Microsoft on Tuesday revealed pricing details for a new server software bundle aimed at midsize companies and the next version of its Small Business Server product.
Microsoft also made available preview versions of those products -- Windows Essential Business Server 2008 and Windows Small Business Server 2008 -- for download and evaluation.
Both products have been undergoing private testing. Tuesday's previews allow Microsoft to receive feedback from a larger audience before releasing the products, which it expects to do by the end of the year, the company said.
Microsoft is offering a standard version of Windows Essential Business Server 2008, including five client access licenses (CALs), for US$5,472; additional CALs will cost $81 each. CALs are required for each desktop user accessing server software products from Microsoft. A premium edition of Essential Business Server 2008 will be available for $7,163, a price that also includes five CALs. Additional CALs for the premium edition will cost $195 each.
Windows Small Business Server 2008 Standard Edition, with five CALs, will cost $1,089, Microsoft said. Additional CALs for the software are available for $77 each. A premium edition of the product, including five CALs, will cost $1,899; additional CALs are $189 each for that product.
Pricing for Small Business Server has gone up from the current version of Small Business Server 2003 R2, which is $599 with five client access licenses for the standard edition and $1,299 with five CALs for the premium edition. Microsoft said the pricing has gone up because the latest version of the product includes more technology and services than the previous version of the product.
Microsoft Windows Small Business Server 2008, formally code-named "Cougar," and Windows Essential Business Server 2008, formerly code-named "Centro," are part of Microsoft's new Windows Essential Server Solutions line. The products in the Essential line combine Microsoft's Windows Server OS with other software products the company deems necessary to running a business, to provide what it describes as an all-in-one, easy-to-install software stack for companies that may only have a small IT support staff.
Essential Business Server includes three copies of Windows Server 2008 running on three hardware servers. The first server is a domain controller and management server that includes the Windows Essential Business Unified Management Console.
System-management products in the offering include Microsoft System Center Essentials, Active Directory Domain Services, DHCP and DNS, all of which are built onto Windows Server 2008. The second server in the Essential Business Server stack is for e-mail; it runs Exchange Server 2007 Standard Edition, Microsoft said. The third server is a security server running Forefront Security for Exchange Server and Forefront Threat Management Gateway.
The premium edition of Essential Business Server 2008 will include a fourth version of Windows Server 2008 on a fourth piece of hardware running SQL Server 2008, Microsoft said.
Aside from its price and new features, another change to Small Business Server 2008 is that it will be offered for 64-bit servers only; previous versions were available for 32-bit servers. Microsoft has said that going forward, it will be offering most of its software in 64-bit versions only, to encourage customers to move to the 64-bit version of Windows Server. For instance, the latest version of Exchange Server is available only for x64 servers, while previous versions also supported 32-bit hardware.
Small Business Server is an integrated offering of Windows Server 2008, Exchange Server 2007 Standard Edition and Windows SharePoint Services 3.0. It also includes Microsoft's Office Live Small Business service and 120-day trial subscriptions to Forefront Security for Exchange and Windows Live OneCare for Server. The premium edition of the software includes an additional license for Windows Server 2008 and SQL Server 2008.
Tuesday, May 13, 2008
EarthLink to remove Philadelphia Wi-Fi
EarthLink next month will shut down its Philadelphia Wi-Fi network, the flagship of its now-dashed municipal wireless initiative, and then remove it from the city's street lights.
The ailing service provider made the announcement Tuesday, saying it is proceeding with that plan after months of negotiations with the city and a nonprofit that had planned to offer free Wi-Fi on the network. The deal fell apart because of a disagreement among the city, the nonprofit and the group Wireless Philadelphia, EarthLink said. The carrier will provide a 30-day transition period, finally shutting down the network on June 12, and offer its Wi-Fi subscribers discounts on other EarthLink services.
Unless a deal to hand over the network can be salvaged, it will be a somber ending to the project that put municipal Wi-Fi on the map in the U.S. just three years ago. Philadelphia's plan in 2005 to build the nation's largest municipal Wi-Fi network, spanning 135 square miles (350 square kilometers), drew fire from Verizon Communications, which charged it was unfair to use tax dollars to create a network that would compete with private service providers.
Under EarthLink's winning proposal for the project, the carrier financed, built and operated the network at no cost to taxpayers, sharing revenue with Wireless Philadelphia. The idea was to make Wi-Fi available to residents and businesses throughout the city, reaching areas the city said didn't have broadband, and to offer the service at a subsidized rate to low-income residents to bring them online.
But there were delays in rolling out the network and it never gained much traction. In court papers filed Tuesday, EarthLink said it had only 5,034 regular residential and business subscribers and 908 customers under the subsidized plan. EarthLink said it knew by late 2007 that the business was unsustainable.
EarthLink's other municipal Wi-Fi networks also failed to deliver, and the company started shutting down its municipal Wi-Fi unit last year. Since then it has given networks back to cities including Corpus Christi, Texas, and Milpitas, California. The company offered to give the Philadelphia network to the city or the unnamed nonprofit for free, after which the nonprofit would offer free service, according to EarthLink.
Also on Tuesday, EarthLink asked a federal court to declare it has the right to take down the network and that its liability for pulling out is capped at US$1 million.
Wireless Philadelphia, the entity providing low-cost network access, said it has not given up on the network.
"Wireless Philadelphia and the city are still working actively together to identify alternatives for preserving this network and applying it to numerous civic, commercial and social purposes. We remain optimistic for an orderly resolution of this matter," Greg Goldman, the group's CEO, said in a statement.
The history of Philadelphia's wireless initiative is making it harder for the city to move on, according to Craig Settles, an independent municipal network consultant who has written a book about the project. The high hopes raised by the project, the long wait to see it built and the bitter conflict with incumbent service providers -- who might have taken over the network -- have put leaders in a tough position, Settles said.
Given the potential cost of taking down the network versus just running it at a loss for a few more months, Settles believes EarthLink may have threatened the move to scare its negotiating partners into a resolution. Yet given more time, the city and its partners might find other stakeholders such as hospitals or universities to help out, he said.
"I can't see why you would just walk in and pull the plug," Settles said, though he added, "Dumber business deals have been done because of someone just getting peeved." EarthLink might also want to resolve the issue quickly to clear the way for a sale of the company, he added.
The ailing service provider made the announcement Tuesday, saying it is proceeding with that plan after months of negotiations with the city and a nonprofit that had planned to offer free Wi-Fi on the network. The deal fell apart because of a disagreement among the city, the nonprofit and the group Wireless Philadelphia, EarthLink said. The carrier will provide a 30-day transition period, finally shutting down the network on June 12, and offer its Wi-Fi subscribers discounts on other EarthLink services.
Unless a deal to hand over the network can be salvaged, it will be a somber ending to the project that put municipal Wi-Fi on the map in the U.S. just three years ago. Philadelphia's plan in 2005 to build the nation's largest municipal Wi-Fi network, spanning 135 square miles (350 square kilometers), drew fire from Verizon Communications, which charged it was unfair to use tax dollars to create a network that would compete with private service providers.
Under EarthLink's winning proposal for the project, the carrier financed, built and operated the network at no cost to taxpayers, sharing revenue with Wireless Philadelphia. The idea was to make Wi-Fi available to residents and businesses throughout the city, reaching areas the city said didn't have broadband, and to offer the service at a subsidized rate to low-income residents to bring them online.
But there were delays in rolling out the network and it never gained much traction. In court papers filed Tuesday, EarthLink said it had only 5,034 regular residential and business subscribers and 908 customers under the subsidized plan. EarthLink said it knew by late 2007 that the business was unsustainable.
EarthLink's other municipal Wi-Fi networks also failed to deliver, and the company started shutting down its municipal Wi-Fi unit last year. Since then it has given networks back to cities including Corpus Christi, Texas, and Milpitas, California. The company offered to give the Philadelphia network to the city or the unnamed nonprofit for free, after which the nonprofit would offer free service, according to EarthLink.
Also on Tuesday, EarthLink asked a federal court to declare it has the right to take down the network and that its liability for pulling out is capped at US$1 million.
Wireless Philadelphia, the entity providing low-cost network access, said it has not given up on the network.
"Wireless Philadelphia and the city are still working actively together to identify alternatives for preserving this network and applying it to numerous civic, commercial and social purposes. We remain optimistic for an orderly resolution of this matter," Greg Goldman, the group's CEO, said in a statement.
The history of Philadelphia's wireless initiative is making it harder for the city to move on, according to Craig Settles, an independent municipal network consultant who has written a book about the project. The high hopes raised by the project, the long wait to see it built and the bitter conflict with incumbent service providers -- who might have taken over the network -- have put leaders in a tough position, Settles said.
Given the potential cost of taking down the network versus just running it at a loss for a few more months, Settles believes EarthLink may have threatened the move to scare its negotiating partners into a resolution. Yet given more time, the city and its partners might find other stakeholders such as hospitals or universities to help out, he said.
"I can't see why you would just walk in and pull the plug," Settles said, though he added, "Dumber business deals have been done because of someone just getting peeved." EarthLink might also want to resolve the issue quickly to clear the way for a sale of the company, he added.
Icahn said to be mulling Yahoo proxy fight
Billionaire investor Carl Icahn is reportedly mulling a proxy fight against Yahoo's current board members in order to pressure the company to re-establish merger negotiations with Microsoft.
Icahn has bought as many as 50 million Yahoo shares since Microsoft walked away from the deal, according to reports Tuesday in the Wall Street Journal and on CNBC, which both quoted anonymous sources familiar with the situation.
However, Microsoft hasn't indicated to Icahn that it would return to the negotiating table, and Icahn hasn't decided whether he will go through with the proxy fight, the reports said.
Yahoo investors have until Thursday to nominate candidates to the board, whose 10 incumbent directors are all up for re-election this year when Yahoo holds its shareholders' meeting in July. Separately from Icahn's plans, other large investors are considering getting into the fray, the Journal reported.
Icahn did not immediately respond to a request for comment, and Microsoft and Yahoo declined to comment.
The news was first reported by CNBC in the mid-afternoon, helping to give a lift to Yahoo's stock, which closed up 5 percent to US$26.56 on the Nasdaq.
Microsoft announced its $44.6 billion bid for Yahoo on Feb. 1 but walked away from the deal three months later, on May 3, saying the companies couldn't agree on a price. Microsoft's last offer was for $33 per share, or about $5 billion more than its original offer, but Yahoo wanted $37 per share.
Since then, various big Yahoo shareholders have expressed their displeasure with Yahoo's board and management for, in their view, not negotiating in good faith with Microsoft and causing the talks to collapse. Yahoo formally rejected Microsoft's original offer on Feb. 11, saying it undervalued the company.
On Monday, May 5, the first day of trading after Microsoft's offer withdrawal, Yahoo's stock lost significant value, closing down 15 percent at $24.37, after dropping as low as $22.97 during the day.
Last week, Yahoo cofounder and CEO Jerry Yang and other top Yahoo executives tried to shift the blame to Microsoft, alleging that the $33-per-share offer was never put in writing and that Microsoft unexpectedly walked away at a time when Yahoo was still open to negotiating.
At the same time, Microsoft's top brass, including Chairman Bill Gates, have repeatedly said that Microsoft has closed the book on its attempts to buy Yahoo and that it is moving on to other options, namely growing its Internet business "organically," meaning via internal efforts and not big acquisitions.
In the meantime, a much-publicized deal in which Yahoo would outsource part of its search advertising business to Google -- the possibility of which Microsoft CEO Steve Ballmer cited as a major reason to withdraw the offer -- has yet to be finalized, and, according to recent anonymously sourced press reports, has lost steam.
All along, Microsoft had indicated its readiness to launch a proxy fight to oust Yahoo's board and replace it with its own candidates, but eventually, as Ballmer explained, Microsoft decided against that option, saying that it wasn't interested in engaging in a hostile and potentially long process.
Microsoft's main goal in acquiring Yahoo had been to give its underperforming Internet business a boost and turn it into a stronger competitor against Google.
Icahn is well-known for taking to task the CEOs of companies he invests in when he feels they aren't doing a good job of delivering shareholder value.
Icahn has bought as many as 50 million Yahoo shares since Microsoft walked away from the deal, according to reports Tuesday in the Wall Street Journal and on CNBC, which both quoted anonymous sources familiar with the situation.
However, Microsoft hasn't indicated to Icahn that it would return to the negotiating table, and Icahn hasn't decided whether he will go through with the proxy fight, the reports said.
Yahoo investors have until Thursday to nominate candidates to the board, whose 10 incumbent directors are all up for re-election this year when Yahoo holds its shareholders' meeting in July. Separately from Icahn's plans, other large investors are considering getting into the fray, the Journal reported.
Icahn did not immediately respond to a request for comment, and Microsoft and Yahoo declined to comment.
The news was first reported by CNBC in the mid-afternoon, helping to give a lift to Yahoo's stock, which closed up 5 percent to US$26.56 on the Nasdaq.
Microsoft announced its $44.6 billion bid for Yahoo on Feb. 1 but walked away from the deal three months later, on May 3, saying the companies couldn't agree on a price. Microsoft's last offer was for $33 per share, or about $5 billion more than its original offer, but Yahoo wanted $37 per share.
Since then, various big Yahoo shareholders have expressed their displeasure with Yahoo's board and management for, in their view, not negotiating in good faith with Microsoft and causing the talks to collapse. Yahoo formally rejected Microsoft's original offer on Feb. 11, saying it undervalued the company.
On Monday, May 5, the first day of trading after Microsoft's offer withdrawal, Yahoo's stock lost significant value, closing down 15 percent at $24.37, after dropping as low as $22.97 during the day.
Last week, Yahoo cofounder and CEO Jerry Yang and other top Yahoo executives tried to shift the blame to Microsoft, alleging that the $33-per-share offer was never put in writing and that Microsoft unexpectedly walked away at a time when Yahoo was still open to negotiating.
At the same time, Microsoft's top brass, including Chairman Bill Gates, have repeatedly said that Microsoft has closed the book on its attempts to buy Yahoo and that it is moving on to other options, namely growing its Internet business "organically," meaning via internal efforts and not big acquisitions.
In the meantime, a much-publicized deal in which Yahoo would outsource part of its search advertising business to Google -- the possibility of which Microsoft CEO Steve Ballmer cited as a major reason to withdraw the offer -- has yet to be finalized, and, according to recent anonymously sourced press reports, has lost steam.
All along, Microsoft had indicated its readiness to launch a proxy fight to oust Yahoo's board and replace it with its own candidates, but eventually, as Ballmer explained, Microsoft decided against that option, saying that it wasn't interested in engaging in a hostile and potentially long process.
Microsoft's main goal in acquiring Yahoo had been to give its underperforming Internet business a boost and turn it into a stronger competitor against Google.
Icahn is well-known for taking to task the CEOs of companies he invests in when he feels they aren't doing a good job of delivering shareholder value.
IPass turns its users on to in-flight Wi-Fi
Business travelers and consumers who subscribe to iPass will be able to get on Aircell's upcoming U.S. in-flight Wi-Fi service without debating whether the per-flight charge is worth it.
The mobile service consolidator will include Aircell in the services available to subscribers after the in-flight service debuts later this year, the companies said Tuesday. It's the first roaming agreement for Aircell and adds a critical component to iPass for people who want Internet access wherever they are.
An iPass account gives people access to a wide variety of Internet access services with a single login and monthly subscription fee. The service covers Wi-Fi hotspots and hotel Ethernet in more than 100,000 locations around the world, as well as 3G services in many areas and dial-up Internet access in 160 countries.
Aircell's GoGo service will turn planes on some domestic flights into Wi-Fi hotspots, with cellular backhaul to the ground. Laptops and smartphones with IEEE 802.11a/b/g will be able to connect. Aircell won't allow either cellular or VoIP (voice over Internet Protocol) voice calls. GoGo is expected to go live on American Airlines, Virgin America and other airlines later this year. American's service will cost about US$10 for short-haul flights and $12.95 for longer trips. The service will include access to the online Wall Street Journal.
Subscribers to iPass will be able to sign on to GoGo using their iPass accounts, and at least initially, the full cost will be covered under the monthly iPass charge. The service consolidator has a variety of plans for enterprises and earlier this year introduced a service for individual travelers, priced starting at $29.99 per month. There are about 1 million iPass users at more than 3,500 companies around the world, according to iPass.
In-flight broadband has had a rocky history, partly because some service providers haven't been able to make money from it. The Connexion by Boeing service was shut down in 2006 and left aircraft maker Boeing with a $320 million write-off. Connexion by Boeing used satellites for backhaul and cost passengers as much as $30 per flight.
The mobile service consolidator will include Aircell in the services available to subscribers after the in-flight service debuts later this year, the companies said Tuesday. It's the first roaming agreement for Aircell and adds a critical component to iPass for people who want Internet access wherever they are.
An iPass account gives people access to a wide variety of Internet access services with a single login and monthly subscription fee. The service covers Wi-Fi hotspots and hotel Ethernet in more than 100,000 locations around the world, as well as 3G services in many areas and dial-up Internet access in 160 countries.
Aircell's GoGo service will turn planes on some domestic flights into Wi-Fi hotspots, with cellular backhaul to the ground. Laptops and smartphones with IEEE 802.11a/b/g will be able to connect. Aircell won't allow either cellular or VoIP (voice over Internet Protocol) voice calls. GoGo is expected to go live on American Airlines, Virgin America and other airlines later this year. American's service will cost about US$10 for short-haul flights and $12.95 for longer trips. The service will include access to the online Wall Street Journal.
Subscribers to iPass will be able to sign on to GoGo using their iPass accounts, and at least initially, the full cost will be covered under the monthly iPass charge. The service consolidator has a variety of plans for enterprises and earlier this year introduced a service for individual travelers, priced starting at $29.99 per month. There are about 1 million iPass users at more than 3,500 companies around the world, according to iPass.
In-flight broadband has had a rocky history, partly because some service providers haven't been able to make money from it. The Connexion by Boeing service was shut down in 2006 and left aircraft maker Boeing with a $320 million write-off. Connexion by Boeing used satellites for backhaul and cost passengers as much as $30 per flight.
