co as among the Inferno recipients. Lucent comes from the ex-Bell Labs team that wrote Unix, including Dennis Ritchie and Rob Pike.
Meanwhile, free binary distribution kits of Inferno for Plan9, Windows 95, NT, Irix and Solaris 2.5 were made available in September. They are aimed at programmers that are interested in developing networked applications, and can be downloaded from Lucent's Web site. The kits, which are currently at beta 0.2, with beta 1 promised by year end, take up 25Mb, and include the Dis interpreter, two windowing systems, the Limbo compiler, a multi-threaded debugger, Unicode font set and a Unix-like shell, among other things.
HP ADDS WEB TO NETMETRIX
Hewlett-Packard Co plans to add some Web-based management tools to its NetMetrix monitoring product for OpenView this week.
HP will integrate Web technology with its InternetWork Response Manager and NetMetrix Reporter, allowing network-response information to be viewed from a browser.
Other features include network-wide Web-based performance viewing, rather than segment-by-segment, and exception reporting software that filters out relevant network information from a plethora of data.
NetMetrix InternetWork Response Manager is out now at $4,000, Reporter at $5,000 and Enterprise Manager 4.7 at $21,000. The network-viewing feature will be available for free in January. www.hp.com
VIEWCALL PLAYS DOWN ITS PROPRIETARY TV-HTML
Fledgling TV on-line service provider ViewCall America was showing off a buffed-up user interface for its ON-TV service at the Comdex Show Stoppers event last week, but played down its proprietary TV-HTML extensions.
Initially, a ViewCall spokesperson even denied that the product used anything but regular HTML - a key feature they were planning to develop as an "open standard" back in September (OR 17). Two months ago ViewCall was promising a conference to open up TV-HTML through an industry consortium within 60 days.
Now the party line has changed from open standard through consortium to open standard through industry consensus. ViewCall says Sega plans to bundle its online service in its NetLink product. Deals have recently been announced with Boca Research Inc, for its as-yet-unnamed consumer Internet device, and Motorola, who will be including ViewCall in their Internet appliance reference design. www.viewcall.com
CHECKPOINT'S OFFERS ONE-STOP SHOP SECURITY PLATFORM
CheckPoint Software Technologies Ltd has created a framework of security APIs and protocols plus an Inspect scripting language it says will allow organizations to create enterprise-wide security management systems by integrating third party access control, address translation, authentication, auditing, accounting, encryption and content security applications with its CheckPoint FireWall.
CheckPoint will publish its proprietary content vectoring, suspicious activity monitoring and URL filtering protocols in the Open Platform for Secure Enterprise Connectivity (OPSEC). It will also support Radius authentication and a veritable acronym soup of standards such as SNMP Simple Network Management Protocol, LDAP Lightweight Directory Application Protocol, ODBC Open Database Connectivity, Fortezza hardware token authentication, IETF IPsec ISAKMP key management and SKIP Simple Key Management for Internet Protocols.
MERISEL FIRST WITH WEB-ORDERING
Reseller Merisel claims it's got the first national Web-based order entry system. The El Segundo, California-based company's system offers US and Canadian resellers the ability to place orders via it's Web site, download daily price lists, check on order status and availability of products, and link to FedEx and UPS tracking sites. Ingram Micro touted a similar system this week that starts next month. But its Order Status system only enables resellers to check on an order which has been placed over the telephone. Ingram says it should be able to take orders via it's Web site by the second quarter of next year.
W3C CORBA-TO-DCOM MEET LOADED IN CORBA'S FAVOR
We hear that pro-Corba types and fencesitters out-numbered the pro-Microsofties at last week's W3C meeting (OR 25). There were about 65 present. It was originally planned for a conference room housing up to 200 people, but it was moved to a hotel room when it became apparent late last week that attendance was going to be a bit on the thin side.
It was apparently a very technical session, and Microsoft wasn't allowed to make its Active Group progress pitch as previously thought (OR 25); there was a pro-Corba speech from Iona Technologies Ltd's Anrai O'Toole and Microsoft's Nat Brown did his bit for DCOM, but no side could claim to have 'won'; it was said to be non-confrontational.
The tecchie stuff got pretty deep at times, with a long session on DCOM transport and Internet Inter-ORB Protocol (IIOP). Apparently DCOM's garbage collection technique raised a few eyebrows. If the last object attached to a server is either partitioned or down for more than six minutes, then the server is garbage-collected. Microsoft also said it doesn't reckon that TCP is a scalable transport, so that's why DCOM is UDP-based. Other topics covered included programming models, including Microsoft's Interface Definition Language, VB, C/C++ and so on, change management and multiple interfaces per object, both issues were said to be slightly confused. Those attending has already made up their minds for the most part, and there's no follow-up planned yet apparently.
REDMOND PLANS TO OUT-JAVA SUN
Saying that it will better address problems that Sun has been unable to resolve, Microsoft will have its Official Win32 Reference implementation of the Java virtual machine in beta by the end of the year.
Internet platform program manager Charles Fitzgerald says Microsoft will be able to better execute on things like a class library and Just-In-Time (JIT) compiler.
Meantime, Microsoft said it would honor all parts of its contract with JavaSoft, under which, Microsoft, like all licensees, has to keep all the APIs up to date on their Web site. Redmond now says it will do as much, but will push its own where it has an alternative.
