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Xenakis on Technology</font></h3>' #>
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<h1>Xenakis on Technology</h1>

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<i>Written by John J. Xenakis for 
<#redir "http://cfo.com"#>CFO.com</a>,
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<i>(This is a modified version of an article that originally
appeared on 
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at
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this location.
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=data conxot.art.d01May16.date
May 16, 2001
=data conxot.art.d01May16.title
How XML Brings Old Content Back to Life
=data conxot.art.d01May16.summary
How document management software from Documentum and other vendors
allows you to put all your paper documents onto the internet for
access by authorized users.
=data conxot.art.d01May16.url
http://www.cfo.com/printarticle/1,4580,0|1|AD|3168,00.html
=data conxot.art.d01May16.txt

A chipmaker is opening up its extensive library of technical documents
to its customers by using a tool for defining Web data.

=//-(Editor's Note: This is the third of a three-part series about
=//-content management in E-commerce and corporate Web strategies.
=//-Today's story focuses on one company's use of XML, an important
=//-emerging technology in the transfer of information on the
=//-Internet. The first article in the series focused on one firm's
=//-integration of its Web strategy with its retail stores. The
=//-second story explained how a London law firm used document
=//-management tools to serve clients via its Web site.)

Applied Micro Circuits Corp. is a prime example of how companies can
take their archives of content that's several years old and marry it
to their corporate Web strategies. The San Diego-based semiconductor
maker has been facing increasing pressure from its clients to make
its technical specifications available online. So the company decided
to oblige them.

"We decided that managing our technical documents---making them
available on the Web for customers and internal use---will lower
costs and improve service," says CFO Bill Bendush.

Pat McGinty, the firm's CIO, says, "We have pockets and islands of
technical data spread all around the company, with each group having
its own method of storage, so it's hard to make them available to
everyone."

Yet with the Web, such an inefficient situation can't be tolerated for
long.

"Because of the Web, our customers are calling us on the carpet to
make that documentation available," McGinty says. "They want more
access to the technical documents, and we'd like to be able to do
collaborative design with our customers."

AMCC has just begun a six-month effort to put up 100,000 technical
documents, some as much as 10-years old, online. The entire
implementation is expected to cost just over $1 million.

The company is using Documentum Corp.'s (<#stdurl
www.documentum.com#>) document management software, which includes a
repository where word-processing files, engineering designs, and
other documents can be stored. The system also has tools to
manipulate content. The software can process documents produced by
more than 500 creation tools.

The software can take documents and convert and display them on AMCC's
Web site. McGinty says this feature saves him the trouble of assigning
a tech staffer with specialized HTML knowledge the task of publishing
the document.

"Once the data goes into the repository, anyone is able to set up new
Web pages and put it out onto the Web," he says.

According to McGinty, many of the 100,000 documents will simply be
stored in the repository with no special handling. The documents will
then be published on the Web as "white papers." Generally speaking,
individual sections will not be made available separately.

However, McGinty adds that many of the company's documents contain
sections of data that have to be identified separately, and for this,
AMCC is relying on the Extensible Markup Language (XML), a method of
tagging data that permits an author to specify the significance of
different items and different sections.

For example, if this column had XML tags, the sentence two paragraphs
above would read

According to <Interview Subject> McGinty </Interview Subject>, many of
the <NumDocuments> 100,000 </NumDocuments> documents will simply be
stored in the repository with no special handling.

In this example, "McGinty" is tagged as an "InterviewSubject," and
100,000 is tagged as "NumDocuments."

Longer sections of a document can also be tagged, with tags like
"ExecutiveSummary" or "DetailedProductDescription."

In the last few years, XML has been adopted as a standard in E-
commerce, where XML tags identifying fields of data such as credit
card numbers or invoice detail items are becoming increasingly
common.

"XML is the major driver in the whole ability to describe content,"
says Alan Weintraub, analyst with Stamford, Conn., based Gartner
Group. "Companies just using Word to write simple one-page memos
probably don't need XML. Companies that want to produce reusable
manuals should consider XML. And companies producing technical
documentation can't ignore it."

But for a firm like AMCC, where many of its documents were written and
stored in files years ago, it's no easy task to add XML tags to these
legacy documents.

XML tags can be added with an ordinary word processor, but that's
incredibly labor-intensive. To save companies the trouble, some
special tools have been designed in recent years, including Xmetal
from SoftQuad Software Ltd. (<#stdurl www.softquad.com#>) and Epic
from Arbortext Inc. (<#stdurl www.arbortext.com#>), both of which are
integrated with Documentum's 4i.

Even so, adding XML tags can be time consuming, according to Whitney
Tidmarsh, VP of marketing for Documentum. Based on her experience, "an
average worker can do XML tagging for 50 pages a week, tops."

But once XML tags have been added to the documents, it becomes easier
to re-use them and export them to other systems. For example, a sales
or marketing employee can take sections of a file that's been encoded
in XML and reformat it more easily than if it lacks the tags.

Documentum charges $100,000 to license a typical entry-level version
of 4i. But, according to the company, the average license will run
approximately $300,000, and it's not unusual for a high-end
installation to exceed $1 million. Features include the repository and
server, version control of documents, workflow functions to manage
document approval

"What's interesting about Documentum is that they stand just about
alone at the high end of the marketplace," says Charles Brett, an
analyst with the Stamford, Conn., based Meta Group.  "They're the big
daddy in terms of document management systems, and they're also good
at managing web content."  Managing web content is a niche function of
this category, managing documents which, unlike word processing
documents, are intended for display only on the web.

According to Brett, users considering Documentum should also check
out FileNet Corp. (<#stdurl www.filenet.com#>), Hummingbird Ltd.
(<#stdurl www.hummingbird.com#>), and Open Text Corp. (<#stdurl
www.opentext.com#>).  For managing web content, users should look at
Interwoven Inc. (<#stdurl www.interwoven.com#>) and Open Market Inc.
(<#stdurl www.openmarket.com#>).

Lower cost solutions, in the $20,000 license fee range, include Lotus
Development Corp.'s Domino.com (<#stdurl www.lotus.com#>) and Xerox
Corp.'s DocuShare (<#stdurl www.xerox.com#>).

"These are two solutions that we see on the lower end," says Brett. 
"They don't have tons of features, but they can get the job done."


=eod

=data conxot.art.d01Apr18.date
Apr 18, 2001
=data conxot.art.d01Apr18.title
Budget Software that Turns on a Dime
=data conxot.art.d01Apr18.summary
How enterprise budgeting software from ClosedLoop Solutions is
targeting a niche -- "high-velocity companies" -- in order to
differentiate it from competitors like Hyperion, Adaytum and
OutlookSoft.
=data conxot.art.d01Apr18.url
http://www.cfo.com/printarticle/1,4580,0|1|AD|2760,00.html
=data conxot.art.d01Apr18.txt

A budgeting tool is helping tech companies revise their budgets, if
need be, on a daily basis.

With the number of enterprise budgeting packages growing (see
OutlookSoft column on 4/3/01), it's not surprising that some are
targetling specialized areas.

For example, a package from ClosedLoop Solutions Inc. (<#stdurl
www.closedloopsolutions.com#>) targets so-called high-velocity
companies -- or firms whose business plans change so quickly that the
standard annual budgeting cycle doesn't help.

"The companies that ClosedLoop is targeting don't have a lot of use
for the budgeting process," says Paul Hamerman, analyst with the Giga
Information Group. For these companies, budgeting has to be much more
collaborative, and much more event-driven, sometimes on an almost
daily basis, rather than calendar driven. "These high-velocity
companies need a continuous forecasting process, more often than on a
quarterly time frame. They feel the annual budgeting process is
irrelevant for these high-velocity companies."

The problem with the traditional budgeting process is the mismatch
between top-down and bottom-up results. Corporate spending and revenue
goals are set at the top, and then the departmental budgets are
computed from the bottom, often on spreadsheets, in a process that can
take several weeks. If the departmental budgets don't meet top
management goals after they've been merged, then arbitrary adjustments
sometimes have to be made.

In fact, especially in the current economic environment, a budget can
be obsolete almost as soon as it's completed. Many companies have to
deal with changes to partners, suppliers, customers, and competitors,
creating a climate where corporate direction has to change rapidly.

Traditional budget process provides no simple method for realigning
the departmental budgets when the corporate strategy changes abruptly.
If expenses have to be cut, for example, there's no simple way to
adjust all the line items except with a meat-axe approach of
across-the-board cuts. There's also no way to guarantee that the
imposed cutbacks will be realized. Fine-tuning will have to wait until
the next budget cycle begins, perhaps months down the line.

Network Appliance Inc. (<#stdurl www.netapp.com#>) of Sunnyvale,
Calif., is a company facing exactly those pressures. The company
competes with EMC Corp., the industry leader in disk drives and
storage networks. Network Appliance, which had over $1 billion in
sales last year, has to react not only to changes in the stock market,
but also to the ups and downs of PC and server sales, as well as to
announcements from its very aggressive competition.

That's why the company decided to implement ClosedLoop's SpendCap
Manager in January for its budgeting process, according to Leslie
Paulides, VP finance for the company. "ClosedLoop is not a mature
company, but they have a good vision for how budgeting should be
done," she says.

Instead of licensing the software, they use ClosedLoop as an ASP,
which has responsibility for hosting both the software and the data.
All functions of the software are handled through an ordinary browser,
so no client software is required, and little training is required for
users. "I pay a monthly fee to use it," says Paulides. "I have no sunk
cost if the product doesn't work out."

The product has been rolled out to about 150 of the company's 500
cost centers, with the remaining managers scheduled to be put online
by the end of the year. In the meantime, the financial analyst group
is budgeting for the other cost centers.

Paulides explained how the budgeting process has become more
interactive and collaborative with the new software. "Suppose I see
that I'm spending $25 million worldwide on consulting, and I want to
cut back to $15 million, and I want to be convinced that each cost
center is committed to their number," she says. "I tell each cost
center to cut costs and show me the new numbers by tomorrow." Each
cost center manager enters new spending forecasts, and Paulides can
roll up the modified budgets within 24 hours.

It's a cultural thing whether a company can use a product like
ClosedLoop's, according to Giga's Hamerman. "Even the traditional
budget process has a collaborative element, even though it's centrally
controlled," he says. "But ClosedLoop is pursuing a much more
interactive process. The whole thing is to engage the front-line
managers and business managers throughout the company. Being fully
collaborative is more a cultural style."

ClosedLoop's software comes in three modules: SpendCap Manager
maintains expense, capital, and headcount plans in real time, and
enforces top-down spending guidance. TopLine Manager captures actual
data and provides forecasts measured against budgets. The third,
BizPlan Manager produces pro forma financial statements that help
business owners decide when to grow and when to slow the business.

One-time license fees for each of these modules range from $100,000
to $250,000, depending on company size. ClosedLoop has eight customers
so far, and all of them are using its ASP service, which is typically
priced from $40,000 to $50,000 per month, according to Doug Barton,
ClosedLoop's VP marketing.

"Our customers are paying more than they would for traditional
solutions like [Hyperion] Pillar and Adaytum, and the reason is that
we're used more often by more people in the organization," says
Barton.  "They use our app sometimes four times a month to change the
plan around.  They use it on demand to respond to changing business
conditions.  With other products, the budget's not trustable."

However, despite that view, users may wish to consider other
products, some of which are more mature and have more features,
according to Hamerman.

"For example, Adaytum is going after a similar kind of market with
similar features," he says.  "They're looking for a broader segment of
the market.  They sell to more mature companies, but they can also
pitch to companies that want to pursue collaborative forecasting."

Adaytum's ePlanning budgeting software costs $100,000 to $500,000 or
more per license, with $300,000 the license fee for the average sale.

=eod

=data conxot.art.d01Apr11.date
Apr 11, 2001
=data conxot.art.d01Apr11.title
Oracle Plays Catch up with PeopleSoft
=data conxot.art.d01Apr11.summary
For years, PeopleSoft has been the acknowledged industry leader in
enterprise HRMS (Human Resource Management Software).  With the
release of Oracle 11i, Oracle is claiming to have caught up or
surpassed PeopleSoft in the human resources, but have they?
=data conxot.art.d01Apr11.url
http://www.cfo.com/printarticle/1,4580,0|1|AD|2676,00.html
=data conxot.art.d01Apr11.txt

Oracle's upgraded ERP system includes an HR component that's a strong
competitor to PeopleSoft's.

Last year, when Oracle Corp. overhauled its enterprise resource
planning software with Release 11i, it renamed the system the E-
Business Suite to emphasize the degree to which the Web is now
incorporated into the system.

But more important, the company revamped its Human Resources
Management System (HRMS) module, and it's worthwhile to ask whether
Oracle has finally caught up to PeopleSoft, the ERP industry's
long-time leader in human resources systems.

Both systems have similar features, but they differ widely on their
marketing and pricing policies for the two products.

Like many enterprise products, both Oracle HRMS 11i and PeopleSoft
HRMS 8.0 are different from earlier versions. The client/server
technology has been abandoned, and all functions are accessible
through Web browsers. New functions, such as those that empower
employees to design their benefits package online or automate the
selection of candidates for new positions, are available because of
the Web technology.

In fact, Oracle has performed studies of its customers that indicate
that using Oracle HRMS 11i can save HR costs of 25 percent per
employee with the new functionality, and there's every reason to
believe that similar savings would be achieved with PeopleSoft HRMS
8.0.

Oracle HRMS has made an enormous difference to Kelly Staff Leasing,
according to the general manager, Mike Butler. "Handling payroll and
benefit functions was formerly very paper intensive," he says. "In
the past, we received payroll input in several different ways --
faxed time cards, E-mailed spreadsheets, or calls to our computer from
a modem line. These are being streamlined so that all the input comes
in through a Web browser."

Although the payroll area was the one having the biggest impact,
according to Butler, the benefits area also changed for the Troy,
Mich., based temp agency and HR outsourcing firm.

"One of our key deliverables to our client is offering a comprehensive
suite of benefits for their employees," he says. "With Oracle's
advanced benefits module, employees can view their benefits, get live
updates, and track new benefits interactively."

According to Butler, a great strength of 11i is its flexibility in
adding or changing entire benefit programs, something that he has to
do frequently because he has to support multiple corporate clients. In
fact, he compares his situation to that of a company that has been
formed from a number of mergers and acquisitions.

"It's not uncommon to see large companies that have many different
systems that have to be integrated -- with different HR rules,
benefits and vacation policies, and with different tax treatments in
different statements. It's amazing how many different rules you have
to administer, and this software can handle it."

In fact, integration within the Oracle ERP suite itself is one of the
major strong points of the products, according to Jenni Lehman, an
analyst at Stamford, Conn., based Gartner Inc.

"I give Oracle high scores in integrating HR types of data throughout
the enterprise, not just in the HR department," says Lehman. "Every
one of the vendors supports the HR department but every department has
an HR element, and Oracle is much more aware of that, supporting that
much more aggressively than the other vendors. And it goes will with
their single application integration story: Oracle says that you
should buy from just one vendor."

This single application message is highly engrained in Oracle,
especially since it's unique among ERP vendors in that it also
supplies the database software in addition to the ERP software.

"All our products can be purchased modularly," says Tony Cavanagh,
Oracle's director for E-Business Suite marketing. "But our pitch is
that it's better to truly wage a war on complexity, and to avoid
managing multiple release dates and upgrades, and to get better
functionality and integration in one suite, rather than trying to
stitch different products together."

This is different from PeopleSoft's strategy, which frequently
involves HRMS-only sales. "It's no secret that [other vendors] tend to
bundle HRMS in with their larger ERP package offering, whether the
organization gets HRMS whether they want it or not," says Julie
Thomas, director of HRMS marketing. "PeopleSoft went to market as an
HRMS vendor, so we've had a different strategy."

The different strategy focuses resources particularly on HRMS, and it
shows, according to Gartner's Lehman.

"All of the products do the core functionality well, but PeopleSoft is
still the one to beat," she says. According to Lehman, the overall
design and flow of the PeopleSoft product, as well as the designs of
the individual screens, are more intuitive and easy to use and provide
easier collaboration among users than in the Oracle product. "Oracle
has a great product, and they've done really well adding
functionality, but they're still focused on the nuts and bolts. I
still give PeopleSoft the edge in vision for how to manage human
capital."

"We're becoming much more bottom line oriented and [PeopleSoft HRMS]
is the best solution," says Michael Head, exec VP for human resources
from Regions Financial Corp., a Birmingham, Alabama, banking firm. "It
gives us more robust and seamless platform for management reporting,
and more cost-effective controls."

Head is rolling out PeopleSoft HRMS to 110 managers heading up an
organization of 17,000 employees. "We have a very decentralized
management structure. We'll be rolling out time and labor systems
throughout the company. The system will avoid performance reviews not
being done, and handle staffing issues."

Head has outsourced his payroll and HR, and uses PeopleSoft through
an application service provider, Oasis Software LLC of Brentwood,
Tenn. PeopleSoft's license was slightly less than $400,000.

He decided on an ASP solution, paying Oasis $350 per month for each
manager, a price which includes hosting the software and outsourcing
all IT and payroll functions. Because of staff savings and
infrastructure savings, Head expects the system to pay for itself in
less than two years.

This highlights some of the major marketing and pricing differences
between Oracle and PeopleSoft that the new releases have brought
about.

The Internet has dramatically changed the functionality of both the
Oracle and PeopleSoft HRMS software, but when Oracle's changes to its
marketing and pricing have been more dramatic. The company is now
using the Internet as a distribution channel for all its enterprise
software. Anyone can go to Oracle's Web site and purchase as many
licenses as desired for each of the HRMS modules.

There are seven Oracle HRMS modules in all: human resources, payroll,
time management, advanced benefits, training and administration, self-
service HR, and HR intelligence. Perpetual license prices range from
$25 to $60 per module per user. The site gives prices for two or three
year licenses as well. In keeping with Oracle's singlE-vendor message,
the site also provides ASP prices, with Oracle acting as the hosting
company.

It's hard to overstate what a big change this is. For years, the major
ERP software players have refused to divulge software prices publicly,
and used what they called "value pricing," which meant they charged
the customer as much as they could get.

Oracle now believes that value pricing has had a negative effect on
the company, according to Cavanagh. "If there's no rigidity in
pricing, and there are lots of discounts, then you get a lot of ups
and downs in revenues, just as the best time to buy a car is the last
Sunday of the month," he says. "Larry [Ellison] reviewed the
significant discounts and said it had to stop. We had to get better
control over pricing in order to build significant business over the
Web. So this is the result of our own E-business transformation."

PeopleSoft has not reached the same conclusion and will continue
value pricing, according to HRMS marketing director Thomas.

"If we thought customers were pushing us to list prices on our Web
site, I think PeopleSoft would do that," she says. "But buying
software is complex, and sales cycles can be one month to six months
or longer. Why not let customers rely on a salesperson to give them
the information they need?"

=eod

=data conxot.art.d01Apr04.date
Apr 04, 2001
=data conxot.art.d01Apr04.title
Budget Planning Software Moves to the Web
=data conxot.art.d01Apr04.summary
Until recently, a handful of companies -- Hyperion, Adaytum, Cognos
and Comshare -- have dominated the market for enterprise budgeting
packages.  Now, OutlookSoft Corp. claims to have stolen a march on
its competitors by marrying budgeting with the Web, an OLAP (on line
analytical processing) database for analysis and decision support,
and a user interface based on the Microsoft Excel spreadsheet.
=data conxot.art.d01Apr04.url
http://www.cfo.com/printarticle/1,4580,0|1|AD|2561,00.html
=data conxot.art.d01Apr04.txt

A software package uses the Web to help CFOs make accurate forecasts.

Has there ever been a time when CFOs weren't under pressure to
provide accurate financial forecasts? Whether the audience is the CEO,
the board of directors, shareholders, or Wall Street analysts, the
numbers in the forecast had better be in tune with the real-world
business conditions.

Switch the economy from the irrational exuberance of 1999 to the
broadening crisis of 2001, and the pressure only gets more intense.

Even without a nasty economic slowdown, users of budgeting packages
were bound to demand more from these applications.

This is forcing some vendors of budgeting software broaden their
software beyond core budgeting. In particular, the Web is seen as the
key to making budgeting a more collaborative process, since
geographically scattered managers can work together over the
Internet.

"People are buying budgeting software differently," says Lee
Geishecker, an analyst with the Stamford, Conn., based market research
firm Gartner Inc. "After they got through Y2K, by mid 2000 they
realized that their budgeting was still broken. They're looking beyond
basic budgeting to financial reporting, information delivery,
analysis, performance management, and planning, and they want
something that combines them all together."

Until recently, a handful of companies -- Hyperion Solutions Corp.
(<#stdurl www.hyperion.com#>), Adaytum Software Inc. (<#stdurl
www.adaytum.com#>), Cognos Corp. (<#stdurl www.cognos.com#>), and
Comshare Inc. (<#stdurl www.comshare.com#>) -- dominated the market
for budgeting packages.

But recently, a package called Financial Planning and Analysis (FPA),
formerly called Everest, from OutlookSoft Corp. (<#stdurl
www.outlooksoft.com#>), has stolen a march on its well-known
competitors. The application marries budgeting with the Web, an OLAP
(on line analytical processing) database for analysis and decision
support, and a user interface based on the Microsoft Excel
spreadsheet.

The Excel user interface has been a powerful selling point. "A lot of
our early deals were based almost entirely on the Excel interface,"
brags OutlookSoft's CEO Craig Schiff.

For example, David Bancroft, corporate finance process leader for
Esco Corp., a Portland, Oregon, manufacturer of steel castings for the
mining and construction industries, says, "We wanted for a number of
years to push the budget and planning process down to the cost center
manager desktop level. We tried some off-the-shelf products, and we
tried building our own with limited success, but we weren't where we
wanted to be."

Esco had been using Hyperion Financials for several years to handle
consolidations, and "we really liked the Excel add-in," says Bancroft.
The Excel add-in makes it easy to transfer data between Hyperion
Financials and Excel spreadsheets, but Esco was looking for a system
that relied upon Excel as its sole user interface.

Bancroft says users of FPA don't have to learn a new user interface,
since FPA functions can be accessed from Excel using toolbars and menu
items that OutlookSoft developed with Microsoft.

Bancroft is making FPA available to 50 cost-center managers, and
eventually may roll it out to 100 more users, almost all of whom are
familiar with Excel. "With the Excel basis, training and ease of use
issues are minimized," he says. "And it has the ease of formatting and
presentation you have with Excel. You're not locked into that
rectangular format that traditional reporting products give you."

Gartner analyst Geishecker points to the product's analytics, which
tie in with the Internet functionality. "They've developed a Web
portal approach which gives each user a personalized approach to
information delivery and analysis. This isn't just for budgeting. It
ties into financial reporting and things like key indicators."

The analytics were important to Midwest Wireless Holdings LLC.
"OutlookSoft is more of an analytical tool than the other budgeting
products we looked at," says Dennis Findley, VP finance for the
Mankato, Minn., wireless service provider.

What Findley likes is the product's capability to load other data,
even non-financial data, from other databases, and use it in
budgeting.

"For example, we're a wireless carrier, and minutes of use by our
customers is very important to us, and is a very complicated input to
our budget," he says. "Now we're able to download that data and use
it."

The reason that this analytics capability is available in
OutlookSoft's product is that it combines a budgeting product with
Microsoft SQL Server's OLAP (online analytical processing), an
integrated multi- dimensional decision support database.

A user of another budgeting product could get the same functionality
by using it with another OLAP. For example, Hyperion's Pillar could be
used with Hyperion's Essbase OLAP. However, that makes users learn yet
another user interface.

OutlookSoft, for its part, has integrated budgeting software with an
OLAP, and made the functions of both products available over the
Internet within an Excel-based user interface.

