in the School of Business Administration at UM - St. Louis |
 |
COMPUTER SECURITY DOWN, LOSSES UP: Two recently conducted studies report that losses experienced by Fortune 1000 companies as a result of computer break-ins were higher last year than ever before, despite increased spending on computer security measures. A study by the Computer Security Institute and the FBI estimates 1997 losses from computer crime at $136 million, up 36% from 1996. About half the respondents cited the Internet as a frequent point-of-attack, with the remainder citing internal corporate networks as the favored break-in point. Meanwhile, a study by WarRoom Research LLC found that a large majority of Fortune 1000 companies have experienced a break-in by an outsider in the past 12 months, with more than half reporting more than 30 security breaches during that time period. Nearly 60% reported losses of $200,000 or more for each intrusion. Mitch Kabay, director of education at the International Computer Security Association, notes that even these figures may be understating the problem: "It's not possible to have truly accurate information on break-ins, because you can't know how many of them went completely undetected and you can't be sure how many of them are not reported." One former cracker, who recently completed a prison sentence for his activities, says networks are getting more vulnerable, not less: "You don't need even a basic skill level to get in." (Internet Week 23 Mar 98)
PRIVACY COALITION FIGHTS ADMINISTRATION ON ENCRYPTION: The Clinton Administration's computer encryption policies will be the target of a new group called Americans for Computer Privacy, which is supported by Silicon Valley and other major U.S. companies and which includes in its membership both liberal Senator Barbara Boxer (D-California) and the conservative activist Phyllis Schlafly. The coalition has planned a $10-million media campaign denouncing what they call a "Digital Age Attack on the Constitution." California Congresswoman Zoe Lofgren (D-San Jose), whose bill in Congress serves as the focus of the group's activities, says: "The right to privacy of every American is more seriously threatened now than at any time in history. If the FBI has its way, banking, e-mail, medical records ... will be monitored surreptitiously by the U.S. government." (San Francisco Chronicle 5 Mar 98)
FLAW IN WIDELY USED SECURITY SYSTEM: A flaw has been found in a security system that has been used for a number of years to control access to restricted areas in airports, prisons, financial institutions, technology organizations, drug companies, and government agencies. Apparently caused by a programming mistake, the flaw could allow terrorists to gain control of the electronic badges authorizing access to such areas. The FAA says it has "notified our field personnel and they are examining the situation with airports that use this system." (New York Times 8 Feb 98)
SUIT CHALLENGES USE OF FILTERING SOFTWARE IN PUBLIC LIBRARY: The American Civil Liberties Union and a columnist for the San Francisco Examiner are among eight plaintiffs challenging the constitutionality of a decision by a library in Loudon County, Virginia, to use filtering software to block certain Internet sites from its publicly available computers. The X-Stop software, which is intended to screen out obscene material or sexually explicit language, is blocking sites that include some mainstream newspapers, a Methodist church, a university women's association, and a safe-sex page for teenagers. An ACLU attorney says: "We should hold libraries to the higher standards of the First Amendment. You simply can'tblock books that are constitutionally protected." The chair of the library's board says: "The library has the right to choose the material in its library. We could become the financers of pornography." (AP 8 Feb 98)
ARGENTINE SUPREME COURT RULES SOFTWARE PIRACY LEGAL: Executives of Microsoft, IBM and Unisys are protesting a recent Argentine Supreme Court decision ruling that antiquated copyright laws don't cover computer software. Software makers point out that royalties aren't paid on about 70% of the software sold in Argentina, resulting in roughly $165 million in revenue losses annually. A recent study by Price Waterhouse & Co. indicates the biggest abusers are Argentine federal and local government agencies and small private businesses. "There's no culture in Argentina of assigning value to software," says a Unisys unit president. (Wall Street Journal 6 Feb 98)
SENATOR HATCH WORRIES ABOUT MICROSOFT "PROPRIETARY INTERNET": Senate Judiciary Committee chairman Orrin Hatch (R., Utah) is worried that Microsoft may be trying to build a "proprietary Internet" that will excluded competitors, stifle innovation, and invite government regulation of global networks. Hatch told the audience at a seminar hosted by a conservative think tank in Washington: "Vigilant and effective antitrust enforcement today is preferable to the heavy hand of government regulation of the Internet tomorrow." (Wall Street Journal 6 Feb 98)
CANADIAN EFFORTS TO ENSURE PRIVACY ON NET