But it's all a bit confused right now as to how far this will go. One part of Microsoft last week suggested it would use the JavaBeans API for instance, and another said it wouldn't.
Microsoft also plans to release a Java virtual machine plug-in for Netscape Navigator which, it claims, can execute 30 percent faster than Navigator. Netscape scoffs at this move, saying that Microsoft's Java execution speed advantage will be forgotten in about three months. Of course, Netscape may stop its scoffing if Microsoft gets its way and slaps some widely-adopted ActiveX or DCOM extensions onto Java that would be accessible only to Netscape users through the plug-in.
Fitzgerald says Redmond plans to do such an integration with, for example, its Viper transaction processing stuff.
Other features Microsoft plans for the IE 4.0 virtual machine are a "supercharged" Abstract Windowing Toolkit (AWT), multimedia and database class libraries, the ability to circumvent Java's sandbox security, some admin tools, and Viper support. Microsoft will do IE versions of the virtual machine for Solaris, HP-UX, Linux and it is working with Metrowerks on a Mac version. www.microsoft.com
IBM PERSONAL SOFTWARE GROUP SPINS OUT JAVA AND WEB UNIT
IBM Corp's Personal Software Products (PSP) group said at Comdex last week that it will announce in the next few days the formation of a separate group to work with its customers to develop and tailor Web-and Java-enabled applications.
The new Network Computing Projects group will embark on a 40-city tour of the US early next year, Donn Atkins, director of marketing for IBM Personal Software told InfoWorld. It'll be based alongside the PSP group in Austin, Texas, which had apparently been doing so much Java stuff recently that the move became essential to avoid hurting the remainder of its business.
Meantime, the company introduced a beta version of Java 1.0.2 last week: the new version features a new Just-In-Time (JIT) compiler that the company claims improves CaffeineMark 2.01 and 2.5 scores by up to 40% compared with the version of Java that IBM shipped in OS/2 Warp 4.0 in September. It's at www.ncc.hursley.ibm.com/javainfo. Version 2.0 of the JIT compiler will be out in December and Java support is planned for OS/2 Warp Connect, Warp 3.X, Warp Server and SMP.
CONSTELLATION IS NETSCAPE'S LATEST STAR
It's a bit of a sad day when the biggest product announcement at Comdex is a new look front-end to sit on top of existing operating systems, but that is what Netscape Communications Corp's CEO Jim Barksdale described with the company's new desktop user interface code-named Constellation.
Netscape is calling it a Communicator component and says it could be used on any client machine, but the technology seems, in particular, to make sense as the user interface for all those Intel Network Computers for which Netscape's Navio subsidiary is quietly writing the browsers but not saying anything about. Developed, according to Netscape, with user interface ideas, rather than technology from its Papersoft acquisition last year, Constellation, which Netscape stresses is not an operating system or a "Windows killer", is layered on top of existing operating systems (something, Netscape says, like Windows on DOS, but remember: it's not an operating system).
Constellation information is "pushed" in HTML, Java, or JavaScript form, from the server to the client, via a "notification engine". There it is displayed in what Netscape considers to be a more intuitive non-browser format; essentially without the familiar gray Microsoft GUI.
Personal preference information is stored, using LDAP extensions on the server, allowing clients to log into the network from any site and restore their preferences on "home-ports".
Netscape says that Communicators' features could all be wrapped into a Constellation environment, if that were required. Information or applications could be pushed from the server and Netscape has signed deals with Marimba Inc (OR 19) to use its Castanet technology to push applications and PointCast Inc for data delivery.
This type of information could be displayed on an "infoscreen", which took the form of a banner of images along the bottom of the screen.
Constellation elements like the infoscreen could be mixed and matched on top of the OS interface as desired. Netscape would not reveal the financial details of the Marimba or PointCast deals.
Navio will be integrating constellation technology into its stuff but the company was evasive about its product plans, admitting that nothing much had been said since Navio's rushed launch back in August (OR 14), and saying that an announcement would come in the next few months.
Constellation is expected to ship in mid 1997 as part of Communicator, which is due in the first quarter. www.netscape.com/comprod/tech_preview/index.html
TIVOLI READIES JAVA PLUG-INS
IBM subsidiary Tivoli Systems Inc is developing technology called the Lightweight Client Framework (LCF) to do management for its Network Computers.
Details are sketchy, but LCF is software implemented on the client side that would allow NCs to plug into existing Tivoli Management Environment frameworks.
IBM says that LCF will do systems management functions like end-user monitoring and alert generation. No word on when it will be available.
NETMANAGE LAUNCHES MAXIMUM WEB MANAGER
If San Jose, California-based NetManage Inc is to be believed, the market for Web site management tools is going to be huge - $900m over the next three years. The company has launched its IntraChange product to cash in on that market.
The technology behind IntraChange comes from NetManage's acquisition of San Francisco-based Maximum Information Inc back in June: Maximum was just about to launch the product at the time of its acquisition. As well as a range of management functions, IntraChange has a kind of workflow system that is said to enable a team to work together more efficiently to keep a Web site - and associated intranet - up to date. It uses widely-used SQL database servers, such as Oracle, Sybase and Microsoft. There's no pricing details yet.