The top enterprise budgeting packages typically cost $100,000 to
$300,000 for license fees, but OutlookSoft is pricing FPA as a
subscription service, similar to software leasing. The subscription
service for 100 seats is $84,000 per year, a price which includes
maintenance and upgrades.

Competing vendors, which have more mature, more functionally complete
budgeting products, have to play catch-up in integrating with Web and
OLAP technologies.

In August, 2000, Hyperion announced upgraded versions of Financials
and Pillar, its major consolidation and planning software packages.
The products, Financial Management and Planning, integrate Internet
access and OLAP.

"We're in an in-between period with Hyperion," says Gartner's
Geishecker. "The new products are much more advanced in using
technology, but they don't have the depth of functionality of the old
products."

=eod

=data conxot.art.d01Mar28.date
Mar 28, 2001
=data conxot.art.d01Mar28.title
How to Pay on a B2B Exchange
=data conxot.art.d01Mar28.summary
E-commerce is taking hold, but electronic payments are still in the
dark ages, with a scarcity of ways to pay for online purchases,
especially on B2B (business to business) sites.  Now, Virtual
Purchase Connection (VPC) is working to provide a new, low-cost
online payment method.
=data conxot.art.d01Mar28.url
http://www.cfo.com/printarticle/1,4580,0|1|AD|2437,00.html
=data conxot.art.d01Mar28.txt

Virtual Purchase Connection provides new payment options for Business
to Business E-commerce.

The Internet is having a sweeping effect on every aspect of American
business. Companies are saving huge sums in E-commerce by providing
for online bidding, electronic processing and administration, and real
time tracking of inventories and parts flow. An increasing number of
companies are using B2B exchanges, even though the projected growth
rate has been slashed in recent weeks See CFO.com's recent story
entitled "The B2B Exchange Myth".

Products can be bought and sold at the click of a mouse, but the
online nature of most E-commerce transactions ends when the buyer
pushes the "Pay" button. The payment system is still in the dark ages,
and everything is usually still on paper, using faxes, invoices, and
paper checks.

The problem is that there's a scarcity of available E-payment options.
The traditional methods are still being used, despite their
disadvantages in the new world: Credit cards have high fees, checks
are slow, and wire transfers are difficult to use.

Alternative payment options are beginning to emerge, including one
from a year-old company called Virtual Purchase Connection (<#stdurl
www.virtualpurchaseconnection.com#>). VPC has partnered with Wells
Fargo Bank, Fleet Bank, and JP Morgan Chase to offer a new E-payment
option supported by a number of services.

"We got into it to offer another payment option on our Web site,"
says Thad Armbruster, CFO for XS Inc, which runs the <#stdurl
www.XSAgg.com#> web site which provides products for agricultural
companies. "VPC offers an excellent upside, since it offers the same
comforts as a credit card. Our credit card fees are passed on to the
customer, and people who use credit cards pay 2.5-3 percent. With VPC,
the fees are roughly half that."

Buyers who want to use VPC have to sign up in advance with a partner
bank, making whatever credit or payment arrangements they agree upon.

When a buyer selects VPC as a payment option on a Web site, the buyer
is authenticated using digital certificates. The seller's Web site
then transmits detailed (so-called "Level 3") line item detail to
VPC's site, which then approves or declines the transaction. If
approved, a unique transaction ID is delivered back to the seller, and
funds are delivered to the seller on the next business day.

The funds are delivered through the standard Automated Clearing House
(ACH) network. Funds never pass through a VPC bank account.

Unlike credit cards, where the seller takes the full responsibility
for fraud, VPC provides full fraud protection to the seller, and
guarantees full payment on the next business day.

MVM Products LLC is implementing a VPC trial program because credit
card fraud has been such a big problem, according to president Daniel
Loyer. The company manufactures and sells ink jet and laser printer
supplies on its Web site, <#stdurl www.ink-jet.com#>.

"We used to run at 8-10 percent credit card fraud, which is the
industry average," he says. "We've cut it down to $1,000-1,500 per
month, on sales of $100,000 per month, because we've stopped
authorizing all charges. When we get a charge that's suspect, we call
the issuing bank and get an authorization."

"With VPC I won't have to do any of that. It releases me from having
to check each card with the bank, since the bank assumes the liability
for the transaction."

This is one of the main strengths of the program, according to David
Kurrasch, president of Virtual Purchase Connection. "Our product is
designed to allow the merchant to feel absolutely certain about who
the buyer is," he says. "When we give them an approval, a top 50
financial institution is guaranteeing the transaction. We eliminate
the merchant's risk that they won't get paid."

Kurrasch points to features that make VPC a complete package. For
example, although a VPC transaction cannot be repudiated once made,
there is a conflict resolution process. "We have a Dispute Resolution
Committee, with merchants, banks, and ourselves represented on it."

Kurrasch would like to see VPC become an industry standard, but there
are some obstacles in the way, according to Avivah Litan, analyst at
the Stamford, Conn.-based Gartner Group.

"One obstacle is that the banks that participate are going to have to
integrate many of their IT systems," she says. "Banks already have
many different data bases, and now they'll have to put them all
together into a single data base. It's a big job."

The second obstacle is the imposition that it places on the seller.
"The seller has to change its system to accept the payments as an
additional option," says Litan.

"It took only about a week of software implementation for the IT
people to implement the pilot," says Scott Peoples, director of
marketing for XS Inc. "However, it'll become more complicated when we
make it available across the board because we have multiple buying
options for many products, and VPC will have to be made available for
each one."

However, despite these obstacles, Litan thinks VPC has a good chance
of making it.

"The bottom line is that it fills a void in the E-commerce B2B space,"
she says. "In my mind, it's a credit card without all the baggage,
like high fees. How far it'll go will depend on whether they can line
up enough banks and enough sellers to make it work. The incentives are
there, but nothing comes for free."

VPC is not the only company launching new B2B E-payment services.

Clareon Corp. (<#stdurl www.clareon.net#>) was launched as a spin-off
from FleetBoston Financial, and offers a system called PayMode. It
doesn't require any modifications to the seller's Web site, since it
works with the buyer's and seller's existing accounts payable and
accounts receivable system. A PayMode buyer would receive electronic
invoices from a PayMode seller. After reviewing the transaction
details, instead of issuing a check, the buyer clicks on a button
which automatically transmits instructions to Clareon to make a
payment. As with VPC, the money is payed through the ACH system.

BankServ Corp. (<#stdurl www.bankserv.com#>) offers a collection of
services to facilitate traditional methods of E-commerce payments,
including ACH system payments, credit card payments, and wire
transfers. As an example of one of many services, BankServ provides
real-time credit card authorizations within 2-4 seconds. In doing so,
it performs several additional security and authentication checks to
reduce fraud. As another example, BankServ systems provide for fast
and efficient wire transfer payments.

These E-payment servers are easier to implement because they use
existing invoicing and payment mechanisms, without requiring changes
to web sites. However, they do not as readily target impulse B2B
purchases by first time buyers, as the VPC option does.

=eod

=data conxot.art.d01Mar21.date
Mar 21, 2001
=data conxot.art.d01Mar21.title
Bill-Paying Services Follow the Money
=data conxot.art.d01Mar21.summary
Online bill-paying services like Paytrust, CheckFree and CheckSpace
allow both individuals and businesses to pay their bills online,
instead of dealing with paper bills and paper checks.
=data conxot.art.d01Mar21.url
http://www.cfo.com/printarticle/1,4580,0|1|AD|2331,00.html
=data conxot.art.d01Mar21.txt

Electronic bill-paying services for small businesses have been around
for years, but lately their appeal has grown.

For years, commercial banks have hawked electronic bill payment as a
magic elixir for relieving the everyday hassle of running a small
business, but they had few takers. Now that's beginning to change: A
trio of service companies are convincing single-proprietor firms and
other small businesses that they can make life easier for them. For
example, Laurie Atkinson, the owner of two businesses, Atkinson
Roofing and Graphic Image Plus, in La Mesa, Calif., pays dozens of
bills each month, but she has long had a habit of losing them.

"It's just that I'm a very bad bill payer," she says. "I'd lose the
bills, and I was always getting three-day notices."

Atkinson solved the problem by creating an account with Paytrust on
its Web site, <#stdurl www.paytrust.com#>.  She typed in the names and
addresses of her regular creditors  the electric utility, her
insurance company, credit card issuers, suppliers, and so forth.
Paytrust notified the creditors to send it the bills, and it now
prints and mails checks for each of Atkinson's three checking accounts
according to rules Atkinson set up.

Typically, customers can specify the date of the month on which bills
are paid, and set limits for each bill. Some bills are paid after the
customer determines the amount of the check.

"Paytrust notifies me by E-mail when it receives a bill," says
Atkinson. "I go online for a few minutes every day, and I just click
on a button to pay the bills. When you have a small business, time is
important, and I don't like dealing with a lot of paperwork."

For that reason, small- and medium-sized businesses' use of
bill-paying services is expected to grow rapidly, according to Paul
Jamieson, an analyst for Gomez Advisors of Lincoln, Mass.

"The more time business owners spend administering the business, the
less time they have to perform core activities," Jamieson says. "These
services give them time, and make the business more productive."

Jamieson estimates that the average small business spends $1,391 per
month to receive and process payments. This includes the highly labor
intensive costs of sending out and processing checks as they're
received.

"Unfortunately, many small businesses are unaware that simply getting
paid costs so much," Jamieson says. Using a bill-payment service can
cut their monthly overhead by almost $600.

The services vary in cost, but generally speaking they charge around
$30 per month for a couple of dozen bills paid, and $0.50 to $1 for
each additional bill.

Richard Mafouz, a Watertown, Mass., based consultant recommends that
his clients use a bill-paying service. "I do consulting for startup
companies, and it saves significant time and money."

Most of the 200 or so checks Mafouz pays each month for his business,
online retailer Dan's Chocolates (<#stdurl www.danschocolates.com#>),
are handled by the service.

"There are only a few times when it doesn't make sense," he says. "If
we're paying Fedex, and we're paying 12 invoices on a single check,
then we have to attach documentation, so we run our own check." The
service can handle checks where there are one or two invoice numbers,
since those numbers can be printed on the check.

Mafouz is using a bill-paying service provided by OneCore Financial
Network Inc. (<#stdurl www.onecore.com#>), which is a reseller for
the bill-paying service originated by CheckFree Corp. (<#stdurl
www.checkfree.com#>).

CheckFree has about 4.5 million users, and is the oldest and largest
of the three services, according to Jamieson. CheckFree also has the
largest number of third parties, including The United States Postal
Service, Yahoo, and dozens of banks. One of its largest accounts is
Bank of America, with 30 million customers.

CheckSpace (<#stdurl www.checkspace.com#>) is a young competitor in
this market, and its clients include Edith Woodworth, owner of an
exotic bird store, Birds & More, in Clarksville, Tenn. She buys as
many as 30 birds each from each of 10 suppliers. The birds retail for
$500 apiece.

"As soon as I put a payment in the system, the system sends the
supplier an E-mail notification, and a few days later the money gets
deposited into his account electronically," says Woodworth.

Like Paytrust and CheckFree, CheckSpace can mail paper checks, but it
emphasizes electronic invoicing and payments. If you schedule a
payment for a supplier who is not a CheckSpace member, then CheckSpace
contacts her or him by E-mail and encourages the supplier to join.

There's no charge for customers making three or fewer payments per
month. But CheckSpace is hoping that new suppliers will be encouraged
to join the system as new customers bring in their own customers and
suppliers, and subsequently use the system for invoicing and
payments.

However, CheckSpace is not alone in providing for online invoicing and
bill paying.

The giant of the business, CheckFree, has spent years forming
relationships with hundreds of organizations to present electronic
bills online, so that its bill-paying customers are able to receive
electronic bills from banks, utilities, and many other businesses, and
then pay them electronically.

The good thing is that once the bill presentment technology is in
place, the other bill-paying services can piggyback on it, and so
eventually these same organizations will present bills online to
customers of the rival services. The expectation is that within five
years or so, almost all organizations will be capable of presenting
their bills electronically.

=eod

=data conxot.art.d01Feb28.date
Feb 28, 2001
=data conxot.art.d01Feb28.title
Expense Management Software Grows Up
=data conxot.art.d01Feb28.summary
Both Extensity Inc. and Concur Technologies are attempting to
integrate three major financial areas -- travel expenses, procurement
expenses, and timesheet tracking -- into a single set of software
modules that can be accessed from the web.
=data conxot.art.d01Feb28.url
http://www.cfo.com/printarticle/1,4580,0|1|AD|2168,00.html
=data conxot.art.d01Feb28.txt

Systems for managing employee expenses can be as unruly as a bowl of
spaghetti, but two software publishers are tying together the loose
ends.

Managing expenses and collecting revenue is a piece-by-piece affair,
and Extensity Inc. (<#stdurl www.extensity.com#>) is attempting to
integrate three major areas -- travel expenses, procurement expenses,
and timesheet tracking -- into a single set of software modules. The
company's first application was travel expense management. One of its
customers, Bestfoods, purchased Extensity's Connect software in 1998
and uses it to enforce its cost-conscious management style, according
to Bob DeLuca, Bestfoods' director of corporate services.

"We've done it with approval-by-exception only," DeLuca says. "Your
manager only sees expense reports on an exception basis, based on our
particular parameters. But if someone takes a trip, and it's not on
the approved airline, the software books it. At the end of the month,
the manager is E-mailed a report containing all the employee expense
reports."

Extensity's prices start at $500,000 for 5,000 seats ($100 per seat),
and include procurement and timesheet modules. The company's biggest
competitor is Concur Technologies (<#stdurl www.concur.com#>), which
introduced a client/server product in 1993. The firm came out with
Web-enabled products, called Expense and Time, in 1999.

One of Concur's customers, Avnet Corp., selected the firm in December
after a lengthy comparison with Extensity.

"We test drove both products, and we had both apps accessible by a
dozen or so people within the company, to experience it within our
four walls," says Jim Strand, vice president of financial operations
for the electronic component distributor. "That proved to be pretty
useful."

Strand decided that the products were roughly equivalent in the way
they matched up with Avnet's requirements. Although he did not reveal
the precise cost of each system, the prices were comparable.

In the end, Strand selected Concur because it offered a 90-day fixed
price "rapid implementation" consulting plan, which began on February
1. "The intent of the rapid implementation plan is to get it up and
running within the company, and then it'll be our job to roll it out."
Ultimately, 7,500 Avnet employees will use the system.

According to Timothy Tow, an analyst with Gartner Group., a Stamford,
Conn., based market research firm, other vendors have offered 90-day,
fixed-price implementation plans, but discarded them.

"A 90-day guarantee is a throw-away statement," Tow says. "It's easy
to get a pilot site up, but it's a lot harder to get the back-end
integration completed after the pilot is over."

Strand agrees with this statement, but says that Concur's 90-day
rapid implementation plan is valuable because he's getting his staff
involved in the implementation.

"The whole concept of rapid implementation sounds good, but it's
useless if you don't have the resources internally to support it,"
Strand says. "We have all the resources lined up from IT, finance, and
training, and they're all part of the project."

Concur's business model is different from Extensity's. Concur targets
the same high-end businesses as Extensity, but it also sells to mid-
size companies. Software license prices start at $150 per seat, and
decrease to $50 per seat in large volumes. Both companies sell
software licenses for their products and make them available on an
application service provider basis.

Concur has aggressively targeted the medium-size business sector with
its ASP model, typically charging $10,000 up front plus several
thousand dollars per month. In the ASP model, the customer outsources
operation of the computers running the application.

"Concur has an agreement with its customers that guarantees the
application is up and running, or Concur doesn't get paid," says Andy
Goloboy, an analyst for the Framingham, Mass., based market research
firm International Data Corp. "The old support model of 'bring down
the server, we'll send you the patch tomorrow morning' doesn't apply
in the world of ASP."

However, Concur last year canceled plans to implement an
E-procurement application in competition with Extensity's and decided
to stick to its core business of travel expense management and
timesheet applications, says Rajeev Singh, executive vice president
for Concur.

By contrast, Extensity has not only continued to pursue the E-
procurement market, but it has also announced a series of applications
to manage hiring and related human resources functions, dubbing the
products workforce management.

"We believe that the world is just waking up to the tremendous gains
that can be realized by applying technology to the employee
lifecycle," says Bob Spinner, Extensity's CEO.

However, both companies are investing heavily in technology, and
neither company has been showing profits. In fact, continued
technology investment will be necessary for either company to survive,
according to Gartner Group's Tow, because of competition from the
publishers of enterprise resource planning systems, such as Oracle and
PeopleSoft.

"Concur and Extensity have to invest heavily in R&D to keep their
functionality ahead of the competition," Tow says. Without that
investment, both companies will become acquisition targets.

=eod

=data conxot.art.d01Feb21.date
Feb 21, 2001
=data conxot.art.d01Feb21.title
Web Analytics Can Improve Your Marketing
=data conxot.art.d01Feb21.summary
How many people are accessing your web site?  And when they do, which
options do they click on, and how do they sequence through the
various web site pages?  To find out, you need to use a web analytics
program, like the ones from WebSideStory, Coremetrics, WebTrends and
Accrue. However, web analytics also has some dirty little secrets.
More females than males are playing online games now.  What this
might mean for e-commerce, and how e-commerce need to be designed to
be more female-oriented than they are now.
=data conxot.art.d01Feb21.url
http://www.cfo.com/printarticle/1,4580,0|1|AD|2168,00.html
=data conxot.art.d01Feb21.txt

The Web can provide marketing executives with more information than
they ever dreamed of. Making sense of it is another matter.

Perhaps one of the best business innovations brought on by the
Internet is its ability to provide nearly instantaneous feedback on
marketing campaigns. For example, once a campaign is launched, a
company can measure the impact on its Web site by doing further
research on the products being marketed and the people buying them.
Gift catalog merchant ABC Distributing Inc. sends out millions of
catalogs each month, and it uses the Internet to get fast feedback
from test mailings.

"One of the biggest benefits for ABC is detecting as quickly as
possible the results of sending out test catalogs," says Daniel
Gudema, Web site manager for the North Miami Beach firm. "We can
monitor the browsing level of the online catalog on an hour-by-hour
basis, and then use that to determine within two or three days whether
to send the test catalog out for a major run."

But getting detailed feedback of this sort requires accurate
measurements of a Web site's traffic, an area known as "Web
analytics."

"The Web analytics market is relatively crowded with 36 major
suppliers, and the number is growing," says Guy Creese, analyst for
the Boston based Aberdeen Group. He adds there are a number of dirty
little secrets that these companies don't tell you, which means you
should be careful when selecting products.

Click here to read Aberdeen's dirty little secrets of Web analytics.

ABC Distributing tracks the activities in real time on its Web site
(abcdistributing.com) by means of an ASP service called HitBox,
provided by WebSideStory Inc. (Websidestory.com).

In order to make this work, the company puts JavaScript commands into
the HTML for each of the site's pages. When a user visits one, the
JavaScript sends information about the visit and the section of the
page the mouse has been clicked on (or been dragged) over back to
WebSideStory's database.

"Originally we were quoted a price of $4,000 to $5,000 dollars a month
for the service," says Gudema. "But now we've gone up to 20 million to
30 million page views per month on the Web site, and at that level
it's $7,000 to $9,000 per month."

Even at this price, the service is well worth it, according to
Gudema. "Anyone in the company can log in from the office or from home
and know exactly what's going on," he says. "It's brought a lot of
accountability."

GMAC Insurance Online notes that Web analytics is important for other
reasons. The company has just signed a contract with Coremetrics Inc.
(<#stdurl www.coremetrics.com#>), an ASP whose base service costs $250,000 per
year, which includes some consulting.

"Strategically, we believe that this kind of tool gives our customers
a better online experience, by enabling us to provide them with the
services and products they want," says president Mitch White. "For
example, if 50% of our customers were going to the billing screen, and
it took them three clicks, we could serve that screen up in just one
click."

Another reason to use analytics is to get quick marketing feedback. "A
real life example is that a competitor of ours did a giveaway of a $10
gift certificate to Amazon.com," says White. "The campaign was a big
success based on the click-through, because they gave away a lot of
gift certificates, but unfortunately they sold only one policy."

Good real time analytics, even though expensive, can nip disasters
like that in the bud. In fact, since Web-site development and
maintenance can easily cost millions of dollars per year, a strong
case can be made for spending an extra $250,000 to $300,000 per year
for Web analytics.

Companies put off by the price tag can opt for some simple, homegrown
ways to analyze their Web site's traffic.

Web servers generate "Web log files" that record visits to most sites.
A company can obtain generalized analytics figures in terms of "Web
site hits" or "page views" just from the size of these log files.

Several companies, such as WebTrends Corp. (<#stdurl
www.webtrends.com#>) and Accrue Software Inc. (<#stdurl
www.accrue.com#>), have become market leaders in Web analytics by
providing software products that analyze these log files.

Server Data or Browser Data The analysis of server-side data has been
around a little longer than the analysis of browser-generated
JavaScript files. For this reason, most of the industry-leading Web
analytics firms have grown up using server data. The server method is
effective in providing data about how the Web site's servers are being
used and for monitoring the growth of the Web site.

Browser-side data analysis is a newer method, and appears to be more
effective in providing marketing or business data. As a further
wrinkle, one company, Elytics Corp. (<#stdurl www.elytics.com#>), is
launching a product that processes and merges both server-side and
browser-side data.

But at the end of the day, a Web analytics system has to do more than
just count page hits.

For example, if a user visits your site on Monday and Tuesday to do
the Web equivalent of window-shopping, and then makes a purchase on
Thursday, the analytics software has to encapsulate all three visits
into a single experience leading to a sale. Determining this from
either server-side or browser-side alone is extremely difficult.

In fact, Gudema has analyzed a number of Web analytics products, and
found none that provide functionality in all four of the areas that he
requires: "One [area] is the volume of traffic through the Web site;
one is a system that tracks and monitors the health of the servers,
and how heavily they're loaded; one is the detailed behavior analysis
of people who make purchases; and the fourth is E-mail management."

Gudema requires multiple products to handle all these areas.

Privacy Issues If there's one issue that's a potential showstopper in
the area of Web marketing, it has to be privacy. That presents an
extra challenge to marketing executives. Analytics services have to
provide enough data to satisfy the marketing aims of their clients,
but not so much that they invade the privacy of their clients'
customers.

"With this technology you shouldn't be collecting any personally
identifying information on the user," says Michael Christian,
WebSideStory senior vice president. "And sometimes you have to do some
special things [in the JavaScript] to strip information out." Some of
his competitors have been hit with lawsuits from users with privacy
concerns.

The problem is that there's a lot of data floating around -- the
user's behavior at the Web site, credit card data, purchases,
demographics, and, depending on the technology, information about
other Web sites a visitor has been to. A malicious vendor could
combine all this information and get a detailed personal profile of
each Web site visitor.

It doesn't help that a lot of Web analytics data is stored on the
servers at an ASP. That means that businesses are relying upon the
security of the ASP's firewalls to protect their customers' data.

Even with literally dozens of Web analytics on the market, and more
being introduced every week, the technological questions are still at
an early stage of being solved. But Web site developers and providers
will have to make sure that the privacy issues don't get overlooked as
they race to improve the technology.



<h3>Sidebar -- Web Analytics's Dirty Little Secrets</h3>

By John Xenakis    CFO.com    Feb 21, 2001

If only Web-analytics software worked as advertised. Before you buy a
service, here are five things you should consider.

During the sales process, Web-analytics suppliers rarely mention some
common problems and pitfalls, according to Guy Creese, an analyst with
The Aberdeen Group. Here are some of them:

Data collection perfection is unattainable. The Internet was not
designed with auditing of end-user behavior in mind. Different
technologies gather different views of the user's behavior.
Enterprises that depend on only one of these technologies are seeing
no more than a partial view of Web-site behavior, yet getting a
"total" view can be expensive or impossible.