HP-EDS deal spurs range of customer reactions
Customers of Hewlett-Packard and Electronic Data Systems offered a range of reactions Tuesday to HP's $13.9 billion bid for the massive outsourcing company.
HP will benefit from EDS' talent pool, but the specter of layoffs -- which EDS President and CEO Ronald A. Rittenmeyer indicated Tuesday would be possible as the companies integrate -- raises concerns about customers' existing deals, said Nina Buik, president of Encompass, an HP user group that says it has 50,000 members.
"From a business perspective, I understand when you consolidate staff there's going to be duplicate jobs," Buik said. "I want to make sure the customers are still getting the level of service they signed up for. That would be my concern."
HP's pending purchase, which will bring it in close competition with services leader IBM, has been approved by both companies' boards of directors, and is expected to close in the second half of this year.
The deal will result in a new unit called "EDS -- an HP company," based in Plano, Texas, where EDS has its headquarters. Rittenmeyer will lead the new unit and report to HP CEO Mark Hurd.
Joe Lovetere, president of Hub Technical Services, said he was surprised by HP's move, but called it "exciting" and not likely to be a threat for his South Easton, Massachusetts, company, which resells HP's hardware and provides services.
"I don't think that it affects our business in terms of the market segment we have," he said, explaining that it is divided between the public sector and small to medium-size companies. EDS goes after the biggest accounts, Lovetere said.
One of those is Xerox, which has spent billions of dollars on EDS services during the past couple of decades. The company signed a $263 million deal in April that will see EDS manage and support its end-users, service desk and mainframe operations. It was a recent milestone in a long relationship.
Xerox's latest deal with EDS provides it with "flexibility in the event of changing business circumstances," and the pending acquisition could well qualify as such, said Carl Langsenkamp, director of public relations at Xerox.
However, he declined to speculate on whether Xerox would, in fact, look to alter the contract.
The company has a "two-fold relationship" with EDS, partnering with it as a member of EDS' Agility Alliance, which brings together offerings from a range of vendors into an "agile enterprise platform," he said.
Meanwhile, HP and Xerox compete in the office printing business, but Langsenkamp downplayed the potential impact. "This move seems to retrench them in IT outsourcing, but not document management," he said.
HP's hardware division presents another potential wild card for customers, should HP attempt to move EDS clients over to its computing platforms.
Hurd insisted during a conference call Tuesday that EDS would resist such an obvious temptation and remain hardware-agnostic.
This scenario is believable, Lovetere suggested.
"EDS is still a stand-alone business with a core group of customers and a core group of relationships," Lovetere said. "Trying to force customers onto platforms they don't have comfort level with doesn't make good business sense."
The acquisition will benefit both companies in the long run, said Rick Morris, chief information officer of Dollar Thrifty Automotive, which signed a five-year IT services contract with EDS worth $150 million to manage application development, network and hardware management.
"I would be more worried if they were merging with a lesser-known commodity than HP," Morris said.
With HP being a products company and much of EDS' revenue coming from infrastructure outsourcing, the acquisition is a natural way to try to expand in the services business, he said.
The combined company could lower Dollar Thrifty's IT operation cost by bringing in HP's product culture and more scale, Morris said, adding that HP could also reinforce and enable EDS' strategy to make business applications for the travel and transport industry.
Yet, there are concerns. EDS has a big focus on the travel and transportation industry, and Morris questioned whether HP would retain that vertical focus. Questions also remain about HP's ability to effectively integrate EDS' operation and culture, Morris said.
"The HP-Compaq merger seemed pretty messy; the major thought would be, would they execute this better," Morris said. HP's acquisition of Compaq for $25 billion in 2001 was considered a failure, as the company didn't generate hardware profits as a result. Former CEO Carly Fiorina, who oversaw HP's buy of Compaq, was replaced by Hurd.
While the deal could present issues for some vertical markets, it could translate to better IT integration for health care organizations, said Elizabeth Messina, CIO of Blue Cross Blue Shield Arizona. Blue Cross already uses HP hardware and recently renewed a contract with EDS for claims-processing hosting in March.
Blue Cross has been an EDS customer for 15 years and the acquisition could allow HP to expand its offerings, Messina said.
"This allows [HP] to come forward with hardware solutions with services to provide at competitive prices," Messina said.
The EDS deal would catapult HP near the top of a space worth $748 billion in 2007, according to recent figures from Gartner.
IBM led the market with about $54 billion in revenue, followed by EDS with $22 billion. HP was in fifth place with revenue of $17 billion, behind Accenture and Fujitsu.
(Peter Sayer in Paris contributed to this report.)
HP will benefit from EDS' talent pool, but the specter of layoffs -- which EDS President and CEO Ronald A. Rittenmeyer indicated Tuesday would be possible as the companies integrate -- raises concerns about customers' existing deals, said Nina Buik, president of Encompass, an HP user group that says it has 50,000 members.
"From a business perspective, I understand when you consolidate staff there's going to be duplicate jobs," Buik said. "I want to make sure the customers are still getting the level of service they signed up for. That would be my concern."
HP's pending purchase, which will bring it in close competition with services leader IBM, has been approved by both companies' boards of directors, and is expected to close in the second half of this year.
The deal will result in a new unit called "EDS -- an HP company," based in Plano, Texas, where EDS has its headquarters. Rittenmeyer will lead the new unit and report to HP CEO Mark Hurd.
Joe Lovetere, president of Hub Technical Services, said he was surprised by HP's move, but called it "exciting" and not likely to be a threat for his South Easton, Massachusetts, company, which resells HP's hardware and provides services.
"I don't think that it affects our business in terms of the market segment we have," he said, explaining that it is divided between the public sector and small to medium-size companies. EDS goes after the biggest accounts, Lovetere said.
One of those is Xerox, which has spent billions of dollars on EDS services during the past couple of decades. The company signed a $263 million deal in April that will see EDS manage and support its end-users, service desk and mainframe operations. It was a recent milestone in a long relationship.
Xerox's latest deal with EDS provides it with "flexibility in the event of changing business circumstances," and the pending acquisition could well qualify as such, said Carl Langsenkamp, director of public relations at Xerox.
However, he declined to speculate on whether Xerox would, in fact, look to alter the contract.
The company has a "two-fold relationship" with EDS, partnering with it as a member of EDS' Agility Alliance, which brings together offerings from a range of vendors into an "agile enterprise platform," he said.
Meanwhile, HP and Xerox compete in the office printing business, but Langsenkamp downplayed the potential impact. "This move seems to retrench them in IT outsourcing, but not document management," he said.
HP's hardware division presents another potential wild card for customers, should HP attempt to move EDS clients over to its computing platforms.
Hurd insisted during a conference call Tuesday that EDS would resist such an obvious temptation and remain hardware-agnostic.
This scenario is believable, Lovetere suggested.
"EDS is still a stand-alone business with a core group of customers and a core group of relationships," Lovetere said. "Trying to force customers onto platforms they don't have comfort level with doesn't make good business sense."
The acquisition will benefit both companies in the long run, said Rick Morris, chief information officer of Dollar Thrifty Automotive, which signed a five-year IT services contract with EDS worth $150 million to manage application development, network and hardware management.
"I would be more worried if they were merging with a lesser-known commodity than HP," Morris said.
With HP being a products company and much of EDS' revenue coming from infrastructure outsourcing, the acquisition is a natural way to try to expand in the services business, he said.
The combined company could lower Dollar Thrifty's IT operation cost by bringing in HP's product culture and more scale, Morris said, adding that HP could also reinforce and enable EDS' strategy to make business applications for the travel and transport industry.
Yet, there are concerns. EDS has a big focus on the travel and transportation industry, and Morris questioned whether HP would retain that vertical focus. Questions also remain about HP's ability to effectively integrate EDS' operation and culture, Morris said.
"The HP-Compaq merger seemed pretty messy; the major thought would be, would they execute this better," Morris said. HP's acquisition of Compaq for $25 billion in 2001 was considered a failure, as the company didn't generate hardware profits as a result. Former CEO Carly Fiorina, who oversaw HP's buy of Compaq, was replaced by Hurd.
While the deal could present issues for some vertical markets, it could translate to better IT integration for health care organizations, said Elizabeth Messina, CIO of Blue Cross Blue Shield Arizona. Blue Cross already uses HP hardware and recently renewed a contract with EDS for claims-processing hosting in March.
Blue Cross has been an EDS customer for 15 years and the acquisition could allow HP to expand its offerings, Messina said.
"This allows [HP] to come forward with hardware solutions with services to provide at competitive prices," Messina said.
The EDS deal would catapult HP near the top of a space worth $748 billion in 2007, according to recent figures from Gartner.
IBM led the market with about $54 billion in revenue, followed by EDS with $22 billion. HP was in fifth place with revenue of $17 billion, behind Accenture and Fujitsu.
(Peter Sayer in Paris contributed to this report.)
Microsoft fixes Jet database flaw after attacks
Microsoft has released four sets of security patches for its products, fixing a critical flaw in Microsoft Jet Database Engine software that had been used in online attacks.
Security experts say that the Jet flaw (MS08-028) should be patched first, since it has already been exploited. Microsoft had previously warned of this bug in a March 21 advisory.
Attackers could take advantage of this flaw to run unauthorized software on a victim's computer by tricking them into opening a Word document that has an embedded malicious Jet file or by previewing the file in Outlook 2003 or 2007. Jet files have the .mdb extension.
Microsoft fixed the vulnerability on Tuesday by repairing the Msjet40.dll file that is used to open Jet documents. "If the version of Msjet40.dll is lower than 4.0.9505.0, you have a vulnerable version of the Microsoft Jet Database Engine," Microsoft said in its advisory.
This month's four updates fix six software bugs.
Microsoft also patched two critical flaws in Word and a critical Publisher bug.
Finally, a pair of vulnerabilities in Microsoft's Malware Protection Engine could give attackers a way to crash security software such as Windows Live OneCare, Antigen, Windows Defender and the Forefront products.
Though these bugs are considered to be only a moderate risk, they should be taken seriously by system administrators, said Amol Sarwate, vulnerability lab manager at Qualys.
"If someone sends a malformed e-mail and that is processed by any of these antivirus and antispyware products, it would cause the product to crash," he said. "If you can crash security software which is supposed to protect you, then you are left with no protection at all."
Security experts say that the Jet flaw (MS08-028) should be patched first, since it has already been exploited. Microsoft had previously warned of this bug in a March 21 advisory.
Attackers could take advantage of this flaw to run unauthorized software on a victim's computer by tricking them into opening a Word document that has an embedded malicious Jet file or by previewing the file in Outlook 2003 or 2007. Jet files have the .mdb extension.
Microsoft fixed the vulnerability on Tuesday by repairing the Msjet40.dll file that is used to open Jet documents. "If the version of Msjet40.dll is lower than 4.0.9505.0, you have a vulnerable version of the Microsoft Jet Database Engine," Microsoft said in its advisory.
This month's four updates fix six software bugs.
Microsoft also patched two critical flaws in Word and a critical Publisher bug.
Finally, a pair of vulnerabilities in Microsoft's Malware Protection Engine could give attackers a way to crash security software such as Windows Live OneCare, Antigen, Windows Defender and the Forefront products.
Though these bugs are considered to be only a moderate risk, they should be taken seriously by system administrators, said Amol Sarwate, vulnerability lab manager at Qualys.
"If someone sends a malformed e-mail and that is processed by any of these antivirus and antispyware products, it would cause the product to crash," he said. "If you can crash security software which is supposed to protect you, then you are left with no protection at all."
EU won't seek new antitrust complaint against Microsoft
The European Commission confirmed it has received a complaint about Microsoft's business practices from a British government agency Tuesday, but isn't following it up as it normally would with an antitrust complaint, according to a press officer.
The British Educational Communications and Technology Agency filed the complaint to the Office of Fair Trading. "We are already looking into the issues raised in that complaint already and we are not treating it as a formal complaint to us," the press officer said.
Microsoft said in a statement Tuesday that it will continue to work with BECTA and the Commission to resolve the issues raised in the complaint.
BECTA filed the complaint with the U.K. Office of Fair Trading last October alleging that Microsoft's behavior impedes the exchange of files between Office 2007 and competitors' products and that its licensing practices in the market for software for schools are anticompetitive. BECTA Tuesday forwarded the complaint to the Commission.
"It is not just the interests of competitors and the wider marketplace that are damaged when barriers to effective interoperability are created. Such barriers can also damage the interests of education and training organizations, learners, teachers and parents," said Stephen Lucey, BECTA's executive director of Strategic Technologies.
Microsoft insisted that it is "deeply committed" to education and interoperability. More schools are upgrading to Windows Vista and Office 2007 as they recognize the benefit of "embracing technology to transform teaching and learning," and Microsoft has funded development of tools for interoperability between Office 2007 and products based on ODF. " We believe that more and more schools are upgrading to Windows Vista and Office 2007 as they increasingly recognize the benefits of embracing technology to transform teaching and learning. We have funded the development of tools to promote interoperability between Office 2007 and products based on the Open Document Format," the company said in its statement.
BECTA's complaint arrived at the offices of the Commission's competition department just after Microsoft decided to appeal against the €899 million (US$1.3 billion) fine it received earlier this year for failing to honor the Commission's 2004 antitrust ruling against it.
Europe's top antitrust regulator "is confident its decision to impose the fine was legally sound," Commission spokesman Jonathan Todd said Tuesday.
The British Educational Communications and Technology Agency filed the complaint to the Office of Fair Trading. "We are already looking into the issues raised in that complaint already and we are not treating it as a formal complaint to us," the press officer said.
Microsoft said in a statement Tuesday that it will continue to work with BECTA and the Commission to resolve the issues raised in the complaint.
BECTA filed the complaint with the U.K. Office of Fair Trading last October alleging that Microsoft's behavior impedes the exchange of files between Office 2007 and competitors' products and that its licensing practices in the market for software for schools are anticompetitive. BECTA Tuesday forwarded the complaint to the Commission.
"It is not just the interests of competitors and the wider marketplace that are damaged when barriers to effective interoperability are created. Such barriers can also damage the interests of education and training organizations, learners, teachers and parents," said Stephen Lucey, BECTA's executive director of Strategic Technologies.
Microsoft insisted that it is "deeply committed" to education and interoperability. More schools are upgrading to Windows Vista and Office 2007 as they recognize the benefit of "embracing technology to transform teaching and learning," and Microsoft has funded development of tools for interoperability between Office 2007 and products based on ODF. " We believe that more and more schools are upgrading to Windows Vista and Office 2007 as they increasingly recognize the benefits of embracing technology to transform teaching and learning. We have funded the development of tools to promote interoperability between Office 2007 and products based on the Open Document Format," the company said in its statement.
BECTA's complaint arrived at the offices of the Commission's competition department just after Microsoft decided to appeal against the €899 million (US$1.3 billion) fine it received earlier this year for failing to honor the Commission's 2004 antitrust ruling against it.
Europe's top antitrust regulator "is confident its decision to impose the fine was legally sound," Commission spokesman Jonathan Todd said Tuesday.
Microsoft launches Google Sky killer
Microsoft is going head-to-head with Google by releasing a beta version of an astronomy viewing tool.
WorldWide Telescope, which is in direct competition to Google's Sky application, allows users to view images taken by the Hubble Space Telescope, Chandra X-Ray Observatory Center and Spitzer Space Telescope.
Using the cursor, it's possible to roam freely through the universe and zoom in or out as well as viewing the locations of current and past plants and even looking at the universe through different wavelengths of light. Alternatively, make use of a guided tour which features a number of different narrators.
"By combining terabytes of incredible imagery and data with easy-to-use software for viewing and moving through all that information, the WorldWide Telescope opens the door to new ways to see and experience the wonders of space," said Bill Gates.
"WorldWide Telescope brings to life a dream that many of us in Microsoft Research have pursued for years. Where is Saturn in the sky, in relation to the moon? Does the Milky Way really have a supermassive black hole in the center of the galaxy? With the universe at your fingertips, you can discover the answers for yourself," added Curtis Wong, manager of Microsoft's Next Media Research Group.
Microsoft hopes the software, which is currently available for free, will become widely used as an educational tool.
WorldWide Telescope, which is in direct competition to Google's Sky application, allows users to view images taken by the Hubble Space Telescope, Chandra X-Ray Observatory Center and Spitzer Space Telescope.
Using the cursor, it's possible to roam freely through the universe and zoom in or out as well as viewing the locations of current and past plants and even looking at the universe through different wavelengths of light. Alternatively, make use of a guided tour which features a number of different narrators.
"By combining terabytes of incredible imagery and data with easy-to-use software for viewing and moving through all that information, the WorldWide Telescope opens the door to new ways to see and experience the wonders of space," said Bill Gates.
"WorldWide Telescope brings to life a dream that many of us in Microsoft Research have pursued for years. Where is Saturn in the sky, in relation to the moon? Does the Milky Way really have a supermassive black hole in the center of the galaxy? With the universe at your fingertips, you can discover the answers for yourself," added Curtis Wong, manager of Microsoft's Next Media Research Group.
Microsoft hopes the software, which is currently available for free, will become widely used as an educational tool.
BlackBerry startups get $150 million funding boost from RIM
Research in Motion has launched a $150 million investment fund to spur development of mobile applications and services for its BlackBerry brand.
The fund was announced this week at RIM's annual BlackBerry users conference, Wireless Enterprise Symposium (WES). RIM also announced it will bring two Microsoft Live services, Hotmail and Live Messenger, to the BlackBerry.
The Waterloo, Ontario-based company is putting up some of the money, along with Thomson Reuters, the New York-based business information and news company, RBC Venture Partners, the investment arm of Royal Bank of Canada, JLA Ventures, a Canadian venture fund that specializes in technology companies, and several private Canadian investors. RBC Venture Partners and JLA will co-manage the fund. (See "Top 10 network venture deals from Q1")
The fund will target a wide range of applications: mobile commerce, including payments, retailing, advertising and banking; an array of vertical and horizontal enterprise applications, communications, social networking and location-based services such as navigation and mapping, media/entertainment, personal productivity programs and lifestyle applications.