According to NetManage, the only competition is Lotus Notes and various document management systems, but these, it says, can't cope with managing Web sites kept current by hundreds of contributors.
FORCES RALLY AGAINST OFF-SHORE INTERNET CASINOS
Some unlikely bedfellows are rounding on Internet gambling, reports the Los Angeles Times. Internet casinos have been springing up fairly regularly over the past 18 months or so, nearly all of them off-shore, requiring a local bank account in whatever, usually exotic location the server is located.
There are federal and state laws preventing sports betting over wires, which was initiated to stop inter-state sports betting. Critics of the Internet casinos think similar measures should be enforced once more. Republican Senators Jon Kyl of Arizona and Orrin Hatch of Utah will campaign to ban Internet gambling when Congress reconvenes.
Minnesota Attorney General Hubert H. Humphrey III has sued Granite Gate Resorts of Las Vegas, which operates its WagerNet site, www.wagernet.com, out of Belize, arguing somewhat grayly, that the state of Minnesota decides what is legal entertainment for Minnesotans, and as the site advertises that the site is legal for Minnesotans to bet through, it is fraudulent. Ironically, the site is operating on a points, not cash basis at the moment. But it does include a warning to "consult your local, county and state authorities regarding restrictions on off-shore sports betting via telephone before registering."
Senator Jon Kyl's position is more straightforward, all gambling is morally bad according to him, regardless of the medium. Internet gambling is also opposed by the American Gaming Association, not a body that would normally find itself allied with the likes of Kyl. Its objection is that there are no checks and balances on the off-shore sites, although they obviously have none of Kyl's moral objections.
It gets more complicated still, as Native American nations are exempt from most federal gambling legislation. The Foxwoods casino and resort on a reservation at Ledyard, Connecticut is touted as the largest in North America.
Those supposedly in the know say the most likely result of a two-year gambling review that Congress began this year is a call to limit on-line gambling, by which time it could have snowballed. And legislators say the underlying issue is gambling, which is legal in one form or another in most parts of America. But if Congress feels it's right to legislate against Internet gambling - having seen the Communications Decency Act blocked by a federal appeals court - then why not go after controlling general Internet access as well?
ACTRA AND MASTERCARD PUT ORDEREXPERT WEB TO THE TEST
Actra Business Systems, a joint venture between Netscape Communications Corp and GE Information Services, and MasterCard International have formed a consortium to bring financial institutions, corporations and suppliers together to pilot the Actra OrderExpert System.
It's an electronic catalog-based order management system which is supposed to provide a secure Internet system for corporate purchasing. Ray Rike, VP marketing for Actra, says it's built the OrderExpert application software on top of its Business Document Gateway electronic commerce infrastructure.
A buyer can have a localized OrderExpert system where s/he can add suppliers information and create a shopping cart for employees. They're given passwords and authorization according to what management specifies the employee is allowed to buy, including specific items and budget. If an employee needs authorization the system will e-mail the person who can authorize the purchase. OrderExpert will send the order to the supplier. The payment module provides line item detail of all merchandise purchased. Suppliers can also buy OrderExpert and design their own Web catalog.
OrderExpert will link customers who use the MasterCard Corporate Purchasing card electronic payment method, to their financial institutions and suppliers. The pilot program is using the same card for all transactions but expects to accept any card when the system rolls out in June next year. The pilot will run from January to May. Pilot participants include Actra Business Systems, American Material Resources Inc, Bank of America, Boise Cascade Office Products, Citibank, First Chicago NBD, First Data Corporation, GE Capital Financial, General Motors, Hamilton Hallmark and Avnet Co, Hoffmann La-Roche, Hughes Aircraft, MasterCard, NBC, and Netscape.
The system has full EDI support, comes bundled with Netscape Enterprise Server, Navigator Gold, LivePayment, LiveWire Pro, and Relational Database Management System, takes up 8GB of disk space, and requires a CD ROM for installation. It currently supports Sun Sparc/Ultra Servers and anticipates support for Windows NT, HP-UX, and AIX. Actra says the system is designed to increase a suppliers sales, simplify purchases and sales and reduce purchasing costs by reducing human error and providing a full audit trail. www.actracorp.com
MICROSOFT SNAPS UP RESNOVA MAC WEB SERVER BRAINS
Microsoft Corp has acquired Macintosh Web server technology and five employees from ResNova Software Inc on undisclosed terms.
The two products Redmond has bought are WebForOne and Boulevard, and they will be integrated into future versions of the Mac version of Internet Explorer, which will eventually be packaged with the forthcoming Personal Web Server for Mac, due out by the year-end. It's meant for small workgroups, takes up less than 1Mb memory and enables any Mac to act as a low-end server, rather than having a dedicated machine. The quintet leave a few employees behind in their Huntingdon Beach, California base as they go to work in Microsoft's San Jose offices.
AT&T WORLDNET USERS TO BE COMPENSATED AFTER FAILURE
Around 50,000 AT&T Co WorldNet Service electronic mail customers were recently hit by a problem that stopped electronic message delivery. It was caused by a server failure which damaged a database and the back-up database that contained messages for delivery. The service was down for almost 32 hours and AT&T has offered compensation to customers affected. It has also set out to reassure its users that that new processes have been put in place to reduce the probability of a similar situation arising again.