Page views and Web-site visits must be defined. Individual Web pages
can be very complex, using multiple frames, tables, and graphics, some
of which are shared between pages. Collecting raw data about the
elements a user has downloaded to her browser is one thing, but the
enterprise's business analysts have to decide which of the elements
have to be combined to form a true page view or Web-site visit.

Understanding the visitor's journey is key. Enterprises have a
functional view of their Web site  One group of pages goes under
"products and services," while another set belongs under "partners."
However, this view clashes with the process orientation of visitors
who are browsing, buying or complaining, involving several functional
areas. The key to understanding visitor behavior is to study visitors'
journeys across the Web site rather than simply count the waypoints.

Affiliated business processes are not always easy to implement.
Enterprises typically underestimate the amount of work required to
integrate Web analytics into business processes, just as they
initially underestimated the work it takes to maintain a Web site. For
example, an enterprise must agree on the amount of information it will
gather. Enterprises that track too much risk antagonizing privacy
watchdog groups. If they track too little, the corporation won't
understand its customers.

Beware of corporate politics. Web analytics systems initially tracked
activities of particular interest to IT managers concerned with
predicting Web-site growth. But with the shift toward business
metrics, marketing managers who are currently excluded from seeing the
data should now have access to it. Click here to return to main story
on Web analytics.

=eod

=data conxot.art.d01Feb14.date
Feb 14, 2001
=data conxot.art.d01Feb14.title
Online Games for Girls: E-commerce's Next Frontier?
=data conxot.art.d01Feb14.summary
More females than males are playing online games now.  What this
might mean for e-commerce, and how e-commerce need to be designed to
be more female-oriented than they are now.
=data conxot.art.d01Feb14.url
http://www.cfo.com/printarticle/1,4580,0|1|AD|2110,00.html
=data conxot.art.d01Feb14.txt

Will 'collaboration' and 'no males allowed' revive online markets?

Surprise! More females than males play online games. Just a few years
ago, computer games were considered a no-woman's-land. Not anymore.
However, men and women tend to play different games and use different
styles of play, which raises the question whether existing E-commerce
Web sites are set up to encourage the maximum number of online
purchases by women.

Most market research says that some 80 percent to 85 percent of all
consumer purchases in the U.S. are made by women. This means that four
times as many consumer goods are purchased by women as by men.

But there's a tremendous gender gap between E-commerce and retail
purchases. For example, a recent report from Forrester Research says
that as many women as men are buying online, and that women and men
follow similar E-tailing patterns.

But the different E-commerce habits of men and women are often
misunderstood. Because, men and women are now making equal amounts of
purchases in cyberspace, Forrester concludes that "gender is a red
herring," and "the E-commerce gender gap has closed."

But that assertion seems to be off the mark. As long as women make up
a far-smaller percentage of virtual transactions than they do in the
bricks-and-mortar world of traditional retailing, the obvious
conclusion is that online marketers are missing an enormous
opportunity. It's fair to ask whether the majority of E-commerce Web
sites are simply "too masculine."

But how should this disparity be addressed? Unfortunately, there's no
conclusive data on a solution.

It remains to be seen whether collaborative or other female-oriented
traits can help E-commerce Web sites attract more women customers.
Simply put, women tend to behave differently than men in online games
and communications, and some observations about the distinctive
features in online games for girls suggest some tactics that E-tailers
might try to lure more women customers.

"Our latest study shows that women make up about 51 percent of the
online gaming population," says Sean Wargo of the market research
firm, PC Data Inc. However, while men are more likely to be playing
shooter or sports games, "what appeals most to women is card games,
games based on a trivia theme and games with a gambling theme." Most
of these games have a collaborative element, permitting groups of
people to share experiences.

The computer games adults choose appear to parallel the games young
boys and girls play. Males tend to enjoy competitive, sometimes
solitary games like car racing or shooting monsters, while women are
more likely to look for games that emphasize sharing and
communication, or which test their intelligence and problem-solving
skills in non- competitive ways.

The PC games for girls that have reached a mass market include the
Barbie games from Mattel Media Inc. (<#stdurl www.mattelmedia.com#>).
These games, which are targeted to five- to 10-year-old girls,
emphasize clothing and fashion. But "Detective Barbie: Mystery Cruise"
is an adventure game starring Barbie, who has to solve an art-theft
mystery using a variety of gadgets to uncover clues.

The Nancy Drew series games from Her Interactive Inc. (<#stdurl
www.herinteractive.com#>) have also sold well through four titles
since 1997, and are targeted to girls 10 and older.

"What's interesting is that girls had never really been asked what
they want in games, with the result that most games have been designed
by males for males," says Megan Gaiser, president of Her Interactive.
"We took a look at how they use the computer and what they like and
dislike, and they've given us a fresh perspective on what games should
be."

The latest title, "Nancy Drew: Message in a Haunted Mansion" topped
the Amazon.com children's software list for a part of the last holiday
season, according to Gaiser, who says that girls collaborate in this
game similar to the manner in which they play hopscotch.

"We find that girls tend to play this game in groups of two or three,"
she says. "They work together. One girl sits at the computer, and one
girl writes down the hints and the clues that you need to solve the
mystery."

The games packaging makes it clear that this a "no males allowed"
game, and the first thing you see when you open it is a banner
reading, "Girls are cool." My teen son, who's willing to try almost
any computer game, wouldn't go near this one, although he watched me
play it and only took command of the mouse when I was well into it.

How important is an occasional "no males allowed" message to this and
other games targeted to girls?

Tami Cotter, a communications professional with two young daughters, 3
and 5, says that in her experience this kind of gender differentiation
is very important.

"I don't think it has to do with the parents, because we're very
open," says Cotter. "But even when Ashley was very little she just
wanted to play with dolls, and her attitude towards trucks was, 'I'm
not interested - those are for boys.' "

This theme appears in the Tomb Raider games from Eidos (<#stdurl
www.eidos.com#>) in a different way. The lead character in this series
is the character Lara Croft, who is being heavily cross-promoted. Lara
wears a Timex TMX Grip Clip watch in the game, and you can also buy
that watch in stores. And a Tomb Raider movie is scheduled for release
this summer, with Academy Award winner Angelina Jolie in the title
role.

Although more males than females purchase Tomb Raider games, the
percentage of female purchasers is relatively high, more than 10
percent, compared to less than 1 percent for most PC games.

Paul Baldwin, vice president of marketing for Eidos, "no males
allowed" is at least a part of what women look for in this game.

"Lara Croft is an intelligent female heroine, never had time for
males, always adventurous," says Baldwin. "There's a big puzzle and
adventure element, including exploration in 3D worlds. For example,
you can visit the massive tombs in Egypt and explore for hours. There
are puzzles, but they don't test your reactions, which is a male
thing, but they touch your mind."

The billion dollar question, of course, is whether companies can learn
some new marketing skills by studying the differences in the online
behavior between males and females. In the billion dollar world of E-
commerce, that's not kid stuff.

=eod

=data conxot.art.d01Feb07.date
Feb 07, 2001
=data conxot.art.d01Feb07.title
Softline Has Big Plans for AccountMate
=data conxot.art.d01Feb07.summary
Is a little-known South African company ready to join the accounting
software big leagues?
=data conxot.art.d01Feb07.url
http://cfo.com/Pge_Channel_Article_Detail/1,2908,3|19|AD|2078,00.html
=data conxot.art.d01Feb07.txt

Is a little-known South African company ready to join the accounting
software big leagues?

(Editor's Note: This is the first in a series of monthly columns on
the strategies of accounting software vendors.) The growing demands of
technology and globalization have made it almost impossible for
midrange accounting software vendors to remain independent and viable.
A large number of them have gone on the auction block, but in the
process new firms have entered the sector.

For example, even industry leader Great Plains Software announced
last December that it is being sold to Microsoft Corp.

In other instances, foreign firms have used the turmoil to enter the
U.S. market. London-based Sage Group PLC was almost unknown in the
U.S. until 1998, when it acquired State of the Art. Then last year,
Sage acquired Peachtree Software, and the company now markets low-end
to mid- range software programs. It has more than 1 million
installations worldwide.

Recently, South African-based Softline Ltd. (<#stdurl
www.softline.co.za#>) has made it clear that it hopes to follow in
Sage's footsteps. The company is as unknown in the U.S. as Sage was
four years ago. But Softline's December acquisition of AccountMate
Software Corp. of Novato, Calif. has given it 400,000 installations
worldwide.

The company's other recent acquisitions include Pastel Software
(<#stdurl www.pastel.com#>), a vendor of a small business accounting
package with more than 130,000 customers in 37 countries, and of
BusinessVision Management Systems Inc. (<#stdurl
www.businessvision.com#>), the second largest accounting software
vendor in Canada (behind Accpac International Inc.) It also owns
Datafaction Inc. (<#stdurl www.df.com#>), a niche software vendor that
handles accounting software for entertainment firms.

"AccountMate has good products and a good reseller channel," says
Ivan Epstein, founder and CEO of the Johannesburg firm. "The
acquisition enhances our international position, expands our user
base, adds to our product range, and provides a solid footprint in
the USA. We are now clearly a leading vendor in South Africa,
Australia, Canada, and the USA."

AccountMate has sold some 120,000 installations since it was founded
in 1984. But, like the rest of the accounting software industry, it's
stalled in recent years. Its current product, Visual AccountMate, has
only 15,000 registered installations.

The lackluster sales forced the firm to change its business strategy
a year ago, according to AccountMate CEO Ben Tse. "We can no longer
be just an accounting software company," he says. "That's why our
business model has changed to work closely with third-party
developers."

As part of the strategy, AccountMate formed marketing and product
development alliances with Prism Visual Software (<#stdurl
www.prismvs.com#>), a developer of fleet route management software and
TIW Technology Inc. (<#stdurl www.tiwcorp.com#>), which develops
factory management systems and process control software.

"We're taking a very proactive approach in working with these third-
party developers," says Tse. "We've devoted considerable resources to
them for system integration and design review. Our goal is to bring
new versions of the third-party developer's products to market at the
same time that we release our products."

AccountMate's third-party strategy is evident at Kinetico Inc., a
manufacturer and retailer of water-treatment systems for home and
industrial use. The firm uses J. D. Edwards accounting software in
its headquarters, and Visual AccountMate and Prism's Visual in its
retail stores.

"We sell water softening systems," says Kinetico IS Manager Ned
Sherry. "We install them, and we do service calls. We deliver salts,
and one store delivers water. We needed a package that could handle
the service call scheduling, generate an invoice, and track the
history. We also need to track the customer financially -- what
equipment they have, the serial numbers, how many times we went out
there, and so forth. So we wanted a package that did accounting and
also handled the service aspect."

This list of requirements led Sherry to the partnership between
AccountMate and Prism. "The interface between the two packages is
seamless, and you don't even know that you're using two different
packages."

Tse hopes that the Kinetico installation proves to be a model for
many others. "We're going to go after generic accounting software
resellers, and advise them on how to go after these specific niche
markets," he says.

Within the next few weeks, Softline will be launching itself in North
America. The new division is tentatively being called Softline /
Pastel, and it will be headed by Steven Rostovsky, CEO of the firm's
North America subsidiary.

"BusinessVision is at the lower end of the market, and AccountMate is
at the upper end," says Rostovsky. "In the generic accounting space,
we'll be covering everything from the small business into the middle
market."

Rostovsky plans to expand Tse's strategy of affiliating with third-
party software developers.

"Here in the US, it's hard to differentiate yourself when you're a
generic product," he says. "The end users want something unique. So
we're focusing on verticalization, and committing ourselves to our
channel partners. We think we'll see greater success that way."

However, while Rostovsky and Epstein are adopting AccountMate's
verticalization strategy, they do have some changes planned for the
company. "I'm very passionate about customer service," says Epstein.

So while AccountMate has excellent products, it bothers Epstein that
"two thirds of the head count in that company are developing
technology. We need to change that to get superior customer service."

Does that mean that AccountMate's programmers are going to be
replaced by marketing people? "It's not a requirement to change
personnel," says Epstein. "It's changing the corporate culture to
develop a sense of urgency to meet a customer need. For example,
technology people relate more to computers and to code and to the
excitement of new technology than to fixing an accounts receivable or
accounts payable bug," he says. "What we'll be changing is the sense
of urgency to do what the customers are asking us to do."

Tse agrees with this approach. "We are going to reorient our
priorities to a more customer service-driven focus, with special
attention given to the improvement in our responsiveness and quality
of support to our customers," he says. "This does not require any
change of personnel; rather it just requires that we shift our focus
to a more customer service-driven approach."

=html

<b>AccountMate Software Corp.</b><br>
81 Digital Drive<br>
Novato, CA 94949;<br>
Phone: 1-800-877-8896<br>
Web site: <#redir "http://www.accountmate.com"#> 
www.accountmate.com</a><br>
<br>
<b>Product Name:</b> Visual AccountMate version 5.<br>
<br>
In addition to the basic functions, (g/l, a/r, a/p, order entry,<br>
etc.), the product has the following technical specifications:</p>
<table border="0" width="75%">
  <tr>
    <td width="100%" colspan="2"><b><font color="#CC0000"> 
Integrated Functionality -- General</font></b></td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Activity Based Costing</td>
    <td width="56%" bgcolor="#FFFFDD"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Complex Allocations</td>
    <td width="56%" bgcolor="#E4E4C9"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Credit Management</td>
    <td width="56%" bgcolor="#FFFFDD"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Complex Consolidations/Roll 
Ups</td>
    <td width="56%" bgcolor="#E4E4C9"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Debt Collection</td>
    <td width="56%" bgcolor="#FFFFDD"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Document 
Management/Imaging</td>
    <td width="56%" bgcolor="#E4E4C9"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Electronic Funds Transfer</td>
    <td width="56%" bgcolor="#FFFFDD"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Govt. Commitment 
Accounting</td>
    <td width="56%" bgcolor="#E4E4C9"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Human Resources</td>
    <td width="56%" bgcolor="#FFFFDD"> YES (Provided by third party)
</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Multicurrency</td>
    <td width="56%" bgcolor="#E4E4C9"> Supports unlimited 
currencies</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Job/Project Costing</td>
    <td width="56%" bgcolor="#FFFFDD"> YES-Third Party</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Multilingual</td>
    <td width="56%" bgcolor="#E4E4C9"> YES - supports Chinese, French, 
Spanish</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Nonprofit Accounting</td>
    <td width="56%" bgcolor="#FFFFDD"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    OLAP / Data Warehouse</td>
    <td width="56%" bgcolor="#E4E4C9"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Project Management</td>
    <td width="56%" bgcolor="#FFFFDD"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Sales Force Management</td>
    <td width="56%" bgcolor="#E4E4C9"> YES-Third Party</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Service Management</td>
    <td width="56%" bgcolor="#FFFFDD"> YES-Third Party</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Transaction Analysis 
Codes</td>
    <td width="56%" bgcolor="#E4E4C9"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Travel Management</td>
    <td width="56%" bgcolor="#FFFFDD"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Treasury Management</td>
    <td width="56%" bgcolor="#E4E4C9"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Workflow</td>
    <td width="56%" bgcolor="#FFFFDD"> YES-Third Party</td>
  </tr>
</table>
<p> 
<table border="0" width="75%">
  <tr>
    <td width="100%" colspan="2"><b><font color="#CC0000"> 
Integrated Manufacturing</font></b></td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Discrete Manufacturing</td>
    <td width="56%" bgcolor="#FFFFDD"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Logistics and 
Distribution</td>
    <td width="56%" bgcolor="#E4E4C9"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    MRP/ERP</td>
    <td width="56%" bgcolor="#FFFFDD"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Process Manufacturing</td>
    <td width="56%" bgcolor="#E4E4C9"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Work Orders</td>
    <td width="56%" bgcolor="#FFFFDD"> YES</td>
  </tr>
</table>
<p>
<table border="0" width="75%">
  <tr>
    <td width="100%" colspan="2"><b><font color="#CC0000"> 
Integrated Internet Functions</font></b></td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Data Entry / Query</td>
    <td width="56%" bgcolor="#FFFFDD"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Report Distribution</td>
    <td width="56%" bgcolor="#E4E4C9"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Business to Business e-
commerce</td>
    <td width="56%" bgcolor="#FFFFDD"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Business to Consumer e-
commerce</td>
    <td width="56%" bgcolor="#E4E4C9"> YES</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Employee Self Service</td>
    <td width="56%" bgcolor="#FFFFDD"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#E4E4C9">    Customer Self Service</td>
    <td width="56%" bgcolor="#E4E4C9"> NO</td>
  </tr>
  <tr>
    <td width="44%" bgcolor="#FFFFDD">    Vendor Self Service</td>
    <td width="56%" bgcolor="#FFFFDD"> YES</td>
  </tr>
</table>
<p>
<table border="0" width="75%">
  <tr>
    <td width="100%" colspan="2"><b><font color="#CC0000">
Platform</font></b></td>
  </tr>
  <tr>
    <td width="24%" bgcolor="#FFFFDD">    Servers:</td>
    <td width="76%" bgcolor="#FFFFDD"> NT, Novell, AS/400</td>
  </tr>
  <tr>
    <td width="24%" bgcolor="#E4E4C9">    Databases:</td>
    <td width="76%" bgcolor="#E4E4C9"> SQL Server, DB2, Visual 
FoxPro</td>
  </tr>
  <tr>
    <td width="24%" bgcolor="#FFFFDD">    Source language:</td>
    <td width="76%" bgcolor="#FFFFDD"> Visual FoxPro 6.0 (source code 
available)</td>
  </tr>
</table>
<p>
<table border="0" width="75%">
  <tr>
    <td width="100%" colspan="4"><b><font color="#CC0000"> 
Comparison with other midrange vendors</font></b></td>
  </tr>
  <tr>
    <td width="22%" valign="top"> </td>
    <td width="29%" align="center" valign="top"><b><font face="Arial" 
size="2">                AccountMate                
Visual                AccountMate</font></b></td>
    <td width="28%" align="center" valign="top"><b><font face="Arial" 
size="2">           Great Plains                 
Dynamics</font></b></td>
    <td width="24%" align="center" valign="top"><b><font face="Arial" 
size="2">      Sage          MAS-90</font></b></td>
  </tr>
  <tr>
    <td width="100%" colspan="4" bgcolor="#E7CFCF"><b><font 
face="Arial" size="2">Price</font></b></td>
  </tr>
  <tr>
    <td width="22%" align="right" bgcolor="#FFFFDD">    Low </td>
    <td width="29%" align="center" bgcolor="#FFFFDD">         
$4,000</td>
    <td width="28%" align="center" bgcolor="#FFFFDD">                
$50,000</td>
    <td width="24%" align="center" bgcolor="#FFFFDD">             
$6,000</td>
  </tr>
  <tr>
    <td width="22%" align="right" bgcolor="#E4E4C9">    Average</td>
    <td width="29%" align="center" bgcolor="#E4E4C9">     $12,000</td>
    <td width="28%" align="center" bgcolor="#E4E4C9">              
$90,000</td>
    <td width="24%" align="center" bgcolor="#E4E4C9">            
$20,000</td>
  </tr>
  <tr>
    <td width="22%" align="right" bgcolor="#FFFFDD">    High</td>
    <td width="29%" align="center" bgcolor="#FFFFDD">        
$150,000</td>
    <td width="28%" align="center" bgcolor="#FFFFDD">               
$225,000</td>
    <td width="24%" align="center" bgcolor="#FFFFDD">           
$50,000</td>
  </tr>
  <tr>
    <td width="22%" align="right" bgcolor="#E4E4C9">    Per module</td>
    <td width="29%" align="center" bgcolor="#E4E4C9">  $995</td>
    <td width="28%" align="center" bgcolor="#E4E4C9">                 
$7,500-20,000</td>
    <td width="24%" align="center" bgcolor="#E4E4C9">     $1,300</td>
  </tr>
  <tr>
    <td width="100%" colspan="4" bgcolor="#E7CFCF"><b><font 
face="Arial" size="2">Target Customer
      Size ($Sales)</font></b></td>
  </tr>
  <tr>
    <td width="22%" align="right" bgcolor="#FFFFDD">    Low</td>
    <td width="29%" align="center" bgcolor="#FFFFDD">         $5 
million </td>
    <td width="28%" align="center" bgcolor="#FFFFDD">          $10 
million</td>
    <td width="24%" align="center" bgcolor="#FFFFDD">      $2 
million</td>
  </tr>
  <tr>
    <td width="22%" align="right" bgcolor="#E4E4C9">    High</td>
    <td width="29%" align="center" bgcolor="#E4E4C9">        $500 
million</td>
    <td width="28%" align="center" bgcolor="#E4E4C9">          $250 
million </td>
    <td width="24%" align="center" bgcolor="#E4E4C9">$100 million</td>
  </tr>
  <tr>
    <td width="100%" colspan="4" bgcolor="#E7CFCF"><b><font 
face="Arial" size="2">Principal
      Target Markets </font></b></td>
  </tr>
  <tr>
    <td width="22%" bgcolor="#FFFFDD"> </td>
    <td width="29%" bgcolor="#FFFFDD" align="center" 
valign="top">Manufacturing,                 Distribution</td>
    <td width="28%" bgcolor="#FFFFDD" align="center" 
valign="top">        Service orgs,           e-
commerce,                                        
wholesale/distribution</td>
    <td width="24%" bgcolor="#FFFFDD" align="center" valign="top">     
Distributors</td>
  </tr>
</table>
<br><br><i>Source: All specifications were provided by the vendors 
themselves.<br>
</i><br>
 <BR><BR>
    </TD>
  </TR>
</TABLE>


=// <pre>
=// 
=// AccountMate Software Corp.
=// 81 Digital Drive
=// Novato, CA 94949;
=// Phone: 1-800-877-8896
=// Web site: www.accountmate.com
=// 
=// Product Name: Visual AccountMate version 5.
=// 
=// In addition to the basic functions, (g/l, a/r, a/p, order entry,
=// etc.), the product has the following technical specifications:
=// 
=// Integrated Functionality -- General
=// Activity Based Costing NO
=// Complex Allocations NO
=// Credit Management YES
=// Complex Consolidations/Roll Ups YES
=// Debt Collection NO
=// Document Management/Imaging YES
=// Electronic Funds Transfer YES
=// Govt. Commitment Accounting NO
=// Human Resources YES (Provided by third party)
=// Multicurrency Supports unlimited currencies
=// Job/Project Costing YES-Third Party
=// Multilingual YES - supports Chinese, French, Spanish
=// Nonprofit Accounting YES
=// OLAP / Data Warehouse YES
=// Project Management NO
=// Sales Force Management YES-Third Party
=// Service Management YES-Third Party
=// Transaction Analysis Codes YES
=// Travel Management NO
=// Treasury Management NO
=// Workflow YES-Third Party
=// 
=//   Integrated Manufacturing
=// Discrete Manufacturing YES
=// Logistics and Distribution YES
=// MRP/ERP YES
=// Process Manufacturing YES
=// Work Orders YES
=// 
=// 
=// Integrated Internet Functions
=// Data Entry / Query NO
=// Report Distribution NO
=// Business to Business e- commerce YES
=// Business to Consumer e- commerce YES
=// Employee Self Service NO
=// Customer Self Service NO
=// Vendor Self Service YES
=// 
=// 
=// Platform
=// Servers: NT, Novell, AS/400
=// Databases: SQL Server, DB2, Visual FoxPro
=// Source language: Visual FoxPro 6.0 (source code available)
=// 
=// 
=// Comparison with other midrange vendors
=//   AccountMate Visual AccountMate Great Plains Dynamics Sage MAS-90
=// Price
=// Low  $4,000 $50,000 $6,000
=// Average $12,000 $90,000 $20,000
=// High $150,000 $225,000 $50,000
=// Per module $995 $7,500-20,000 $1,300
=// Target Customer Size ($Sales)
=// Low $5 million  $10 million $2 million
=// High $500 million $250 million  $100 million
=// Principal Target Markets
=//   Manufacturing, Distribution Service orgs,  e- commerce, 
=// wholesale/distribution Distributors
=// 
=// 
=// Source: All specifications were provided by the vendors themselves.
=// 
=// </pre>

=eod

=data conxot.art.d01Jan31.date
Jan 31, 2001
=data conxot.art.d01Jan31.title
Why You Need an Optical Mouse
=data conxot.art.d01Jan31.summary
You should buy yourself an optical mouse even if your employer is too
cheap to get one for you. How keyboard and mouse devices are helping
overcome repetitive stress injuries.
=data conxot.art.d01Jan31.url
http://cfo.com/Pge_Channel_Article_Detail/1,1864,3|19|AD|2029,00.html
=data conxot.art.d01Jan31.txt

Keyboard and mouse devices are helping overcome repetitive stress
injuries.