In a sense, the fund is intended to accelerate what's already happening, since plenty of vendors, from start-ups to carriers and big software companies, are betting big on the mobilization of the enterprise. At WES this year, there are 140 companies in the companion exhibit hall, all RIM partners and nearly all of them software vendors. This BlackBerry ecosystem is a mix of personal user applications, mobile-designed business applications, middleware for linking with back-end applications and data, BlackBerry system and device management, carriers organizing business services around the BlackBerry platform, and systems integrators, including Alcatel-Lucent and IBM.
RIM also announced it will bring two online Microsoft applications to the BlackBerry: Windows Live Hotmail and Windows Live Messenger. From the BlackBerry's browser, users will be able to get automatic message delivery from, and synchronization with, their Live Hotmail account, with messages displayed in a dedicated onscreen box, for example. With Live Messenger, BlackBerry users will be able to send instant messages and join group chats, see the presence of colleagues and friends, set and customize status messages, and send and receive pictures and files.
Both Windows Live services will be available this summer.
The fund was announced this week at RIM's annual BlackBerry users conference, Wireless Enterprise Symposium (WES). RIM also announced it will bring two Microsoft Live services, Hotmail and Live Messenger, to the BlackBerry.
The Waterloo, Ontario-based company is putting up some of the money, along with Thomson Reuters, the New York-based business information and news company, RBC Venture Partners, the investment arm of Royal Bank of Canada, JLA Ventures, a Canadian venture fund that specializes in technology companies, and several private Canadian investors. RBC Venture Partners and JLA will co-manage the fund. (See "Top 10 network venture deals from Q1")
The fund will target a wide range of applications: mobile commerce, including payments, retailing, advertising and banking; an array of vertical and horizontal enterprise applications, communications, social networking and location-based services such as navigation and mapping, media/entertainment, personal productivity programs and lifestyle applications.
In a sense, the fund is intended to accelerate what's already happening, since plenty of vendors, from start-ups to carriers and big software companies, are betting big on the mobilization of the enterprise. At WES this year, there are 140 companies in the companion exhibit hall, all RIM partners and nearly all of them software vendors. This BlackBerry ecosystem is a mix of personal user applications, mobile-designed business applications, middleware for linking with back-end applications and data, BlackBerry system and device management, carriers organizing business services around the BlackBerry platform, and systems integrators, including Alcatel-Lucent and IBM.
RIM also announced it will bring two online Microsoft applications to the BlackBerry: Windows Live Hotmail and Windows Live Messenger. From the BlackBerry's browser, users will be able to get automatic message delivery from, and synchronization with, their Live Hotmail account, with messages displayed in a dedicated onscreen box, for example. With Live Messenger, BlackBerry users will be able to send instant messages and join group chats, see the presence of colleagues and friends, set and customize status messages, and send and receive pictures and files.
Both Windows Live services will be available this summer.
Study: Corporate software spending slowing
One in four respondents to a new US corporate IT spending survey by ChangeWave Research said their company will spend less on software in coming months.
The 25 percent figure is 3 points higher than a study ChangeWave conducted in January and 11 points higher than one completed in October, indicating a deepening trend.
Meanwhile, 55 percent said their software spending will not change in the next 90 days, and just 12 percent indicated it will rise, according to ChangeWave.
Cuts to capital budgets appear to be a factor, according to the survey. Twenty-six percent of people who took it said their capital budgets had been cut over the past three months, a 4 point rise from January. In contrast, only 8 percent reported an increase in their capital budgets, ChangeWave said.
However, 27 percent reported they simply did not need to buy any new software, down two points from the January survey.
A number of major software categories, such as ERP (enterprise resource planning) and CRM (customer relationship management) applications, showed weakness moving forward.
But spending on two, virtualization and security, will see a modest jump in the next 90 days, according to the study.
ChangeWave Research, based in Rockville, Maryland, polled 1,956 people involved with corporate IT spending from April 8-15.
The 25 percent figure is 3 points higher than a study ChangeWave conducted in January and 11 points higher than one completed in October, indicating a deepening trend.
Meanwhile, 55 percent said their software spending will not change in the next 90 days, and just 12 percent indicated it will rise, according to ChangeWave.
Cuts to capital budgets appear to be a factor, according to the survey. Twenty-six percent of people who took it said their capital budgets had been cut over the past three months, a 4 point rise from January. In contrast, only 8 percent reported an increase in their capital budgets, ChangeWave said.
However, 27 percent reported they simply did not need to buy any new software, down two points from the January survey.
A number of major software categories, such as ERP (enterprise resource planning) and CRM (customer relationship management) applications, showed weakness moving forward.
But spending on two, virtualization and security, will see a modest jump in the next 90 days, according to the study.
ChangeWave Research, based in Rockville, Maryland, polled 1,956 people involved with corporate IT spending from April 8-15.
CSC settles government kickbacks case
Computer Sciences (CSC) has agreed to pay US $1.37 million to settle allegations that it received kickbacks on technology contracts with U.S. government agencies, part of an alleged scheme involving millions of dollars and dozens of IT vendors and systems integrators.
The settlement, announced by the U.S. Department of Justice Tuesday, stems from a 2004 lawsuit filed in Arkansas by whistleblowers who worked at Accenture and PricewaterhouseCoopers. In August, IBM agreed to pay just under $3 million and PricewaterhouseCoopers agreed to pay $2.3 million to settle similar complaints.
The DOJ joined the lawsuits in April 2007. The DOJ investigation into the alleged kickbacks continues, the agency said.
CSC spokespeople were not immediately available for comment.
Whistleblowers Norman Rille and Neal Roberts filed lawsuits against Hewlett-Packard, Sun Microsystems and Accenture in U.S. District Court for the Eastern District of Arkansas in September 2004. The men alleged that the three companies, along with more than three dozen other IT vendors and system integrators, engaged in a long-term kickbacks scheme in which the companies created alliance relationships with dozens of other vendors, giving each other discounts or rebates on products or work for government contracts.
The companies did not pass the rebates on to their government clients, according to the complaints.
Several of the defendants have responded to the complaints by saying their contracting actions were legal.
CSC "knowingly" solicited or received payments of money and other things of value from other companies in its global alliance, the DOJ said. The benefits "amount to kickbacks and undisclosed conflict-of-interest relationships," the DOJ said.
The settlement, announced by the U.S. Department of Justice Tuesday, stems from a 2004 lawsuit filed in Arkansas by whistleblowers who worked at Accenture and PricewaterhouseCoopers. In August, IBM agreed to pay just under $3 million and PricewaterhouseCoopers agreed to pay $2.3 million to settle similar complaints.
The DOJ joined the lawsuits in April 2007. The DOJ investigation into the alleged kickbacks continues, the agency said.
CSC spokespeople were not immediately available for comment.
Whistleblowers Norman Rille and Neal Roberts filed lawsuits against Hewlett-Packard, Sun Microsystems and Accenture in U.S. District Court for the Eastern District of Arkansas in September 2004. The men alleged that the three companies, along with more than three dozen other IT vendors and system integrators, engaged in a long-term kickbacks scheme in which the companies created alliance relationships with dozens of other vendors, giving each other discounts or rebates on products or work for government contracts.
The companies did not pass the rebates on to their government clients, according to the complaints.
Several of the defendants have responded to the complaints by saying their contracting actions were legal.
CSC "knowingly" solicited or received payments of money and other things of value from other companies in its global alliance, the DOJ said. The benefits "amount to kickbacks and undisclosed conflict-of-interest relationships," the DOJ said.
NEC to expand rugged laptop sales worldwide
Spray them with water, subject them to extreme temperatures or drop them on the ground, NEC's rugged ShieldPro laptops are made to survive rough treatment. The biggest challenge, however, is about to come: battling more established competitors in the harsh international market.
It was in January of last year that NEC entered Japan's market for rugged PCs, a segment that was at the time monopolized by Panasonic. Since then it has grabbed a 10 percent share of that market, and the company is now heading overseas to conquer other markets.
Despite a larger number of competitors in the international arena, NEC is determined it establish itself internationally and will initially target government agencies and construction companies in Europe, North America and Australia, said Takanori Kawanaka, who will help sell the laptops overseas.
NEC hopes to sell 50,000 of the ShieldPro models in the next two years, 30,000 of them outside Japan. In the same period it also hopes to boost its domestic market share from 10 percent to 40 percent.
To spearhead its expansion, NEC added a new model, the N22A, to the ShieldPro range on Thursday.
The N22A has a number of advances on the previous model, such as an Intel Core 2 Duo processor, 80G bytes of memory, a brighter 750cd/m (candela per square meter) screen and an optional high-capacity battery that lasts up to 12 hours.
Its IP rating, an environmental protection rating developed by the European Committee for Electrotechnical Standardization (CENELEC), also increased to IP55, which means that can tolerate a direct spray of water while the previous model could withstand just splashes.
New is a series of enclosures designed to fit around the PC's ports so that cables can stay plugged in or PC Card modems be operated without allowing water into the machine.
Like the previous model, the N22A can function between 5 degrees and 45 degrees Celsius or, if specified at the time of ordering, be constructed to operate at between -20 degrees and 50 degrees Celsius for additional cost.
It can survive a drop from up to 90 centimeters, which is approximately the height when carried close to the waist, as NEC demonstrated at a Tokyo news conference. A member of the NEC Greens rugby team dropped the PC, it hit a hard wooden board with a bang but Windows XP started right-up as normal.
The N22A is available build-to-order from NEC in Japan at prices starting from ¥300,000 (US$2,900). It will hit international markets by the end of this year.
It was in January of last year that NEC entered Japan's market for rugged PCs, a segment that was at the time monopolized by Panasonic. Since then it has grabbed a 10 percent share of that market, and the company is now heading overseas to conquer other markets.
Despite a larger number of competitors in the international arena, NEC is determined it establish itself internationally and will initially target government agencies and construction companies in Europe, North America and Australia, said Takanori Kawanaka, who will help sell the laptops overseas.
NEC hopes to sell 50,000 of the ShieldPro models in the next two years, 30,000 of them outside Japan. In the same period it also hopes to boost its domestic market share from 10 percent to 40 percent.
To spearhead its expansion, NEC added a new model, the N22A, to the ShieldPro range on Thursday.
The N22A has a number of advances on the previous model, such as an Intel Core 2 Duo processor, 80G bytes of memory, a brighter 750cd/m (candela per square meter) screen and an optional high-capacity battery that lasts up to 12 hours.
Its IP rating, an environmental protection rating developed by the European Committee for Electrotechnical Standardization (CENELEC), also increased to IP55, which means that can tolerate a direct spray of water while the previous model could withstand just splashes.
New is a series of enclosures designed to fit around the PC's ports so that cables can stay plugged in or PC Card modems be operated without allowing water into the machine.
Like the previous model, the N22A can function between 5 degrees and 45 degrees Celsius or, if specified at the time of ordering, be constructed to operate at between -20 degrees and 50 degrees Celsius for additional cost.
It can survive a drop from up to 90 centimeters, which is approximately the height when carried close to the waist, as NEC demonstrated at a Tokyo news conference. A member of the NEC Greens rugby team dropped the PC, it hit a hard wooden board with a bang but Windows XP started right-up as normal.
The N22A is available build-to-order from NEC in Japan at prices starting from ¥300,000 (US$2,900). It will hit international markets by the end of this year.
AMD shuffles executives, creates central engineering group
Advanced Micro Devices announced a series of executive changes Monday, including the creation of a Central Engineering Organization to oversee the company's product roadmap.
Leading the new executive appointments was the announcement that Randy Allen will replace Mario Rivas as head of the company's Computing Solutions Group. Rivas, who was an executive vice president, is leaving the company "to pursue new opportunities," the company said.
Prior to his latest appointment, Allen was responsible for AMD's server and workstation business. He will now report directly to Dirk Meyer, AMD's president and chief operating officer.
Another key appointment is the hiring of Chekib Akrout, formerly vice president of design technology at Freescale Semiconductor, to co-head the newly created Central Engineering Organization with Jeff VerHeul, AMD's corporate vice president of design engineering. This new group will report to Meyer and will oversee the development and direction of AMD's technology and product roadmaps.
Prior to Freescale, Akrout worked at IBM where "he was responsible for IBM's work on the development of the Cell processor, the Xbox 360 processor for Microsoft, and embedded PowerPC cores," AMD said.
Leading the new executive appointments was the announcement that Randy Allen will replace Mario Rivas as head of the company's Computing Solutions Group. Rivas, who was an executive vice president, is leaving the company "to pursue new opportunities," the company said.
Prior to his latest appointment, Allen was responsible for AMD's server and workstation business. He will now report directly to Dirk Meyer, AMD's president and chief operating officer.
Another key appointment is the hiring of Chekib Akrout, formerly vice president of design technology at Freescale Semiconductor, to co-head the newly created Central Engineering Organization with Jeff VerHeul, AMD's corporate vice president of design engineering. This new group will report to Meyer and will oversee the development and direction of AMD's technology and product roadmaps.
Prior to Freescale, Akrout worked at IBM where "he was responsible for IBM's work on the development of the Cell processor, the Xbox 360 processor for Microsoft, and embedded PowerPC cores," AMD said.
HP buys EDS for $13.9 billion
HP said Tuesday morning that it has signed a deal to acquire IT outsourcer EDS for US$13.9 billion, or $25.00 per share.
The deal has been approved by both companies' boards of directors, and is expected to close in the second half of this year.
HP said it will more than double its services revenue.
It plans to fold its outsourcing business into a new unit to be called "EDS -- an HP company," which will be based in Plano, Texas, where EDS has its headquarters.
"This is about us putting our outsourcing business into EDS," said HP Chairman and CEO Mark Hurd, in a conference call with analysts.
The EDS division will be led by EDS Chairman, President and Chief Executive Officer Ronald A. Rittenmeyer, who will report directly to Hurd.
That will take control of some of HP's services activities away from Ann Livermore, executive vice president of HP's Technology Solutions Group (TSG). Services, including outsourcing, contribute almost half of that group's revenue: the other half comes from storage, servers and software. Livermore "has got a big job," said Hurd, adding that much of HP's services activity will remain with TSG.
Rittenmeyer's appointment raised at least one analyst's eyebrows.
"It's interesting that he has been put into this spot, as there were questions about how he was going since taking over as CEO at EDS," said Gartner analyst Ben Pring.
The deal will greatly expand HP's IT services business and catapult it to the number two spot close behind IBM, whose Global Technology Services division has long been a strong profit generator for the company.
"I see [the acquisition] as an attempt by HP to really go head to head with IBM in a much more meaningful way, especially in technology services and IT outsourcing," Dana Stiffler, research director with AMR Research, said Monday, while the two companies were still in talks.
The worldwide market for IT services was worth $748 billion in 2007, an increase of 10.5 percent from the year before, according to recent figures from Gartner. IBM led the market with about $54 billion in revenue, followed by EDS with $22 billion. HP was in fifth place with revenue of $17 billion, behind Accenture and Fujitsu.
Buying a services business in a faltering economy is a good investment, because that's when customers are keenest to cut their costs by outsourcing, said Hurd.
"Services is countercyclical, the tougher things get, the better services does," he said.
Rittenmeyer said that EDS has a "strong pipeline" of contracts ahead of it.
There is little overlap in the channels by which the two companies reach customers, said Hurd, since HP's services business primarily targets small and medium-size businesses. Nevertheless, Hurd sees other areas where the companies can realize "significant synergies" and reduce operational costs.
The pending deal should not adversely impact HP partners who are authorized to sell services for its products, Hurd insisted.
"It’s good for HP, so it’s going to be good for our channel partners," Hurd said. "If you look at our outsourcing business today, we try to make it very complementary to our partners."
EDS will remain hardware-agnostic following the acquisition despite the presence of HP’s hardware business, Hurd said.
"While this is a popular question because of our product portfolio, in the services industry you have to work with all kinds of [products]," he said.
The acquisition will enable EDS to begin offering lower-priced services to customers, Hurd said.
"There’s a tremendous leverage you get from scale," he said. "We’re spreading our cost structure across a much larger revenue base. We expect to bring that capability to EDS. With many of the functions they do today, we can help them take advantage of that scale."
Buying EDS will grow HP's services business and allow it to offer a wider range of services to attract large business customers. EDS is strong in infrastructure management services and also custom application services, where it helps companies to design, integrate and manage applications.
EDS is less strong in providing services for packaged applications, however, and the acquisition will not give HP a big lift in the type of business consulting services delivered to line managers and business executives either, Stiffler said Monday.
HP has been keen to expand its services business for years, and EDS is not its first attempt to do so. In 2000 HP dropped plans to acquire PricewaterhouseCoopers Consulting, which was ultimately scooped up by IBM two years later, for $3.5 billion.
HP's services business generated only 16 percent of its total 2007 revenue of $104.3 billion, while IBM makes more than half of its annual revenue from services. The company increased its revenue estimate for fiscal year 2008 on Tuesday morning, saying it now expects revenue of between $114.2 billion and $114.4 billion, up from a previous estimate of $113.5 billion to $114 billion.
The company also reported preliminary results for its second fiscal quarter, ended April 30. It made revenue of $28.3 billion for the quarter, compared with $25.5 billion a year earlier. The figure beat estimates of analysts polled by Thomson Financial, who had expected $27.98 billion. HP also said estimated earnings per share for the quarter were $0.80, up from $0.65 one year earlier. Excluding acquisition related costs, EPS was $0.87, beating the analyst estimate of $0.84.
It expects to announce final results on May 20.
Buying EDS will give HP the muscle it needs to become a serious threat to IBM's services business, said Kathryn Hale, research vice president at Gartner, also speaking before the companies confirmed the deal. HP has the resources and the wherewithal to acquire EDS and improve its business results, she added.
EDS reported revenue of $22.1 billion for its fiscal year 2007, which was up only a fraction from 2006. Net income was $716 million, up from $470 million.