HDS PORTS NETOS TO POWERPC
HDS Network Systems Inc has ported its netOS network computer operating system to PowerPC, and is offering it as part of Motorola Inc's Semiconductor Products Sector's WebRef reference design boards, which are built around the PowerPC MPC800. HDS is Motorola's sole OEM for the product, which Motorola will not be manufacturing itself. HDS claims a few signatures for the product already, with announcements in the next few weeks.
MASTERCARD TAKES MAJORITY STAKE IN MONDEX
As expected, Mastercard International Inc announced its purchase of 51% of Mondex International Ltd. (OR 25). The credit card giant now controls what appears to be the leading electronic payments system using smart cards and so-called electronic wallets.
Financial terms were not disclosed, but MasterCard CEO Gene Lockhart said last weeks figure of $150m quoted by the New York Times was "vastly in excess" of what was paid. When Mondex was established as an independent company away from the its founder National Westminster Bank Plc last July, it was capitalized at £100m ($167m) and is owned by National Westminster and 16 other companies, mostly banks, including Wells Fargo & Co, the Midland Bank and Hong Kong and Shanghai Banking Corp units of HSBC Holdings Ltd, AT&T Corp, Canadian Imperial Bank of Commerce and ANZ Ltd.
MasterCard has taken any outstanding equity and diluted the existing holders' stakes. Mondex is now a subsidiary of MasterCard and Lockhart expressed his wish that the Mondex brand will appear on as many cards as possible - not just MasterCards - as does two of MasterCard's other subsidiaries, Cirrus and Maestro. The Mondex card can store monetary values, and users can download cash from ATMs and spend it in participating shops, as well as checking their balance using the electronic wallet. It is on trial in Swindon, Exeter, and York in the UK, Guelth, Ontario, Christchurch and Wellington in New Zealand, San Francisco with Wells Fargo employees and, following a launch last month in Hong Kong, Mondex has received more than 20,000 applications, according to Mondex CEO Michael Keegan. Lockhart said the Peoples Bank of China had been "very impressed" with Mondex, but stressed that no decision had been made yet. Lockhart left for China after the announcement to try a little more persuasion. With the exception of Hong Kong, the trials are all live, "real money, real cards, real cash," said Lockhart. Lockhart stressed that it wasn't just the card's stored value element that MasterCard was interested in, it appears to have an advantage over other smart card payment technologies in that it can be used across currencies, is downloadable from ATMs or Point of Sale systems and can access other bank account functions. Users can make card-to-card transactions as well as buy things, so people can lend each other money electronically, for instance. And the most obvious application of this would be the Internet. Lockhart said the Internet was a "major factor in the decision" to go with Mondex, because of its access security. He envisioned a day when money could be downloaded through a phone or television fitted with a card reader, pointing out that Mondex already works with AT&T, Hitachi Ltd and British Telecommunications Plc. All MasterCard members - there are 22,000 issuing almost 370m credit and debit cards - will be able to apply for a license to use the Mondex stored value product. MasterCard will participate in the development of the Mondex platform for other chip-based products, but will not invest in any other electronic purse products as a result of the deal. The original trial in Swindon now involves around 700 merchants and 13,000 individuals. The average transaction amount has been £6.50 ($10.85) and the average "withdrawal" £25 ($41.75). Mondex will continue to be headquartered in London, with Keegan in charge: "I know which card will become the worldwide standard," he said confidently.
HP FINDS ITS WAY ROUND THE ENCRYPTION EXPORT BAR
Another piece of the Hewlett-Packard Praesidium security architecture fell into place last week, with the adoption of its International Cryptography Framework (ICF) by US, British and French governments, and the promise of products from Intel and endorsement from Microsoft Corp. Companies adopting the ICF could export their products, which are compliant with new US export regulations.
There has been concern among the encryption community following one of WebTV Networks set-top boxes being classified as "munitions" because the encryption was so powerful, which also happened to Lotus Notes earlier this year, when Lotus had to grant the US government the key to unlock it's 64-bit encryption if necessary in return for an export license.
The International Cryptography Framework separates the encryption capability from the actual encryption algorithm used, so that software incorporating it can be exported without an encryption algorithm, and have one inserted at the other end. It is designed to support current and future cryptographic algorithms, and can support keys of any length. The ICF units are exportable because they require a policy activation token - a software module or Smart Card to function, and the activation token, obtained from an accredited agency, enables encryption to be carried out for a specific application or need that adheres to appropriate government or corporate regulations.
Two weeks ago President Clinton signed an executive order changing the stringent export rules to allow products with strong encryption to be exported, provided part of the key be submitted to enable the government to have access if acting under a court order. HP went to the RSA Data Security Inc arm of Security Dynamics Technologies Inc for its BSafe and TIPEM software developers tool kits to incorporate security into the new framework. BSafe offers software developers multiple algorithms and modules for adding encryption and authentication features to applications. Intel said it will manufacture and distribute cryptographioc hardware that will include ICF technology and Microsoft's export-approved Crypto-API programming interface.