Leah Stevens gets shooting pains in her hands and wrists if she types
for several hours at a time on her computer. As it happens, she's
also working on her Ph.D. thesis on ergonomics and technology for the
engineering and psychology departments at the University of Central
Florida, so she's in a good position to find ways to help herself.
Part of her research is to test out a "keyless keyboard" called the
OrbiTouch from Keybowl Inc. (<#stdurl www.keybowl.com#>). To use it,
you put your hands on two knobs (or domes) and slide them up, down,
left, or right in various combinations to type letters.

The device also has an integrated mouse, and therefore, the same
motions can drag and click the mouse.

Note that the knobs don't turn; they slide. This is important, because
it means that you can type without moving your fingers at all. Even
wrist movement is minimal, so that all motion is performed by the
elbows and shoulders.

"It has a contour that matches the anatomical fit of my hand," Stevens
says. "I notice a difference just putting my hands on the domes."

Stevens, who's a touch typist at 100 words per minute, finds the
OrbiTouch extremely comfortable to use. And after about 40 hours of
practice, she achieved a typing speed of 40 words per minute, which is
quite adequate, given the reduced physical stress.

Input Devices Aplenty Before going on with the OrbiTouch, it's worth
noting that the low-cost options are increasing for people with hand
injuries.

In fact, everyone should go to their local computer store and get an
optical mouse, a device that usually costs no more than $30 from
manufacturers such as Logitech Corp. or Microsoft Corp.

A ball mouse requires the user to press hard to make it work,
especially after dirt and gunk have accumulated in the mechanism.

But an optical mouse has no moving parts, and never gets dirty. It
works purely with a laser light, and it responds precisely and
accurately to the lightest feather touch, which does a lot to save
stress on the fingers and wrists.

There is such a big difference between using a mechanical mouse and
an optical mouse, that even if the company you work for is too cheap
to pay for it, I strongly recommend to everyone to go out to the store
and pay $30 for it yourself. The difference is so great, you'll be
glad you did.

While you're at the computer store, you might want to check out some
other devices. For example, there are wireless mice that don't require
cables between the mouse and the computer.

In addition, there are specially shaped mice that conform to the hand
in various ways. Or the mouse can be eliminated entirely with a
trackball or a tablet. Finally, there are "natural keyboards" that
provide different kinds of hand positions when typing.

"Try out the different mice in the store -- feel them and grip them, to see 
what you should be honing in on," says Stevens. "The main thing is to use 
common sense. Just because someone says it's ergonomically designed, don't 
take their word for it. If it feels unorthodox to you, then don't use it. 
Ask yourself whether it fits your body naturally, and whether you'd be 
comfortable spending the time learning how to use it. If you don't give 
yourself enough time, it'll just sit in the corner."

"Feel" the Screen

The iFeel mouse can help people having difficulty seeing windows on
the computer screen or different objects on a Web page, by letting
computer users "feel" the objects on their screens.

When a cursor moves across a window boundary, or moves over a button,
the mouse physically vibrates. You can adjust the vibrations to give
a "rubbery," "metallic," or "crisp" feel.

People who think they could be helped by the iFeel mouse should take
a couple of days to get used to it, according to Rob Enderle, analyst
for Giga Information Group. "It's different because it gives one more
piece of feedback."

Enderle says, "A lot of folks are uncomfortable with things they
can't touch. The iFeel gives them a feel for the pages they're looking
at, and for people having difficulty seeing lines, it can be very
helpful."

The iFeel mouse is available in computer stores for about $50. It
requires a USB port on your computer.

Typing with Boxing Gloves

The OrbiTouch is more experimental, with a product launch from Keybowl
Inc. expected within the next three months.

"It started out seven years ago as an innocent research project to
eliminate the motions causing [repetitive motion injuries]," says Pete
McAlindon, the inventor and CEO of Keybowl Inc. The company was formed
in 1997, following publication of McAlindon's original research
results, sponsored by the National Science Foundation.

Indeed, this kind of injury can strike almost any computer user at any
time. One person, who prefers to remain anonymous, played Minesweeper
intensively for two days and ended up with several months of wrist
pain. It's also been reported that even teenagers suffer life-long
repetitive stress injuries.

Carpal tunnel syndrome is the most widely publicized of these
problems, but there are many other injuries that can affect computer
typists, including arthritis, paralysis, missing fingers, and
neuromuscular disorders.

"As people started coming to me with upper body disabilities, I saw
this as a huge problem," says McAlindon. "For example, some people who
can't move their fingers have to type by blowing into a stick. These
people could use [the OrbiTouch] to type without using their fingers.
They could have their wrists totally immobilized, if necessary. You
could literally use it with boxing gloves on, although he doesn't
recommend it.

New users find that it takes five to 10 hours to use the keyboard
comfortably, and the average user can attain about half of his former
typing speed, according to McAlindon.

Although the OrbiTouch is not yet available for purchase, you can
advance order it from the Keybowl Web site, <#stdurl
www.keybowl.com#>, for $299. The Web site also contains detailed
information on how the device works.

=eod

=data conxot.art.d01Jan24.date
Jan 24, 2001
=data conxot.art.d01Jan24.title
Electronic Billing and Payments Save Money
=data conxot.art.d01Jan24.summary
It's a killer app, but so far, no one's been able to tame it.
=data conxot.art.d01Jan24.url
http://cfo.com/Pge_Channel_Article_Detail/1,1864,3|19|AD|1996,00.html
=data conxot.art.d01Jan24.txt

It's a killer app, but so far no one's been able to tame it.

At Texas A&M University, 45,000 students use the "Aggie Card," a
prepaid debit card with which they purchase goods and services both on
and off campus. Each month, students receive, by secure E-mail, a
detailed statement of all charges on the card. The concept sounds
simple enough -- send out bills and statements by E-mail and, when
appropriate, have the customer use his or her mouse to click the
"Pay" button to pay the bill from a credit card or checking account.

It's all part of the latest phenomenon in retail banking, Electronic
Bill Presentment and Payment, or EBPP. Banks have been eager to
promote this service for years, and if it becomes widespread, they and
some of their larger business customers could save millions of dollars
a year by eliminating the printing, mailing, and handling customer
statements and paper checks.

Unfortunately, no large company in the United States has implemented
EBPP, says Michael Killen, CEO of consulting firm Killen & Assoc.

"There are about 30,000 good-sized companies in the world, and about
one-third of them issue large numbers of monthly bills," he says. "In
the near future, all of them will be equipped to send out all their
monthly bills electronically, while still issuing some by paper."

However, many retail customers are ambivalent about electronic bill
payment. According to a Gartner Group study of 40,000 U.S. households
last spring, 50 percent of the 130 million adults who use the Internet
do not want to receive their bills over the Internet. Another third
aren't sure.

"I see this [EBPP] as very parallel to moving from bank tellers to
ATM machines in the 1970s," says Gartner Group analyst Joyce Graff.
"There was a lot of resistance to ATM machines, because people enjoyed
talking to the pretty girls behind the teller windows. Then people
realized that they could get cash on Saturday evenings, and they
started preferring ATMs."

In fact, EBPP has taken root in some other forms. For example, Saks
Fifth Avenue allows its credit card customers to pay their bills
online, but it's not E-mail based. The customer has to go to his or
her Web page on the Saks Web site, view the bill, and pay it
electronically.

In terms of E-mail bill processing, the Aggie Card application is one
of the most advanced, but even it only does only half the job: It
presents the statements by E-mail, but since the card is a prepaid
debit card, there's no payment by E-mail.

Still, the university is very pleased with the results so far,
according to Charles Boatwright, who supervises the Aggie Card
program. Texas A&M is particularly pleased with the savings the card
generates in handling student payments.

In addition, the university is also happy with the appearance of the
E-mail statements. "It has to be pretty," he says, "and it has to be
an interactive document. So one of our goals was to send out richly
formatted text and have places where students could click on things."

In addition, Boatwright says the university guarantees delivery of
student payments. Texas A&M uses an ACI MessagingDirect
(<#stdurl www.messagingdirect.com#>) software system that ties the university's
student E-mail system into billers' back end accounting software. The
system collects billing data, formats the data into an interactive
E-mail message and uses public key encryption to guarantee to the
recipient that the statement is valid.

Boatwright says the university can guarantee delivery in its closed
environment, particularly because he was able to pre-assign E-mail
addresses.

"Companies that try to do this [with the general public] are going to
have a hard time," he says. Many customers won't have E- mail
addresses or have temporary addresses. We wouldn't have implemented
this system if we hadn't found a way to guarantee deliverability."

ACI MessagingDirect says its software will guarantee delivery of the
payment. The company's major competitor, MicroVault Corp.
(<#stdurl www.microvault.com#>) says its software will do the same. However, the
two companies are using different standards-based technologies, with
the result that MessagingDirect's software provides a larger number of
security features, but only customers running certain browsers (and
AOL's browsers are not among those) can receive bills by E-mail. On
the other hand, MicroVault indicates that its technology works with
all browsers.

Implementing either company's solutions has both up front costs and
transaction fees. Typical consulting fees for integrating the system
into a biller's accounting systems are $100,000 and up.

Both companies charge for use of their software on a transaction basis
-- number of bills delivered and paid, with MessagingDirect charging 5
cents to 30 cents per bill, depending on features used, while
MicroVault quotes an average of 10 cents per bill. In addition, both
companies require at least a $100,000 up front royalty prepayment --
money from which the transaction fees are deducted.

How long will it be before a large utility or telephone company uses
E-mail to send bills and receive payments? There are still a number of
hurdles to jump, according to Joyce Graff.

"For this to work today, you need some community of interest, such as
people trading in auto parts or all the doctors in the same HMO," says
Graff. "There's a big leap going from a bounded user community to the
general population. I think we're going to get there, but to achieve
it you'll have to Internet- enable all those customers, and that's a
huge challenge."

Despite the challenges, any company that uses snail mail to send out
paper bills and receive paper checks should be seriously looking at
this technology, because of the potential savings.

According to Graff, we should look to Europe and Asia for answers.
"Everyone's sticking their toes in the water, but it's much farther
ahead in Europe than in the U.S.," she says, pointing out that in
Europe people can receive and pay bills on their cell phones.

"There are banks in Europe giving away Internet-enabled telephones,
just as our banks give away toasters, just to allow for this kind of
bill paying," she says. If U.S. banks adopt a similar promotional
strategy, the market could take off.

=eod

=data conxot.art.d01Jan17.date
Jan 17, 2001
=data conxot.art.d01Jan17.title
Enhanced 9-1-1 Can Save Employees' Lives, for a Price
=data conxot.art.d01Jan17.summary
Enhanced 911 is a service offered by local phone companies so that
when an employee dials 911, the exact location of the employee --
address, floor, cubicle location -- comes up on the screen of the
person who answers the calls and sends out the paramedics.  Phone
companies are charging outrageous prices for Enhanced 911, but
software from RedSky can help.
=data conxot.art.d01Jan17.url
http://cfo.com/Pge_Channel_Article_Detail/1,1864,87|92|AD|1954,00.html
=data conxot.art.d01Jan17.txt

Is the phone company overcharging companies that want to protect
their employees?

"Enhanced 911" (E-9-1-1) is what tells the emergency response services
the address you're calling from. But if one of your employees dials
911 from one of your multi-line business phones, then the ambulance
might be sent to the wrong address.

If you have a multi-line phone system hooked up through a PBX, then
the phone company has only one address, usually the company's main
office. The problem is that phones might be scattered among multiple
offices, sometimes as much as 10 or 15 miles apart.

If you care about the danger this presents your employees, especially
those who work at odd hours, then the phone company has a solution for
you. Each phone company maintains a large database of "Enhanced 911"
information, and you can arrange to have it include the specific
location for each of your multi-line phones -- the exact building,
floor, area, and cubicle number.

When an employee dials 911, the paramedics will know her exact
location.

That's what Paula Graller, voice communications manager for W.W.
Grainger Inc. of Lake Forest, Ill., has done, not only for Grainger's
phone lines, but also, with her previous employer, for the huge
McCormick Place and Navy Pier convention buildings in Chicago.

"McCormick Place is the largest convention center in the Midwest, and
Navy Pier is also very big," says Graller. "For example, we can have
five or six million people going through Navy Pier in a year, and so
getting an Enhanced 911 system to quickly determine where to locate a
problem was very critical to us."

In all three cases, Graller used AutoPilot 911, a software product
from RedSky Technologies Inc. (<#stdurl www.redskytech.com#>). AutoPilot is
designed for large companies, with 500 or more lines controlled by PBX
or other similar switches. Whenever a technician adds or changes a
line in the switch, he must store into the switch the "Automatic
Location Information" required by Enhanced 911.

Then the AutoPilot software takes over. It monitors the company's PBX
switches on a regular schedule, reads the location information out of
the switch, and stores it remotely into the phone company's E-9-1-1
database.

RedSky's AutoPilot starts at about $30,000 for 1,000 lines. Major
competitors are Proctor & Associates Inc. (<#stdurl www.proctorinc.com#>) and
Telident Inc. (<#stdurl www.telident.com#>). In addition, phone companies have
their own basic packages.

When I first started researching this story, I thought it would a
nice, sweet little moralistic piece saying, "Hey, you love your
employees -- this is cheap insurance -- do it and save a life," kind
of thing, perhaps with a little tale of someone's life who was saved.

But unfortunately, the story wasn't that simple.

First off, E-9-1-1 is a great way to generate revenue - for the phone
company. For example, Verizon's prices (not including the RedSky
software) just to update its database include setup charges and
monthly fees, are as follows: $3,000 for database setup and access and
$750 per trunk (minimum of two) for network trunk installation.

Recurring monthly fees include $10 for each block of 100 records on
file to cover database maintenance and management, and $39 per network
access trunk (minimum of two) for accessing the database.

Should a database setup cost $3,000? You know that's very profitable
just by looking at it. (Verizon did not respond to a request for an
explanation.) Don't forget that this is a minimum cost. The total cost
can quickly exceed $25,000, even for a small business.

But if you want to protect your employees with E-9-1-1, then you have
to pay it, especially in states like Illinois, Washington, Vermont,
Mississippi, Tennessee and Texas, where the law requires you to do
so.

"There's been a lot of controversy over this law," says Marci Schroll,
911 Assistant Program Director for the Illinois Commerce Commission,
the Illinois state agency that regulates E-9-1-1.

"Many businesses claimed that it was too expensive to comply with, and
so the law was rewritten to lessen the requirements. The law was
changed so that instead of identifying every station [phone line] in
the building individually, you only had to identify groups of stations
in the same 40,000 square feet of work space," she says. "And any
business with less than 40,000 square feet didn't have to do
anything."

This change provided a very clever "out" for many businesses, even
larger businesses. The company could provide a separate trunk for each
40,000 square feet of space, and make sure that the phone company
billing records for each trunk record an address within that 40,000
square feet area.

However, this really isn't a solution at all, according to James
Carlini, president of Carlini & Associates Inc., a telecommunications
consulting firm, who says that this change is a mistake and
effectively guts the Illinois law.

Carlini says, "40,000 square feet is still pretty big. Say you have a
business with 120,000 square feet, and you break it up into three
trunks. Your business could be in a big office building with 10,000 to
15,000 square feet on each floor, with non-contiguous floors. The
people responding to a 9-1-1 wouldn't know whether to look on the
third floor or the 30th."

The 40,000 square-feet threshold is also too big for the National
Emergency Number Association (NENA, <#stdurl www.nena9#>-1-1.org), the principle
standards organization working with the Federal Communications
Commission to develop national 911 standards.

"We looked at stats and evaluations, to see how much area can be
searched by the fire department in a given period of time, and we
settled on 7,000 square feet as a compromise," says Roger Hixson,
standards chairman. "If you have cubicles, then 7,000 may be too high,
while for an open warehouse, 7,000 may be enough."

Carlini says that there's an even worse problem, having to do with the
fact that the E- 9-1-1 database contains just a 20-character field for
specific location information.

NENA provides an optional standard that tells you to use something
like "Flr2,SW,Rm219,CubeA" to stand for "2nd floor, southwest corner,
room 219, cubicle A."

But suppose your abbreviations are just a little too clever, and the
9-1-1 response team can't figure them out in time.

"The bottom line is that the corporation maintains the database, and
has to send the right information," says Carlini. "If the wrong
location information is sent, and somebody dies, then the corporation
might be liable."

Finally, I asked Paula Graller if she thinks her employers would have
implemented E-9-1-1 on their phones if there hadn't been an Illinois
law requiring it.

"At McCormick Place and Navy Pier we probably would have, just
because they're so big," she says. "But at Grainger, they're so
focused on the health and well being of their employees, there's no
doubt that they would have done it."

=eod

=data conxot.art.d01Jan10.date
Jan 10, 2001
=data conxot.art.d01Jan10.title
Microsoft Acquires Great Plains Software
=data conxot.art.d01Jan10.summary
Microsoft's acquisition of this company should make the use of
software from all midrange accounting software companies more
credible.  However, Microsoft may run into channel conflict when it
tries to sell it.
=data conxot.art.d01Jan10.url
http://cfo.com/Pge_Channel_Article_Detail/1,1864,87|92|AD|1927,00.html
=data conxot.art.d01Jan10.txt

The deal should strengthen the midrange accounting software industry,
but can Microsoft really adapt?

Microsoft's proposed acquisition of Great Plains Software indicates
how the computer industry is changing and how Microsoft itself may
have to change in order to maintain its leadership position. On
December 21, 2000, Microsoft said that it would acquire Great Plains
Software Inc. in a $1.1 billion stock purchase.

"The combination of our two companies will accelerate small and
medium business efficiency and agility by offering software solutions
for automating interconnected business processes," said Jeff Raikes,
group vice president of Microsoft's Productivity and Business Services
Group in a statement. "Together we will bridge the gap between
on-premise[s] software and next- generation software and services."

This last sentence concisely states the opportunities associated with
the merger. Small and medium-sized businesses typically purchase
midrange accounting software from local resellers (also called
value-added resellers, or VARs) who install the software on a
particular customer's premises and customize the product for the
customer's business needs.

However, many businesses today are choosing to use a hosting service,
also called an ASP (Application Service Provider).

The software is installed on the host service's computers, instead of
the customer's computers, and the customer accesses the software
remotely, over the internet.

Tami Reller, Great Plains' CFO, agrees that developing the ASP
marketplace is the point. "We currently have a little over 200 ASP
customers, which is small compared to our 35,000 total customers," she
says. "But in five years, we expect that a large majority of our
customers will have some hosted services."

This strategy also involves a change in GP's target marketplace,
according to Timothy Tow, an analyst with Stamford, Connecticut-based
Gartner Group. "In recent years, Great Plains had been positioning
[itself] to move up-market, but now that's changing significantly, as
they're moving down-market to Microsoft's sweet spot in the midrange,"
he says. "That makes GP less competitive for other competitors, such
as Sage and Epicor, who have been moving up- market."

But the risk that Microsoft is taking is represented by the element
that's missing from Raikes's statement: Whether the software is
on-premises or hosted, it still requires a VAR to do an installation
and custom modifications.

And more than half of Great Plains' installations require software
modifications, according to Charles Chewning of Solutions Inc., a
Richmond, Virginia-based consultant who evaluates accounting software
products.

"There's something that doesn't make sense to me from what Microsoft
is saying," says Chewning. "They want to go after the small to
mid-sized market, but Dynamics [Great Plains' accounting software
product] is too big, too complex for that. And if they integrate [a
small version of] it into their ASP hosting initiatives, then Great
Plains' current ASP resellers are going to get hurt."

Indeed, some of Great Plains' competitors seem quite sanguine about
the pending deal. "We've seen some pretty positive implications of the
fact that Microsoft is buying into the marketplace that we're in,"
says Randy Keith, president and CEO of NavisionDamgaard US. "We expect
Microsoft is interested in going after smaller companies, instead of
the bigger companies that we go after, and the response that we're
getting from our [resellers] is not one of fear."

Keith indicates that he's also heard from a couple of Great Plains'
resellers expressing concern that they'd have to change products if
Great Plains changed its market.

Ben Tse, president and CEO, Accountmate Software Corp., sees it a
little differently. But he reaches the same conclusion. "Microsoft
will increase awareness of the necessity for smaller businesses [who
often do accounting on very low-end financial packages like Peachtree,
DacEasy or Quicken] to get more sophisticated business software like
ours," he says.

Tse is in fact not very impressed with the acquisition as a whole.
"The way I look at it, Microsoft is a very high-profit-margin company,
and in the accounting software business, traditionally, profit margin
isn't that great," he says. Indeed, Microsoft's profit margins have
run around 40 percent, while Great Plains' have been at a much more
modest 5 percent. "Their business models are different and the
corporate culture is different, so Microsoft may not do so well."

This could be wishful thinking by a competitor, of course, but there's
good reason to raise questions.

There's a massive shakeout going on in the midrange accounting
software industry right now.See sidebar.

And there's no reason to believe that Microsoft will be immune from
the same pressures.

Microsoft may well be the world's master at creating software in a
shrink-wrapped box that a customer buys, at which time the software
almost jumps out of the box and installs itself. No other company,
including even IBM, has been able to beat Microsoft at that game.

But accounting software is like that only at the very low end, with
packages that sell to companies with $1 million to $50 million in
annual sales. But Great Plains systems are targeted to $100 million to
$500 million companies and frequently require lengthy sales cycles by
the reseller.

Microsoft would like to make an accounting system available on its
bCentral (<#stdurl www.bcentral.com#>) service, which is a Microsoft hosting
service for small businesses, and one possibility would be to develop
a self- configuring ASP version of that a business could run on
bCentral.

But this would undercut Great Plains' resellers, and Great Plains'
Reller says that this definitely will NOT happen. "Microsoft's
bCentral is more like [low end ASP-only accounting software vendor]
Intacct," she says. "Today we have a hosted offering through our
partner [reseller] channel. Once the acquisition is complete, we'll
look at how bCentral and our strategies come together, but we will
always continue to leverage the partner model."

So Great Plains may not use bCentral at all? "It's too big a leap to
say that bCentral would not be a leveraged component," says Reller.
"There could be some great bCentral components that add value to our
customers and partners."

In other words, Great Plains expects to continue doing business pretty
much the same as before, without risking anything that might disturb
its valuable reseller channel.

So it's easy to see what Great Plains is getting out of this deal:
access to Microsoft's vast assets and resources. But what is Microsoft
getting out of it?

"We have tremendous domain expertise in business applications and the
mid-market, and that's where Microsoft sees value," says Reller. "They
don't have domain expertise in the business application area, and they
need that to serve the mid-market."

Microsoft's public statements suggest that it may tap Great Plains'
expertise to develop its own bCentral-based accounting system, which
would compete with Intacct and NetLedger.

If Microsoft can be happy with so minimal a return from its investment
in Great Plains, then things may go well. But if, as expected,
Microsoft is going to demand substantially greater growth and further
product integration than that, then Microsoft will have to deal with
the same channel-contention issues that every other firm has had to
deal with, and which have caused more than one of these firms to
founder.

