Presswatch

Most computer companies that have tried - like IBM - to sell 'solutions' have ended up with hardware and software businesses that couldn't compete against more focused competitors. Unisys and Digital are two prime examples. Both companies tried to be all things to all people and ended up, essentially, as services vendors crippled with hardware businesses. The danger for IBM is its current strategy seems to be heading in that direction. IBM's hardware and software products are likely to play an increasingly minor role with a negative impact on IBM's earnings. Over time, IBM's influence appears destined to wane, as the growth of the industry outpaces the growth of IBM and as the company's profits lag those of competitors who are more highly focused.

Upsidedown, May

A glowing reference

IT has played a crucial role in increased labour productivity and a decline in inflation in the US, said Federal Reserve chairman Alan Greenspan. 'Information technologies have begun to alter the manner in which we do business and create value, often in ways not readily foreseeable even five years ago,' he said. Increased and faster access to information has streamlined the delivery time of various goods. 'Intermediate production and distribution processes, so essential when information and quality control were poor, are being bypassed and eventually eliminated. The increasing ubiquitousness of Internet web sites is promising to significantly alter the way our distribution system is managed.'

InfoWorld Electric, 7 May

August picks holes in the Net

Silicon Valley venture capital firm August Capital has taken small steps to bring Internet startups into its portfolio, but remains wary of the Internet economy. Despite the promotion of Internet expert Andrew Anker from associate to partner and investments in Net companies, August Capital is happy to leave some of the more high-profile deals to its competitors. 'The Internet is a short-term, hyped trend,' says Anker. 'We don't fund cosmetics or pets, but companies that will still be standing when the Internet bubble bursts.' August Capital focuses on a major technology trend: the continuing connectivity of devices, and extending the intelligence of those devices.

Red Herring, 7 May

Superfast breakthrough in quantum computing

Japanese scientists announced a breakthrough that could mean we have the first superfast quantum computer within 10 years. Researchers from NEC and the Japan Science and Technology Corporation have succeeded in controlling the apparent ability of elementary particles to be in many places at the same time - a process known as superposition in quantum physics. If the superposition of electrons flowing through tiny circuits etched onto the surface of a semi-conducting material can be controlled, a single computer circuit may be able to carry out many computations simultaneously. Computer circuits are currently limited to one calculation at a time. A quantum computer would take only a few minutes to complete an operation that would take today's supercomputers trillions of years to carry out.

Daily Telegraph, 6 May

Trade row over EU's 'Draconian' data directive

The European Union's (EU) Data Protection Directive aims to give people control over their personal information, requiring unambiguous consent before a company or agency can process the data, and barring the use of the data for any purpose other than that for which it was originally collected. But the US views the directive as Draconian, and a trade row has blown up about the EU's threat to stop data exports to the US. A compromise may be reached that enables US firms to follow voluntary guidelines, but that merely would create a big loophole. Policing the rising tide of data collection and trading is probably beyond the capability of any government without a crackdown so massive it could stop the new information economy in its tracks.

The Economist, 1-7 May

What no bills? Free telephone service with strings

BT is to launch the UK's first 'free' telephone service. The service, BT Freetime, plays advertisements at the beginning of calls and at regular intervals throughout conversations. In return, customers receive free calls. BT Freetime is being run conjunction with Swedish company GratisTel, which operates a similar service in Sweden. A three-month pilot is now underway in Tyne and Wear and in the Bristol area. BT Freetime targets students and low-income groups. However, there is some doubts over whether or not such a demographic group will be sufficiently appealing to advertisers.

Utility Week, 7 May

Europe plans Internet taps for security agencies

The European Union could force Internet service providers and telcos to build data taps into their Internet servers to allow governments' securities agencies to siphon off email, monitor individuals' web activities and check news group membership. Details of the proposals were uncovered by Caspar Bowden, director of the London-based Foundation for Information Policy Research. The proposals are backed by the International Law Enforcement Telecommunications Seminar, an organisation which includes security agencies from 20 countries. Bowden says that the proposals could infringe the European Convention of Human Rights. Even if Internet users encrypt their emails, analysis programs can reveal a lot about someone's Internet usage. 'It's no less than 1984,' Bowden says.

New Scientist, 8 May

Court frees Snuffle from expert rules

A US Appeals Court found strict export limits on computer data scrambling technology violated the free speech rights of a computer scientist who wanted to post his encryption software program on the Internet. While the scope of the decision was limited to the scientist, professor Daniel Bernstein, academics and high-technology companies that oppose the export rules are likely to seek a broader ruling. The court ruled that a version of Bernstein's encryption program, called Snuffle, was protected by the First Amendment's free-speech clause.

David Sobel, general counsel at the Electronic Privacy Information Center in Washington, which filed a brief supporting Bernstein, said the ruling was 'one of the most significant Internet decisions yet issued, one that establishes important precedents for both free speech and privacy online'. The case arose in 1995 after Bernstein, then a graduate student at the University of California, asked the State Department for permission to put source code for Snuffle on the Internet. The department said the posting would violate the export rules, so Bernstein sued.

San Jose Mercury, 6 May

Some stories have been edited for length.