Netscape Communications Corp and CeriFone Corp are exploring uses for ICF, which also includes RecoverKey technology from Trusted Information Systems Inc. HP's own Domain and HP 9000 Enterprise Servers, and HP NetServers will incorporate the ICF stuff by early next year, according to the company. The Praesidium architecture comprises Authorization Server (OR 25), an applications security server, smart card technology, VirtualVault Trusted Gateway and electronic commerce system and the ICF. Separately, HP said at the opening of Comdex that it will announce a broad Internet strategy, and the kind of products it will be coming out with, early next month.
AOL'S NEW PRICING GETS IT INTO LEGAL HOT WATER
America Online Inc's publicity machine has come off the rails somewhat in the past few weeks, just at a time that Dulles, Virginia online services provider must have thought it would be making hay while the sun shined.
The latest calamity is a letter from the attorney generals of 15 states expressing their concern over AOL's new unlimited-access-for-$20-per-month pricing model; not the prices themselves, for they will actually save many AOL customers money, but the imposition of the model come December 1, unless the customer specifically requests the alternative plan of $5 per month for three hours with each additional hour at $2.50 each.
Microsoft and Prodigy both introduced similar pricing models just ahead of AOL, but they don't seem to be in similar legal hot water. Microsoft rolled over its Frequent User members to its unlimited access $20 per month model without giving them another option, but they were already paying $20 per month. With its other two plans Redmond gave the users till the end of next June and their first anniversary respectively, before automatically being rolled over to the new pricing (OR 20). Presumably so few people use Prodigy nobody could be bothered to cause a fuss about it. AOL's defense is that it sent out postcards as well as posting on on-line forums, and customers can stick with the $10 monthly plan for 90 days by calling a toll-free number. The company is confident that it can overcome any legal hurdles placed in its path by this news.
After Web-enabling its Developer/2000 application development tools, Oracle Corp is doing the same to the complimentary Designer/2000 modeling and design software. Version 1.3.2 still enables developers to publish in HTML but applications created using it can now also make changes to the database from a browser. Up on Windows95 and NT it will sell for $4,000.
NET-SCENE LETS YOU ZIP POWERPOINT PRESENTATIONS TO THE WEB
Net-Scene has introduced a Universal Java Viewer version of its PointPlus product, that enables users to share their Microsoft PowerPoint presentations over intranets and the Web.
The San Francisco company already offers a PointPlus Viewer and Maker, but the Java version obviously has wider applications across multiple platforms. The existing Maker costs $200 and converts the PowerPoint files into readable formats. The Java Maker is now in beta, and will be out around the year-end. The Viewer will available for free from this week, downloadable each time a presentation is required, or as a Netscape plug-in. The company is also working on a virtual seminar environment.
Net-Scene made a separate announcement of its Intranet Applications Suite, comprising the same Viewer, Navigator plus a bunch of templates designed for specific tasks, such as human resources, corporate training, procedures and regulations and so on. It also compresses the presentations for sending over the net. The suite costs $500 for a single license www.net-scene.com
Using a feature called tele-prompter, Webmasters can describe images on their Website and embed them for telephone callers. NetPhonic president Ken Rhie says the product is really targeted toward corporate users who have a sales force that may need Web-based information, but may not have Web access. Web-on-Call software is available now for $1,000 per voice modem port serviced. www.netphonic.com
Wave Systems Corp signed a memorandum of understanding for Creative Technology Ltd to incorporate Wave's electronic commerce system in its multimedia products. Wave has developed a digital content metering system. designed to ensure payment when information publishers transmit material to customers over networks.
AT&T MARKET TESTS WEB-TELEPHONE INTEGRATION
As part of its Web Call Center customer trials, AT&T Co is testing a feature called Page Push, which allows vendors to manipulate Web pages via the telephone.
The Web Call Center is targeted at vendors who want to solicit an immediate and direct response from potential clients surfing the Web. The customer calls a toll-free number displayed on the Website, which then initiates a call to an AT&T server on the Internet. The server then delivers a short, pre-recorded voice mail explaining what the call is about and then connects the vendor's sales force with the customer. The vendor, while talking to the customer, uses proprietary AT&T technology to "push" Web pages to the customer by pressing buttons on the touch-tone phone. Trial customers now include pharmaceutical company Hoffman Larouche and Stahls Printing Equipment. AT&T is examining different pricing models and transaction options for Web Call Center, including an online processing system or a direct call center. The service will be generally available in April. www.att.com
NETPHONIC BRINGS WEB ON CALL
Mountain View Start-up NetPhonic has taken a different approach to Internet-telephone integration. Its Web-on-Call Voice Browser, which sits on the server, converts HTML pages into audio and plays them back over the telephone.
Surprisingly, NetPhonic claims there isn't much tinkering that needs to be done in order to make Voice-on-Call work on existing Websites. Webmasters plug a voice modem into their server and install the Voice Browser and the software takes care of the rest, translating existing HTML into audio for whomever calls in. If words on your Website are not recognized by the Voice Browser, well, it does its best phonetically. The pound key selects a hyperlink and the asterix brings up a menu of system options.
WINDOWS CE REARS ITS HEAD
Microsoft's Pegasus project, formerly WinPad, now Windows CE finally showed its head at Comdex last week with a slimmed-down version of Internet Explorer 2.0.