EDS and its subsidiaries employ about 137,000 people worldwide, around 90,000 of them overseas. About 45,000 of the overseas employees work in what EDS calls "best shore" countries, affording high service quality and low cost. EDS aims to boost the number of overseas workers in the "best shore" countries to around 55,000, said Rittenmeyer. HP ended its 2007 fiscal year with about 172,000 workers.
The $25.00 per share offer is a $6.14 premium above EDS' closing share price of $18.86 Friday. Rumors of the acquisition drove up EDS' share price to $24.13 by the close of trading Monday. Within two hours of trading Tuesday, EDS shares were at $24.45, up by $0.37, and HP shares were down by $2.95 to $43.88. The share price of buying companies often drops on the day an acquisition is announced, as traders calculate that big acquisitions usually have a dilutive effect on earnings, at least initially.
(Chris Kanaracus in Boston contributed to this report.)
The deal has been approved by both companies' boards of directors, and is expected to close in the second half of this year.
HP said it will more than double its services revenue.
It plans to fold its outsourcing business into a new unit to be called "EDS -- an HP company," which will be based in Plano, Texas, where EDS has its headquarters.
"This is about us putting our outsourcing business into EDS," said HP Chairman and CEO Mark Hurd, in a conference call with analysts.
The EDS division will be led by EDS Chairman, President and Chief Executive Officer Ronald A. Rittenmeyer, who will report directly to Hurd.
That will take control of some of HP's services activities away from Ann Livermore, executive vice president of HP's Technology Solutions Group (TSG). Services, including outsourcing, contribute almost half of that group's revenue: the other half comes from storage, servers and software. Livermore "has got a big job," said Hurd, adding that much of HP's services activity will remain with TSG.
Rittenmeyer's appointment raised at least one analyst's eyebrows.
"It's interesting that he has been put into this spot, as there were questions about how he was going since taking over as CEO at EDS," said Gartner analyst Ben Pring.
The deal will greatly expand HP's IT services business and catapult it to the number two spot close behind IBM, whose Global Technology Services division has long been a strong profit generator for the company.
"I see [the acquisition] as an attempt by HP to really go head to head with IBM in a much more meaningful way, especially in technology services and IT outsourcing," Dana Stiffler, research director with AMR Research, said Monday, while the two companies were still in talks.
The worldwide market for IT services was worth $748 billion in 2007, an increase of 10.5 percent from the year before, according to recent figures from Gartner. IBM led the market with about $54 billion in revenue, followed by EDS with $22 billion. HP was in fifth place with revenue of $17 billion, behind Accenture and Fujitsu.
Buying a services business in a faltering economy is a good investment, because that's when customers are keenest to cut their costs by outsourcing, said Hurd.
"Services is countercyclical, the tougher things get, the better services does," he said.
Rittenmeyer said that EDS has a "strong pipeline" of contracts ahead of it.
There is little overlap in the channels by which the two companies reach customers, said Hurd, since HP's services business primarily targets small and medium-size businesses. Nevertheless, Hurd sees other areas where the companies can realize "significant synergies" and reduce operational costs.
The pending deal should not adversely impact HP partners who are authorized to sell services for its products, Hurd insisted.
"It’s good for HP, so it’s going to be good for our channel partners," Hurd said. "If you look at our outsourcing business today, we try to make it very complementary to our partners."
EDS will remain hardware-agnostic following the acquisition despite the presence of HP’s hardware business, Hurd said.
"While this is a popular question because of our product portfolio, in the services industry you have to work with all kinds of [products]," he said.
The acquisition will enable EDS to begin offering lower-priced services to customers, Hurd said.
"There’s a tremendous leverage you get from scale," he said. "We’re spreading our cost structure across a much larger revenue base. We expect to bring that capability to EDS. With many of the functions they do today, we can help them take advantage of that scale."
Buying EDS will grow HP's services business and allow it to offer a wider range of services to attract large business customers. EDS is strong in infrastructure management services and also custom application services, where it helps companies to design, integrate and manage applications.
EDS is less strong in providing services for packaged applications, however, and the acquisition will not give HP a big lift in the type of business consulting services delivered to line managers and business executives either, Stiffler said Monday.
HP has been keen to expand its services business for years, and EDS is not its first attempt to do so. In 2000 HP dropped plans to acquire PricewaterhouseCoopers Consulting, which was ultimately scooped up by IBM two years later, for $3.5 billion.
HP's services business generated only 16 percent of its total 2007 revenue of $104.3 billion, while IBM makes more than half of its annual revenue from services. The company increased its revenue estimate for fiscal year 2008 on Tuesday morning, saying it now expects revenue of between $114.2 billion and $114.4 billion, up from a previous estimate of $113.5 billion to $114 billion.
The company also reported preliminary results for its second fiscal quarter, ended April 30. It made revenue of $28.3 billion for the quarter, compared with $25.5 billion a year earlier. The figure beat estimates of analysts polled by Thomson Financial, who had expected $27.98 billion. HP also said estimated earnings per share for the quarter were $0.80, up from $0.65 one year earlier. Excluding acquisition related costs, EPS was $0.87, beating the analyst estimate of $0.84.
It expects to announce final results on May 20.
Buying EDS will give HP the muscle it needs to become a serious threat to IBM's services business, said Kathryn Hale, research vice president at Gartner, also speaking before the companies confirmed the deal. HP has the resources and the wherewithal to acquire EDS and improve its business results, she added.
EDS reported revenue of $22.1 billion for its fiscal year 2007, which was up only a fraction from 2006. Net income was $716 million, up from $470 million.
EDS and its subsidiaries employ about 137,000 people worldwide, around 90,000 of them overseas. About 45,000 of the overseas employees work in what EDS calls "best shore" countries, affording high service quality and low cost. EDS aims to boost the number of overseas workers in the "best shore" countries to around 55,000, said Rittenmeyer. HP ended its 2007 fiscal year with about 172,000 workers.
The $25.00 per share offer is a $6.14 premium above EDS' closing share price of $18.86 Friday. Rumors of the acquisition drove up EDS' share price to $24.13 by the close of trading Monday. Within two hours of trading Tuesday, EDS shares were at $24.45, up by $0.37, and HP shares were down by $2.95 to $43.88. The share price of buying companies often drops on the day an acquisition is announced, as traders calculate that big acquisitions usually have a dilutive effect on earnings, at least initially.
(Chris Kanaracus in Boston contributed to this report.)
Nokia phone maps will get Webbed feet
Nokia is extending its mobile navigation system to the Web via its Ovi.com site, where people will be able to save map locations and routes and then synchronize them with their phones.
Maps on Ovi, unveiled Monday at the Where 2.0 conference in Burlingame, California, builds on Nokia's next generation of mobile-phone navigation technology, Nokia Maps 2.0. It also signals Nokia's growing focus on software and services, even for use independent of its mobile phones.
Ovi is a Nokia Web portal for Internet services such as content sharing. Maps on Ovi will let people use and mark up maps on the Web and then upload their changes to a cell phone, said Michael Halbherr, vice president of context-based services at Nokia. For example, before traveling to another city, a user could pick out places to visit and the routes to those sites from his hotel. Once saved on Ovi, that information would be copied onto his phone automatically at the next synchronization, Halbherr said.
In addition, the user could walk or drive around the city and save his route on the phone, then upload that to his Ovi map. Sights along the way that he marked as interesting could be uploaded to the Web map, which eventually could provide a wealth of information about those places from a variety of sources. Nokia expects to deliver that information on the Web-based map through mashups with partners, which might include user-generated review sites such as TripAdvisor, Halbherr said.
Later, Nokia will let users of Ovi share their routes and tips with friends. For example, a company could put together a set of suggestions for employees visiting its headquarters city, Halbherr said.
Maps on Ovi will become available by the end of September, Nokia said. It may or may not be in beta at that time, but it will be fairly close to production quality in any case, he said.
Initially, Maps on Ovi will work only with Nokia phones, but the company intends to make it independent of its hardware. Nokia intends to succeed as a software and services company independent of its phones, Halbherr said. This is true even in the U.S., where Nokia's smartphones have had trouble gaining traction.
"We are running a software business," Halbherr said. "We'll do whatever we need to do to make (inroads) in the U.S. It may be a Nokia device, or it may not."
Maps 2.0 is a set of navigation capabilities, the fruit of Nokia's acquisition of Gate5, that was introduced in February and is now in beta for Nokia's Series 60 operating system. It includes features such as routes and directions designed for pedestrians instead of drivers. That software will emerge from beta by early next month for Series 60 phones, which include N-Series and E-Series smartphones as well as some less expensive devices, Nokia said. By the end of this year, a reduced version of Maps 2.0 will become available in beta for the company's lower-end Series 40 OS, Halbherr said.
Maps on Ovi, unveiled Monday at the Where 2.0 conference in Burlingame, California, builds on Nokia's next generation of mobile-phone navigation technology, Nokia Maps 2.0. It also signals Nokia's growing focus on software and services, even for use independent of its mobile phones.
Ovi is a Nokia Web portal for Internet services such as content sharing. Maps on Ovi will let people use and mark up maps on the Web and then upload their changes to a cell phone, said Michael Halbherr, vice president of context-based services at Nokia. For example, before traveling to another city, a user could pick out places to visit and the routes to those sites from his hotel. Once saved on Ovi, that information would be copied onto his phone automatically at the next synchronization, Halbherr said.
In addition, the user could walk or drive around the city and save his route on the phone, then upload that to his Ovi map. Sights along the way that he marked as interesting could be uploaded to the Web map, which eventually could provide a wealth of information about those places from a variety of sources. Nokia expects to deliver that information on the Web-based map through mashups with partners, which might include user-generated review sites such as TripAdvisor, Halbherr said.
Later, Nokia will let users of Ovi share their routes and tips with friends. For example, a company could put together a set of suggestions for employees visiting its headquarters city, Halbherr said.
Maps on Ovi will become available by the end of September, Nokia said. It may or may not be in beta at that time, but it will be fairly close to production quality in any case, he said.
Initially, Maps on Ovi will work only with Nokia phones, but the company intends to make it independent of its hardware. Nokia intends to succeed as a software and services company independent of its phones, Halbherr said. This is true even in the U.S., where Nokia's smartphones have had trouble gaining traction.
"We are running a software business," Halbherr said. "We'll do whatever we need to do to make (inroads) in the U.S. It may be a Nokia device, or it may not."
Maps 2.0 is a set of navigation capabilities, the fruit of Nokia's acquisition of Gate5, that was introduced in February and is now in beta for Nokia's Series 60 operating system. It includes features such as routes and directions designed for pedestrians instead of drivers. That software will emerge from beta by early next month for Series 60 phones, which include N-Series and E-Series smartphones as well as some less expensive devices, Nokia said. By the end of this year, a reduced version of Maps 2.0 will become available in beta for the company's lower-end Series 40 OS, Halbherr said.
Sun to clarify JavaFX open-source plan later this year
While Sun executives have said that JavaFX, the company's nascent rich Internet application (RIA) development product family and eventual competitor to Adobe's Flash and Microsoft's Silverlight, will be entirely open source, a FAQ page on Sun's site appears to contradict that.
"The JavaFX Script language, currently being developed with the community's help (see OpenJFX project), will have a grammar and syntax that are open source. Some parts of the language are already open source," it states, but adds, "the JavaFX compiler, runtime engine, player, and tools currently under development are not expected to be open source."
Simon Brocklehurst, CEO of software development company Psynixis, noted the FAQ's wording in a recent blog post.
"I'm pretty sure that potential JavaFX developers would be interested in getting some better understanding on this," Brocklehurst wrote. "Certainly, the lack of clarity has stopped me getting my hands dirty with JavaFX technology for the time being."
A Sun spokeswoman declined to provide a direct response to the FAQ statement, but said Sun is looking into revising it and will reveal more information regarding JavaFX and open source later this year.
"Sun will be rolling out our open source strategy for JavaFX concurrent with the release of version 1 of JavaFX Desktop in the fall," she said in a statement.
She noted that a number of components are already open source, including the JavaFX Plugin for NetBeans. Sun has also started the OpenJFX Compiler project.
The company announced JavaFX in 2007. During last week's JavaOne conference, it presented some demonstrations of the technology and provided a road map.
Although Sun is coming to market with an RIA platform after some competitors, the company believes it has a built-in advantage due to the pervasive reach of Java.
"The JavaFX Script language, currently being developed with the community's help (see OpenJFX project), will have a grammar and syntax that are open source. Some parts of the language are already open source," it states, but adds, "the JavaFX compiler, runtime engine, player, and tools currently under development are not expected to be open source."
Simon Brocklehurst, CEO of software development company Psynixis, noted the FAQ's wording in a recent blog post.
"I'm pretty sure that potential JavaFX developers would be interested in getting some better understanding on this," Brocklehurst wrote. "Certainly, the lack of clarity has stopped me getting my hands dirty with JavaFX technology for the time being."
A Sun spokeswoman declined to provide a direct response to the FAQ statement, but said Sun is looking into revising it and will reveal more information regarding JavaFX and open source later this year.
"Sun will be rolling out our open source strategy for JavaFX concurrent with the release of version 1 of JavaFX Desktop in the fall," she said in a statement.
She noted that a number of components are already open source, including the JavaFX Plugin for NetBeans. Sun has also started the OpenJFX Compiler project.
The company announced JavaFX in 2007. During last week's JavaOne conference, it presented some demonstrations of the technology and provided a road map.
Although Sun is coming to market with an RIA platform after some competitors, the company believes it has a built-in advantage due to the pervasive reach of Java.
Widespread iPhone shortages fuel 3G rumors
Apple's iPhone has gone missing from most retail shelves, fueling speculation that the arrival a new version of the mobile device--possibly featuring support for faster 3G wireless technology--is imminent.
Following last week's announcement by O2, the iPhone's exclusive service provider in the U.K., that it had run out of iPhones, U.S. customers reported similar shortages. Over the weekend, Apple's online stores in both the U.S. and the U.K. listed the 8GB and 16GB models of the handset as "currently unavailable."
"We are currently out of stock," Apple spokeswoman Natalie Kerris confirmed on Monday.
That goes for brick-and-mortar Apple Stores as well. Macworld called five Apple Stores located across the U.S. The stores in New York, Chicago, San Francisco, Cambridge, Mass., and Palo Alto, Calif., all confirmed that their iPhone offerings had dried up.
"We don't have either [model]," said a sales representative at Apple's flagship Fifth Avenue store in New York City. "At this time we don't have any info on when we'll get them." Sales personnel at other locations suggested that additional iPhones could be in stock as early as Tuesday, though they strongly suggested that customers call to confirm availability before heading to the store.
U.S. customers looking for iPhones aren't totally locked out, however; Macworld also contacted AT&T stores near each of the Apple Stores we polled. Four of the five stores reported that they had both 8GB and 16GB iPhones in stock; the AT&T store in Palo Alto only had 16GB phones available.
That's a contrast to the U.K., where iPhones are out of stock both through Apple and its partners. Besides O2 reporting that it was out of iPhones, Carphone Warehouse, a retail partner in the U.K., says that it's out of stock for both models.
Signs began pointing to a constrained iPhone supplier in recent weeks. During an April conference call to discuss Apple's second-quarter earnings, Chief Operating Officer Tim Cook acknowledged that the company's U.S. stores had been experiencing an inventory shortfall earlier that month, which he attributed to higher than forecasted demand in the post-holiday buying environment.
Given Apple's oft-stated goal of selling 10 million iPhone by year's end, the assumption gaining favor on the Internet is that iPhone supplies have dried up as Apple readies a new version of the phone, with a release likely to come in the next few weeks. "It would be the kind of thing that would naturally precede the introduction of a new model," said Ross Rubin, director of analysis at market-research firm NPD Group.
A second-generation iPhone, likely incorporating high-speed 3G wireless technology, is widely expected to make an appearance soon. Hints have been dropped over the past year by both AT&T CEO Randall Stephenson, who said last November that a 3G iPhone would show up "next year," and AT&T Wireless chief Ralph de la Vega, who said during April's CTIA Conference that "our integrated devices [will] be 3G devices in the not-too-distant future, and I mean months."
While Apple has kept characteristically mum about its roadmap for future products--the company declined Monday to comment about the latest round of speculation--it has not been secretive about its plans to expand further into Europe and into Asia this year. Already, a slew of carriers have announced deals with Apple in recent weeks to bring the iPhone to countries such as India, Australia, and Italy. In the case of Italy, reports from media in that country have suggested that 3G compatibility was part of the deal negotiated between Apple and local carriers.
Regardless of the details of those agreements, it's no secret that many of the countries Apple is entering or plans to enter soon have more widespread and mature 3G coverage than what's currently available in the U.S. (Earlier this year, though, iPhone partner AT&T announced it planned to expand its 3G service to more U.S. cities.)
"It's a natural fit for a product that's marketed on the strength of its internet presence," Rubin said. "AT&T has also made strides in developing its 3G network, so now would be a sensible time to introduce it."
A look at the calendar also adds fuel to the rumored update fire. June not only marks the first anniversary of the iPhone's launch, it also brings Apple's annual Worldwide Developers Conference, where Steve Jobs traditionally delivers an opening keynote. The iPhone figures to be a major focus at WWDC, since Apple has promised to deliver iPhone 2.0 software in June that will add native applications to the handheld device. WWDC begins in San Francisco on June 9.
And that poses a challenge for Apple. The June 9 keynote is still several weeks away, meaning a potentially month-long gap between the disappearance of the current model from retail shelves and potential arrival of a new iPhone.
"There is certainly some concern about that," said NPD Group's Rubin. "You don't want to be in a situation for too long without available stock. Perhaps the benefit will be if they are not selling many older models the day before a release, they will keep that buyers remorse to a minimum."
Indeed, Apple has been stung by such remorse in the recent past. The company cut the price of the 8GB iPhone by US$200 in September 2007, a little more than two months after the phone's debut. After a sharply negative reaction from early adopters, Apple wound up offering a $100 credit to people who bought the iPhone in its first two months of release.