The Canadian government says it will introduce legislation this fall to protect the privacy of individuals who conduct business on the Internet. The law, which the government wants to have in place by 2000, will also apply to other forms of computer-based e-commerce and personal data transfer in sectors under federal jurisdiction, including the banking sector. The law will try to ensure that personal data collected by businesses for one purpose are not used for other purposes without the consent of the individual, and will prohibit managers of medical databases from notifying insurance companies that a person had down-loaded fact sheets about AIDS or other diseases. (Toronto Globe & Mail 27 Jan 98)
AIR FORCE THINKS PUSH-PULL TECHNOLOGY TOO RISKY
The U.S. Air Force is in the process of evaluating whether to use or ban
numerous products from PointCast, Netscape, Microsoft, and BackWeb that use
"push-pull" technology to manage information transfer between server and
client computers. In October an Air Force memo declared: "Effective
immediately, all commercially available auto push-pull data gathering
applications ... are to be disabled from all networks. Currently, these
technologies introduce security risks and impact data throughput on our
networks than cannot be tolerated." The companies involved insist their
software is secure. (News.Com 23 Jan 98)
COMMERCE SECRETARY CALLS U.S. ENCRYPTION POLICY A FAILURE: Distancing the Commerce Department from the position held by the Federal Bureau of Investigation, Commerce Secretary William M. Daley says that the Clinton Administration's controls on encryption technology are hurtingAmerica's ability to compete with other countries. "There are solutions out there. Solutions that would meet some of law enforcement's needs without compromising the concerns of the privacy and business communities. But I fear our search has thus far been more symbolic than sincere... The cost of our failure will be high. The ultimate result will be foreign dominance of the market. This means a loss of jobs here, and products that do not meet either our law enforcement or national security needs." (New York Times 16 Apr 98)
DIGITAL ISN'T FOREVER: "Digital information lasts forever, or five years -- whichever comes first," says a senior computer scientist at RAND Corp. The problem is that computer experts are finding out that under less-than-optimal conditions, digital tapes and disks, including CD-ROMs, can deteriorate in as little as five to 10 years. And the decay, although it happens gradually, isn't evident until it's too late, says the founder of Voyager Co., which makes commercial CD-ROM books and games. "CDs have a tendency to degrade much faster than anybody, at least in the companies that make them, is willing to predict." At the same time, as data is ported from an antiquated platform to a newersystem, often there are bits that fail to make the transition. Sometimes it's just a matter of footnotes disappearing, but sometimes whole categories of data are lost. "It's like playing the child's game of Telephone. It doesn't take many translations from one media to another before you have lost significant aspects of the original data." (Business Week 20 Apr 98)
ENCRYPTION ALTERNATIVE SEPARATES THE WHEAT FROM THE CHAFF: An alternative approach to electronic privacy has been proposed by MIT cryptographer Ronald Rivest that could render the current debate over third-party encryption keys moot. Unlike conventional encryption programs, Rivest's new technique doesn't rely on altering message bits; rather, each bit is tagged with a "message authentication code" (MAC) and then mixed inwith random bits tagged with incorrect MACs, called "chaff." The intended recipient can then use a secret code shared with the sender to "winnow" out the fake bits. (Science 3 Apr 98) A description of the process can be found at http://theory.lcs.mit.edu/~rivest/chaffing.txt.
FTC CONDUCTS INTERNET PRIVACY SURVEY: The Federal Trade Commission is surveying 1,200 commercial Web sites to determine their policies for disclosing, collecting and using personal information; in a separate effort, the Commission is investigating whether sites are honoring their stated policies. The FTC can bring legal action against companies that fail to follow their posted policies. (New York Times 28 Feb 98)
HACKERS PLAGUE PENTAGON MACHINES: The FBI is investigating a "fairly heavy" series of attempted break-ins on unclassified military computer networks over the past couple of weeks. The hackers entered the networks and placed "trap doors" in them, enabling information to be retrieved later. "It was widespread, and it was modestly sophisticated," says the Pentagon's No. 2 official. Security experts have termed the recent attacks "ankle-biters" -- more of a nuisance than a serious threat to national security. Fifty-three percent of federal government computer security managers reported unauthorized use of their systems last year, and "This year, the number is more like 60%," says a Computer Security Institute analyst. (Wall Street Journal 26 Feb 98; also USA Today)
PIRACY DETECTOR: Researchers at Cambridge University in England have built a prototype of a device that automatically sniffs out illegal software. The mobile electronic surveillance system detects and decodes otherwise-inaudible radio signals emitted by a PC that are used to report licensing violations of specially designed software. The PC piracy scanner is modeled on similar technology used by spies to eavesdrop on computer and telephone communications. A similar device is used in Great Britain to identify scofflaws who haven't paid the annual fees required of TV set owners. (Information Week 16 Feb 98)