Microsoft says that there is no special reason it went with an obsolete version of IE, just that it had to start cramming the software into the CE environment before 3.0 was ready. It says that IE for CE required a fair deal of software customization and the product will have its own development schedule.
ONEWAVE WEB START-UP IS TRANSFORMED TO A HOT PROSPECT
Spurred on by strong hardware support - Casio, Compaq, HP, Hitachi, LG Electronics, NEC and Philips are all doing products - the CE SDK proved to be one of the hottest pieces of software at Comdex, making Apple's Newton booth seem even emptier.
How can a company once notoriously derided by Forrester Research as 'The Easel of the Web,' after Easel Corp, the now defunct supplier of graphical user interface screen-scraping tools, be a hot prospect? Easy, if that company is Boston, Massachusetts-based OneWave Inc, and its chief executive officer is Klaus Besier, a former high-level executive at SAP AG, one of the software industry's all-time success stories.
OneWave is a provider of client and server software for Web-enabling business applications. Its proposition is that by adding Web functionality to existing mission-critical systems, corporates using secure TCP/IP can do EDI over the Internet instead of investing in expensive private networks. The technology clearly has appeal, and there is little doubt that most of OneWave's 80 customers would have bought the product even if they had not heard that the new CEO at the 160-person, two-year old start-up is also the man who built up SAP America, which shot from revenues of $20m to $710m in the space of four years.
But Besier's involvement will certainly make a difference. Luring such a high-flyer to such a small start-up demanded a hefty mortgage on OneWave's balance sheet. 'Compensation to CEO' appears as a line item in all OneWave statements of operations. The figure is $7.5m for the first six months of 1996. Given that the company lost $9.3m on sales of $5.5m in the same period, Besier was an expensive buy. But OneWave is convinced that he will be worth it.
His first action on joining in January (after changing the name from Object Power to Business@Web, before changing it again in June to OneWave) was to sign up Baan International NV, the Dutch manufacturing software supplier, as a business partner. Others now include systems vendors NEC Corp and Hewlett-Packard Co, Informix Corp (which has invested $1m in the company), and application providers SAP AG and PeopleSoft Inc.
Such deals have helped turn the company very rapidly in the right direction. After securing nearly $44m from its public offering earlier this year, OneWave's first quarter showed $2.4m sales with a net loss of $8.5m, second quarter $3.2m sales (up 32% sequentially) with a loss of $793,000, and a third quarter of $5.3m (up 69% sequentially) and losses of only $379,000. Losses as a proportion of sales were already down to 16% last quarter from 25% the one before.
Goldman Sachs & Co, one of the bankers who took OneWave public, estimates that revenue for 1996 will reach $16m, rising to $34.7m in 1997. It views the stock as a "core holding" for long-term investors and believes that OneWave is well poised to win in Internet services and software. What could go wrong? For a start, OneWave competes with many of the companies it currently partners. Then there is the whole question of the unpredictable impact of Java (which Besier sees as a complementary technology) and ActiveX on distributed computing.
Besier, however, says the company's biggest opportunity lies in intranets. "People who've spent hundreds of thousands of dollars on their Web sites - but who haven't done anything to add value to the information they have access to - will be in trouble. There will be a 'cool Web site' backlash," he says. Besier clearly stands by what he said on joining OneWave in January: "The market opportunity for this company is as great as the one I saw for SAP America in 1992 when I became its chief executive officer."
COMPUSERVE LOOKS TO STOP ROT
It was quite a week for CompuServe Corp. It turned in heavy half-year net losses, scrapped its Wow! family-oriented on-line service, and announced that it was having to move its German office out the country. Its recent well-documented problems have forced it into a re-think and it's hired consulting firm McKinsey & Co. CompuServe's reportedly drawn up a strategy and brought in McKinsey to pull it to pieces.
The Columbus Ohio-based provider has decided its best hopes lies with the US corporate market and its growing European business as its share of the US consumer market is slipping away.
So it's canning Wow! next January, having only launched it in April and is taking a $4.9m after-tax hit in the process. Its start-up cost have been one of the main factors behind CompuServe's financial dogs' breakfast this year (OR 10).
Ironically, it was Scott Kaufman, the general manager of Wow!, who was put in charge of the restructuring and finding new revenue streams. It had 102,000 subscribers as of October 31, and these will be invited to join CompuServe Interactive (CSi), the company's Internet and on-line service aimed at home and small business users. That only manages to hang on to 36% of its customers up to 12 months - 45% have left after just three.
Second quarter net losses were a hefty $58.0m or $0.63 a share after the $4.9m hit - at the operating level they were $94.5m - against profits last time of $14.0m. Revenues were up 14% to $214.3m. The First Call analysts average was a $0.25 per share loss before charges, CompuServe came in with $0.26 per share. The company had warned in October that the losses would be between $0.22 and $0.27 per share (OR 22).
The other main reason cited for the losses is the high distribution costs of the latest version of the CompuServe interface, version 3.0. The company expects to begin feeling the effects of the pruning it announced in August in the third and fourth quarters in the shape of lower costs. Like America Online Inc before it, CompuServe has had to change the way it reports, and accelerate its amortization period. This cost it a further $28.6m hit in the half, and it now expenses its subscriber acquisition costs at 50% in the first three months, 30% over the next nine and 20% in the following year. That's against 60% in the first 12 months and 40% in the year after. At the quarter end there was still $50.2m of outstanding unamortized costs. It's a more realistic reflection of the company's high churn rate.