=eod

=data conxot.art.d01Jan10s.date
Jan 10, 2001
=data conxot.art.d01Jan10s.title
Technology Sidebar: The Midrange Accounting Software Shakeout
=data conxot.art.d01Jan10s.summary
Microsoft's acqusition of Great Plains Software is just one part of a
general consolidation in the midrange accounting software
marketplace.
=data conxot.art.d01Jan10s.url
http://www.cfo.com/printarticle/1,4580,87|92|AD|1926,00.html
=data conxot.art.d01Jan10s.txt

Microsoft's acquisition of Great Plains troubles waters that were
already churning.

Microsoft's announcement that it's buying Great Plains Software is
roiling a midrange accounting software industry that has already been
increasingly troubled for years by several major trends:

<ul><li>Rapidly changing computer technology: new versions of Windows and
Internet-based computing models.</li>

<li>Demand for internationalization: multiple currency support,
multiple-language support, and support for foreign accounting and tax
rules.</li>

<li>Need for increased functionality: general business functionality
such as project accounting, manufacturing, inventory management,
E-commerce, supply-chain management (SCM), and customer-relationship
management (CRM), as well as demand for support of numerous specific
verticals.</li></ul>

When these trends are combined, the financial demands on any midrange
company may become overwhelming. Indeed, although Great Plains has
proven itself to be a very viable company, the continually increasing
development costs required to keep a product at the leading edge was
certainly a factor in the company's desire to be acquired.

In fact, almost every single midrange accounting software vendor has
been directly affected by a merger or acquisition within the last
year.

Great Plains itself has acquired two decades- old competitors:
RealWorld Corp. and Solomon Software Inc. RealWorld's products are
being phased out, and its resellers and 19,000 customers are being
migrated to Great Plains Dynamics. Solomon's products are being
maintained for its 20,000 customers.

London-based Sage Group plc was almost unknown in the U.S. until 1998,
when it acquired State of the Art, a U.S.-based accounting software
vendor. Then last year, Sage acquired Peachtree Software, and now
markets a wide set of products ranging from low-end to high-
midrange.

Denmark-based accounting software firms Navision Software a/s and
Damgaard Software a/s had separately established strong presences in
Europe and were slowly entering the U.S. market. Navision has been
doing well, but Damgaard has had slow going, especially after a
proposed partnership with IBM failed. Recently, Navision and Damgaard
have announced a merger, with the new company called
NavisionDamgaard.

In a stroke, AccountMate Software Corp. went from being a small,
closely held U.S. company to a large international company, when it
was acquired by Softline Limited, a South African company with major
financial software offerings in South Africa, the UK, and the rest of
Europe.

And SBT Accounting Systems was recently acquired by Accpac
International, a division of Computer Associates' interBiz group.
Accpac was itself acquired by Computer Associates in the early 1990s.
SBT's products will continue to be marketed and supported on their
own.

Timothy Tow, an analyst at the Gartner Group, expects the shakeout to
continue, with a lot of added pressure resulting from Microsoft's
acquisition of Great Plains.

"Ultimately, Microsoft and Great Plains will grab a greater share of
the market, especially in Great Plains' strength, the pure financial
accounting product," says Tow. "Sage's Mas-90 and Epicor's Platinum
for Windows will especially feel the pressure, and it's likely that
these products will become increasingly difficult to support and sell.
Companies that provide manufacturing apps have more staying power in
the market than those with just financial accounting, since Great
Plains is not that strong in manufacturing."

=eod

=data conxot.art.d01Jan03.date
Jan 03, 2001
=data conxot.art.d01Jan03.title
If Only Bill Gates Would Just Apologize
=data conxot.art.d01Jan03.summary
Contrary to the claims of Ralph Nader and other Microsoft critics,
Microsoft has consisted produced technology superior products, some
of the best products in the world. But Microsoft also used marketing
techniques that resembled extortion and racketeering. It's almost as
if the company were behaving like an admired uncle who's done
wonderful things for your family and many others, but who is
embezzling money from his employer. Do you continue to admire his
accomplishments, or do you condemn his dark side?
=data conxot.art.d01Jan03.url
http://cfo.com/article/1,1874,0|83|AD|1868,00.html
=data conxot.art.d01Jan03.txt

Should Microsoft be split in two?

That's what the Department of Justice will urge the U.S. Court of
Appeals next week, when it files a brief supporting last June's
district court ruling to that effect.

The prospect of this kind of decision is a nightmare scenario for the
company and for the computer industry. We're headed for a time when
government bureaucrats with their parochial views will decide what
features and device drivers will go into the next version of Windows.

At this point, it should be noted that Microsoft's predicament is
largely of its own making. Despite the high quality of the firm's
products, it did engage in anticompetitive behavior that warranted
some form of punishment. But does the proposed punishment fit the
crime? Moreover, is the Justice Department's proposed remedy in the
best interest of Microsoft's corporate end users?

Perhaps the best solution is one that will return Microsoft to a
competitive environment similar to the one that existed in the early
1990s, when it was competing with other software developers to produce
world-class, top-notch products -- products that were so good that
Microsoft would have still have killed the market if it had competed
fairly and not broken so many laws.

In saying that, I'm specifically disagreeing with Ralph Nader and
others like him who say that Microsoft doesn't innovate; it just
copies other companies' software. The consumer advocates also believe
they're qualified to appraise the computer industry.

For example, the launch of Windows 95 was one of the technological
wonders of the world. Those who say that Windows 95 was just a
software retread might also be expected to argue that the Egyptian
pyramids were easy because everyone knows how to build sand castles.
Windows 95 integrated thousands of disparate products from other
vendors and got them to work on computers from hundreds of vendors. It
was a world-class achievement which moved the computer industry years
forward.

Similarly, Microsoft's application products, like Word and Internet
Explorer, are sophisticated products that have set the standard for
other vendors.

Unfortunately, Microsoft wasn't satisfied with producing the world's
best products; it had to use marketing techniques that resembled
extortion and racketeering, and indeed in December, 1999, the federal
court found the company guilty of using anticompetitive tactics to
cripple its rivals.

It's almost as if the company were behaving like an admired uncle
who's done wonderful things for your family and many others, but who
is embezzling money from his employer. Do you continue to admire his
accomplishments, or do you condemn his dark side? And what kind of
punishment does he deserve?

The problem is that Microsoft produced such great products that it
gained monopoly power with them, and this has caused the company to
get sloppy. The latest operating system, Windows Me, has been called a
"pale upgrade" by the Wall Street Journal's Walter Mossberg. PC
Magazine was more positive, but questioned whether it was worth the
$110 street price to purchase an upgrade.

But who can blame Microsoft for producing a second-rate product? If it
adds a major new feature that undercuts another company's product,
then the Justice Department will jump all over it. So the company
might as well put in a few non-controversial features, charge a
fortune, and sit back and collect the profits. It's not Microsoft's
fault; the government is making it behave that way.

Microsoft is in the grip of its own monopoly power and is turning into
the post office -- do as little as possible, keep everyone employed,
and don't rock the boat. Microsoft is becoming mediocre.

Unfortunately, most politicians don't understand that.

What's really sickening is that Microsoft is being drawn into this
political milieu, where excellence just gets some politician mad and
mediocrity is rewarded.

Which brings us to the depressing proposal to split Microsoft into
companies. Huh? That means not one company with two monopolies, but
two companies with two monopolies. Why would anyone think that was
better?

Oh, I see. Government bureaucrats get to regulate both companies, so
there are more politicians getting high salaries and building
bureaucracies to do busy work. It's a politician's dream, and a
nightmare for taxpayers and anyone who uses a computer.

What's needed is a solution that takes Microsoft's monopoly power
away, so that the company can go back to making leading edge
products.

How do you do that? It's actually simple, and it was a proposed remedy
that District Judge Thomas Penfield Jackson rejected. Microsoft should
be required to make the core source code for its monopoly products
available to competitors. Microsoft and others would differentiate
themselves by building unique features on top of the core
capabilities, and true competition would return.

Confiscatory!" is the objection to this proposal voiced by Bill Gates
in a press interview. But hey, when you break the law, you have to pay
a price.

I've had the pleasure of meeting Bill Gates several times over the
years, and although he has business skills that I can only fantasize
of ever having myself, there's a big part of him which is, like me,
pure nerd. If that part of him can ever get out front again, then he
may actually like this proposal for its openness and simplicity.

The deal would be this: Bill Gates would apologize, and would agree to
make Microsoft's source code available to the company's rivals. The
DOJ would agree that Microsoft no longer has monopoly power and would
drop all further litigation.

Microsoft would be back to where it was when it actually had to create
great products to survive. Call me a nerd for saying so, but I think
Bill Gates and Microsoft's employees will, in the end, be much happier
in that environment than playing footsie with politicians.

=eod

=data conxot.art.d00Dec27.date
Dec 27, 2000
=data conxot.art.d00Dec27.title
Squandered Opportunities
=data conxot.art.d00Dec27.summary
While an explosion in computer games provides many marketing tie-in
opportunities, most are not exploited.
=data conxot.art.d00Dec27.url
http://cfo.com/article/1,1874,0|83|AD|1839,00.html
=data conxot.art.d00Dec27.txt

While an explosion in computer games provides many marketing tie-in
opportunities, most are not exploited.

Go to the Microsoft gaming zone (<#stdurl www.zone.com#>) on the
Internet, and play the game "RadioShack RC Riot," and you'll be able
to play a car-race game in which all the cars are graphic duplicates
of remote- controlled cars that are available in Radio Shack retail
stores. But why bother to head out to your local Radio Shack, when a
mouse-click or two lets you order one of the Radio Shack cars online?

Or play "Adrenaline by Toyota," and race a Toyota Truck around the
Track -- and enter a contest that lets you win a truck.

"Toyota went back and tested people who played the game, and brand
recognition was much higher than for people who just saw a TV ad,"
brags Ed Fries, Microsoft's VP of games publishing.

These are just two examples of advertising and tie-in opportunities
with games that are starting to appear, now that we're entering a year
where the size of the computer games market is expected to explode.

Computer games go through cycles of about five years, with the
duration of the cycle determined by the relative success of game
consoles that you hook up to your TV sets. Different companies have
been the market leaders in each of the last few cycles -- Atari,
Nintendo, Sega, and Sony have all been leaders in previous Cycles.

This year, Sony is looking to repeat its past success with the
PlayStation console with the PlayStation 2, which was just released a
couple of months ago, and so far they seem to be succeeding.

"When the PlayStation 1 was launched in September 1995, they sold half
a million units by year-end," says Edward Williams, investment analyst
with Gerard Klauer Mattison, a New York City-based investment bank.
"By contrast, Sony will sell over one million PlayStation 2 units by
year-end, so they've sold twice as many units in significantly less
time."

That's true despite the fact that a chip shortage has kept the PS2 in
limited supply, he noted. "The raw demand for the PS2 game system is
huge, and they'll have shipped over three million units by March,"
says Williams.

But Sony doesn't have the market to itself. Microsoft will be shipping
its new X-Box console in the fall of 2001. It also plans a massive
marketing campaign with the intention of having the X-Box console
dwarf the PS2.

And analysts expect Nintendo to come out with its Game Cube -- a
video-games console -- early in 2002. Nintendo targets a different
demographic, young children, as opposed to the children in their 20s
that are targeted by Sony and Microsoft. The three companies combined
are expected to create a surge in gaming an order of magnitude larger
than we saw in the last explosion, in 1996.

A new game-console cycle means a lot of new business for game
developers, and that means lots of games -- not only for game consoles
but also for online gaming systems and standard PCs. This means that
there will be an explosion of new games coming out in the next two
years.

As I put together the holiday edition of this column, on the topic of
computer games, I was astounded by how many obviously excellent
marketing opportunities there are for tie-in's with games -- and how
these opportunities are being ignored and squandered.

In two specific cases, although the games themselves were marketed
successfully, the opportunity to market tie-ins with the games was not
used.

Consider, for example, the very peculiar story of the game Deer
Hunter, from games developer Infogrames (<#stdurl
www.infogrames.com#>). Analyst James Lin, of the investment bank Sutro
& Company tells what happened: "WalMart wanted a game that would
appeal to deer hunters, and found that there was nothing on the
market."

Infogrames responded by putting together a super-cheap Deer Hunter
game that did little more than let you shoot at a deer as it passed a
fixed target. "Deer Hunter 1 and 2 sold over two million copies
combined," says Lin, "just because the game appealed to deer
hunters."

The company is now on Deer Hunter 4, and it's a mainstream game,
according to Infogrames VP of development Steve Ackrich. "We try to
make the experience as close to real hunting as possible, and now we
also have bird hunting and other types of hunting. There are a lot of
people who like to do these sports," he says.

Let's look at another story. When I was writing an article about
computer games back in the 1980s, I received a review copy of Links, a
golf-playing game from Access Software (now owned by Microsoft). I
installed the game and played it a few minutes and thought, "Boring!
Booooooooring!"

Well I was sooooo wrong. Access put me in touch with some users:
fanatics who went out to the real golf course in the morning, and then
played on the virtual golf courses on Links in the evening, as well as
people who set up and participated in online golf tournaments.

The special appeal was the golf courses themselves. Links had highly
realistic versions of the country's major golf courses. You could
watch a golf tournament on TV and follow along in the game, or you can
simply try out the course yourself by playing the game.

The latest version, Microsoft's Links 2001, actually contains a golf
course designer module, permitting a local guru to design a virtual
version of a golf course in his home town and make it available to
other local golf players!

A Visceral Connection

What these examples have in common is that they show games that, while
their tie-in potential has been left dormant, they are successful on
two levels: they're fun to play and their content appeals to the
players on a visceral level as well.

The market contains lots of so-called "first- person shooter" games
(games in which the person playing just shoots at things). But of all
of them, Deer Hunter selectively appeals to people who actually go out
and hunt deer. Similarly, while there are many sports games, golf
games selectively appeal to golf players.

It's this visceral connection that seems to me to be largely not
exploited so far. This looks like a marketer's dream to me, as the
games target specific niche markets that might be hard to reach in
other ways.

In fact, I believe that games could even be used to advance political
causes. Take, for example, both sides of the gun control issue. A
game like Deer Hunter could be used as political support for
gun-control opponents. So could Hitman Codename 47 from Eidos
(<#stdurl www.eidos.com#>), in which you have to plot out a long,
complex strategy before you can accomplish your mission of shooting
the bad guy.

What about games for those who favor gun control? I haven't seen any,
but it would be an interesting challenge, and I can imagine one: The
town of Happyville is having a crime spree because there are too many
guns around.

Your job is find all guns hidden around town; each time you find one,
the crime rate drops and the standard of living goes up. Maybe you
could even get this incorporated into a special version of Simsville
(described below).

The point of all this is that marketers, whether for consumer products
or politics, have a potent method to find and single out the people in
their target markets. Marketers can take advantage of games that have
a visceral connection for their users. People tend to play such games
because they remind them of themselves in some way.

There are many ways for marketers to exploit such connections, and
they're not all that expensive. Banner ads on online game services
such as <#stdurl www.zone.com#> or <#stdurl www.uproar.com#> cost only
a few hundred dollars, and there are literally hundreds of thousands
of people who use these services every day.

Although top-selling games cost millions of dollars to develop, simple
niche games can be developed for just a few hundred thousand dollars.
These games could be tailored to suit a marketing message and can be
sold in stores, made available in online gaming services, or even be
installed on an organization's own Web site to draw traffic there and
keep people from leaving.

The fact is, today's video games, whether they're PC games, console
games, or online games, are loaded with possibilities for tie-in
marketing. You can see this easily by looking at some of the major
games available today:

Blizzard's <i>Diablo II</i> (<#stdurl www.blizzard.com#>) and
Interplay's <i>Baldur's Gate II</i> (<#stdurl www.interplay.com#>) are
examples of fantasy role-playing games(RPGs). You play as one of the
characters in the game and move along the terrain, picking up various
objects as you go. Most of the objects are weapons, such as swords,
and defenses, such as shields. Both enable you to fight various
monsters. However, objects can be anything -- money to buy other
things, food that restores your health and strength, or potions to
give you additional powers.

If you haven't yet seen how realistic sports games are getting,take a
look at <i>NHL 2001</i> or <i>Madden NFL 2001</i> from Electronic Arts
(<#stdurl www.ea.com#>). Sports games in the past were played with
frozen-faced, stiff players making only two or three types of plays,
but no longer. Watching someone play these games, you almost think
you're viewing a live game on TV. And they have a variety of
strategies, so that the plays seem as intelligent as those of real,
live players.

If you're one of the millions who got hooked on <i>Myst</i> a few
years ago, a new version of this adventure game, <i>RealMyst</i> is
now available from Cyan (<#stdurl www.cyan.com#>), with breathtaking
improvements. In Myst, you could only look at a building from a single
angle, while the RealMyst buildings are fully rendered in 3-D. That
means you can walk around and explore them from any angle, as if you
were on that strange, lovely island for real. (However, if you hated
Myst, you probably won't like RealMyst, since the way the game is
played and the puzzles are similar.)

Possibly the biggest single category is that of real-time strategy
(RTS) games. In these games, you create whole armies, navies and air
forces, consisting of large numbers of units and ready to wage war
against opposing armies. What's fascinating about these games is that
you have to provide control from all levels. That means that while
you have to set large armies in motion, you sometimes have to direct
individuals in hand-to-hand combat. This year's best are Starcraft
from Blizzard Entertainment Inc. (<#stdurl www.blizzard.com#>) and Age
of Empires II from Ensemble Studios (<#stdurl
www.ensemblestudios.com#>). We're all waiting for the delayed but
highly anticipated Warcraft III, also from Blizzard.

For many, the best game of the year 2000 was The Sims from Electronic
Arts, a game in which you simulate an entire family. You create a
"Sim" to be a person that you control --  male, female, fat, thin,
whatever characteristics you want. You build and set up the Sim's
house; you make sure that your Sim's basic needs are met. by
providing for a job, food, furniture, a bathroom, a bedroom, a
kitchen; and you have your Sim flirt with the neighbor Sims, in the
hope of their getting married and having kids. Simsville is the name
of the hugely anticipated sequel, scheduled for 2001. That game will
be a mixture of The Sims and the old SimCity; in Simville, you'll be
the mayor of a town, and you'll be controlling not only individual Sim
families, but also the entire town's health.

A different kind of simulation is the action game Crimson Skies from
Microsoft. Controlling vehicles has always been fun, whether it's
been on Nascar Online (<#stdurl www.nascar.com#>), or on Microsoft
Flight Simulator, which has been letting you fly increasingly
realistic virtual airplanes since the 1980s. In Crimson Skies,
Microsoft has added a complex story line: The U.S. didn't do well in
the 1930s Depression, and the national highway system never got built,
so goods have to be transported by huge zeppelins. Your job is to fly
around in planes and knock out the inevitable pirates. Some unusual
features: Planes take off from and land on the zeppelins; and you can
get close to another plane and board it while flying.

Hasbro Inc., recently acquired by Infogrames, is marketing popular
traditional games and quiz games, such as Monopoly, Frogger and Who
Wants To Be a Millionaire. According to Steve Kleynhans, analyst for
the Meta Group, computer games are becoming considerably more mature,
in many ways. "Next Christmas will be stellar for the gaming
community," he says. "The big thing [about the new games] is being
totally immersed in the game, feeling a part of it. A good graphic
presentation, rich and textured, is essential. But now we're seeing
that being extended to a much richer audio experience in games."

Whether it's video or audio or something else, the number of
opportunities for product promotion are endless.

One thing I'd like to see done in terms of tie-ins to games is
something similar to product placement seen in movies. But I'd only
favor it if it were done in the right way. For example, any user
spending $50 for a game would resent having to stare at a Coca-Cola
ad throughout the game.

But how about this: there's a can of Coke in one of the rooms, and
the player picks it up and drinks it to gain points, and then throws
the empty can away and never sees it again. Coke has a very effective
ad that doesn't linger and cause resentment, and hopefully the game
will be a few bucks cheaper to compensate for the advertising. It's a
win for everyone.

=eod

=data conxot.art.d00Dec20.date
Dec 20, 2000
=data conxot.art.d00Dec20.title
Productivity Improvement
=data conxot.art.d00Dec20.summary
New manufacturing methodology promises substantial improvement in
productivity and profits; however, the software from Maxager
Technology Inc. has not yet proven itself for everyone
=data conxot.art.d00Dec20.url
http://cfo.com/article/1,1874,0|83|AD|1822,00.html
=data conxot.art.d00Dec20.txt

A software company has come up with a system that it says will make
factories more efficient, provided you can afford the million dollar
price tag.

They used to say, "Build a better mousetrap, and the world will beat
a path to your door." But before that happens, you'll have to
convince the world that your mousetrap is not just better, but so much
better that they'll be willing to pay a premium for it. That's the
problem facing Maxager Technology (<#stdurl www.maxager.com#>). Its
decision support software has substantially improved factory output
for a few customers, including Motorola Computer Group, Seiko Epson,
and Wheeling- Pittsburgh Steel, but it has not yet obtained wide
recognition and acceptance. In all, Maxager currently has 14
customers in various stages from trial program to full production,
about half in North American and half in Japan.

One site in full production is Motorola's huge factory in Tempe,
Ariz., which manufactures computer boards. The factory's seven
production lines run around the clock.

"We produce 100,000 boards per month," says Dan Lombardi, director of
operations at Motorola, "with 1,500 different part numbers per month,
with all different customers and selling prices." All in all, several
hundred million dollars of products roll of the Tempe assembly line
every year.

The 100,000 units represent a 30% increase over last year, and
Lombardi attributes that increase to implementation of Maxager's
application software. A 30% increase on a base of several hundred
million dollars is a very great deal of additional revenue.

The methodology is complex, but works as follows: In any factory,
each manufacturing assembly line consists of a series of steps 
preparing raw materials, assembling, heating, attaching, cleaning,
trimming, painting, and so forth. Crucial to the methodology is the
identification of a specific step, a "strategic control point (SCP),"
which constrains the entire assembly line. Identifying the SCP in each
assembly line is the basic starting point of the methodology.

Any step in production can be a bottleneck, or the step that slows
the entire line down. If you're short of raw materials, it could be
the first step; if an employee is out sick, it could be a manual
assembly step down the line.

But the SCP is a strategic bottleneck. It's one that doesn't come and
go, but is in many ways the heart of the entire production line. In
most cases, it's a very expensive machine or asset.

The thing that differentiates the SCP from an ordinary bottleneck is
that it's a step in the production line that can't be easily expanded.
If the problem causing today's bottleneck is a shortage of raw
materials or an employee illness, managers can add materials or
another person.

But if your bottleneck is a machine that costs $2 million, then you
can't expand production at that point without purchasing another $2
million machine, and that normally isn't practical.

Once the SCP is chosen, that's where the controversy starts, because
Maxager's software computes manufacturing costs and profits in ways
that differ from conventional financial systems. What's more, these
new numbers lead to different decisions about such things as factory
loading and product mix, which can result in some political friction.

In conventional financial systems, manufacturing costs are computed
by adding together labor and other variable costs at each step, and
adding on fixed costs via a formula incorporating the time spent in
production, factory space used and other measurements.

"The ways that costs are determined by finance are steeped in
tradition, and they don't always give you the level of detail you
need," says Jack Maynard, analyst with the Boston based Aberdeen
Group. "The finance department or the cost accountants do a lot of
averaging, coming up with average costs of goods sold, for example."

That's good for a general picture of the company, but it doesn't
always help make the best decisions. "For example, some studies show
that some high cost products that are complex to produce make less
money than other low costs products that are easier to produce," says
Maynard. "The Maxager system provides the granularity of detail to
determine true costs and profits."