Other potential reasons besides the forthcoming release of a new model could explain the sudden dearth of iPhones. "It's either component shortages or a deliberate sell-off before another iPhone is introduced," said Avi Greengart, Research Director for market research firm Current Analysis. "It really might be a component shortage--that happens, although I'm not aware of any issues of that type."
But when it comes to Apple's explanation about higher than expected demand, the situation doesn't seem to add up, analysts say. "Certainly there were some shortage issues during the initial release, but nothing too severe," Rubin said. "Supply has been consistent since then and it would be unusual to have a surge in demand at this point."
Following last week's announcement by O2, the iPhone's exclusive service provider in the U.K., that it had run out of iPhones, U.S. customers reported similar shortages. Over the weekend, Apple's online stores in both the U.S. and the U.K. listed the 8GB and 16GB models of the handset as "currently unavailable."
"We are currently out of stock," Apple spokeswoman Natalie Kerris confirmed on Monday.
That goes for brick-and-mortar Apple Stores as well. Macworld called five Apple Stores located across the U.S. The stores in New York, Chicago, San Francisco, Cambridge, Mass., and Palo Alto, Calif., all confirmed that their iPhone offerings had dried up.
"We don't have either [model]," said a sales representative at Apple's flagship Fifth Avenue store in New York City. "At this time we don't have any info on when we'll get them." Sales personnel at other locations suggested that additional iPhones could be in stock as early as Tuesday, though they strongly suggested that customers call to confirm availability before heading to the store.
U.S. customers looking for iPhones aren't totally locked out, however; Macworld also contacted AT&T stores near each of the Apple Stores we polled. Four of the five stores reported that they had both 8GB and 16GB iPhones in stock; the AT&T store in Palo Alto only had 16GB phones available.
That's a contrast to the U.K., where iPhones are out of stock both through Apple and its partners. Besides O2 reporting that it was out of iPhones, Carphone Warehouse, a retail partner in the U.K., says that it's out of stock for both models.
Signs began pointing to a constrained iPhone supplier in recent weeks. During an April conference call to discuss Apple's second-quarter earnings, Chief Operating Officer Tim Cook acknowledged that the company's U.S. stores had been experiencing an inventory shortfall earlier that month, which he attributed to higher than forecasted demand in the post-holiday buying environment.
Given Apple's oft-stated goal of selling 10 million iPhone by year's end, the assumption gaining favor on the Internet is that iPhone supplies have dried up as Apple readies a new version of the phone, with a release likely to come in the next few weeks. "It would be the kind of thing that would naturally precede the introduction of a new model," said Ross Rubin, director of analysis at market-research firm NPD Group.
A second-generation iPhone, likely incorporating high-speed 3G wireless technology, is widely expected to make an appearance soon. Hints have been dropped over the past year by both AT&T CEO Randall Stephenson, who said last November that a 3G iPhone would show up "next year," and AT&T Wireless chief Ralph de la Vega, who said during April's CTIA Conference that "our integrated devices [will] be 3G devices in the not-too-distant future, and I mean months."
While Apple has kept characteristically mum about its roadmap for future products--the company declined Monday to comment about the latest round of speculation--it has not been secretive about its plans to expand further into Europe and into Asia this year. Already, a slew of carriers have announced deals with Apple in recent weeks to bring the iPhone to countries such as India, Australia, and Italy. In the case of Italy, reports from media in that country have suggested that 3G compatibility was part of the deal negotiated between Apple and local carriers.
Regardless of the details of those agreements, it's no secret that many of the countries Apple is entering or plans to enter soon have more widespread and mature 3G coverage than what's currently available in the U.S. (Earlier this year, though, iPhone partner AT&T announced it planned to expand its 3G service to more U.S. cities.)
"It's a natural fit for a product that's marketed on the strength of its internet presence," Rubin said. "AT&T has also made strides in developing its 3G network, so now would be a sensible time to introduce it."
A look at the calendar also adds fuel to the rumored update fire. June not only marks the first anniversary of the iPhone's launch, it also brings Apple's annual Worldwide Developers Conference, where Steve Jobs traditionally delivers an opening keynote. The iPhone figures to be a major focus at WWDC, since Apple has promised to deliver iPhone 2.0 software in June that will add native applications to the handheld device. WWDC begins in San Francisco on June 9.
And that poses a challenge for Apple. The June 9 keynote is still several weeks away, meaning a potentially month-long gap between the disappearance of the current model from retail shelves and potential arrival of a new iPhone.
"There is certainly some concern about that," said NPD Group's Rubin. "You don't want to be in a situation for too long without available stock. Perhaps the benefit will be if they are not selling many older models the day before a release, they will keep that buyers remorse to a minimum."
Indeed, Apple has been stung by such remorse in the recent past. The company cut the price of the 8GB iPhone by US$200 in September 2007, a little more than two months after the phone's debut. After a sharply negative reaction from early adopters, Apple wound up offering a $100 credit to people who bought the iPhone in its first two months of release.
Other potential reasons besides the forthcoming release of a new model could explain the sudden dearth of iPhones. "It's either component shortages or a deliberate sell-off before another iPhone is introduced," said Avi Greengart, Research Director for market research firm Current Analysis. "It really might be a component shortage--that happens, although I'm not aware of any issues of that type."
But when it comes to Apple's explanation about higher than expected demand, the situation doesn't seem to add up, analysts say. "Certainly there were some shortage issues during the initial release, but nothing too severe," Rubin said. "Supply has been consistent since then and it would be unusual to have a surge in demand at this point."
SOA Software buys LogicLibrary
Matching up critical components in the SOA space, SOA Software, which provides SOA governance automation, said Monday it has acquired SOA repository and governance vendor LogicLibrary.
The combination creates an integrated SOA automation solution, SOA Software said. Enterprises can accelerate adoption of SOA with rapid delivery of services for distributed and mainframe environments, the company said.
The addition of LogicLibrary technology extends SOA Software integration capabilities across governed deployment platforms, such as IBM, JBoss, Microsoft, and SAP, SOA Software said.
"Basically, what LogicLibrary brings to us is SOA asset lifecycle management as well as SOA development governance and SOA repository," said Roberto Medrano, executive vice president at SOA Software. "Those are important to complete our integrated SOA governance [portfolio]."
"From our standpoint, this provides complementary technology so we can provide [an] end-to-end integrated governance solution," added Brent Carlson, who was founder and CTO of LogicLibrary and now has become senior vice president of technology for SOA Software. The merger provides a natural fit between the SOA Software Workbench for software policy governance and the LogicLibrary Logidex repository, Carlson said.
SOA Software did not release the monetary value of the transaction. The deal closed last week.
The combination creates an integrated SOA automation solution, SOA Software said. Enterprises can accelerate adoption of SOA with rapid delivery of services for distributed and mainframe environments, the company said.
The addition of LogicLibrary technology extends SOA Software integration capabilities across governed deployment platforms, such as IBM, JBoss, Microsoft, and SAP, SOA Software said.
"Basically, what LogicLibrary brings to us is SOA asset lifecycle management as well as SOA development governance and SOA repository," said Roberto Medrano, executive vice president at SOA Software. "Those are important to complete our integrated SOA governance [portfolio]."
"From our standpoint, this provides complementary technology so we can provide [an] end-to-end integrated governance solution," added Brent Carlson, who was founder and CTO of LogicLibrary and now has become senior vice president of technology for SOA Software. The merger provides a natural fit between the SOA Software Workbench for software policy governance and the LogicLibrary Logidex repository, Carlson said.
SOA Software did not release the monetary value of the transaction. The deal closed last week.
Hacker posts Chilean government data on 6 million
An anonymous hacker has posted personal data about 6 million Chilean residents on the Internet, highlighting wider privacy problems in the country.
The data was posted early Saturday morning on Fayerwayer.com, a popular Chilean technology blog.
The hacker, who calls himself "Anonymous Coward," posted three compressed files of data that included names, addresses, telephone numbers and taxpayer identification numbers for Chilean residents, said Leo Prieto, Fayerwayer.com's director.
A site editor spotted the data, posted in Fayerwayer's comments section, at 2 a.m. local time on Saturday. He immediately removed the files and contacted Chilean police, who responded two hours later, Prieto said.
But over the following days the files started popping up on other sites including Google's Blogger, Prieto said. "There's never been anything like this," he said. "People are alarmed."
In a note accompanying the files, Anonymous Coward said he posted the databases to draw attention to the poor data protection measures in the country of 16 million people.
The files include tips on what to do with the data and how best to access it.
"If you're going to extract data from a server, it's recommended to make a script that doesn't connect directly to the server, but rather via [anonymous proxies]," the hacker wrote.
Anonymous Coward also claimed that the files include information on the daughter of Chilean president Michelle Bachelet. "Bachelet's daughter has a school pass, although it's not given to many people because their parents have earnings above a certain threshold," he wrote.
The data breach has been front page news in Chile, where it was first reported Sunday by the newspaper El Mercurio.
The publicity has focused the country's attention on both government IT security and also the country's lax privacy laws. For example, Chile's department of elections sells voter data including gender, name, address, nationality, date of birth, and information on disabilities.
Voter registration information is also sold in the U.S., but it can be used only for political purposes. In Chile there is apparently no such restriction.
Before his site became the center of this public firestorm, Prieto said he had no idea that his data could be sold. "There's no such thing as private information in Chile," he said.
(Juan Carlos Perez in Miami contributed to this report.)
The data was posted early Saturday morning on Fayerwayer.com, a popular Chilean technology blog.
The hacker, who calls himself "Anonymous Coward," posted three compressed files of data that included names, addresses, telephone numbers and taxpayer identification numbers for Chilean residents, said Leo Prieto, Fayerwayer.com's director.
A site editor spotted the data, posted in Fayerwayer's comments section, at 2 a.m. local time on Saturday. He immediately removed the files and contacted Chilean police, who responded two hours later, Prieto said.
But over the following days the files started popping up on other sites including Google's Blogger, Prieto said. "There's never been anything like this," he said. "People are alarmed."
In a note accompanying the files, Anonymous Coward said he posted the databases to draw attention to the poor data protection measures in the country of 16 million people.
The files include tips on what to do with the data and how best to access it.
"If you're going to extract data from a server, it's recommended to make a script that doesn't connect directly to the server, but rather via [anonymous proxies]," the hacker wrote.
Anonymous Coward also claimed that the files include information on the daughter of Chilean president Michelle Bachelet. "Bachelet's daughter has a school pass, although it's not given to many people because their parents have earnings above a certain threshold," he wrote.
The data breach has been front page news in Chile, where it was first reported Sunday by the newspaper El Mercurio.
The publicity has focused the country's attention on both government IT security and also the country's lax privacy laws. For example, Chile's department of elections sells voter data including gender, name, address, nationality, date of birth, and information on disabilities.
Voter registration information is also sold in the U.S., but it can be used only for political purposes. In Chile there is apparently no such restriction.
Before his site became the center of this public firestorm, Prieto said he had no idea that his data could be sold. "There's no such thing as private information in Chile," he said.
(Juan Carlos Perez in Miami contributed to this report.)
Over 500,000 sites hacked in latest mass-scale attack
More than half a million Web sites have been compromised in a new round of attacks that hacked domains in order to infect unsuspecting users' PCs with a variety of malware, a security researcher said today.
"This is an on-going campaign, with new domains [hosting the malware] popping up even this morning," said Paul Ferguson, a network architect with anti-virus vendor Trend Micro. "The domains are changing constantly."
According to Ferguson, over half a million legitimate Web sites have been hacked by today's mass-scale attack, only the latest in a string that goes back to at least January. All of the sites, he confirmed, are running "phpBB," an open-source message forum manager.
Ferguson didn't know how the sites were compromised; Trend Micro's investigation is in progress, he said. "We're not sure if it's [because of] improper configuration of phpBB or a vulnerability. Open-source applications like phpBB tend to be targeted quite a bit."
Visitors to a hacked site are redirected through a series of servers, some clearly compromised themselves, until the last in the chain is reached; that server then pings the PC for any one of several vulnerabilities, including bugs in both Microsoft Corp.'s Internet Explorer and RealNetworks Inc.'s RealPlayer media player. If any of the vulnerabilities is present, the PC is exploited and malware is downloaded to it.
Some of the compromised sites have been hijacked before, said Ferguson. "Some had recently been used for keyword search ranking manipulation, and others to pitch fake pharmaceuticals or just malware," he said.
While other research by Trend Micro identified the malware hitting users' PCs as a variant of the Zlob Trojan horse, Ferguson said that more than just one piece of malware is being served. "We seeing some new stuff coming out of this one," he said.
The last massive site attack was less than three weeks ago, when sites that included government URLs in the U.K. and some domains operated by the United Nations were hacked. At the time, some researchers said that bugs in Microsoft's SQL Server or Internet Information Services (IIS) server software was to blame. A few days later, however, Microsoft denied responsibility.
Don't expect the run of site infections to stop anytime soon, said Trend Micro's Ferguson. "As long as attacks are tied to site development and as long as sites don't secure their content, we'll see these attacks," he said.
"This is an on-going campaign, with new domains [hosting the malware] popping up even this morning," said Paul Ferguson, a network architect with anti-virus vendor Trend Micro. "The domains are changing constantly."
According to Ferguson, over half a million legitimate Web sites have been hacked by today's mass-scale attack, only the latest in a string that goes back to at least January. All of the sites, he confirmed, are running "phpBB," an open-source message forum manager.
Ferguson didn't know how the sites were compromised; Trend Micro's investigation is in progress, he said. "We're not sure if it's [because of] improper configuration of phpBB or a vulnerability. Open-source applications like phpBB tend to be targeted quite a bit."
Visitors to a hacked site are redirected through a series of servers, some clearly compromised themselves, until the last in the chain is reached; that server then pings the PC for any one of several vulnerabilities, including bugs in both Microsoft Corp.'s Internet Explorer and RealNetworks Inc.'s RealPlayer media player. If any of the vulnerabilities is present, the PC is exploited and malware is downloaded to it.
Some of the compromised sites have been hijacked before, said Ferguson. "Some had recently been used for keyword search ranking manipulation, and others to pitch fake pharmaceuticals or just malware," he said.
While other research by Trend Micro identified the malware hitting users' PCs as a variant of the Zlob Trojan horse, Ferguson said that more than just one piece of malware is being served. "We seeing some new stuff coming out of this one," he said.
The last massive site attack was less than three weeks ago, when sites that included government URLs in the U.K. and some domains operated by the United Nations were hacked. At the time, some researchers said that bugs in Microsoft's SQL Server or Internet Information Services (IIS) server software was to blame. A few days later, however, Microsoft denied responsibility.
Don't expect the run of site infections to stop anytime soon, said Trend Micro's Ferguson. "As long as attacks are tied to site development and as long as sites don't secure their content, we'll see these attacks," he said.
HP in talks to buy EDS for up to $13 billion
Hewlett-Packard is close to acquiring IT services company Electronic Data Systems for around $13 billion, according to a report in the Wall Street Journal published on Monday.
The deal could be announced as early as Tuesday, according to the news report, which cited sources close to the matter.
The acquisition could boost HP's services business.
A spokeswoman from HP declined comment.
The deal could be announced as early as Tuesday, according to the news report, which cited sources close to the matter.
The acquisition could boost HP's services business.
A spokeswoman from HP declined comment.
Google Friend Connect serves up social networking
Google Monday released a preview version of Friend Connect, a service designed to let Web publishers add social networking features to their sites.
Friend Connect, which will be available on the Web at some point on Monday, lets publishers add social networking applications by inserting "a snippet of code" in their sites, Google said.
"We're seeing social capabilities get baked into the infrastructure of the Web. [They're] increasingly not tied to any one site, to any one source of friends, or any one type of application. We see the Web moving towards an end state where people can use any apps on any Web sites with any of their friends," said David Glazer, director of engineering at Google, during a press conference to discuss Friend Connect.
Thus, sites will be able to add features like user registration, friends invitation and message posting, as well as allow visitors to interact with existing friends in social networking sites like Facebook, Google's Orkut, Plaxo and Hi5, according to Google.
"Google Friend Connect is like giving Webmasters a saltshaker full of 'social' that they can sprinkle on their sites to add social capabilities," Glazer said.
Google's move is yet another in a recent string of data-portability efforts at tearing down the walls in social networking sites and letting users export the data and content they have stored in those sites. MySpace and Facebook took steps in that direction with announcements last week.
As the popularity of social networks keeps rising and people set up multiple profiles in such sites, they are demanding the ability to carry their data, content and connections from one site to another, so that they don't have to reenter all that information again.
At the same time, Web publishers of all sizes are eager to latch on to the craze by adding social networking features to their sites, now that a critical mass of Internet users have embraced the interaction and sharing that social applications provide.
Friend Connect makes use of open standards for authentication and authorization like OpenID and OAuth, and de facto makes any Web site a potential "container" of social applications built with Google's OpenSocial APIs, Glazer said.
"The entire Web has become a container for OpenSocial apps," he said.
Monday night, Web publishers will be able to sign up to a waiting list to get access to the Friend Connect service, but Google expects to make the service available to anyone within a matter of months, officials said.
Friend Connect, which will be available on the Web at some point on Monday, lets publishers add social networking applications by inserting "a snippet of code" in their sites, Google said.
"We're seeing social capabilities get baked into the infrastructure of the Web. [They're] increasingly not tied to any one site, to any one source of friends, or any one type of application. We see the Web moving towards an end state where people can use any apps on any Web sites with any of their friends," said David Glazer, director of engineering at Google, during a press conference to discuss Friend Connect.
Thus, sites will be able to add features like user registration, friends invitation and message posting, as well as allow visitors to interact with existing friends in social networking sites like Facebook, Google's Orkut, Plaxo and Hi5, according to Google.
"Google Friend Connect is like giving Webmasters a saltshaker full of 'social' that they can sprinkle on their sites to add social capabilities," Glazer said.
Google's move is yet another in a recent string of data-portability efforts at tearing down the walls in social networking sites and letting users export the data and content they have stored in those sites. MySpace and Facebook took steps in that direction with announcements last week.