Overall subscriber numbers were flat compared to the previous quarter, at 3.313m. The growth areas are international subscriptions, up 56,000 to 1,120m and Japan, where NiftyServ saw numbers rise to 2.0m from 1.9m and the end of the first quarter. North American subscriptions fell 57,000 to 2,192m.
To try and stop the exodus, CompuServe is abandoning mass consumer marketing and going after each segments separately: "we were bringing in new users in the front door and seeing many go out the back," admitted president and CEO Bob Massey in a statement accompanying the numbers.
It will launch CompuServe for Business early next year in the US built on the CSi service. CompuServe's other division, Network Services grew its revenues in the quarter by 33% to $63.6m.
CompuServe Corp reported second quarter net losses of $58.0m after a $7.7m pre-tax charge for the termination of the Wow! online service, against profits last time of $14.0m, on revenues that rose 13.8% to $214.3m. Half-year net losses were $87.7m, after a $25.6m pre-tax restructuring charge, against profits of $40.8m in the same quarter last year, on revenues that rose 12.8% to $423.0m. First Call estimates a $0.10 per share loss for the third quarter, and a stonking $0.61 per share for the year. And that's before any charges.
COMPUSERVE MAY QUIT GERMANY OVER CENSORSHIP BILL
Meantime, CompuServe looks likely to be driven out of Germany by the country's forthcoming strict on-line censorship law.
Its CompuServe GmbH unit says it may transfer its administrative operations out of Germany because of government moves to force Internet access providers to control pornography on their networks.
It would continue to offer services in Germany, but would shift its headquarters to a country that does not hold on-line companies responsible for obscene material on the Internet. The law under consideration in Germany's Bundestag would require on-line operators to block access to child pornography, neo-Nazi materials or other extreme pictures or writing on the Internet. CompuServe says such measures would require it to patrol and censor vast parts of the network. CompuServe claims 500,000 subscribers in Europe, 335,000 of them in Germany, where it employs 250 people. www.compuserve.com
BALLMER BOASTS OF MICROSOFT LOSSES, TCI PULLS MSN STAKE
The profits that Microsoft Corp makes on its operating software and core applications are so vast that it can afford to squander vast sums of money developing Internet content, and VP Steve Ballmer was recently
boasting that the company has spent $400m this year on the Microsoft Network (MSN), the MSNBC Internet news and cable television service, and vertical market applications such as the Expedia travel service.
And the company intends to spend the same sort of sums in each of the next three or four years -"MSN - it's a loss; Expedia - a loss; MSNBC - a loss," Ballmer boasted, adding that he didn't expect the company's on-line media efforts to stop spouting red ink until three years from now - "We're going to lose a lot of money before we break even," he declared proudly.
Comdex's Internet pavilion seemed rather high on the widget and wireless dohickey content last week and lower on ground-breaking Internet products. But though the connection between disk drive locks and the Internet is tenuous at best, nobody was complaining. Deals were clearly being made. Conventioneers seemed to agree that Internet technology had simply become more ubiquitous. Microsoft's ActiveX booth, for example, was not even in the Internet pavilion. Tom Wong, who was hawking Empac Unix Webservers on the show floor was typical, saying that people have a better grasp of the value of the Internet this year. Working the floor is "much easier", he says, "Now I don't have to explain the whole Internet to them."
Microsoft has acquired Macintosh Web server technology and five employees from ResNova Software Inc on undisclosed terms.
The products Redmond bought are WebForOne and Boulevard, and they'll be integrated into future Mac versions of Internet Explorer, which will be packaged with the forthcoming Personal Web Server for Mac.
JAVA IN ECMA
It looks like JavaSoft has decided to take Java to the European Computer Manufacturers Association for de jure standardization.
Despite internal debate about going to the Open Group, ECMA is at least an actual standards body and Sun has done work with it in the past. ECMA championed the Sun-driven initiative called Public Windows Interface to put a specification for Windows APIs into the public domain and it is is now an ECMA standard even if was eventually shot down by Microsoft Corp at the International Standards Organization, the mother ship of the standards world.
The notion of standardizing Java has been kicking around for some time - indeed JavaSoft's often said its intention is to put the Java technologies in the standardization process as they become mature - but it suddenly decided it had to do it right away and got the notion of piggy-backing on Netscape Communications Corp's JavaScript-ECMA meeting held last Thursday/Friday at Netscape's Mountain View, California offices.
DOT Gossip
IBM Corp is renovating a building in Manhattan's Silicon Alley - Broadway between the Flat Iron building - right by our office - down to SoHo, to house its Web site developers and maintenance people. They're being moved down from their up-state location. General manager of the Internet division, Irving Wladawsky-Berger reportedly wanted to come too from his office in up-state Somers, but top management nixed that. IBM recently totted up the number of pages and got a shock when it came to 91,000.
Comdex says 210-225,000 came this year.