AT&T NETWORK FAILURE TAKES A TOLL ON COMMERCE: The failure earlier this week of AT&T's national high-speed network didn't affect conventional or cellular telephone service, but did manage to disrupt the portion of the network that carries data for transactions involving credit cards, bank accounts, travel reservations and the like. "This sort of thing is going to happen infrequently, but more and more in the future," says the managing director of the Yankee Group. "And it makes you realize how vital to the lifeblood of the economy these complex computer networks have become." There is no way to gauge how many transactions were forfeited as a result of the blackout, but analysts are saying the losses are likely huge, with thousands of businesses affected. (New York Times 15 Apr 98)
IBM'S NOT SELLING COMPUTERS, IT'S SELLING "E-BUSINESS TOOLS" IBM has been telling customers that their future lies in electronic business, but up until now, it's been unclear how Big Blue plans to capitalize on that trend. Now it's announced a $100-million yearlong global advertising campaign based on the slogan, "The Work Matters. The People Matter. The Tools Matter." IBM plans to repackage its laptops, PCs and other computers as "e-business tools," on the theory that the strategy will differentiate it from competitors who focus on price and features. "By positioning every IBM product as part of e-business, they strengthen their ability to compete against other hardware and software companies," says a senior analyst at Zona Research. (Wall Street Journal 15 Apr 98)
INTERNET GROWTH: A study by the U.S. Commerce Department (http://ecommerce.gov/ ) says that traffic on the Internet is doubling every hundred days and predicts that electronic commerce will grow to $300 billion a year by 2002. (USA Today 16 Apr 96) DIGITAL TALKING HEADS: A newly launched employee leasing firm is taking a decidedly virtual approach to filling jobs. Using technology developed at NASA's Jet Propulsion Laboratory, Digital Personnel Inc. offers businesses a stable of virtual employees -- photo-realistic, computerized talking heads to use for fielding complaints or taking product orders through the Internet. "We offer ready-to-talk talking heads to companies," says DPI's owner. "I see it as a natural evolutionary next step for the Internet. If you think about how every time you go to look up the Web page of a company, you'd much rather talk with someone than read a bunch of text. It's the difference between reading the telephone book and asking someone what the number is... I can't imagine any company not wanting their Web site to have a human interface, whether it's the IRS or Home Shopping Network." The talking heads can be pre-programmed with canned responses to frequently asked questions, or operate as a facade for an artificial intelligent agent, or even serve as photogenic masks for human customer reps. (Tampa Bay Business Journal 6 Apr 98)
E-COMMERCE POTENTIAL WIDELY UNDERESTIMATED: Government estimates on the future of electronic commerce fall far short of private predictions, according to speakers at a recent Web publisher's conference. While the government has pegged e-commerce activity at $365 billion by 2000, industry experts say the real figure will be closer to $1 trillion. MIT Media Lab director Nicholas Negroponte said about 70% of the transactions will be business-to-business commerce. Meanwhile, Sun Microsystems chief scientist John Gage touted the benefits of using Java-based smart cards, predicting that the widespread availability of such cards will serve as a catalyst for increasing online consumer spending. (Computer Reseller News 6 Apr 98)
FINDING A NEEDLE (OR 7,079 PAGES ON NEEDLES) ON THE WEB: A study by the NEC Research Institute says the Internet has exploded to more than 320 million Web pages, an estimate that does not include millions of pages that are protected by passwords or "search walls" that block access to browsers or search engines. The study indicates that the HotBot search engine has the most comprehensive index of the Web, but even so, covers only about 34 percent of the indexable pages. Coverage of some of the other search engines includes: AltaVista (28%); Northern Light (20%); Excite (14%); Lycos (3%). One of the report's coauthors says that the Web's data explosion may be better controlled by the "meta-search engines," such as Meta-Crawler and Ahoy!, which have developed thinking techniques that sense what readers are looking for and seek out pages not found on most indexes. (AP 3 Apr 98)
EXPLAINING THE CUSTOMER PARADOX: Mark Evans, managing director of Deloitte & Touche's high-tech industry practice, has a theory for why consumers are increasingly unhappy with technology goods at the same time that they are increasingly higher in quality: "There's a customer paradox underway... I think the reason is that the expectations of the customers have risen rapidly because of information that's available on a real-time basis. Also, they're getting better service from all their vendors, (which raises the bar for everyone). Information is a great thing, but it also results in people expecting to get more. There's an idea of getting services along with the product itself. Customers were less hard on the manufacturers maybe three years ago. They were more willing to go off and contract with one company for products and another one for services. Goods are more complex now. They're more integrated and more important to running the business... Customers now want to be able to get an answer to a question, not just a product or a service." (Investor's Business Daily 2 Apr 98)