There's another big change that Maxager implements: Maxager treats
labor as a fixed overhead cost, rather than a variable cost.

"Labor is not a truly variable cost," says David Shucavage, director
of consulting methodology for Maxager "It's fixed, since you can't
send someone home an hour early. With union contracts, your goal is to
make as much money each day with the labor you have."

Maxager then allocates overhead, including labor, in a specific way:
according to how much time product manufacturing spends in just one
single step: the SCP. Other steps and other factors do not take part
in the overhead allocation formula, as they would in standard
financial computations.

For example, if a product spends five hours in the SCP, and the SCP
is running continuously, then that product is allocated 5/168 = 2.98%
of the production line's overhead, including labor.

This is quite different from the way things are usually done, and a
lot more precise, according to Shucavage, who used to be a production
manager before coming to Maxager.

"People often lie and cheat to promote the products they want to see
made," he says. "The numbers that represent the standard costs are
wrong because they're old and because there's game playing and
politics. If you don't have the right data, then you don't know what's
really going on."

For that reason, many companies installed data collection systems at
their manufacturing workstations, in order to implement real time
activities based costing. For companies that haven't already done
that, Maxager installs real time data collection.

Using all this data, Maxager's software then makes a number of
computations -- and Maxager has obtained some software patents on
these computations -- to implement the methodology's cost and
profitability formulas.

The software computes a particular metric for each product, called
"profitability per minute," based on the profitability of the
production line divided by the amount of time that product spends in
the SCP.

According to the methodology, you change your product mix to favor
products with the highest profitability per minute, according to
Michael Rothschild, President and CEO of Maxager. "When you look at
the world from a time based measure of profitability, as opposed to
the stagnant snapshots of profit per unit as traditional systems do,
you find that there are many products that have the same unit costs,
but some generate very high levels of profit per minute, and some are
very low."

"You have to understand what you're using Maxager for," explains Rick
Prohammer, a partner with Arthur Andersen LLP who is responsible for
Andersen's alliance with Maxager, and who has been involved in
several Maxager implementations.

"It's the ultimate decision support system to help you figure out how
to load your plant. It implies cooperation of the sales people, to
sell the right things, so that they allow the fixed asset investment
to sell as much product as possible. You have to avoid the situation
where the sales people sell products, and then you have to make the
stuff to fill the orders as well as you can. Maxager is tool to get
them focused."

Motorola's Lombardi puts it differently: "The way we look at it,
Maxager is the tool," he says. "Maxager likes to say that they give
you $2 million or $10 million or whatever in savings, but the reality
is that the tool only gives you information. You have to make the
necessary changes."

Why does this methodology even make sense? Should a company really
make decisions based on "magic" numbers computed by Maxager's software
in a way that few people understand?

And granted that the SCP is an important step, maybe even the most
important step in the production line, but does that really mean that
every other step in the line should be so completely subordinated to
that one? Isn't the reasoning a bit circular? Aren't we making the SCP
into the most important step because we believe it should be the most
important step?

Setco Corp., an Anaheim, Calif., manufacturer of molded plastics, and
a division of McCormick & Co., ran the Maxager software in a pilot
study that lasted six months, and ended in a decision not to continue.
"We found that our manufacturing processes were pretty clean, and the
bottom line was that there wasn't a lot of additional money to be
made," says controller Hal Hendrix.

The Setco factory production lines had characteristics that did not
match the ideal situation for implementation of Maxager software: the
factory did not have clearly defined strategic bottlenecks -- the SCPs
-- and the factory is not running 168 hours per week.

According to Prohammer, there are two major criteria which decide
whether the Maxager technology will be successful in particular plant.
"It works for asset intensive manufacturing operations, something like
a steel mill or a paper plant," he says, "and though it's risky to
make broad generalizations, this is as opposed to a chemical operation
which is a fairly simple mixing together of materials. This won't be
asset intensive, and to add capacity, it's fairly simple just to get
some extra warehouse space."

Prohammer's second criterion has to do with the different types of
products manufactured at the plant.

"It thrives on variability," says Prohammer. "It works if there's a
wide variety of products that flow out of the manufacturing operating.
For example, a company that makes only ten products -- even if it's
asset intensive -- may be a tough fit [for Maxager] since there's not
enough room to maneuver. Once you get to a hundred products or more,
that's where you hit the sweet spot of Maxager."

Implementation

Putting all this together, there are several steps to adopting the
Maxager methodology, and implementing the Maxager software, and all of
them are difficult:

Analyze each of your production lines, and determine the Strategic
Control Point for each of them. If the production line has several
different bottlenecks, choosing the SCP may not always be easy,
according to AMR's Prouty. "It takes a significant amount of analysis
to pick the right one, and a huge risk if you pick the wrong one," he
says. "Also, in some plants, it can appear to shift between two or
three different places, depending on how the company's product mix
shifts."

Install real-time data-collection equipment. This is an important step
by itself  regardless of the methodology is used. Many factories do
not capture data, and financial executives have no way to be certain
that product cost estimates are accurate. Maxager's algorithms use all
this data to make its computations.

Use the financial algorithms implemented in the Maxager software to
determine manufacturing cost and "profit per minute" for each product
manufactured. In some cases these figures will be dramatically
different from the figures that are being computed by the company's
existing financial systems. This will raise political issues that will
have to be resolved.

Use the cost and profit calculations of the new methodology to drive
decision making on how the factory should be loaded - - what product
mix should be manufactured -- and therefore what products the sales
people should sell. That's a tall drink of water for any company. No
one's going to jump all of those obstacles without a lot of management
work and support.

This situation is made even more difficult by the price of Maxager's
software: $500,000 for the software license fee for each plant, with
an implementation cost of $100,000 or more, depending on the changes
on the production line the software says is needed. (Some earlier
published articles on Maxager indicate that Maxager is charging 1% of
the factory's revenue for its software. Maxager indicates that this
idea was briefly considered at one time, but has been abandoned.)

This cost may be relatively insignificant for the Motorola plant,
when compared to the 30% increase in revenue obtained for a plant
which generates several hundred million dollars in revenue per year.
But for smaller companies, that's a lot of money.

Recommendations

I spoke to numerous people for this column, always trying to get an
answer to the following question: If this methodology is so great, how
come more companies aren't using it? After several years in business,
why does Maxager have only 14 customers?

The answers that came back were variations of the following: This is
such a radically new way of measuring costs and profit, that it causes
political problems between the CFO's office and the production
managers.

In my numerous discussions with experts from the vendor and analyst
community, and users, I reached my own professional conclusions about
the technical validity of the methodology. I reached these conclusions
based on my own background not only as a journalist but also as a
mathematician (I studied graduate mathematics at MIT for several
years) and as a systems analyst and programmer (which I've been for
several decades). And I reached these conclusions about the overall
methodology and approach, but without having studied the gory,
nitty-gritty details about how Maxager's software performs each
individual computation.

In my professional opinion, the Maxager algorithm should work in cases
that fit the criteria we've described - where there's an expensive
asset which serves as the SCP for the entire production line. Under
these conditions, the Maxager methodology and algorithms should
produce substantially better numbers and better decisions than
traditional standard costing or activities based costing methods, and
should produce the profit improvements that the vendors claim.

While I agree that there are political obstacles to installing this
new methodology, my own belief is that the reason Maxager hasn't taken
off more is because it's too expensive. The entry level licensing and
implementation cost is almost a million dollars, which is a lot for a
largely untested technology for even large companies, and is out of
the question for smaller or mid-market companies which could never
hope to improve profits more than a few hundred thousand dollars per
year.

I'd like to see Maxager come out with smaller $50,000 versions of
their applications, targeted to specific mid-market verticals. A model
for such a system might be SAP's mid- market products. SAP's R/3 costs
large companies several million dollars to implement, but SAP has
products for $50,000 with built-in templates that target specific
vertical mid-market companies. Maxager should look for a way to do the
same sort of thing.

Companies wishing to evaluate this technology can start with a number
of other resources.

The Maxager methodology is based on the Theory of Constraints
developed by Avraham Y. Goldratt. The theory can be checked out at
<#stdurl www.goldratt.com#>, the web site for the Goldratt Institute,
and <#stdurl www.rogo.com#>, the web site on Theory of Constraints
maintained by David Shucavage, the Maxager methodology expert quoted
earlier in this article.

Some of the content on these sites tends to have an evangelistic
flavor, but look particularly for the numerous Theory of Constraints
user stories at <#stdurl www.goldratt.com/success.htm#>, including
Ford, Lucent, and a number of other companies.

Can your company's programmers implement constraint-based algorithms
in your own company's application software? Perhaps, but keep in mind
that Maxager has spent several years developing and implementing its
systems, and has refined the computations well beyond the ability of
someone not full time in the field to duplicate easily. And, as we've
noted, someone else might run into Maxager's software patents.

If you've done your due diligence, and you decide that your company
might indeed see large productivity from Maxager's new mousetrap, then
ask Maxager to set up a pilot or trial run. They've indicated a
willingness to consider that option for promising prospective
customers.

=eod

=data conxot.art.d00Dec13.date
Dec 13, 2000
=data conxot.art.d00Dec13.title
How to Slash Inventory Costs
=data conxot.art.d00Dec13.summary
How DaimlerChrysler and Western Digital are slashing inventory costs:
A new class of software from SeeCommerce and other vendors monitors
products and parts for manufacturers.
=data conxot.art.d00Dec13.url
http://cfo.com/article/1,1874,0|83|AD|1803,00.html
=data conxot.art.d00Dec13.txt

A new class of software monitors products and parts for
manufacturers.

The CFO of any manufacturing firm is always going to be in conflict
with the product managers: The managers want the warehouses to be
chock full of products, ready to ship when customers need them
something, while the CFO will want nearly empty warehouses to keep
inventory costs down. A similar conflict exists on the input side:
Production managers want plenty of raw materials in the warehouses, so
that the production line will never have to wait for materials while
the CFO, once again, wants the materials warehouse to be near empty.

There's no doubt that inventory costs can be great. DaimlerChrysler's
Mopar Parts Group discovered $3.5 million in excess inventory costs
in just one week of running a sequence of software applications from
SeeCommerce (<#stdurl www.seecommerce.com#>). The packages analyze a
manufacturer's so-called supply chain.

By the end of 12 months, the company expects to save $12 million in
inventory costs.

How is that even possible? The answer to that question shows how much
computers are changing all our lives by tracking and zeroing in on
huge numbers of even tiny activities that businesses perform.

"We have 280,000 part numbers and over two million SKUs that we
forecast," says Jerry Quell, senior manager of materials operations
planning. The parts include everything from pistons to car seats, and
the SKUs include variations such as color and style. The parts come
from over 3,000 suppliers, who send them to three central warehouses
located in the Midwest, which then ship them to 11 regional warehouses
in North America and on to hundreds of DaimlerChrysler parts dealers.

"We have this monster forecasting system that cranks out weekly
forecasts based on demand, and you just have to assume that it's
working correctly, because you never really know," he adds.

If the forecasting system is wrong, it can be expensive. If a dealer
needs a part, he has to get it from a regional warehouse. Failing
that, he has to search the central and regional warehouses.

If that fails, the part has to be drop shipped from a supplier. Going
through that labor- intensive process every now and then wouldn't be
so bad, but Mopar fills more than 1 million line items for parts each
week. If only 5% of the parts aren't in stock, then the company has to
do 50,000 part searches, something which can cost $1 million.

Didn't Mopar already have computer software to manage all of this?
Sure. In addition to the forecasting software the firm has home-grown
logistics software, the kind that's available from supply-chain
management (SCM) software companies like i2 Technologies Inc.
(<#stdurl www.i2.com#>) and Manugistics Inc. (<#stdurl
www.manugistics.com#>).

The applications keep track of such things as what's in inventory and
handle various "what- if" scenarios, but they were missing a
performance measurement function.

"Supply chain management products in the past have supplied two
components, planning and executing," says Tom Harwick, an analyst at
the Giga Information Group. "The SeeCommerce products close the loop
in supply chain management by supplying the measurement component."

There had been some measurement in place, of course. Quell had a
paper-based system that kept track of 100 of the highest-cost and
best-selling parts, measuring such things as how often the items were
out of stock or overstocked, but those are only a very tiny fraction
of the 280,000 total parts.

For most of those other parts, inventory processing costs were too
high: Either inventory levels were too low, resulting in expensive
out-of-stock handling charges or inventory levels were too high,
valuable space was being occupied by parts that stayed on the shelf
way too long.

The truth is that for most parts, no one was sure what was going on.
"I was unable to reconcile the fact that we had full warehouses in
some regions, but still had low parts inventories," says Quell.

That's the problem the SeeCommerce software solved. The applications
are built on a huge data warehouse which tracks all parts, suppliers,
central warehouses, regional warehouses, dealerships, and forecast
levels. The data warehouse is fed input from the forecasting and
logistics systems, as well as order entry data from the accounting
systems.

Implementation of the SeeCommerce software began in April 2000, and
the system was in production 12 weeks later on July 5. The
implementation cost of $1.5 million has been dwarfed by the savings,
says Quell.

The $3 million in "safety stock" savings were discovered in just the
first week of production, and that's just the beginning. "This is a
pure cost reduction," says Quell. "By knowing exactly where we're not
forecasting well, and by adjusting dials in our forecasting software,
we're expecting to save $9.5 million in inventory safety stock per
year."

Quell also predicts that supplier performance will improve
substantially. "We see the potential for a 1 percent order line
improvement through better supplier performance," he says. "This means
that of the 220,000 order lines we process every day, approximately
2,200 line orders will not have to be backordered or rushed through
the supply chain. That could translate into additional savings of over
$10 million per year."

SeeCommerce is a relatively new company developing a relatively new
category of software, supply chain performance measurement. The firm
sells six applications, focusing on inventory, production, materials,
demand, suppliers, and fulfillment. Typical licensing fees are $1
million, with additional fees computed on a per-user basis.

In theory, any company can develop its own supply chain measurement
software by building a data warehouse and implementing its own
metrics. But one big advantage of using a packaged application like
SeeCommerce's is that the metrics come built in.

"These guys specialize in measurement, and have numerous built-in key
performance indicators" says Larry Lapide, analyst with AMR Research.
"Another important feature is the alerting and notification.  When one
of the measurements is a little off, the package tracks down the
responsible individuals [via alerts such as e-mail] and lets them
know. That's something you might not always build into your own
measurement system."

A competitive vendor is SageTree Inc. (<#stdurl www.sagetree.com#>), a
subsidiary of hard drive manufacturer Western Digital Corp. Its
product, SageQuest, was originally developed as an in house
application to solve the problems faced by hard drive manufacturers.

"In 1997, we were building 100,000 drives a day, each with 250
individual piece parts, assembled in a clean room under tight
conditions, and tested for 18 hours before it's shipped," says Jerry
Hill, who is now SageTree's chief technical officer.

When a hard drive problem is discovered in the field, it usually turns
out that it was caused by a part defect. This means that other drives
with the same defective parts have to be recalled.

"Usually what we know are the serial numbers of the bad products,"
says Hill. "The numbers are in the shop floor system, but then you
have to go to the ERP system to find out where those drives are
shipped.

But you can't tell what the serial numbers from the ERP system.
Solving this problem meant stopping the shipping of product worldwide
and hiring temp people to go to the warehouses to open boxes and look
at the serial numbers of the drives, and compare them to the serial
numbers on the lists."

So SageTree's software has a different focus than SeeCommerce. Here
the focus is on keeping track of the serial number of every hard drive
the company makes, the lot and serial numbers of the parts, the boxes
they were shipped in, the carriers who shipped them, and other details
to the number of the test station that tested the individual drive.

Western Digital's supply chain data warehouse contains a full terabyte
of raw data, according to Hill. "The database remains roughly at that
size, since data is retained for the three year warranty period of
each drive, after which it is rolled off onto tape."

If a problem arises with a drive under warranty, Western Digital can
search its database for other drives with the same component. The
software provides analysis information which developers can use to
design out product and manufacturing weaknesses.

Although saving money is as much an objective of SageTree's software
as it is of SeeCommerce's software, SageTree has a different primary
objective, engineering control and quality control of the finished
product.

This need to track the serial number of manufactured items, or every
detail of every component, and track those serial numbers and lot
numbers throughout the manufacturing and shipping process, is felt by
manufacturers of highly complex products with many components.

One market being targeted is process manufacturing, which refers to
the manufacturing of liquid products, such as catsup or gasoline, as
opposed to discrete manufacturing, which is the assembly of parts into
hard objects, like cars or computers.

The SageQuest software can be used to track every ingredient and step
in the manufacturing process.

SageTree was spun off as a subsidiary in September, 1999. Western
Digital is currently the only production customer, but according to
the vendor, it is close to closing sales to two other companies. The
software costs from $500,000 to several million, depending on the
components implemented.

An important aspect of the new supply chain measurement software
applications is their collaborative aspect, according to Karen
Peterson, an analyst with the Gartner Group. "We're seeing a trend
toward being able to develop metrics that you can share with your
trading partners," she says, adding that it's important that everyone
involved see the same data.

"Each participating person must see the same measurements, so that
they can all know how well or how poorly they're doing," Peterson
says.

=eod

=data conxot.art.d00Dec06.date
Dec 06, 2000
=data conxot.art.d00Dec06.title
Say 'Please' Before You Market Via E-Mail
=data conxot.art.d00Dec06.summary
If you want to use e-mail as a marketing tool, don't just spam
millions of people.  Instead, do what The Museum Company and CNNSI.com
do: Use opt-in e-mail marketing services from companies like
Responsys.com and E2 Communications.
=data conxot.art.d00Dec06.url
http://cfo.com/article/1,1874,0|83|AD|1649,00.html
=data conxot.art.d00Dec06.txt

How The Museum Company and CNNSI.com use E-mail as a marketing tool.

E-mail is becoming more and more a prominent part of marketing
campaigns for small and large businesses alike. But as with any other
marketing technique, you must use it carefully. Otherwise, you risk
alienating potential customers instead of embracing them. The key to
successful E-mail marketing is called "opt-in E-mail" or "permission
E-mail," in which the people who receive your E-mail messages are only
those who have indicated that they want to receive them. Without that
permission, your E-mail message just becomes worthless "spam." And
spam can engender negative feelings toward the sender of the message.

E-mail marketing is generally much more successful than banner ads
that appear on Web pages, according to Rick Bruner, an analyst with
IMT Strategies, an E-business market research firm based in Stamford,
Conn. "Marketers can commonly achieve 15 percent click-through rates
on permission E-mail campaigns (compared to 1 percent or below with
Web banner ads) and conversion rates (for sweepstakes, newsletter
sign-ups, surveys, E-commerce sales, and more) of 5 percent or
better," he says. "Unlike Web banners, E-mail is an elegant and
universal 'push technology' that puts the marketer back in control of
what messages the customer sees [, and] when."

That's exactly the kind of program that's been set up by The Museum
Company (<#stdurl www.museumcompany.com#>), the New York City-based
headquarters for the national chain of over 100 The Museum Company
retail stores in the U.S. and Canada. The chain sells a variety of
items, including jewelry, gifts, and even toys, based in culture and
history.

"We have an in-house EDM [electronic direct mail] program that we use
to communicate with our registered members," says Helen Elizabeth Kim,
vice president of marketing for the retail firm.

"We communicate special offers or promotions for store events to
register customers or other people who have given us permission to
market to them online."

The Museum Company has a mailing list of several hundred thousand
E-mail addresses, starting with those culled from cards filled out by
customers in retail stores. "In addition, we have lists of people who
are registered to our site, and we have national sweepstakes that
people can enter, and they can provide addresses and E-mail
addresses," says Kim.

Anyone can send out E-mail to a list using a standard E-mail program.
But once you have tens or hundreds of thousands of E-mail addresses,
then the problems become complex. Just sending that many E-mail
messages through a system can overwhelm it, and then keeping track of
messages and responses requires a great deal of technology.

For this reason, The Museum Company uses the services of
Responsys.com, an E-mail marketing firm, to manage the E-mail
operation.

Kim says that a core principle of marketing is that you have a
hypothesis, you test the hypothesis, track the results, and expand the
programs that are working, retiring those not working."

Kim has experimented with a number of different marketing
campaigns -- holiday promotions, promotions for special store openings,
special product promotions, and different kinds of E- mail
messages -- varying with the amount of graphics, for example.

Responsys.com provides a variety of tools to mount and measure these
campaigns. E-mail addresses can be segmented according to geographic
region or other demographics provided by users themselves. According
to the company, Responsys charges its customer 10 cents to 15 cents
per outgoing E-mail message, depending on the volume of messages and
complexity of services.

"For example, if we sent out 100 EDM pieces today, we could track when
they go out [and] what percentage actually opened them, and [we could]
follow their behavior to see what people click on and what they
order," says Kim. "And I want to be very clear that we like very much
that the Responsys tools are permission-based, and all our members
have said, 'I want to receive E-mail online.'"

But more than that is required for a successful campaign, according to
Jim Nail, an analyst for Boston-based Forrester Research Group. "The
biggest 'gotcha' in conducting an E-mail campaign is that on the
surface it looks like a direct mail campaign, but without paper and
postage," he says. "While there are a lot of similarities, and a lot
of direct mail insights will apply to E-mail, the big thing that
doesn't apply is that E-mail has to be a lot more personalized, and
has to deliver some kind of value."

For that reason, each outgoing E-mail message is personalized in
several different ways. It contains the recipient's names, and any
URLs in the E-mail message are unique to that message. Each E-mail
message is assigned a unique number which can be tracked back to the
user, and that number appears in all the URLs in that message. If a
user clicks on one of the URLs in the E-mail message, then the
Responsys tools can provide aggregate information on how many people
opened the messages, how many people clicked on a URL, and how many
orders were generated. Each recipient's interests can be tracked, so
that the content of the next E-mail message can reflect those
interests.

Another company, CNNSI.com, uses E-mail marketing in a different
way -- and also very successfully, according to marketing director Andy
Mitchell.

"There are three goals," says Mitchell. "To remind people that we're
on top of the sports news; second, to drive traffic back to the site;
and third, since E-mail is valuable to advertisers, to monetize that
as well."

CNNSI.com sends out very popular E-mail newsletters on golf, football,
and basketball, with baseball to begin in the spring. Users can
subscribe to these newsletters for free from the Web site. There's
also a "refer-a-friend" program in which one sports fan can name
another fan's E-mail address, and that person will be asked if he or
she wants to receive the free newsletters.

The newsletters are even customized for the recipient. For example, a
Massachusetts football subscriber might find a lead story about the
New England Patriots.

CNNSI has almost 200,000 subscribers for its first two newsletters
alone, and the list is still growing.

Because of the size and complexity of the job, CNNSI also outsourced
the E-mail marketing, in this case to the firm E2 Communications
(<#stdurl www.e2communications.com#>). E2 Communications quotes prices
of 2 cents to 4 cents per message, considerably lower than
Responsys.com's price quotes. Although, since the tools and service
are different, it's not always possible to compare the two companies
directly.

E2 Communications is taking care of the first two newsletters on golf
and also on football, which started last summer.

"At CNNSI we're a content company, and E-mail is their business,"
says Mitchell. "We provide the content to them, they design the
newsletters, they format it, and they crank out new E-mail products
every day."

This campaign is already paying for itself, according to Mitchell.
"Through advertising alone, we more than recoup our costs for the
service," he says.

However, when CNNSI was about to start up its basketball newsletter
in November, Responsys.com convinced CNNSI to give them a try.

"E2 had done a good job, and we were already comfortable with them,
but we were aggressively sold by someone at Responsys," says Mitchell.
"At first we didn't even want to consider testing Responsys, but they
gave us equal pricing with E2. I think that both these companies hope
that by establishing themselves with CNNSI, it's going to open doors
with other CNN properties and with [parent company] Time Warner."