As the popularity of social networks keeps rising and people set up multiple profiles in such sites, they are demanding the ability to carry their data, content and connections from one site to another, so that they don't have to reenter all that information again.
At the same time, Web publishers of all sizes are eager to latch on to the craze by adding social networking features to their sites, now that a critical mass of Internet users have embraced the interaction and sharing that social applications provide.
Friend Connect makes use of open standards for authentication and authorization like OpenID and OAuth, and de facto makes any Web site a potential "container" of social applications built with Google's OpenSocial APIs, Glazer said.
"The entire Web has become a container for OpenSocial apps," he said.
Monday night, Web publishers will be able to sign up to a waiting list to get access to the Friend Connect service, but Google expects to make the service available to anyone within a matter of months, officials said.
Mozilla slates Firefox 3.0 RC1 for late May
Mozilla Corp. announced that it has stopped making changes to the first release candidate of Firefox 3.0 and is working to get that build to users by the end of the month.
"We are code complete for Firefox 3 Release Candidate 1 (RC1)," said Mike Schroepfer, Mozilla's vice president of engineering, in a post to the company's development blog on Saturday. "If all goes well we should have the Release Candidate publicly available in late May."
The release candidate -- typically the final stage before software goes final -- will be pushed to more than 1.2 million users when it launches, Schroepfer said.
It's possible that RC1 will be the one and only release candidate. "The QA cycle for RC1 is more extensive than the betas since this may be our last milestone," Schroepfer said in a message posted to the "mozilla.dev.planning" message forum. However, if serious bugs are uncovered, "we will continue to release new Release Candidates until we are ready for final ship," he said.
Mozilla developers quashed several bugs starting Friday morning to make the Saturday "code freeze" deadline, according to the mozilla.dev.planning forum. Among the fixed flaws was a regression bug that made Firefox 3.0 incorrectly convert characters when loading URLs.
Mozilla issued three release candidates in the run-up to the final code of Firefox 2.0 in 2006; as recently as late March Schroepfer said that he expected Firefox 3.0 to follow that same pattern.
The open-source developer last updated its under-construction Firefox 3.0 nearly six weeks ago when it released Beta 5 to testers. Days before that, Schroepfer said Mozilla was shooting for an early-May RC1, but warned that that target might slip. "The release candidates will move a little slower than beta," he said in late March, because of the need to account for more public feedback than with earlier builds.
Also in late March, Schroepfer said that the final version of Firefox would likely ship in June. Monday, he said that Mozilla is still on track for a final release by the end of next month.
Firefox currently accounts for about 17.7% of the browser market, according to Net Applications Inc.'s most recent data. Microsoft Corp.'s Internet Explorer retains the browser lead with 74.8%, while Apple Inc.'s Safari holds down third place with 5.8%.
"We are code complete for Firefox 3 Release Candidate 1 (RC1)," said Mike Schroepfer, Mozilla's vice president of engineering, in a post to the company's development blog on Saturday. "If all goes well we should have the Release Candidate publicly available in late May."
The release candidate -- typically the final stage before software goes final -- will be pushed to more than 1.2 million users when it launches, Schroepfer said.
It's possible that RC1 will be the one and only release candidate. "The QA cycle for RC1 is more extensive than the betas since this may be our last milestone," Schroepfer said in a message posted to the "mozilla.dev.planning" message forum. However, if serious bugs are uncovered, "we will continue to release new Release Candidates until we are ready for final ship," he said.
Mozilla developers quashed several bugs starting Friday morning to make the Saturday "code freeze" deadline, according to the mozilla.dev.planning forum. Among the fixed flaws was a regression bug that made Firefox 3.0 incorrectly convert characters when loading URLs.
Mozilla issued three release candidates in the run-up to the final code of Firefox 2.0 in 2006; as recently as late March Schroepfer said that he expected Firefox 3.0 to follow that same pattern.
The open-source developer last updated its under-construction Firefox 3.0 nearly six weeks ago when it released Beta 5 to testers. Days before that, Schroepfer said Mozilla was shooting for an early-May RC1, but warned that that target might slip. "The release candidates will move a little slower than beta," he said in late March, because of the need to account for more public feedback than with earlier builds.
Also in late March, Schroepfer said that the final version of Firefox would likely ship in June. Monday, he said that Mozilla is still on track for a final release by the end of next month.
Firefox currently accounts for about 17.7% of the browser market, according to Net Applications Inc.'s most recent data. Microsoft Corp.'s Internet Explorer retains the browser lead with 74.8%, while Apple Inc.'s Safari holds down third place with 5.8%.
Srizbi grows into world's largest botnet
The prodigious Srizbi botnet has continued to grow and now accounts for up to 50 percent of the spam being filtered by one security company.
If the latest figures from security company Marshal can be taken at face value -- their engines scan much the same traffic as do others in the industry -- then Srizbi is now the biggest single menace on the Internet, dwarfing even the feared and mysterious Storm.
Having compromised 300,000 PCs around the world, it was now sending out an estimated 60 billion spam emails per day on "watches, pens, male enlargement pills", a torrent that consumed huge amounts of processing power to keep in check.
"Srizbi is the single greatest spam threat we have ever seen. At its peak, the highly publicized Storm botnet only accounted for 20 percent of spam. Srizbi now produces more spam than all the other botnets combined." said Marshal's Bradley Anstis.
In March of this year, Marshall's Threat Research and Content Engineering team (TRACE) reported the botnet as a growing problem among a small family of super-botnets, a sign that a few highly-successful bots were starting to monopolize traffic.
If it's growing, what is it about this botnet that has made it so successful? Srizbi appears to spread by as part of the spam messages it sends, meaning that its lifecycle extends to reproducing itself and not just distributing email. This is not a unique feature, but it could be that it is either evading detection at this stage or tricking people using more sophisticated social engineering.
What makes Srizbi slightly baffling is that botnet controllers like bots to stay away for the headlines. At the point they become as large as Srizbi has become, the chances of them being detected and countered increases. It's possible that Srizbi has been more successful that its creators expected.
If there's hope, it's in the fate of the infamous Storm, which appeared in early 2007, and became the malware phenomenon of that year. Marshall's figures suggest it now accounts for less than 1 percent of spam traffic, which suggests that Sribzi will one day go the same way. However, by the time that this happens, it is also possible that a new super-botnet will have taken its place.
"Microsoft recently announced its success combating the Storm botnet with their Malicious Software Removal Tool (MSRT). The challenge now is for the security industry to collectively turn its sights on Srizbi and the other major botnets. We look forward to seeing Microsoft target Srizbi with MSRT in the near future," said Marshal's Anstis.
If the latest figures from security company Marshal can be taken at face value -- their engines scan much the same traffic as do others in the industry -- then Srizbi is now the biggest single menace on the Internet, dwarfing even the feared and mysterious Storm.
Having compromised 300,000 PCs around the world, it was now sending out an estimated 60 billion spam emails per day on "watches, pens, male enlargement pills", a torrent that consumed huge amounts of processing power to keep in check.
"Srizbi is the single greatest spam threat we have ever seen. At its peak, the highly publicized Storm botnet only accounted for 20 percent of spam. Srizbi now produces more spam than all the other botnets combined." said Marshal's Bradley Anstis.
In March of this year, Marshall's Threat Research and Content Engineering team (TRACE) reported the botnet as a growing problem among a small family of super-botnets, a sign that a few highly-successful bots were starting to monopolize traffic.
If it's growing, what is it about this botnet that has made it so successful? Srizbi appears to spread by as part of the spam messages it sends, meaning that its lifecycle extends to reproducing itself and not just distributing email. This is not a unique feature, but it could be that it is either evading detection at this stage or tricking people using more sophisticated social engineering.
What makes Srizbi slightly baffling is that botnet controllers like bots to stay away for the headlines. At the point they become as large as Srizbi has become, the chances of them being detected and countered increases. It's possible that Srizbi has been more successful that its creators expected.
If there's hope, it's in the fate of the infamous Storm, which appeared in early 2007, and became the malware phenomenon of that year. Marshall's figures suggest it now accounts for less than 1 percent of spam traffic, which suggests that Sribzi will one day go the same way. However, by the time that this happens, it is also possible that a new super-botnet will have taken its place.
"Microsoft recently announced its success combating the Storm botnet with their Malicious Software Removal Tool (MSRT). The challenge now is for the security industry to collectively turn its sights on Srizbi and the other major botnets. We look forward to seeing Microsoft target Srizbi with MSRT in the near future," said Marshal's Anstis.
Srizbi grows into world's largest botnet
The prodigious Srizbi botnet has continued to grow and now accounts for up to 50 percent of the spam being filtered by one security company.
If the latest figures from security company Marshal can be taken at face value -- their engines scan much the same traffic as do others in the industry -- then Srizbi is now the biggest single menace on the Internet, dwarfing even the feared and mysterious Storm.
Having compromised 300,000 PCs around the world, it was now sending out an estimated 60 billion spam emails per day on "watches, pens, male enlargement pills", a torrent that consumed huge amounts of processing power to keep in check.
"Srizbi is the single greatest spam threat we have ever seen. At its peak, the highly publicized Storm botnet only accounted for 20 percent of spam. Srizbi now produces more spam than all the other botnets combined." said Marshal's Bradley Anstis.
In March of this year, Marshall's Threat Research and Content Engineering team (TRACE) reported the botnet as a growing problem among a small family of super-botnets, a sign that a few highly-successful bots were starting to monopolize traffic.
If it's growing, what is it about this botnet that has made it so successful? Srizbi appears to spread by as part of the spam messages it sends, meaning that its lifecycle extends to reproducing itself and not just distributing email. This is not a unique feature, but it could be that it is either evading detection at this stage or tricking people using more sophisticated social engineering.
What makes Srizbi slightly baffling is that botnet controllers like bots to stay away for the headlines. At the point they become as large as Srizbi has become, the chances of them being detected and countered increases. It's possible that Srizbi has been more successful that its creators expected.
If there's hope, it's in the fate of the infamous Storm, which appeared in early 2007, and became the malware phenomenon of that year. Marshall's figures suggest it now accounts for less than 1 percent of spam traffic, which suggests that Sribzi will one day go the same way. However, by the time that this happens, it is also possible that a new super-botnet will have taken its place.
"Microsoft recently announced its success combating the Storm botnet with their Malicious Software Removal Tool (MSRT). The challenge now is for the security industry to collectively turn its sights on Srizbi and the other major botnets. We look forward to seeing Microsoft target Srizbi with MSRT in the near future," said Marshal's Anstis.
If the latest figures from security company Marshal can be taken at face value -- their engines scan much the same traffic as do others in the industry -- then Srizbi is now the biggest single menace on the Internet, dwarfing even the feared and mysterious Storm.
Having compromised 300,000 PCs around the world, it was now sending out an estimated 60 billion spam emails per day on "watches, pens, male enlargement pills", a torrent that consumed huge amounts of processing power to keep in check.
"Srizbi is the single greatest spam threat we have ever seen. At its peak, the highly publicized Storm botnet only accounted for 20 percent of spam. Srizbi now produces more spam than all the other botnets combined." said Marshal's Bradley Anstis.
In March of this year, Marshall's Threat Research and Content Engineering team (TRACE) reported the botnet as a growing problem among a small family of super-botnets, a sign that a few highly-successful bots were starting to monopolize traffic.
If it's growing, what is it about this botnet that has made it so successful? Srizbi appears to spread by as part of the spam messages it sends, meaning that its lifecycle extends to reproducing itself and not just distributing email. This is not a unique feature, but it could be that it is either evading detection at this stage or tricking people using more sophisticated social engineering.
What makes Srizbi slightly baffling is that botnet controllers like bots to stay away for the headlines. At the point they become as large as Srizbi has become, the chances of them being detected and countered increases. It's possible that Srizbi has been more successful that its creators expected.
If there's hope, it's in the fate of the infamous Storm, which appeared in early 2007, and became the malware phenomenon of that year. Marshall's figures suggest it now accounts for less than 1 percent of spam traffic, which suggests that Sribzi will one day go the same way. However, by the time that this happens, it is also possible that a new super-botnet will have taken its place.
"Microsoft recently announced its success combating the Storm botnet with their Malicious Software Removal Tool (MSRT). The challenge now is for the security industry to collectively turn its sights on Srizbi and the other major botnets. We look forward to seeing Microsoft target Srizbi with MSRT in the near future," said Marshal's Anstis.
Hackers create their own social network
Hackers now have their own social network, backed by GnuCitizen, a high-profile "ethical hacking" group.
The network, called House of Hackers, has signed up more than 1,000 members since its launch earlier this week, according to the site.
GnuCitizen set up the network in order to promote collaboration among security researchers. The site's founders said they use "hacker" in the complementary sense.
The term "should all express admiration for the work of the most skilled, creative, clever, unique, provocative, intelligent, intense, intriguing and interesting people among the human society," said GnuCitizen in a message on the House of Hackers website.
"From our perspective, a hacker is a person people express admiration for his/her work, skills, creative edge, cleverness, uniqueness, intelligence, etc," said GnuCitizen founder Petko D. Petkov in a blog post.
"We do not promote criminal activities. The network is designed to enable its members to exchange ideas with each other, communicate, form groups, elite circles and tiger/red teams, conglomerate around projects and participate in a hacker recruitment market."
Petkov said the ability to create groups on the network could be useful for setting up ad-hoc penetration testing teams. He suggested organizers could use the site's events features to test the water for planned events.
GnuCitizen is encouraging businesses to use the site to seek out security researchers for jobs or particular projects.
The network is built on Ning, a site allowing the creation of ad-hoc social networks, and programmers can create customized add-ons using the Google-backed Open Social API, meaning the add-ons are reusable on other sites.
GnuCitizen was founded in 2005 and has been credited with some high-profile security research of late, including vulnerabilities involving SNMP and BT Home Hub Wi-Fi routers.
The network, called House of Hackers, has signed up more than 1,000 members since its launch earlier this week, according to the site.
GnuCitizen set up the network in order to promote collaboration among security researchers. The site's founders said they use "hacker" in the complementary sense.
The term "should all express admiration for the work of the most skilled, creative, clever, unique, provocative, intelligent, intense, intriguing and interesting people among the human society," said GnuCitizen in a message on the House of Hackers website.
"From our perspective, a hacker is a person people express admiration for his/her work, skills, creative edge, cleverness, uniqueness, intelligence, etc," said GnuCitizen founder Petko D. Petkov in a blog post.
"We do not promote criminal activities. The network is designed to enable its members to exchange ideas with each other, communicate, form groups, elite circles and tiger/red teams, conglomerate around projects and participate in a hacker recruitment market."
Petkov said the ability to create groups on the network could be useful for setting up ad-hoc penetration testing teams. He suggested organizers could use the site's events features to test the water for planned events.
GnuCitizen is encouraging businesses to use the site to seek out security researchers for jobs or particular projects.
The network is built on Ning, a site allowing the creation of ad-hoc social networks, and programmers can create customized add-ons using the Google-backed Open Social API, meaning the add-ons are reusable on other sites.
GnuCitizen was founded in 2005 and has been credited with some high-profile security research of late, including vulnerabilities involving SNMP and BT Home Hub Wi-Fi routers.
BlackBerry Bold beats iPhone to 3G
Amid swirling rumors about the impending announcement of a 3G iPhone, Research in Motion today introduced its slickest, speediest, most powerful, and most connected BlackBerry to date: the BlackBerry Bold 9000.
Equipped with support for tri-band HSDPA and quad-band EDGE (which means that it will support the highest-speed GSM-family data networks wherever they are available worldwide), 802.11a/b/g Wi-Fi, stereo Bluetooth, and both assisted and autonomous GPS, the Bold could prove a formidable challenger to Apple's next-gen iPhone on connectivity alone.
It even looks a bit iPhone-esque, with its glassy display area, generally flat profile, and rounded corners. Still, the Bold comes configured with a hardware QWERTY keyboard, and it retains the general dimensions of its predecessors, so it's much shorter and somewhat thicker than the iPhone.
The Bold's removable back is covered in black leatherette, and you'll be able to personalize the device by buying replacement backs in different colors (blue, brown, green, gray, and red).
The redesigned keyboard has guitar-inspired frets--thin metal strips--between each row. The keys themselves are sculpted to help users avoid fingertip slippage. The device also carries a 2-megapixel camera capable of up to 5X digital zoom.
Fast CPU, High-Res Display
The Bold's 624-MHz StrongARM processor with full MMX (multimedia extensions) is the most powerful CPU on a handheld to date (the BlackBerry Curve, in contrast, uses a 312-MHz chip without MMX). The Bold's extra power enables the device to handle full-motion video on its 480-by-320-pixel, 65,000-plus-color display (that resolution is double the Curve's at basically the same screen size): In a demo at PC World's offices last week, video clips on the Bold looked smooth and exceptionally sharp.
Of course, little commercial video content is available as yet for non-Apple media players. Further, the Bold's screen is diminutive compared to the current iPhone's roomy 3.5-inch display, and it isn't a touch screen. (RIM president and co-CEO Mike Lazaridis simply smiled when we asked about reports that the company is working on a touch-screen BlackBerry).
But since the Bold's smaller display holds the same number of pixels as the current iPhone's, images look much higher-res on it than on its competitor.
The Bold's 1GB of on-board secure memory (on top of its 128MB of flash) will appeal to BlackBerry's core enterprise community, providing storage for items that companies would rather not make available for transport on a micro SD card. But users who want to carry their music and video libraries on their handsets will be able to do so via micro SD.
Carriers will determine pricing, and RIM had no details on which U.S. carrier will introduce the Bold (though AT&T, with the largest HSDPA network in the United States, seems a likelier candidate than T-Mobile, which has just begun to roll out 3G service stateside). RIM said that it expects the Bold to be shipping worldwide this summer.