I WANT MY MINITEL!: Almost 20 years ago, France became the first networked nation with the deployment of the Minitel, a low-tech terminal that citizens could use to do everything from check the weather to order a pizza. Now, the country's 35 million subscribers are loathe to give up their beloved Minitel and go online with the Internet: "The Minitel... could end up hindering the development of new and promising applications of information technology," warned Prime Minister Jospin last summer, adding that France's technology gap "could soon have dire repercussions on competitiveness and employment." To bring the populace up to speed, Minitel owner France Telecom is planning to deploy next-generation terminals that will access both Minitel and the Internet, but French Internet-industry executives say such hybrid solutions merely encourage users to keep thinking "Minitel," rather than "Internet." "While we sit and worry about the Minitel and ways to get around it, we could be throwing our whole future away," says one. (Wall Street Journal 26 Mar 98)
INTERNET GAMING RUNS FOR COVER: The International Internet Gaming Association, which represents the owners of Web sites that sponsor online gambling, says it has established working groups to develop recommendations for ways to work with various countries' regulations to stay in business. Earlier this month, U.S. federal prosecutors charged several online sports bookmaking operations with conspiracy to transmit bets via the Internet and telephone. Some companies say that if the IIGA can work out deals with other countries to accommodate their operations, the lion's share of the income will go to those countries rather than the U.S. Internet gaming brought in an estimated $500 million last year, and is expected to produce more this year. (Broadcasting & Cable 16 Mar 98)
"SPAMFORD" WALLACE AGREES TO STOP SENDING JUNK E-MAIL: Sanford Wallace (dubbed "Spamford" for his aggressiveness in "spamming" the Internet with unsolicited commercial messages) to pay $2 million to settle the last of several lawsuits brought by Internet providers against him and his company, Cyber Promotion Inc. Wallace indicated that legal battles have "put Cyber out of the spamming business." (New York Times 29 Mar 98) Did you ever wonder who runs the Internet? Who's in charge? Well, despite the fact that the Internet requires widespread cooperation in order to run, nobody runs it. Paul Boutin explains, in Web 101.
TECHNOLOGY DRIVING BANK MERGERS: Fueling the increasing number of banking mega-mergers are the high-speed global computer networks that sell everything from simple checking accounts to mutual funds and insurance policies. "Unlike 10 or 15 years ago in the banking world, there are virtually no business or strategic decisions that are not either driven by technology or have immediate massive implications for technology," says the head of IBM's banking consulting team. New technologies like computerized check imaging are cutting costs, and recent agreements on Internet standards are making it easier to link online operations between banks with disparate systems. And the ubiquitous ATM is transforming from a cash machine to a selling tool -- offering customers brief, personalized messages on IRAs or investment opportunities. (Wall Street Journal 23 Apr 98)
SKIRMISHING AGAINST THE POWER OF MICROSOFT: A group of industry executives critical of Microsoft has delivered a 10-point memorandum to the U.S. Justice Department suggesting that Justice force Microsoft to separate its applications businesses from its operating system business; establish a system to monitor Microsoft's business practices; force Microsoft to be more open about its description of the operating system; prohibit Microsoft from tying new products to the Windows operating system; divest Microsoft's software compatibility laboratories (which award a Windows 95-approved logo to products meeting Microsoft's standards); etc. A Microsoft executive scoffed: "This is a wish list from Microsoft competitors with no basis in the facts of this industry or the laws of this country." (New York times 7 Apr 98)
COMPUTER CENSUS ON HOLD: The Census Bureau has decided to postpone its plans to use the Internet to compile census information, noting that security concerns have prompted the delay. The bureau now plans to use the Internet in data gathering in 2010. (St. Petersburg Times 6 Apr 98)
WEB SITE DESIGN FOR THE BLIND: There are a steadily growing number of the half-million blind people nationwide who regularly use computers for work, education and pleasure, and technological breakthroughs are occurring almost daily in text-to-voice scanners, Braille printers and specially designed software to help overcome the barriers of icons and other graphics of the visually oriented World Wide Web. Recently, Blind Industries and Services of Maryland in Baltimore opened a fully accessible site -- including graphics -- that contains information for both blind and sighted people -- http://www.bism.com/ . The site was specifically designed to include graphics: "We didn't want just a plain boring screen because sighted people use the site as well." Creating the graphics-friendly site required "a lot of major revisions" of conventional Internet design concepts. (Washington Post 4 Apr 98)