So, at this time, E2 Communications is marketing the golf and
football newsletters, and Responsys.com is marketing the basketball
newsletter. "It's completely practical for us to test both their
solutions simultaneously," says Mitchell. "The real judgment day is
going to be in February when we decide who's going to do the baseball
letter for us. Our present plan is to move all the letters to a single
vendor."

Responsys.com and E2 Communications are just two of many companies in
the E-mail marketing business, with prices ranging from roughly 2
cents to 3 cents per E-mail message to as much as 15 cents per
message, depending on volume of E-mail.

In addition, there may be large up-front consulting expenses required
to integrate the E-mail system with financial systems. For example,
E-commerce companies may want to integrate their order-entry and
order-fulfillment systems with the E-mail system, in order to send
E-mail messages automatically to customers at the time an order is
placed and again when the order is shipped.

Both Responsys.com and E2 Communications make their entry-level tools
available on their Web sites to low-volume users on a self-service
basis.

Responsys.com's JumpStart is available online for free without time
limit, with usage limited to 500 messages per month. The next level up
is a supported package for $900 per month, allowing up to 5,000
messages per month.

E2 Communication's entry-level product has a somewhat different price
structure. There's typically a couple of thousand dollars in setup
costs. Then, however, monthly costs are $400 per month for an
entry-level supported system permitting up to 10,000 E- mail messages
per month.

Another market leader in E-mail marketing is Digital Impact
(<#stdurl www.digitalimpact.com#>). But its service is heavy on
the consulting services, according to Matt Cain, analyst with the
Meta Group. Digital Impact, which he calls a more expensive,
high-touch outfit, works closely with the customer, to the point of
holding the hand of the customer, says Cain. "Reponsys.com is more
self-service. They want to provide their tools, and provide a
lower-cost service."

In fact, there are so many firms offering E- mail marketing services,
that we're starting to see a lot of merger-and-acquisition activity,
according to Cain. "The interesting dynamic is that the guys who've
done a lot with banner advertising, like 24/7 Media [<#stdurl
www.247media.com#>], Engage Inc., [<#stdurl www.engage.com#>] and
DoubleClick [<#stdurl www.doubleclick.com#>], are now very interested
in E-mail, and are acquiring E-mail companies," he says. "They want
to diversify and offer services so that customers can go to one place
and get numerous online advertising services."

<h3>Sidebar: Whatever Happened to Sanford Wallace?</h3>

He burst on the scene in 1997 as one of the original E-mail marketers.
But Sanford Wallace didn't exactly follow the "opt-in" or "permission
marketing" model. Through his company, Cyber Promotions, he sent out
millions of advertising E-mail messages to mostly unwelcoming
recipients.

He was hated and reviled by many in the traditional Internet
community, several of whom referred to him as "Spamford Wallace" and
mounted worldwide, hostile E-mail campaigns against him, in order to
force him out of business. He just laughed it off, and even appeared
in media photo shoots with cans of Spam, the food product that became
famous in World War II as the dinner not quite of choice for soldiers
in Europe.

Then Wallace got a stroke of luck when Spam's owner, Hormel Foods
Corporation, sent him a cease-and-desist letter, ordering him to stop
using the word "spam" to promote his business. The utter absurdity of
the whole situation thrust Wallace onto many television shows and
magazine pages, where he got enormous publicity, always thumbing his
nose at his detractors.

Wallace's detractors never stopped him. But a funny thing happened:
His E-mail marketing campaigns were utter failures. It turns out that
people didn't and still don't like unsolicited E-mail advertising.
Overwhelmingly, not only do people ignore such advertising, but often
actually become actively hostile to companies who promote their
products that way. So Wallace ended up losing many clients.

He now claims to be thoroughly reformed. He runs a permission-based
E-mail marketing service, where he claims to be making much more money
than he ever did through Cyber Promotions. "If I had it all to do over
again and I knew how much profit and positive results come from
permission marketing," he says in a news report, "I would have never
have gone close to that [spam] model."

=eod

=data conxot.art.d00Nov29.date
Nov 29, 2000
=data conxot.art.d00Nov29.title
Time and Billing Software For Small Firms
=data conxot.art.d00Nov29.summary
How one firm uses a new service from Timeslips Corp. to keep track of
its billable hours.  Also this week: Computer Associates announces
software leasing, and tells us why dealing with CA in the past was so
acrimonious.
=data conxot.art.d00Nov29.url
http://cfo.com/article/1,1874,0|83|AD|1250,00.html 
=data conxot.art.d00Nov29.txt

How one firm uses a new service to keep track of its billable hours.

(Also this week: Computer Associates announces software leasing, and
tells us why dealing with CA in the past was so acrimonious.)

Keeping precise track of time is an important part of the job of many
types of professionals, including accountants and lawyers.
Complicating the time tracking job is the fact that this data may be
highly sensitive or proprietary, since it affects client billing and
employee payrolls.

Nichols Dezenhall CMG, a crisis management public relations firm with
27 employees in Washington DC, solved that problem by taking advantage
of a new service from the vendor of the time and billing program
Timeslips to store the company's billing data on the vendor's server
rather than the customer's server.

Larger businesses with midrange or high-end accounting systems usually
have some means to track employees' time through their accounting
software. As a small business, Nichols Dezenhall did not have such a
solution available, and it considered a number of other solutions that
many small businesses (as well as small departments of larger
companies) look at when they wanted to replace their paper-based
system five years ago.

"We were going to have a special program written by consultants, but
that program was going to cost $5,000," says Jennifer Hirshon, the
agency's director of administration and development. The plan was that
employees would track their time and expenses on paper, and Hirshon
would type the times into the new application program.

The company ended up purchasing the packaged application program
called Timeslips, a program which inputs time and expense data for
employees, and produces bills, payroll data, and reports.

Now move forward to this year. "My job was changing, and Timeslips
didn't eliminate all the time I had to spend entering data, which
after five years I found was boring and mundane, because I had to read
people's handwriting," says Hirshon.

The obvious solution would be to go to some sort of client/server
version of Timeslips. However, this has technical problems, as well as
problems having to do with the sensitive nature of the data.

Installing any client/server program on a local area network for a
small business is complex, and requires one or more employees with
sophisticated technical knowledge, often much more technical knowledge
than their bosses. Inevitably, these "computer wizards" have access to
all the data on the server. These problems can be solved, of course,
and many companies have done so, but usually by hiring more people and
installing expensive safeguards.

This is one of the reasons why even small installations of midrange
accounting software can run into many tens of thousands of dollars.

However, just to illustrate how out of line these costs are for
Nichols Dezenhall, the company uses M.Y.O.B. Accounting from BestWare.
M.Y.O.B. is a low-end small business accounting product, whose major
competitors are Peachtree and QuickBooks, and sells for around $200.

So a big client/server installation was out of the question, but it
turns out that Sage U.S., the vendor of Timeslips, has a fairly
low-cost solution called eCenter. Hirshon purchased Timeslips eCenter
licenses for each of the employees' computers and laptops, and allowed
them to input their own time and billing information while they were
on the job.

Employees now fill out their own online time slips, and when they're
done, the data is sent out to the Timeslips server. However, that
server isn't on Nichols Dezenhall's premises, as would be the case in
an ordinary client/server configuration. The employees' time slip data
goes out over the Internet to a server run by Sage expressly for this
purpose.

As administrator, Hirshon can download all the employees' data back
into her copy of the software, and prepare the monthly bills and
reports. Hirshon no longer has to input the time slip data herself.

And the cost? Roughly $1,000 per year for all 27 employees, a small
fraction of what it would cost to securely implement and configure a
client/server version of almost any financial software application.

According to Hirshon, both employees and clients are delighted with
the result. "We're in the second month of this, and the account
managers are surprised because we're billing more accurately," says
Hirshon.

In the old days, "before each billing cycle we'd have a lengthy
review process, and everyone would have to correct things, since there
were mistakes. Now it's great - everyone just uses the client codes
that are right there on the screen, and it's mistake free for them."

As for the clients, "They're now asking for more details on their
invoices," she says. With the old paper system, "I had never written
on bills what activities were being billed, both because I couldn't
read people's writing, and because some people wrote nothing. Now the
people can write then own descriptions, and they go out with the
bills."

Hirshon also offers one unconventional little bit of wisdom that works
for her, but may not work for other people.

She likes the fact that after Timeslips prints out the billing
invoices, she then manually enters the invoice data into the company's
accounting system, M.Y.O.B. This is not a requirement of Timeslips, we
hasten to point out, but Hirshon makes a virtue out of manually
entering the data a second time.

"The one thing I've always liked about running two systems
simultaneously is that you have checks and balances -- you make sure
that they come out with the same results," she says.

However, it is time consuming, and so Hirshon is planning in a couple
of months to take advantage of features of both Timeslips and M.Y.O.B.
to have Timeslips automatically export the invoice data to a file
which M.Y.O.B. can then import.

Pricing and Competition

Single user versions of Timeslips software cost $399.95, with a
streamlined Timeslips Express with fewer features selling for
$129.95. The software can be purchased from the Web site, <#stdurl
www.timeslips.com#>.

Sage U.S. has just come out with a client/server version of
Timeslips, starting at $1,299.

However, small businesses should consider starting with eCenter
(<#stdurl www.timeslipsecenter.com#>), the system that Nichols
Dezenhall uses. You can try out a free online demo of the system at
the web address. Using the system costs $49.95 per year per user, with
a 40% for over 25 users.

Timeslips has been around for a long time. I first reviewed it in
1987, when it was being developed by a couple of kids out of their
basement in Beverly, Mass. It became the computer industry's best
selling general purpose time and billing program, and was acquired by
Sage U.S. in 1997.

The product's major competitors have also been around for a long
time, usually since the early 1980s, and are mainly targeted to law
firms. Check out PC Law (<#stdurl www.pclaw.com#>) from Alumni
Computer Group Inc., Juris (<#stdurl www.juris.com#>) from Juris
Software, and TABS III (<#stdurl www.stilegal.com#>) from Software
Technology Inc., if you'd like to take advantage of the special
features these programs offer specifically targeted to law firms.

<h1>Computer Associates Inc. announces Software Leasing</h1>

Computer Associates announced a radical change in its marketing policy
when it said that its software products will henceforth be made
available on a monthly lease basis.

Instead of paying a one-time license for software, you pay a monthly
leasing fee. You can terminate the lease or switch to another product
at any time, but if you commit, for example, to paying $10 million a
year to CA for 7 years, then you can lease any of CA's products during
that period at a 20% discount.

In announcing the new policy, company president and CEO Sanjay Kumar
said that in the old business model, after you've made the sale,
"you're then stuck with a protracted, sometimes acrimonious
negotiation where the customer is driving for long term predictability
and you're driving for long term revenue. All of this happens towards
the end of the quarter, making it very volatile." He indicated that
the new business model should eliminate these problems completely.

=eod

=data conxot.art.d00Nov22.date
Nov 22, 2000
=data conxot.art.d00Nov22.title
Beyond Voice Mail
=data conxot.art.d00Nov22.summary
Services from two companies -- Orchestrate and Wildfire -- go beyond
telephone voicemail by providing an automated service that acts as a
personal assistant that takes messages, places calls, and
automatically finds you when someone wants to reach you.
=data conxot.art.d00Nov22.url
http://cfo.com/article/1,1874,0|83|AD|1227,00.html
=data conxot.art.d00Nov22.txt

Two services act as automated personal assistants.

If you miss the good old days when a secretary answered your phone
calls and tracked you down when one of them was urgent, then you may
be interested in two services that provide these capabilities in an
automated fashion. Orchestrate 2000 from Voicecom Communications Inc.
and Wildfire from Wildfire Communications Inc., each cost $10-20 per
month per user, depending on features, and provide some of the
services of a live assistant. The two services have one thing in
common: If someone calls your number, an automated voice offers to try
to reach you at whatever number you've previously indicated you might
be at. If you answer, you hear something like, "Joe Smith is holding
for you; do you accept the call?" A caller who doesn't reach you can
leave a voicemail message.

Orchestrate 2000

When someone calls your Orchestrate phone number, he first hears a
brief recorded message from you, and the following in an efficient
female voice: "To call your party, press 1; to leave a voice mail
message, press 2; to send a fax mail message, press 3; for assistance
press 0." If asked to locate you, Orchestrate simultaneously calls up
to three phone numbers you've specified.

The designers of Orchestrate have built a lot of power into the system
by the technique of tying phone capabilities to the Web.

You're given a Web page on which a variety of features are
consolidated, including features which duplicate what you can do over
the phone:

You can retrieve your voice mail messages over the phone, or you can
retrieve them from your Web page, listening to them with a Real Audio
Player.

If the caller sends you a fax, it's available as a graphic on your Web
page.

You're also given an E-Mail address and can retrieve messages from
your Web page. Out in the field, you can retrieve them via the phone,
and the system will read them to you.

You can even set up conference calls. You set up the list of phone
numbers from your Web page and click on a button. Orchestrate calls
your phone first, then each of the other conferees in turn, until
everyone's together.

Your Web page can also have stock quotes, news headlines, and local
weather reports, giving you a home page that simultaneously provides
your news, voicemail, faxes, and E- Mail in one place. Sign up for
Orchestrate 2000 by going to <#stdurl www.orchestrate.com#>.  The cost
is $19.95 per month, or $9.95 for a version with fewer features. You
can make long distance calls through Orchestrate for 4.9 cents per
minute.

Orchestrate is used by 25 employees of Elk Corp., an Atlanta
manufacturer of retail roofing. "It gives us the ability to respond
immediately to customers' needs," says regional manager Frank Kelly.
"Our competition sometimes takes days just to return a phone call."

Wildfire

The fun feature about Wildfire is that you can talk to and carry on a
voice conversation with your automated assistant, not just push touch
tone buttons. To have "her" play a voicemail message for you, you say,
"What'd it say?" When you're done, you say "Goodbye, Wildfire."

If you place a call through Wildfire, you say "Call" and then dictate
the number. If you're in the middle of any call, you can say
"Wildfire," and she'll come on the line and ask what you want.

Wildfire is being specifically targeted to cell phone and mobile
users, for the obvious reason that you can manage your phone calls
while you're driving without having to punch buttons.

Unfortunately, its availability is very limited. The developer,
Wildfire Communications Inc. (<#stdurl www.wildfire.com#>) of
Lexington, Mass., has been trying to market the system to large
companies and telecommunications firms for several years, but hasn't
made a lot of headway, although it's still trying. Currently, in the
U.S., the only way to get this service is through Pacific Bell
Wireless in Los Angeles or San Diego, although PacBell says it plans
to extend coverage to northern California and Las Vegas next year.

"Wildfire's service is very mature -- they've been around for almost
10 years," says Kevin Werbach, analyst and editor of newsletter
Release 1.0. "They were ahead of the market when they first launched,
but the voice recognition wasn't good enough, and users weren't ready
for an automated assistant. But now with growth of Internet and mobile
services, people are more interested. Also, people's time is tighter
than ever, and business users in particular are more willing to pay
for it."

Wildfire was acquired earlier this year by the London based wireless
telecommunications firm Orange plc, which is now part of France
Telecom. As a result, Wildfire is more widely available in the U.K.,
France and Italy than in the U.S.

According to market development manager Mike Harnett, when the
Wildfire automated attendant speaks to you in each of these countries,
"she" uses a personality appropriate to that country, as determined by
focus groups.

"In the U.S., she's friendly, productive, sometimes funny, sometimes
a little bit sassy," says Harnett. "In the U.K., she's more formal,
because that's what the U.K. market is more comfortable with. The
French version is more informal, and the Italian version has reached
whole new levels of sassiness."

When I asked Harnett for an example of sassiness during our phone
call, he called up Wildfire and said to her, "I'm depressed." The
response was, "YOU'RE depressed?? I live in a box!"

To sign up for the PacBell Wildfire service, go to <#stdurl
www.pacbellwireless.com#>, select "Los Angeles," and perform a site
search on "Wildfire." The service is available for $9.95 per month as
an add-on to PacBell Wireless' existing service. (As the result of
the merger of the wireless divisions of SBC Communications and
BellSouth, PacBell Wireless will be part of Cingular Wireless,
<#stdurl www.cingular.com#>, as of January 2001.)

<h1>Voice Recognition</h1>

"Voice recognition" is the technology that allows a computer to
understand human speech. I've been following this technology closely
since 1985, when artificial intelligence guru Raymond Kurzweil
(<#stdurl www.kurzweiltech.com#>) first announced that he would have a
10,000 word voice recognition word processor on the market by the end
of 1986, a goal which he didn't achieve until 1997. I review these
products regularly, and will do so again soon here.

A problem that Wildfire has had for years is its voice recognition.
It's much easier for Wildfire to recognize words than for a general
word processor, since Wildfire has to recognize only 100 or so
different words compared to the 10,000 words of Kurzweil's system.

My experience with Wildfire is that as long as I was sitting in a
quiet room, its voice recognition works remarkably well, although
there was an anomaly or two. (For example, "she" could never recognize
the word "twelve," no matter how many times I said it. I finally
figured out that I had to say "one two.")

Another problem is that Wildfire's target market of mobile users are
usually calling from noisy environments like cars and trains. In that
environment, the voice recognition is not as certain.

However, that's changing. Voice recognition technology has been
getting noticeably better every year for a number of years, and
Wildfire has been getting better along with it.

Now, Voicecom is planning to incorporate voice recognition into
Orchestrate, according to Daryl Engelman, executive vice president of
strategic development. "The technology is finally getting good
enough," he says. "Voice recognition in Orchestrate is going to be
available in the second half of 2001."

=eod

=data conxot.art.d00Nov15.date
Nov 15, 2000
=data conxot.art.d00Nov15.title
Are Accounting ASPs your Friend or Foe?
=data conxot.art.d00Nov15.summary
With an Application Software Provider (ASP), you can have another
company manage your accounting software for you.  We looked at three
ASPs.
=data conxot.art.d00Nov15.url
http://cfo.com/article/1,1874,0|83|AD|1203,00.html
=data conxot.art.d00Nov15.txt

Here's what we found when we looked at three accounting applications
service providers.

If you need new accounting or financial software, an ASP (application
service provider) can be an easy and inexpensive option. Instead of
purchasing accounting software and computer equipment and bringing
them in house, you outsource the entire project to an ASP via the
Internet.

For this report, I checked out Intacct from Intacct Corp.(<#stdurl
www.intacct.com#>), NetLedger from NetLedger Inc. (<#stdurl
www.netledger.com#>), and Great Plains Accounting from the ASP
ManagedOpts.com. Intacct and NetLedger are Internet-only accounting
systems, while Great Plains is also available for traditional on-site
licensing from Great Plains Software Inc. (<#stdurl
www.greatplains.com#>). Other Internet-only accounting systems that
you can check out for yourself are ePeachtree (<#stdurl
www.epeachtree.com#>) and eLedger (<#stdurl www.eledger.com#>).

Internet-only systems like Intacct and NetLedger are easy to sign up
for. You just go to a Web site, and sign up. For either service, you
can play around with a demo account for a few weeks, in order to
familiarize yourself with how the system works and decide whether it
will work for you.

There are some concerns with ASPs. For example, if your accounting
data is on someone else's computer, can you easily get to it? Can your
competitors hack into the ASP's computer and see your data?

Even worse, what happens if your ASP goes under, as so many dot-com
companies have been doing recently? If the ASP goes out of business,
will you lose your accounting system? Will you lose the rest of your
business, too? At the very least, you should have a plan in place to
recover your data quickly from the ASP, if it goes under.

The risk of an ASP going belly up is certainly a concern to Richard
Brenner, a business consultant in Cupertino, Calif., who evaluated
the Internet-only accounting system from Intacct. He wanted to use it
for his own business, replacing Intuit Inc.'s QuickBooks (<#stdurl
www.quickbooks.com#>), which had served as his accounting software
for ten years, and also to recommend it to some of his business
clients who need a new accounting system.

But Brenner is also concerned about security.

"One of the biggest fears that we have and our customers have is that
the system is not secure," says Brenner, CEO of the Brenner Group
(<#stdurl www.brennergroup.com#>).

Brenner checked out Intacct's computer systems and found that although
all customer data is stored in the same large Oracle database, the
company is using Oracle's standard security features, with the result
that Brenner believes that each customer's data is fully secure. He
also checked out the firewalls and other features of Intacct's
configuration. "I talked to all my customers about it, and they came
away reassured," he says.

Indeed, Richard Stiennon, research analyst at Stamford, Conn., based
Gartner Group, agrees that Intacct checks out for now, but indicates
that every ASP must be given a thorough technical security check, and
these checks must be repeated frequently during the life of the
contract.

"Watch how the ASP saves on costs," says Stiennon. "The ASP will be
trying to spread their cost by hosting their services on the same
computer as other customers. If my financials are on the same
database, on the same disk drive, as a competitor, then does someone
from my competitor have access to my data?"

Stiennon and the Gartner Group provide a detailed "Security Test" that
you should apply to any ASP. See the Security Test at the end of this
column.

What about classical accounting systems? While Intacct and NetLedger
are brand new, Internet-only, ASP-only accounting systems, Great
Plains Accounting is a classic midrange accounting system that's been
around, in one form or another, since the early 1980s. These days,
Great Plains and other classic systems are also being offered by
ASPs. The ASP installs the accounting system on its own equipment and
offers Internet access to its clients.

Folio Corp., a manufacturer of trade show exhibits, decided to go with
Great Plains ASP service in early 1999, when the company needed a new
accounting system after having acquired two other companies.

"We didn't seek new financial systems with the ASP model in mind
initially," says Dan Lubin, VP of IS, for the Worcester, Mass.,
company, "But we had to put together integrated financial systems to
support our recent acquisitions."

Folio hired outside consultants to select new financial systems, and
narrowed the choices down to J. D. Edwards, Solomon Software, and
Great Plains Software. Then Folio started talking to ManagedOps.com
(at that time known as the Taylor Group), a Bedford, N.H. based Great
Plains reseller which wanted to start an ASP service. Folio ended up
being the first customer.

Although cost was a consideration in selecting an ASP, it wasn't the
major consideration.

Lubin had originally planned to hire a staff and build a data center
to house the computer equipment.

But by going to an ASP, "we had to add zero head count," says Lubin.
The firm does have a small technical project team to manage the
relationship, but "I didn't need to build a help desk, I didn't need
to build a data center, and I didn't need to hire programming experts
in Great Plains and SQL."

Pricing

Like Lubin, most people who go to the ASP model for accounting
software are not doing so solely to save money. More important are
factors like fast implementation, avoiding capital investment, and not
having to hire an expensive, highly specialized technical staff that
can install and maintain the software.

That's not to say that pricing is not a factor. It is. Keep in mind
that these systems are all priced by the number of users who can
access the system. So end users will need to be alert to every user
linked to their system.

Intacct costs $49.95 per user per month, while NetLedger is priced at
$4.95 per user per month, with an additional $9.95 per month to use
the payroll module.

ManagedOps.com provides Great Plains for $450 per month per user, for
users that enter data into the system. There's a second level, users
who only need to display or print reports, and for them, the charge is
$50 per month.

The difference in price reflects the complexity and functionality of
the products.

In addition, Great Plains and other classical accounting systems can
be customized for your business, provided that you're willing to pay
some stiff consulting rates to the ASP.

However, Internet-only accounting systems use an entirely different
mass audience business model where no code customizations are
permitted.

Of course, both kinds of systems allow you to customize forms,
displays and reports.

Misgivings

As I was preparing this column, several misgivings arose. You can
decide for yourself whether my misgivings are important to you, or
whether you feel I'm being overly anxious.

First, NetLedger was the only software company willing to even
estimate how many paying customers it has -- 2,000 paying customers,
and 35,000 that have tried the free online demo. I commend Stephen
Wolfe, VP of product management at NetLedger, for his openness about
this figure, which is very important for getting a sense of a vendor's
credibility.