Equipped with support for tri-band HSDPA and quad-band EDGE (which means that it will support the highest-speed GSM-family data networks wherever they are available worldwide), 802.11a/b/g Wi-Fi, stereo Bluetooth, and both assisted and autonomous GPS, the Bold could prove a formidable challenger to Apple's next-gen iPhone on connectivity alone.
It even looks a bit iPhone-esque, with its glassy display area, generally flat profile, and rounded corners. Still, the Bold comes configured with a hardware QWERTY keyboard, and it retains the general dimensions of its predecessors, so it's much shorter and somewhat thicker than the iPhone.
The Bold's removable back is covered in black leatherette, and you'll be able to personalize the device by buying replacement backs in different colors (blue, brown, green, gray, and red).
The redesigned keyboard has guitar-inspired frets--thin metal strips--between each row. The keys themselves are sculpted to help users avoid fingertip slippage. The device also carries a 2-megapixel camera capable of up to 5X digital zoom.
Fast CPU, High-Res Display
The Bold's 624-MHz StrongARM processor with full MMX (multimedia extensions) is the most powerful CPU on a handheld to date (the BlackBerry Curve, in contrast, uses a 312-MHz chip without MMX). The Bold's extra power enables the device to handle full-motion video on its 480-by-320-pixel, 65,000-plus-color display (that resolution is double the Curve's at basically the same screen size): In a demo at PC World's offices last week, video clips on the Bold looked smooth and exceptionally sharp.
Of course, little commercial video content is available as yet for non-Apple media players. Further, the Bold's screen is diminutive compared to the current iPhone's roomy 3.5-inch display, and it isn't a touch screen. (RIM president and co-CEO Mike Lazaridis simply smiled when we asked about reports that the company is working on a touch-screen BlackBerry).
But since the Bold's smaller display holds the same number of pixels as the current iPhone's, images look much higher-res on it than on its competitor.
The Bold's 1GB of on-board secure memory (on top of its 128MB of flash) will appeal to BlackBerry's core enterprise community, providing storage for items that companies would rather not make available for transport on a micro SD card. But users who want to carry their music and video libraries on their handsets will be able to do so via micro SD.
Carriers will determine pricing, and RIM had no details on which U.S. carrier will introduce the Bold (though AT&T, with the largest HSDPA network in the United States, seems a likelier candidate than T-Mobile, which has just begun to roll out 3G service stateside). RIM said that it expects the Bold to be shipping worldwide this summer.
AMD refreshes low-power Quad-Core Opterons lineup
Advanced Micro Devices is shipping B3 versions of its low-power Quad-Core Opteron processors.
AMD first detailed these processors in September 2007, when it unveiled the Quad-Core Opteron processor. However, earlier versions of the chips were affected by a bug discovered in December that reportedly forced AMD to suspend some processor shipments. The B3 version of the chips announced Monday fixed that bug.
The five chips run at clock speeds ranging from 1.7GHz to 1.9GHz. Three of the chips -- the 2344 HE, 2346 HE, and 2347HE -- are designed for servers with two processors, while the other two -- the 8346 HE and 8347 HE -- can be used in servers with four or eight processors. They are priced from US$255 to $873 in 1,000-unit quantities, a standard way of quoting chip prices.
The low-power Quad-Core Opteron chips have an average power consumption of 55 watts, AMD said.
AMD first detailed these processors in September 2007, when it unveiled the Quad-Core Opteron processor. However, earlier versions of the chips were affected by a bug discovered in December that reportedly forced AMD to suspend some processor shipments. The B3 version of the chips announced Monday fixed that bug.
The five chips run at clock speeds ranging from 1.7GHz to 1.9GHz. Three of the chips -- the 2344 HE, 2346 HE, and 2347HE -- are designed for servers with two processors, while the other two -- the 8346 HE and 8347 HE -- can be used in servers with four or eight processors. They are priced from US$255 to $873 in 1,000-unit quantities, a standard way of quoting chip prices.
The low-power Quad-Core Opteron chips have an average power consumption of 55 watts, AMD said.
MSI's upcoming Wind laptop priced from $560
Taiwanese hardware maker Micro-Star International's upcoming Wind laptop can be preordered starting from US$560.
The Wind, which is expected to use Intel's upcoming 1.6GHz Atom N270 processor, is just one of an expected flood of low-cost systems based on the new chip that will be on show at the Computex exhibition in Taipei during June.
While the Atom processor has yet to be released by Intel, online retailer Expansys has begun accepting orders for the U.K. version of the Wind running either Windows XP Home for $604 or Linux for $560. The laptops are available in three colors: white, black and pink.
The same laptops are priced at £350 ($684) and £320, respectively, on Expansys' U.K. Web site.
The Wind systems available for preorder on Expansys have a 10-inch screen with a resolution of 1,024 pixels by 768 pixels and an LED (light-emitting diode) backlight, which helps lower power consumption. The system, which weighs roughly 1 kilogram (2.2 pounds), also ships with 1G byte of memory, Wi-Fi, Bluetooth, a 1.3-megapixel camera, and an 80G-byte hard drive.
Expansys did not list pricing for a planned version of the Wind that has an 8.9-inch screen.
The Wind, which is expected to use Intel's upcoming 1.6GHz Atom N270 processor, is just one of an expected flood of low-cost systems based on the new chip that will be on show at the Computex exhibition in Taipei during June.
While the Atom processor has yet to be released by Intel, online retailer Expansys has begun accepting orders for the U.K. version of the Wind running either Windows XP Home for $604 or Linux for $560. The laptops are available in three colors: white, black and pink.
The same laptops are priced at £350 ($684) and £320, respectively, on Expansys' U.K. Web site.
The Wind systems available for preorder on Expansys have a 10-inch screen with a resolution of 1,024 pixels by 768 pixels and an LED (light-emitting diode) backlight, which helps lower power consumption. The system, which weighs roughly 1 kilogram (2.2 pounds), also ships with 1G byte of memory, Wi-Fi, Bluetooth, a 1.3-megapixel camera, and an 80G-byte hard drive.
Expansys did not list pricing for a planned version of the Wind that has an 8.9-inch screen.
Powerset unveils test version of Google-killer
The public will get its first chance Monday to test a search engine from start-up Powerset that eschews conventional keyword technology and instead is designed to understand the meaning of Web pages.
As such, Powerset's search engine holds the promise of fundamentally changing people's expectations for search engines by, in theory, offering a smarter, more efficient experience.
However, Powerset's beta version, while delivering impressive results, has a limited scope and index, leaving unanswered questions about its ability to work its magic at the massive scale of Google's keyword-based search engine.
"We're changing the way information is searched by doing a much deeper analysis of the pages we index," said Scott Prevost, Powerset's product director.
Keyword engines treat pages as word bags, indexing their content without grasping its meaning, he said. Meanwhile, Powerset's engine, applying technology developed in-house as well as licensed from Xerox's PARC subsidiary, creates a semantic representation by parsing each sentence and extracting its meaning. "Meaning is what we index," he said.
In an interview in October with IDG News Service, Marissa Mayer, Google's vice president of Search Products & User Experience, acknowledged that the company's search engine should -- and will -- overcome its keyword dependence in time.
"People should be able to ask questions and we should understand their meaning, or they should be able to talk about things at a conceptual level. We see a lot of concept-based questions -- not about what words will appear on the page but more like 'what is this about?'. A lot of people will turn to things like the semantic Web as a possible answer to that," she said.
But she added that Google's search engine acts smart thanks to the humongous amount of data it crunches. "With a lot of data, you ultimately see things that seem intelligent even though they're done through brute force," she said. As examples, she cited a query like "GM," which the engine interprets as "General Motors" but if the query is "GM foods," it delivers results for "genetically-modified foods." "Because we're processing so much data, we have a lot of context around things like acronyms. Suddenly, the search engine seems smart, like it achieved that semantic understanding, but it hasn't really," she said.
For now, Powerset's index is very limited, consisting only of millions of pages from Wikipedia and Metaweb Technologies' Freebase, a Web-based structured database of information. However, Prevost vows that the index will begin growing within a month after its launch and eventually rival in size those of Google, Yahoo and others. "Our technology fully scales," he said.
Still, it's impressive to see Powerset's search engine in action and the promise it holds. Instead of returning the proverbial 10 blue links for search results, Powerset can do more, such as assembling a collection of facts related to the query, as well as summarize the found information. It can also provide direct answers to factual questions.
Because the content from Wikipedia and Freebase can be re-published, Powerset can remain relevant after a user clicks on over to a search result, by providing an outline to navigate through the page and a summary of facts. This, of course, isn't something that Powerset could do with copyrighted content, but the company will seek partnerships with publishers to obtain permission, Prevost said. "We think it'll be a situation where publishers will want their content to be served up in this way," he said.
Industry analyst Greg Sterling of Sterling Market Intelligence calls Powerset's capabilities "impressive" and particularly likes its search results interface. "What they've created is both a better search engine for Wikipedia and a massive 'proof of concept' for their algorithm and technology," he said in an e-mail interview.
Now Powerset has to prove that its search engine can scale and deliver against an index of billions upon billions of Web pages and serving millions of concurrent end users. "There's certainly potential there to build a better mousetrap, it would appear. But bringing what Powerset has done for Wikipedia to the entire Internet seems an enormous challenge that will take both time and lots of additional resources," Sterling said.
Prevost acknowledges that to do this type of deep processing takes a lot of computational power, although once indexed, retrieving pages' information doesn't pose any special challenge.
Powerset also faces the challenges of a start-up technology company, such as generating revenue and going through growing pains. The company has already had some management upheaval, announcing in November the departure of co-founder and Chief Operating Officer Steve Newcomb and its search for a CEO, as co-founder Barney Pell gave up that post to become chief technology officer. "The CEO search is still in process, but we have a strong internal management structure and board of directors," he said.
Prevost said the company's investors are committed to the company and to seeing that it has the resources necessary to scale up the search engine to the level of those with indexes of 20 billion pages.
Powerset's business model is based on advertising, although the search engine will not serve up ads from the beginning. "There's a lot of cool stuff we can do in the ad space by matching the meaning of queries to the relevance of ads, but that's much more longer term," he said.
The search engine will be limited to Web search at first, although Powerset has contemplated adding specialty engines for things like images and video later, as well as targeting verticals such as health, product reviews and travel, he said.
"We've only shown the tip of the iceberg in language analysis," he said.
As such, Powerset's search engine holds the promise of fundamentally changing people's expectations for search engines by, in theory, offering a smarter, more efficient experience.
However, Powerset's beta version, while delivering impressive results, has a limited scope and index, leaving unanswered questions about its ability to work its magic at the massive scale of Google's keyword-based search engine.
"We're changing the way information is searched by doing a much deeper analysis of the pages we index," said Scott Prevost, Powerset's product director.
Keyword engines treat pages as word bags, indexing their content without grasping its meaning, he said. Meanwhile, Powerset's engine, applying technology developed in-house as well as licensed from Xerox's PARC subsidiary, creates a semantic representation by parsing each sentence and extracting its meaning. "Meaning is what we index," he said.
In an interview in October with IDG News Service, Marissa Mayer, Google's vice president of Search Products & User Experience, acknowledged that the company's search engine should -- and will -- overcome its keyword dependence in time.
"People should be able to ask questions and we should understand their meaning, or they should be able to talk about things at a conceptual level. We see a lot of concept-based questions -- not about what words will appear on the page but more like 'what is this about?'. A lot of people will turn to things like the semantic Web as a possible answer to that," she said.
But she added that Google's search engine acts smart thanks to the humongous amount of data it crunches. "With a lot of data, you ultimately see things that seem intelligent even though they're done through brute force," she said. As examples, she cited a query like "GM," which the engine interprets as "General Motors" but if the query is "GM foods," it delivers results for "genetically-modified foods." "Because we're processing so much data, we have a lot of context around things like acronyms. Suddenly, the search engine seems smart, like it achieved that semantic understanding, but it hasn't really," she said.
For now, Powerset's index is very limited, consisting only of millions of pages from Wikipedia and Metaweb Technologies' Freebase, a Web-based structured database of information. However, Prevost vows that the index will begin growing within a month after its launch and eventually rival in size those of Google, Yahoo and others. "Our technology fully scales," he said.
Still, it's impressive to see Powerset's search engine in action and the promise it holds. Instead of returning the proverbial 10 blue links for search results, Powerset can do more, such as assembling a collection of facts related to the query, as well as summarize the found information. It can also provide direct answers to factual questions.
Because the content from Wikipedia and Freebase can be re-published, Powerset can remain relevant after a user clicks on over to a search result, by providing an outline to navigate through the page and a summary of facts. This, of course, isn't something that Powerset could do with copyrighted content, but the company will seek partnerships with publishers to obtain permission, Prevost said. "We think it'll be a situation where publishers will want their content to be served up in this way," he said.
Industry analyst Greg Sterling of Sterling Market Intelligence calls Powerset's capabilities "impressive" and particularly likes its search results interface. "What they've created is both a better search engine for Wikipedia and a massive 'proof of concept' for their algorithm and technology," he said in an e-mail interview.
Now Powerset has to prove that its search engine can scale and deliver against an index of billions upon billions of Web pages and serving millions of concurrent end users. "There's certainly potential there to build a better mousetrap, it would appear. But bringing what Powerset has done for Wikipedia to the entire Internet seems an enormous challenge that will take both time and lots of additional resources," Sterling said.
Prevost acknowledges that to do this type of deep processing takes a lot of computational power, although once indexed, retrieving pages' information doesn't pose any special challenge.
Powerset also faces the challenges of a start-up technology company, such as generating revenue and going through growing pains. The company has already had some management upheaval, announcing in November the departure of co-founder and Chief Operating Officer Steve Newcomb and its search for a CEO, as co-founder Barney Pell gave up that post to become chief technology officer. "The CEO search is still in process, but we have a strong internal management structure and board of directors," he said.
Prevost said the company's investors are committed to the company and to seeing that it has the resources necessary to scale up the search engine to the level of those with indexes of 20 billion pages.
Powerset's business model is based on advertising, although the search engine will not serve up ads from the beginning. "There's a lot of cool stuff we can do in the ad space by matching the meaning of queries to the relevance of ads, but that's much more longer term," he said.
The search engine will be limited to Web search at first, although Powerset has contemplated adding specialty engines for things like images and video later, as well as targeting verticals such as health, product reviews and travel, he said.
"We've only shown the tip of the iceberg in language analysis," he said.
China earthquake takes out mobile network in Chengdu
An earthquake registering 7.8 on the Richter Scale knocked out mobile phone service in the western Chinese city of Chengdu, although fixed-line networks remained in service, Chinese state television reported Monday afternoon.
About 2,300 base stations were affected by power outages or transmission problems, China Mobile's Sichuan office told the state-run Xinhua News Agency, adding that repairs were under way. China is the nation's and world's largest mobile service provider.
Service was affected in both southwestern Sichuan province, and in northwestern Shaanxi province, Xinhua reported, although those two areas do not abut. China Mobile also said that call volume had increased by 10 times what is normal but connections were down by half as a result of the earthquake.
China's online video sites were quick to receive footage shot during the earthquake by users, footage that did not appear on CCTV's nightly newscast, which is carried by most major channels. One clip, labeled "Chengdu Earthquake," showed students in a classroom or dormitory room hiding under their desks, as debris falls from the ceiling. "Don't move, don't move, it's ok," the photographer says to a student who emerges from cover too quickly. Footage from Chengdu would also seem to confirm the availability of Internet service there.
The semiconductor industry and China's growing software outsourcing industry take advantage of Chengdu's status as China's fifth-largest city and southwest China's largest academic center.
Although the Chengdu region is not considered a major manufacturing center for semiconductors, Intel began semiconductor manufacturing there in 2005, and employs 600 at a testing and assembly facility in Chengdu.
"We are now determining if this has implications for Intel's operation in Chengdu. Our first priority is the safety of our people," said Danny Cheung, an Intel spokesman based in Singapore, in an e-mail.
Semiconductor Manufacturing International (SMIC) also operates a testing and assembly facility there, according to its Web site. Sources said that SMIC evacuated a fabrication plant and halted production as a result of the quake.
The earthquake occurred at 2:28 p.m. Beijing local time. The State Seismological Bureau (SSB) originally reported the quake registered at 7.6 on the Richter Scale, but later upgraded it to 7.8. The epicenter was approximately 55 kilometers (33 miles) northwest of Chengdu in Wenchuan County. Shaking lasted for approximately one minute, dislodging lights from ceiling fixtures and knocking over water coolers, a reporter told CCTV.
CCTV did not report aftershocks, but the U.S. Geological Service's Web site reported at least 10 by 8:45 p.m. Beijing local time. The quake was felt as far away as coastal Zhejiang province and Beijing. Beijing experienced a separate 3.9 earthquake at 2:35 p.m., the SSB confirmed.
CCTV's first pictures of the event, broadcast at 4:23 p.m. Beijing time, showed people talking on mobile handsets, although it is not known which networks they were using at the time. They showed traffic moving in the street, and a woman with her head bleeding getting into a car. Footage broadcast during the nightly newscast showed visible cracks in some residential buildings, but no collapsed structures or pictures of people injured or killed by the earthquake.
The strength of Monday's 7.8 earthquake equals China's most famous temblor in modern history, a July 1976 event in Tangshan, east of Beijing. Estimated deaths for the Tangshan earthquake range from over 200,000 to more than 700,000. So far, 107 people are confirmed dead as a result of the earthquake, and as many as 900 children may be buried at a high school in an unspecified location, according to the state-run Xinhua News Agency.
By the end of the day Monday, 8,533 people were confirmed dead as a result of the earthquake, and as many as 900 children may be buried at a high school in an unspecified location, according to the state-run Xinhua News Agency.
(Sumner Lemon in Singapore contributed to this report.)
About 2,300 base stations were affected by power outages or transmission problems, China Mobile's Sichuan office told the state-run Xinhua News Agency, adding that repairs were under way. China is the nation's and world's largest mobile service provider.
Service was affected in both southwestern Sichuan province, and in northwestern Shaanxi province, Xinhua reported, although those two areas do not abut. China Mobile also said that call volume had increased by 10 times what is normal but connections were down by half as a result of the earthquake.