INFORMATION TECHNOLOGY INVESTMENT PLANS REMAIN STRONG
Companies may be cutting back on paper clips and office space, but
information technology spending is still full speed ahead. A survey of 250
senior information technology managers indicates that two-thirds of the
respondents intend to boost their budgets, by an average of 18% over last
year's spending. "People are not building traditional factories or oil
wells, but they're spending a huge chunk of money on information
technology," says an chief economist at Standard & Poor. For most managers,
Year 2000 conversion is at the top of their IT list, with PC purchases and
upgrading to Windows NT 5.0 second and third. (Information Week 5 Jan 98)
BUT ARE EXECUTIVES SOURING ON INTERNET? A survey by the Deloitte Consulting says that the Internet is falling out of favor with a growing number of North American corporate executives. Why? Because of poor online business. Despite a rise in corporate Internet use, a majority of chief information officers (CIOs) are disillusioned with the Internet's perceived inability to improve their companies' bottom line. Barbara Kieley, a Deloitte partner, says that 69% of executives questioned say Internet costs are a "significant concern," up from 16% in 1995. As a result, executives are cutting back on Internet spending, with the number of CIOs planning to increase Internet spending dropping from 65% to 31%, and 17% of CIOs expecting no increase in spending while 1% forecasting a decrease in Internet spending. (Ottawa Citizen 7 Jan 98)
TECHNOLOGY SPENDING RANKS NO. 1 AMONG CFOs: A survey of 1,400 chief financial officers, conducted by Robert Half International, indicates that technology enhancement is the top area for company investment in 1998. Marketing and facilities expansion ranked second and third. (Investor's Business Daily 25 Feb 98)
FED CHAIRMAN CONCERNED ABOUT YEAR 2000 PROBLEM: Federal Reserve Chairman Alan Greenspan says that the problem (caused by the inability of old software to know what century it's in, because space-saving programmers allocated only two digits for the "year" field) is already hurting the economy. And he's worried about even greater damage ahead: "Inevitable difficulties are going to emerge," which could lead to "a very large problem." Greenspan says the Fed will be ready to lend banks tens of billions of dollars to deal with that problem, if necessary. (USA Today 26 Feb 98)
CULTURE, NOT CURRENCY, MAKES A HAVE-NOT COUNTRY: Digital guru Don Tapscott says whether a nation remains a technology "have-not" depends on its mindset, not its bank balance: "It's not the poor countries that are blocking progress. It's countries that have a culture that impedes innovation, that cannot find the national will to go forward with technology. What is it about a national culture that enhances curiosity? You need countries to have an environment where companies have the potential to create wealth." (Upside Apr 98)
GIRLS WILL BE GIRLS: Computer software designer Brenda Laurel says character counts in computer games for girls: "When we asked girls whether they liked the computer games that were available to them at the time -- this research was happening between 1992 and 1995 -- their responses were typically negative. And when we asked them why, the reason was typically because they were 'boring.' I had expected a different answer. I had expected to hear 'they're creepy' or 'they're violent.' When we probed on that, the reasons we heard were that the characters are not interesting -- in fact the characters are so uninteresting that you can't even make up stories about them. You can't fantasize a life for one of the X-men, for example." (New York Times 5 Mar 98)
EUROPEAN PRIVACY RULES WILL CHALLENGE U.S. PRACTICES: The European Union Data Protection Directive, which takes effect October 1998, will force U.S. companies doing business in Europe to change the way they handle routine data collection procedures. For instance, companies will need to get consent from their European employees before including them in corporate e-mail or phone directories, and in extreme cases, it may become illegal to carry a laptop computer containing a database with personal information on Europeans to the U.S. or other countries that are deemed to lack "adequate" guarantees of privacy protection. The directive mandates that any personal data obtained by a company may be used only for the purposes for which it was collected unless consent is granted by the consumer for broader usage. If the data is misused in any way, governments will be able to seek injunctions, fines, and even criminal sanctions, and the individuals affected may sue for damages. (CIO Enterprise 15 Feb 98)
WORKING TO SOLVE THE INFORMATION GAP: An increasing number of publications have been pointing out the growing disparity between the information-rich and information-poor. A good example is the new book by Fred T. Hofstetter ("Internet Literacy"), a guide to using the Internet; Hofstetter says: "Because the Net cannot see racial differences, age, sex, or physical handicaps, it doesn't discriminate. Except, perhaps, against the unconnected, because in an information society, to be cut off from the Internet is to be disenfranchised." ("Internet Literacy," Irwin McGraw-Hill)