Intacct and ManagedOps.com were unwilling to give me any clue as to
how many paying users they have, but since they're priced quite a bit
higher than NetLedger, my (unproven) assumption is that they have far
fewer users.

However, I did speak to a ManagedOps competitor, Genesis Innovations
(<#stdurl www.genesisinnovations.com#>) of St. Paul, Minn., who tells
me that they have nine paying customers using their Great Plains ASP
service, and over 1,300 trying out their full- featured demo.

Now all of these vendors have 100-200 employees, and so have $5
million to $15 million going out each year just for payroll and
related expenses. How many paying customers do the ASPs need to
continue to meet their payroll after the investors start demanding to
see some profits? Do the math yourself, and you'll see why I'm
concerned.

There are millions of small businesses in the U.S., so there's no
doubt that any of these vendors could survive, if only it can get even
a tiny market share. But that hasn't happened yet, and no one appears
to be even close.

What about free demos? Intacct and NetLedger let you try out their
online accounting systems for free for a few weeks, with a demo
account, as does Genesis Innovations. ManagedOps.com appeared to be
shocked! shocked! that I even suggested such a thing as a free online
demo of their systems, and refused to even consider it. So it appears
that some ASPs are willing to permit demos, and some aren't.

I believe that online demo versions are going to be increasingly
important marketing tools for all ASP vendors.

In fact, online demos can alleviate the risk of switching to a new
accounting package sight unseen. One of a financial officer's worst
nightmares is that a new system simply won't work.

According to Charles Chewning of Solutions Inc., a Richmond, Va.,
based consultant who evaluates accounting software products, failure
of an accounting system happens pretty often. "I just talked to
someone who got [a major vendor's product], spent $80,000, and got rid
of the system because they didn't like it," says Chewning. "The cost
of a failure is quite substantial -- much more than the cost of just
the software."

What this means to me is that vendors have an obligation to users to
become increasingly generous in providing as much information online
about their products, including extensive online demo capabilities, in
order to give users the opportunity to "live with" the system before
making a full commitment to it.

Gartner Group's Security Test

The Gartner Group has provided a test that your technical staff should
apply

to any ASP that you're thinking of using. A "no" answer to any of these 
questions represents a serious vulnerability that will put applications and 
data at risk.


* With regard to the ASP's network layer, does the ASP require the use
of two-factor authentication for administrative control of all routers
and firewalls?

* Support 128-bit encryption and two-factor authentication for the
connection from the customer's local area network to the ASP
production backbone? Provide redundancy and load-balancing services
for firewalls and other security-critical elements?

* Perform (or have an experienced consulting company perform)
external penetration tests on at least a quarterly basis and internal
network security audits at least annually?

* Show documented requirements for customer network security (with
audit functions) to ensure that other ASP customers will not
compromise the ASP backbone?

* With regard to the ASP's operating system (OS) platform (usually
Windows NT or Unix), can the ASP provide a documented policy for
hardening the OS on its Web and other servers? (Hardening an OS
entails: eliminating any unnecessary OS services (e.g., Telnet or
FTP), disabling all communications paths that are not needed (e.g.,
TCP/IP ports), installing all required security patches and
minimizing system administration accounts and access to system
logging/auditing.)

* If the ASP co-locates customer applications on physical servers,
does it have a documented set of controls that it uses to ensure
separation of data and security information between customer
applications?

* With regard to the actual accounting application software, does the
ASP review the security of scripts and integration code that are added
to the commercial applications it provides? How is it done? Provide
application or transaction-based intrusion-detection services?
Document the security standards and processes used for creating
interfaces to other systems on the ASPs systems?

* With regard to operations, does the ASP perform background checks
on personnel who will have administrative access to servers and
applications? Show a documented process for evaluating OS and
application vendor security alerts and installing security patches and
service packs?

* Use write-once technology for storing audit trails and security
logs? Show documented procedures for intrusion detection, incident
response and incident escalation/investigation?

* Have membership in the Forum for Incident Response and Security
Teams (FIRST) (<#stdurl www.first.org/about/first-description.html#>).
or use a security service provider that is?

* Use "hot site" failover services that have the same security
operations and procedures?

* Provide authentication services for system users?

* Have documented processes for adding, removing and validating
security keys for all users?

* When using outsourced authentication services, does the outsource
agent have a documented process for managing and validating member
security keys?

* With regard to end user services, does the ASP security staff
average more than three years of experience in information/network
security?

* Do more than 75 percent of the ASP's security staff have CISSP (see
<#stdurl www.isc2.org/isc2faq.html#>) or other security industry
certification?

* Can the ASP show documented help desk procedures for authenticating
callers and resetting access controls?

=eod

=data conxot.art.d00Nov08.date
Nov 08, 2000
=data conxot.art.d00Nov08.title
Don't Let Your Data Die!
=data conxot.art.d00Nov08.summary
EMC Corp. and IBM Corp. are in a battle to provide to high capacity,
high performance extremely reliable disk storage for massive web
sites.
=data conxot.art.d00Nov08.url
http://cfo.com/article/1,1874,0|83|AD|1180,00.html
=data conxot.art.d00Nov08.txt

Why RAIDing your data is the best way to keep it safe.

If you're on the Internet, chances are you need a lot more disk space
to hold all those graphics, movies, sound clips, documents and
databases your Web site uses. All of those have to be stored on a disk
drive, and hopefully the drive won't crash 45 seconds after you run
that big TV ad that draws 1 million new visitors to your site.

High end disk drives have been around for decades, but thanks to the
Internet, the demand for them has never been stronger. Moreover,
unlike their predecessors from 20 or 30 years ago, these disks aren't
dumb, magnetic file cabinets. The latest systems are powerful,
intelligent, complex and expensive.

That's what software development firm Raydium Inc. discovered when it
had its eye on a Symmetrix multi-terabyte disk storage system from EMC
Corp. The software company wanted to store massive amounts of data it
planned to collect about users' behavior on the Internet.

Problem was, it would have cost over $2 million up front, even though
the firm wouldn't need all that storage right away. What's more, the
system required sophisticated maintenance and upgrading. As a result,
the Chicago based company decided to outsource not only its disk
storage, but also its the management of the company's entire Web
site, to a Rolling Meadows, Ill., outsourcer, Telenisus Corp.
(<#stdurl www.telenisus.com#>), one of a new breed of "storage service
providers" (SSPs).

"We looked at several solutions, that would have taken multiple
partners to accomplish, and we felt that as a small startup, with all
our resources dedicated to our business, we didn't want to have to
focus our attention on a disk system and Web site," says Jordan Ho,
vice president of strategic alliances and operations. "They offered us
a great deal of freedom. One of the biggest reasons we went with them
is they provided us with a single point of contact, one stop shop, for
all our needs at the time."

The initial cost saving can be enormous, since you only have to pay
for storage that you're actually using, and administrative and support
costs can be shared with the outsourcers' other clients. For example,
Telenisus charges $5,000 per month for an entry level system with 9
gigabytes of storage, including Web site hosting, security, and other
services.

The major SSPs are listed at the end of this article.

EMC Corp. vs. IBM Corp.

Perhaps, you wouldn't normally expect an ordinary disk drive to have
special functions, but Ho says, "EMC's disks have a Business
Continuance Volume [BCV], an exact copy of the data or database, and
we need an exact copy. It allows us to manage our data in ways that
other storage solutions don't."

It turns out that this feature -- making an extra copy of a disk
volume -- is crucial. This is a precise copy of a disk volume, which
is made as transactions are added during normal processing. The
customer can use the copy to do data analysis or application
development, without disturbing the online database or interrupting
the transaction processing.

Today, the two major competitors for high end disk systems are EMC
Corp.'s Symmetrix systems and IBM Corp.'s Shark systems. Choosing
between these two competitors involves evaluating a mix of pricing,
features and performance issues. Anyone considering using a high end,
mission critical disk system should weigh all of these factors.

Before addressing the "business continuance volume" feature that sold
Jordan Ho on EMC, we have to begin with the most important feature of
all, reliability.

I know from widely published statistics that most of you reading this
column do not regularly make backup copies of your hard disks, even
though your hard disk is just a mechanical device that might simply
stop working at any time. This means that if you don't back up your
disk, then you could turn on your computer tomorrow morning and find
out that you've lost your hard disk, and along with it every memo,
letter, spreadsheet, and your entire customer database.

But if you make daily backups, then at least you can always go back to
the previous day's copy, and you'll have lost only one day's work.
Enough said.

However, backups aren't enough for mission- critical online databases,
where you can't afford to lose one minute's transactions, let alone an
entire day's.

That's why IBM, EMC and other manufacturers implement a technology
known as RAID - Redundant Arrays of Inexpensive Disks. There are
several variations of this 10 year old technology, labeled RAID 1
through RAID 5. What all of them have in common is that instead of
storing data on one very large disk drive, the data, as the name RAID
implies, is stored on an array of small, cheap disk drives in a
redundant fashion, with the idea that if one of the cheap drives is
lost, all the data on it is recoverable by examining the other drives
in the array.

EMC Corp. tends to favor RAID 1, which is the most straightforward of
the five variations. For example, in an array of eight disk drives,
RAID 1 splits them into pairs, so that the data on each drive in each
pair is duplicated on the other drive of the pair. If one drive is
lost, the data is still available on the other drive. This means that
out of the eight drives, four are used for data, and four are used for
copies.

RAID 1 has an obvious performance advantage for certain types of
applications, where overall performance depends on reading data
that's already been stored. The reason is that, with two copies of the
data available, the disk system can perform two separate read
operations simultaneously, one from each disk, meaning that disk read
performance is effectively doubled in those cases. Of course, disk
writes do not double in speed, since each data change must be written
to both disks simultaneously, to keep the disks synchronized.

IBM Corp. tends to favor RAID 5, an algorithm so complex that over the
years some disk vendors have been unable to get it working.

If you have an array of eight disk drives, then RAID 5 writes each
data record in seven pieces on seven of the eight drives. The eighth
drive is called a "parity" drive. If one of the eight drives fails,
then data from the remaining seven drives (which may or may not
include the parity drive) can be used, by means of a very complex
algorithm, to entirely recover the data on the failed drive.

The reason we've gone into these details is obvious: When you buy a
RAID 1 system, only 1/2 of the available physical space is effectively
available; when you buy a RAID 5 system, 7/8 of the available space is
effectively available. That appears to be a huge difference. But if
you recall that the "I" in "RAID" stands for "inexpensive," this may
or may not mean a significant cost difference between the two
systems.

What about performance? The trick about overlapping reads on a RAID 1
system described above also works on RAID 5, but in a different way:
multiple read operations can still be done in parallel, but the
algorithm is much more complex, and we won't attempt to describe it
here. In fact, RAID 5 may permit a little parallelism on write
operations as well as read, improving RAID 5 performance.

On the other hand, on RAID 1, the same amount of data is spread over
a greater number of disks, and so two disk systems with the same
effective amount of disk space may perform better with RAID 1 simply
because the same amount of data is spread over a larger disk array.

The moral? Before you spend several million dollars on a disk system,
be sure you benchmark all the systems to determine how performance
will be with your mix of applications. And don't confuse physical disk
space with effective disk space.

BCV's versus FlashCopy's

The purpose of EMC Corp.'s Business Continuance Volume (BCV)
capability, as we said, is to give you an exact copy of your disk
volume at any particular instant. This feature of EMC's system
appealed to Raydium's Ho.

Recall that EMC's RAID 1 implementations work by creating and
maintaining two disk volumes so that they're constantly identical. The
BCV is a third volume, another copy that's created when you ask the
EMC disk system to maintain a third volume identical to the other two.
The system does this, and at any time you can "break off" the third
volume, and use it for data analysis or software development or
whatever you want.

Does IBM's Shark system have this feature? It turns out that Shark
does have a similar feature, but implemented differently.

IBM's feature, called FlashCopy, works as follows. Shark doesn't
actually create a copy until you request it. When you ask for a copy
of the volume containing your database, Shark appears to create such a
copy instantly, and uses some black magic and trickery to create that
appearance.

When you request your FlashCopy, Shark begins making the copy -- which
might actually take some time to complete. In the meantime, if your
data analysis software actually tries to use data from the new copy --
data that hasn't yet been copied from the original to the new volume
-- the Shark system tricks you by supplying data from the original
drive. Therefore, it looks to your application software that you have
a precise copy of your data at the exact instance you requested -- the
same as in the case of EMC's business continuance volumes.

Both of these algorithms have their advantages and disadvantages in
terms of flexibility, pricing and performance, and your choice will
ultimately be determined by your company's needs.

The Major Storage Service Providers

If you want to outsource your disk storage, you have a number of
choices, since different outsourcers perform different services. Some
provide bare support, doing backups and maintenance as required but no
more. Others host your Web site, provide for firewalls and security,
and perform all sorts of related services.

Prices are a bit high right now, according to William Hurley, analyst
at the Boston based Yankee Group. "One of the major drivers of
outsourcing is that we're seeing a rate of 100% growth, an explosion
in demand for disk capacity, because of the Internet," says Hurley.

"There's a wide variety of pricing schemes in this space, partially
because it's very new, and right now prices tend to be a little high.
But I don't think that price points will bear the pressure, and I
expect them to come down because of competition and technology."

According to Hurley, Telenisus (<#stdurl www.telenisus.com#>) provides
off-site and on-site disk storage outsourcing management, virtual
private networks (VPNs), security and Web site hosting.

Hurley gives the following as the major established SSPs:

StorageNetworks, Inc. (<#stdurl www.storagenetworks.com#>) provides
for primary data storage, tape backup and restore, and high
availability disaster recovery.

StorageWay (<#stdurl www.storageway.com#>) specializes in providing
for storage needs of companies with a high Internet presence.

Arsenal Digital Solutions (<#stdurl www.arsenaldigital.com#>) provides
off-site outsourcing for disk management.

Managed Storage International (<#stdurl www.managedstorage.com#>)
provides disk storage on demand, server backup and management of Web
site content.

Zantaz (<#stdurl www.zantaz.com#>) archives high volume Internet-based
e-mail, documents and transactions, meeting SEC and IRS regulatory
requirements for archiving.

Scale Eight (<#stdurl www.s8.com#>) provides storage on demand with a
focus on rich media and content delivery and distribution.


=eod

=data conxot.art.d00Oct31.date
Oct 31, 2000
=data conxot.art.d00Oct31.title
Expiration of RSA Encryption Patent Should End Sticker Shock
=data conxot.art.d00Oct31.summary
RSA's long-standing patent on its dual-key encryption algorithm is
expiring, and this should bring down the cost of encryption software.
=data conxot.art.d00Oct31.url
http://cfo.com/article/1,1874,0|83|AD|1113,00.html
=data conxot.art.d00Oct31.txt

<i>Xenakis on Technology will appear each week in CFO.com, covering
technology topics of interest to financial executives. John Xenakis
has been in the computer industry for over 30 years and a technology
journalist for 20 years. From 1992 to March, 2000, he was Technology
Editor of CFO Magazine and wrote the monthly TechWatch column.</i>

Many companies have been shocked at the near six-figure or more
licensing fees they've been forced to pay to incorporate security into
their software to do business over the Internet.

Take Wake Forest University Baptist Medical Center, which is about to
go live with a leading edge system to use e-mail to send patients' lab
test results and admission notices to referring doctors. "We wanted to
make sure that this information is secured, so we're encrypting the
e-mail before it goes out," says Joe Foster, Manager of system
development.

The six-month implementation cost of the Winston-Salem, N.C., based
teaching hospital's entire project is $250,000 and of that amount,
$75,000 is licensing fees for the BSafe software from RSA Security
Inc. (<#stdurl www.rsasecurity.com#>). Related technology from
VeriSign Inc. (<#stdurl www.verisign.com#>) was used as well. There
will be no transaction or royalty fees.

"Although we were pressed for time," says Foster, "we looked at other
vendors, and we decided that RSA and VeriSign were leaders, and we
were comfortable with their products and technology."

What exactly is Encryption?

Encryption is the process of scrambling the bits and bytes of a
message so that no one but the intended recipient can read the
original message. Encryption can be used for other things as well,
including credit card numbers or invoice information in an e-commerce
application. Without encryption, any data transmitted over the
internet is vulnerable to hackers. Click here for a primer on
encryption.

Encryption has come a long way since you used a secret decoder ring to
send scrambled messages to your friends as a kid. Almost any method
that you might think of on your own to scramble your messages, no
matter how clever you think it is, would be almost child's play for
many hackers to crack. Nowadays, uncrackable encryption requires tools
based on the most advanced and sophisticated mathematics, and that's
the problem.

One of the most popular encryption algorithms, used in millions of
software applications around the world today, was patented in 1983.
The name of the algorithm is the RSA encryption algorithm, and the
patent is held by RSA Security.

So if you wanted to do business securely over the Internet, you had to
buy BSafe from RSA Security. And they weren't too easy to do business
with. They'd be happy to license BSafe to you to secure your data, but
they charged you $75,000, $100,000 or more, plus transaction or
royalty fees amounting to a fraction of your income.

That's pretty discouraging--like General Motors selling you a car for
$100K, and then demanding 10% of your income as well, since you need
the car to get to work.

And RSA Security got away with it, too. Although the company and its
clients won't disclose prices, rumors are that some large e-commerce
companies have been paying RSA Security several million dollars per
year. That may be OK for the giants, but even small e-commerce
companies were being charged annual six figure licensing and royalty
fees -- for nothing more than to use the RSA encryption algorithm.

But that's all finally expected to change, now that the patent for the
basic technology, the RSA encryption algorithm, expired in September.

Baltimore Technologies (<#stdurl www.baltimore.com#>) has been selling
its KeyTools product, encryption software including the RSA
algorithm, around the world for five years -- except in North America.
(Because of the newness of software patents in 1983 when RSA Security
Inc. first got its patent, it's never had any patent protection
outside of North America.) Baltimore used to have licensing fees
similarly onerous to those of RSA Security's, but now has dropped
them.

You can license their KeyTools Pro software for $9,000 per
application, per platform, with no transaction fees. And they've even
made a subset version, called KeyTools Light, available to be
downloaded for free on their web site, with no licensing fees
whatsoever.

RSA Security, meantime, isn't going to drop prices at all, according
to Michael Vergara, the company's director of product marketing, who
says that they have the best product. "The number of licensees keeps
growing, even since the patent expiration," he says.

Critical Path (<#stdurl www.criticalpath.net#>), a San Francisco-based
developer of applications for running secure messaging over the
internet, licenses both RSA's BSafe and Baltimore's KeyTools, and has
always simply passed the licensing fees through to its own customers.
They believe that RSA Security will have to cave in and lower prices.

"Our view is that this [patent expiration] is great for the security
market, since you now you can buy RSA products and Baltimore products,
both of which deliver a lot of the same algorithms," says Michael
Sebinis, chief security officer. "Now there's competition, which is
always good for the customer and end user, and that's very positive."

However, David Thompson, an analyst with the Meta Group, believes that
RSA Security will be able to keeps its prices up, at least for a
little while. "The other tool kits don't do all the things that the
RSA tool kits do. There are more bells and whistles that you can
configure and modify - key sizes, different implementations for some
algorithms, things like that," he says. "However, with the patent
expiration, there are going to be a lot more tool kits available from
a lot more companies out there, and overall pricing will be
dropping."

Amdahl leaving the mainframe business

Amdahl Corp., a unit of Fujitsu, is announcing this week that it's
discontinuing its IBM compatible mainframe product line.

This is the second such defection, since Hitachi Data Systems also
announced a pullout early this year. Neither company wanted to make
the huge investment necessary to match IBM's new 64 bit technology
that's coming in a couple of years. That means that the only major
remaining company making IBM compatible System/390 mainframes is,
well, IBM.

When I spoke to Carol Stone, Amdahl's VP of server marketing, she
wanted to be sure that I told everyone that Amdahl wasn't abandoning
its existing customers. "We'll be making 32- bit machines until March,
2002, and servicing and supporting them for four or five more years,"
she says.

Will IBM feel free to jack up prices, now that there is no more
competition? Almost certainly not, according to Gartner Group analyst
John Phelps.

"IBM has battled Amdahl for over 20 years, but now that they've won
they may not have won," says Phelps. "IBM has really believed for the
past few years that their main competitor was not Amdahl or Hitachi,
but Sun and HP."

Both Sun Microsystems Inc. (<#stdurl www.sun.com#>) and
Hewlett-Packard (<#stdurl www.hp.com#>) sell high-end systems that
begin to approach the power of a mainframe and can run either Unix or
Windows NT operating systems. Legacy application software was often
written in a way that was dependent on IBM's proprietary MVS mainframe
operating, but in recent years, much new application software has been
designed to run on either mainframe or Unix platforms.

This means that IBM could charge different prices to different users,
according to Phelps. "We believe that there is a potential for there
to be a price differential for people looking to buy cheap legacy MIPS
[mainframe computing power], where competition is disappearing, and
people looking for new application areas, where Sun and HP compete,
since if there is no competition, then the potential exists for the
local teams to not give the best discounts."

<h3>SIDEBAR: So What Exactly is Encryption?</h3>

Descrambling this mysterious technology

These are exciting times in the encryption field, not only because of
the RSA patent expiration, but also because the U.S. government has
just announced a new encryption standard called Rijndael to be adopted
by the entire government. An encryption key is like the password or
PIN that you use to log onto your computer network or to access your
bank account, except that the keys used internally by most commercial
applications are numbers and are substantially longer than the keys
used by ordinary human beings.

Encryption programs use a key to take an e- mail message or a packet
of data and scramble the data so that a hacker can't read it while
it's being sent over the Internet. Once it reaches the target
computer, a decryption program uses a key to descramble the bits. Both
encryption and decryption use very advanced mathematical algorithms,
though there are several different algorithms in use.

There are two major kinds of commercial encryption, depending on
whether or not the decryption key is identical to the encryption key.

In "shared key" or "symmetric key" encryption, the encryption and
decryption keys are identical.

The best-known symmetric key algorithm is the Data Encryption
Standard (DES), so-called because it's been the standard encryption
method used by the U.S. government since the 1970s. DES is still
widely used, even though it was "cracked" in the 1990s -- a determined
hacker can decrypt a DES-encrypted message in a few hours of
computation on a powerful computer.

That's why those who still use DES today actually use "triple DES," or
3DES, which encrypts and decrypts the data three times, using three
separate keys.

Because DES was cracked, the National Institute for Standards and
Technology (NIST) announced in 1997 a worldwide competition to select
a new Advanced Encryption Standard (AES) to replace DES. On October 2,
2000, NIST announced a winner: Rijndael (pronounced "RHINE doll"),
named after its Belgian creators, Joan Daemen and Vincent Rijmen.

Unlike DES, AES will never be cracked -- even if the entire universe
were turned into a giant computer, it would still take trillions of
years to crack Rijndael. Information on Rijndael can be found at
<#stdurl <#stdurl www.nist.gov/aes#>.

Symmetric key encryption is easy to implement and manage when there
are only two or three computers communicating over the internet,
though even in that case you have the problem of how to transport the
shared key securely from one computer to another. However, once you
have numerous computers exchanging data over the Internet, and in
particular once you have e-commerce applications involving thousands
of computers, symmetric key encryption becomes unmanageable.

Dual key encryption uses different keys for encryption and decryption,
one of which is known as a "public key," and one of which is a
"private key." The public key can be made freely known, and anyone can
use it to encrypt a message.

The private key is owned by an individual or a computer, and only
that entity knows the private key and can decrypt the message
encrypted with the public key. The de facto worldwide standard is the
patented RSA algorithm, named after its inventors, Ronald Rivest, Adi
Shamir and Leonard Adleman, all of MIT.

The idea is that each person doing business over the Internet will get
his own public/private key pair. Assigning these pairs is a job of a
Certificate Authority (CA), such as VeriSign Inc.

=eod

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