The "city" of Redmond, Washington (pop: 41,473) is creating 15,000 jobs over the next two years, about a third of them at its biggest employer, Microsoft, reports the Seattle Times. The company's also expanding four of its sites, including the HQ from a total of 2.5m square feet to 4m square feet. City planners reckon Redmond will have more office development going on by the year-end than Washington DC or Miami.
Web hoster Best Internet Connections Inc now supports CyberCash Inc's CyberCoin for low-cost purchases. www.best.com
Conversation overheard between two Apple employees in an elevator at Apple's wing-ding in the Las Vegas Stratosphere casino: the Stratosphere recently filed for Chapter 11 bankruptcy protection. "I can't believe this company's going out of business," said one. "Ohhh, I don't really think that's going to happen," said the other. After a minute: "No. I'm not talking about Apple. I mean the Stratosphere," said the first employee.
With version 1.1 of Microsoft's FrontPage, Redmond has been boasting of tighter integration with Microsoft Office applications like Excel, so when does FrontPage get swallowed by Office? Microsoft won't rule out the possibility, but the company says that right now the life cycle of FrontPage - currently at around six months - is a wee bit accelerated for Office use. Incidentally, Microsoft says that 150,000 copies were sold in the first four months it was on the shelves.
EveryWare Development is shipping its Bolero Web logging, analysis and reporting tool for Unix, Mac OS and Windows from $1,000. www.everyware.com
Who knows how many people use the Internet? Pollsters Louis Harris & Associates reckon they have a good idea, and reckon that 18% of Americans were using it as of September, up from 15% in April and 14% in January, while about 21% subscribe to an on-line service; a January poll also found 21% subscribed to an on-line service.
AlphaBlox Corp, Mountain View, California, is going to integrate Active Software Inc's ActiveWeb communications software with its forthcoming Blox suite of interoperable Web application building blocks.
Microsoft says it has not forgotten how to count. Responding to rumors that Redmond had abandoned Internet Explorer 4.0 and was instead going to roll everything it could into 5.0, Internet Platform program manager Charles Fitzgerald says there will be a 4.0, and it will be out in the first quarter of 1997, as planned. The rumors got started, he says, simply because 4.0 will include the dynamic HTML technology (code-named Trident) that had been scheduled for 5.0. End of story.
Bill Gates beat out Andy Grove and Jim Barksdale to win the battle of the fans at Comdex this year. His keynote was the only one to fill the 7,500 seat Aladdin theater.
At least their not wasting our taxes: the US Government, including the President's office logged more than 5,000 hours on Jumbo!, a Website that offers shareware and free computer applications and utilities, in a three month period. In addition to downloading business-related software and utilities, it seems government workers spent hours pulling games and multimedia files with stuff like Homer Simpson belching. NASA Ames Research Center topped the list with 950 hours but the office of the President only logged 4.8 hours, but they obviously had bigger fish to fry.
If you ask anyone from IBM's Network Computing group whether they plan to do an Intel-based Network Computer, the pat reply is "what does it matter what chip we use?". It matters quite a bit in fact. Phil Hester, the NC VP says IBM doesn't currently have plans to market an Intel box within his division. It doesn't look like Big Blue is any too interested in the Wintel NetPC either. Hester says because the specs are too general right now.
Though it assures us that it'll never be as fast as the Windows 95 version, Microsoft Corp is finally putting the Java virtual machine in Internet Explorer for Windows 3.1. IE 3.0 for Windows 3.1 is now up in beta at www.microsoft.com/ie/. Unlike the recently announced IBM VM, Microsoft's is 16-bit. Redmond says that this will make it quicker.
China will have a total of 100,000 Internet accounts by the end of 1996, up from the current 40,000, Business News said: a Chinese-language network, connecting eight major cities, will open by year-end, it added.
Worldwide Directory Online (WWDO) will launch its eponymous service this week, which is a business directory using information from Dun & Bradstreet and database stuff from O2 Technology Inc. The plan is to make money purely from advertising and it will carry banners for "good causes" for free. The first two are Greenpeace and Save the Children. It also has a CyberDelight shopping mall. www.justdo.com
It looks like Netscape is looking to Microsoft these days for cutting edge coders. Netscape CEO Jim Barksdale did two product demos in his Comdex keynote with the assistance of Netscape tecchies. Both demos began with Barksdale asking, "Now where did you used to work?". The answer both times was Microsoft.
Virtual World Wide Web, a collection of more than 40 3D virtual reality worlds, went live last Tuesday. Superscape Inc, Intel and Nortel are represented among the 3D pages. Superscape expects the VWWW to grow to 200 worlds within six months and 2,000 within the year. VWWW is "owned" collectively by the participants. http://vwww.com.
Matsushita Electric was recently preparing to launch new PCs targeted at the Internet market in Japan, reports EE Times. Its Panasonic unit developed a Japanese Web browser, complete with the cartoon character Woody Woodpecker as the "Internet guide" for first-time users. The launch was set for October but was pulled at the last minute. The reason? The ads ran the slogan "Touch Woody - The Internet Pecker." An American staff member explained to the stunned and embarrassed Japanese what "touch woody" and "pecker" meant in American slang.
(c) 1996 May not be copied
online REPORTER, a sister publication of Unigram.X and ClieNT Server News, is published weekly in Europe by:
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