China's online video sites were quick to receive footage shot during the earthquake by users, footage that did not appear on CCTV's nightly newscast, which is carried by most major channels. One clip, labeled "Chengdu Earthquake," showed students in a classroom or dormitory room hiding under their desks, as debris falls from the ceiling. "Don't move, don't move, it's ok," the photographer says to a student who emerges from cover too quickly. Footage from Chengdu would also seem to confirm the availability of Internet service there.
The semiconductor industry and China's growing software outsourcing industry take advantage of Chengdu's status as China's fifth-largest city and southwest China's largest academic center.
Although the Chengdu region is not considered a major manufacturing center for semiconductors, Intel began semiconductor manufacturing there in 2005, and employs 600 at a testing and assembly facility in Chengdu.
"We are now determining if this has implications for Intel's operation in Chengdu. Our first priority is the safety of our people," said Danny Cheung, an Intel spokesman based in Singapore, in an e-mail.
Semiconductor Manufacturing International (SMIC) also operates a testing and assembly facility there, according to its Web site. Sources said that SMIC evacuated a fabrication plant and halted production as a result of the quake.
The earthquake occurred at 2:28 p.m. Beijing local time. The State Seismological Bureau (SSB) originally reported the quake registered at 7.6 on the Richter Scale, but later upgraded it to 7.8. The epicenter was approximately 55 kilometers (33 miles) northwest of Chengdu in Wenchuan County. Shaking lasted for approximately one minute, dislodging lights from ceiling fixtures and knocking over water coolers, a reporter told CCTV.
CCTV did not report aftershocks, but the U.S. Geological Service's Web site reported at least 10 by 8:45 p.m. Beijing local time. The quake was felt as far away as coastal Zhejiang province and Beijing. Beijing experienced a separate 3.9 earthquake at 2:35 p.m., the SSB confirmed.
CCTV's first pictures of the event, broadcast at 4:23 p.m. Beijing time, showed people talking on mobile handsets, although it is not known which networks they were using at the time. They showed traffic moving in the street, and a woman with her head bleeding getting into a car. Footage broadcast during the nightly newscast showed visible cracks in some residential buildings, but no collapsed structures or pictures of people injured or killed by the earthquake.
The strength of Monday's 7.8 earthquake equals China's most famous temblor in modern history, a July 1976 event in Tangshan, east of Beijing. Estimated deaths for the Tangshan earthquake range from over 200,000 to more than 700,000. So far, 107 people are confirmed dead as a result of the earthquake, and as many as 900 children may be buried at a high school in an unspecified location, according to the state-run Xinhua News Agency.
By the end of the day Monday, 8,533 people were confirmed dead as a result of the earthquake, and as many as 900 children may be buried at a high school in an unspecified location, according to the state-run Xinhua News Agency.
(Sumner Lemon in Singapore contributed to this report.)
Vint Cerf supports municipal broadband networks
Municipal broadband networks could help boost the availability of high-speed Internet access and even help to ensure Net neutrality in the U.S., said Vint Cerf, vice president and chief Internet evangelist at Google.
Cerf, known as one of the fathers of the Internet for his role in creating its basic architecture, spoke at a lunch in Seattle, a city that is investigating the possibility of building its own broadband network. Seattle would follow its southern neighbor Tacoma, which has been operating its own fiber network for several years.
Cerf disputed arguments that operators sometimes give for why they should be able to limit or block bandwidth-hungry applications on their networks, and suggested that since they don't have technology facts to back up their arguments, people should be able to build their own networks to meet their needs.
"Many people raise the issue that video use on the Net is somehow going to drive it into congestion," he said. While in certain scenarios that could be true, the reality is that increasing the throughput solves the problem, he said.
A person could transfer an hour's worth of video over a gigabit channel in about 16 seconds, he said. That means that rather than streaming video, which is indeed taxing on the Internet, users would download it instead. "It's much easier on the network, and people have more than enough storage to download," he said.
Some operators also talk about the capacity of the Internet backbone itself. "As for running out of capacity, we've barely touched the surface of the fiber capacity. We are far from having exhausted this capacity," he said.
Operators may simply not want to invest in their networks to bring higher bandwidth to users, he said. "That comes back to the municipal argument. Citizens that want the capacity should be able to decide among themselves to put the resources in place to get that kind of capacity," he said.
Some operators contend that municipal networks create competition between the government and private companies. "That's nonsense," Cerf said. Governments would contract with the private sector to build the network and maybe even operate it, he said, so the two would be partners. In Tacoma the city maintains the network, but other companies serve as ISPs (Internet service providers), selling access to end-users.
Cerf's comments come as a new bill was introduced by lawmakers in the U.S. this week that would subject broadband providers to antitrust violations if they block or slow Internet traffic. Some lawmakers and operators argue that such legislation is unnecessary and would slow investment in broadband networks. The bill follows discussions across the industry and by government leaders around practices at Comcast, which says it has slowed some customer access to the BitTorrent peer-to-peer protocol during times of network congestion.
Cerf has been a vocal opponent of operators that limit access to certain applications. "I still think it's not a bad idea to have legislation that says don't discriminate unfairly simply because you happen to have control over this shared resource," he said on Friday.
Cerf, known as one of the fathers of the Internet for his role in creating its basic architecture, spoke at a lunch in Seattle, a city that is investigating the possibility of building its own broadband network. Seattle would follow its southern neighbor Tacoma, which has been operating its own fiber network for several years.
Cerf disputed arguments that operators sometimes give for why they should be able to limit or block bandwidth-hungry applications on their networks, and suggested that since they don't have technology facts to back up their arguments, people should be able to build their own networks to meet their needs.
"Many people raise the issue that video use on the Net is somehow going to drive it into congestion," he said. While in certain scenarios that could be true, the reality is that increasing the throughput solves the problem, he said.
A person could transfer an hour's worth of video over a gigabit channel in about 16 seconds, he said. That means that rather than streaming video, which is indeed taxing on the Internet, users would download it instead. "It's much easier on the network, and people have more than enough storage to download," he said.
Some operators also talk about the capacity of the Internet backbone itself. "As for running out of capacity, we've barely touched the surface of the fiber capacity. We are far from having exhausted this capacity," he said.
Operators may simply not want to invest in their networks to bring higher bandwidth to users, he said. "That comes back to the municipal argument. Citizens that want the capacity should be able to decide among themselves to put the resources in place to get that kind of capacity," he said.
Some operators contend that municipal networks create competition between the government and private companies. "That's nonsense," Cerf said. Governments would contract with the private sector to build the network and maybe even operate it, he said, so the two would be partners. In Tacoma the city maintains the network, but other companies serve as ISPs (Internet service providers), selling access to end-users.
Cerf's comments come as a new bill was introduced by lawmakers in the U.S. this week that would subject broadband providers to antitrust violations if they block or slow Internet traffic. Some lawmakers and operators argue that such legislation is unnecessary and would slow investment in broadband networks. The bill follows discussions across the industry and by government leaders around practices at Comcast, which says it has slowed some customer access to the BitTorrent peer-to-peer protocol during times of network congestion.
Cerf has been a vocal opponent of operators that limit access to certain applications. "I still think it's not a bad idea to have legislation that says don't discriminate unfairly simply because you happen to have control over this shared resource," he said on Friday.
Hackers find a new place to hide rootkits
Security researchers have developed a new type of malicious rootkit software that hides itself in an obscure part of a computer's microprocessor, hidden from current antivirus products.
Called a System Management Mode (SMM) rootkit, the software runs in a protected part of a computer's memory that can be locked and rendered invisible to the operating system, but which can give attackers a picture of what's happening in a computer's memory.
The SMM rootkit comes with keylogging and communications software and could be used to steal sensitive information from a victim's computer. It was built by Shawn Embleton and Sherri Sparks, who run an Oviedo, Florida, security company called Clear Hat Consulting.
The proof-of-concept software will be demonstrated publicly for the first time at the Black Hat security conference in Las Vegas this August.
The rootkits used by cyber crooks today are sneaky programs designed to cover up their tracks while they run in order to avoid detection. Rootkits hit the mainstream in late 2005 when Sony BMG Music used rootkit techniques to hide its copy protection software. The music company was ultimately forced to recall millions of CDs amid the ensuing scandal.
In recent years, however, researchers have been looking at ways to run rootkits outside of the operating system, where they are much harder to detect. For example, two years ago researcher Joanna Rutkowska introduced a rootkit called Blue Pill, which used AMD's chip-level virtualization technology to hide itself. She said the technology could eventually be used to create "100 percent undetectable malware."
"Rootkits are going more and more toward the hardware," said Sparks, who wrote another rootkit three years ago called Shadow Walker. "The deeper into the system you go, the more power you have and the harder it is to detect you."
Blue Pill took advantage of new virtualization technologies that are now being added to microprocessors, but the SMM rootkit uses a feature that has been around for much longer and can be found in many more machines. SMM dates back to Intel's 386 processors, where it was added as a way to help hardware vendors fix bugs in their products using software. The technology is also used to help manage the computer's power management, taking it into sleep mode, for example.
In many ways, an SMM rootkit, running in a locked part of memory, would be more difficult to detect than Blue Pill, said John Heasman, director of research with NGS Software, a security consulting firm. "An SMM rootkit has major ramifications for things like [antivirus software products]," he said. "They will be blind to it."
Researchers have suspected for several years that malicious software could be written to run in SMM. In 2006, researcher Loic Duflot demonstrated how SMM malware would work. "Duflot wrote a small SMM handler that compromised the security model of the OS," Embleton said. "We took the idea further by writing a more complex SMM handler that incorporated rootkit-like techniques."
In addition to a debugger, Sparks and Embleton had to write driver code in hard-to-use assembly language to make their rootkit work. "Debugging it was the hardest thing," Sparks said.
Being divorced from the operating system makes the SMM rootkit stealthy, but it also means that hackers have to write this driver code expressly for the system they are attacking.
"I don’t see it as a widespread threat, because it's very hardware-dependent," Sparks said. "You would see this in a targeted attack."
But will it be 100 percent undetectable? Sparks says no. "I'm not saying it's undetectable, but I do think it would be difficult to detect." She and Embleton will talk more about detection techniques during their Black Hat session, she said.
Brand new rootkits don't come along every day, Heasman said. "It will be one of the most interesting, if not the most interesting, at Black Hat this year," he said.
Called a System Management Mode (SMM) rootkit, the software runs in a protected part of a computer's memory that can be locked and rendered invisible to the operating system, but which can give attackers a picture of what's happening in a computer's memory.
The SMM rootkit comes with keylogging and communications software and could be used to steal sensitive information from a victim's computer. It was built by Shawn Embleton and Sherri Sparks, who run an Oviedo, Florida, security company called Clear Hat Consulting.
The proof-of-concept software will be demonstrated publicly for the first time at the Black Hat security conference in Las Vegas this August.
The rootkits used by cyber crooks today are sneaky programs designed to cover up their tracks while they run in order to avoid detection. Rootkits hit the mainstream in late 2005 when Sony BMG Music used rootkit techniques to hide its copy protection software. The music company was ultimately forced to recall millions of CDs amid the ensuing scandal.
In recent years, however, researchers have been looking at ways to run rootkits outside of the operating system, where they are much harder to detect. For example, two years ago researcher Joanna Rutkowska introduced a rootkit called Blue Pill, which used AMD's chip-level virtualization technology to hide itself. She said the technology could eventually be used to create "100 percent undetectable malware."
"Rootkits are going more and more toward the hardware," said Sparks, who wrote another rootkit three years ago called Shadow Walker. "The deeper into the system you go, the more power you have and the harder it is to detect you."
Blue Pill took advantage of new virtualization technologies that are now being added to microprocessors, but the SMM rootkit uses a feature that has been around for much longer and can be found in many more machines. SMM dates back to Intel's 386 processors, where it was added as a way to help hardware vendors fix bugs in their products using software. The technology is also used to help manage the computer's power management, taking it into sleep mode, for example.
In many ways, an SMM rootkit, running in a locked part of memory, would be more difficult to detect than Blue Pill, said John Heasman, director of research with NGS Software, a security consulting firm. "An SMM rootkit has major ramifications for things like [antivirus software products]," he said. "They will be blind to it."
Researchers have suspected for several years that malicious software could be written to run in SMM. In 2006, researcher Loic Duflot demonstrated how SMM malware would work. "Duflot wrote a small SMM handler that compromised the security model of the OS," Embleton said. "We took the idea further by writing a more complex SMM handler that incorporated rootkit-like techniques."
In addition to a debugger, Sparks and Embleton had to write driver code in hard-to-use assembly language to make their rootkit work. "Debugging it was the hardest thing," Sparks said.
Being divorced from the operating system makes the SMM rootkit stealthy, but it also means that hackers have to write this driver code expressly for the system they are attacking.
"I don’t see it as a widespread threat, because it's very hardware-dependent," Sparks said. "You would see this in a targeted attack."
But will it be 100 percent undetectable? Sparks says no. "I'm not saying it's undetectable, but I do think it would be difficult to detect." She and Embleton will talk more about detection techniques during their Black Hat session, she said.
Brand new rootkits don't come along every day, Heasman said. "It will be one of the most interesting, if not the most interesting, at Black Hat this year," he said.
FBI worried as DoD sold counterfeit networking gear
The U.S. Federal Bureau of Investigation is taking the issue of counterfeit Cisco equipment very seriously, according to a leaked FBI presentation that underscores problems in the Cisco supply chain.
The presentation gives an overview of the FBI Cyber Division's effort to crack down on counterfeit network hardware, the FBI said Friday in a statement. "It was never intended for broad distribution across the Internet."
In late February the FBI broke up a counterfeit distribution network, seizing an estimated US$3.5 million worth of components manufactured in China. This two-year FBI effort, called Operation Cisco Raider, involved 15 investigations run out of nine FBI field offices.
According to the FBI presentation, the fake Cisco routers, switches and cards were sold to the U.S. Navy, the U.S. Marine Corps., the U.S. Air Force, the U.S. Federal Aviation Administration, and even the FBI itself.
One slide refers to the problem as a "critical infrastructure threat."
The U.S. Department of Defense is taking the issue seriously. Since 2007, the Defense Advanced Research Projects Agency has funded a program called Trust in IC, which does research in this area.
Last month, researcher Samuel King demonstrated how it was possible to alter a computer chip to give attackers virtually undetectable back-door access to a computer system.
King, an assistant professor in the University of Illinois at Urbana-Champaign's computer science department, has argued that by tampering with equipment, spies could open up a back door to sensitive military systems.
In an interview on Friday, he said the slides show that this is clearly something that has the FBI worried.
The Department of Defense is concerned, too. In 2005 its Science Board cited concerns over just such an attack in a report.
Cisco believes the counterfeiting is being done to make money. The company investigates and tests counterfeit equipment it finds and has never found a "back door" in any counterfeit hardware or software, said spokesman John Noh. "Cisco is working with law enforcement agencies around the world on this issue."
The company monitors its channel partners and will take action, including termination of a contract, if it finds a partner selling counterfeit equipment, he said. "Cisco Brand Protection coordinates and collaborates with our sales organizations, including government sales, across the world, and it's a very tight integration."
The best way for channel partners and customers to avoid counterfeit products is to buy only from authorized channel partners and distributors, Noh said. They have the right to demand written proof that a seller is authorized.
The FBI doesn't seem satisfied with this advice, however. According to the presentation, Cisco's gold and silver partners have purchased counterfeit equipment and sold it to the government and defense contractors.
Security researcher King believes that the government is better off focusing on detection rather than trying to secure the IT supply chain, because there are strong economic incentives to keep it open and flexible -- even if this means there may be security problems. "There are so many good reasons for this global supply chain; I just think there's no way we can secure it."
The presentation gives an overview of the FBI Cyber Division's effort to crack down on counterfeit network hardware, the FBI said Friday in a statement. "It was never intended for broad distribution across the Internet."
In late February the FBI broke up a counterfeit distribution network, seizing an estimated US$3.5 million worth of components manufactured in China. This two-year FBI effort, called Operation Cisco Raider, involved 15 investigations run out of nine FBI field offices.
According to the FBI presentation, the fake Cisco routers, switches and cards were sold to the U.S. Navy, the U.S. Marine Corps., the U.S. Air Force, the U.S. Federal Aviation Administration, and even the FBI itself.
One slide refers to the problem as a "critical infrastructure threat."
The U.S. Department of Defense is taking the issue seriously. Since 2007, the Defense Advanced Research Projects Agency has funded a program called Trust in IC, which does research in this area.
Last month, researcher Samuel King demonstrated how it was possible to alter a computer chip to give attackers virtually undetectable back-door access to a computer system.
King, an assistant professor in the University of Illinois at Urbana-Champaign's computer science department, has argued that by tampering with equipment, spies could open up a back door to sensitive military systems.
In an interview on Friday, he said the slides show that this is clearly something that has the FBI worried.
The Department of Defense is concerned, too. In 2005 its Science Board cited concerns over just such an attack in a report.
Cisco believes the counterfeiting is being done to make money. The company investigates and tests counterfeit equipment it finds and has never found a "back door" in any counterfeit hardware or software, said spokesman John Noh. "Cisco is working with law enforcement agencies around the world on this issue."
The company monitors its channel partners and will take action, including termination of a contract, if it finds a partner selling counterfeit equipment, he said. "Cisco Brand Protection coordinates and collaborates with our sales organizations, including government sales, across the world, and it's a very tight integration."
The best way for channel partners and customers to avoid counterfeit products is to buy only from authorized channel partners and distributors, Noh said. They have the right to demand written proof that a seller is authorized.
The FBI doesn't seem satisfied with this advice, however. According to the presentation, Cisco's gold and silver partners have purchased counterfeit equipment and sold it to the government and defense contractors.
Security researcher King believes that the government is better off focusing on detection rather than trying to secure the IT supply chain, because there are strong economic incentives to keep it open and flexible -- even if this means there may be security problems. "There are so many good reasons for this global supply chain; I just think there's no way we can secure it."
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