PRIMUS BUYS AOL/7 SHARES

Primus Telecom has acquired interactive services business AOL|7 from stakeholders AOL, AAPT and the Seven Network for just over $23 million. AOL|7, which operates the AOL broadband service and offers a selection of exclusive content from Channel Seven and America Online, had been equally owned by broadcast television network Seven, America Online (AOL) and AAPT, the Australian unit if the Telecom New Zealand Group. Under the terms of the sale, Primus Telecom has acquired AOL|7's 90,000 customer base, but AOL|7 will operate as a standalone entity for the time being. Seven Network said it expected to receive cash funding of more than $23 million -- slightly less than the current book value of its investment -- from the sale. AAPT said it sold its one-third stake for $7.5 million. Also, as a result of the sale, AAPT will solely manage its 48,000 dial-up and broadband customers. Previously, AAPT's smartchat internet dial-up and broadband services were jointly managed with AOL|7. During a teleconference held by Primus, Greg Wilson, managing director of Primus Telecom, said the acquisition would make a strong contribution to Primus's profitability and cash flow and would help to expand iPrimus's customer base. Wilson said he was not in a position to state total profit for AOL|7, but said the company was profitable. "We envision delivery of $2 million ongoing revenue per month for Primus [from the acquisition] with EBITDA returns of 30 percent," Wilson told the media. AOL|7 customers continue to have exclusive access to certain AOL AOL|content and applications, while iPrimus customers benefit from the Primus Telecom/AOL partnership with its access to alternative international content and technologies. Wilson said AOL|7 had a good fit with iPrimus' business and there was a chance to upsell that customer base into iPrimus telephony and internet bundles such as DSL-based voice services. Similarly, Primus could provide AOL|7 services to the iPrimus customer base. Wilson said AOL|7 would continue to operate as a standalone business out of its current Sydney location. Although there would be inevitable management changes, Primus was looking to retain as many of the current 140 AOL|7 staff as possible, he said. In the case of Seven, the network would assume direct management of its online activities. Seven said, in a statement, it had decided to focus on leveraging its content -- TV and magazine -- online, "rather than an involvement in a more far-ranging business model in online." Steve Wise, chairman AOL|7 and Seven CEO of New Media and Investments, said the network would continue to develop an online presence, but this would complement its core businesses -- broadcast television and magazines publishing. Wise said each of the parties involved believed the sale of AOL|7 would better support the continued growth of each group's respective brands in the future. Seven's current book value investment in AOL|7 comprises the initial investment as well as promotional support provided since the formation of the partnership. It also included i7, a Seven Network internet venture. Gerald Sokol Jr, executive vice-president of AOL International, said AOL would look to collaborate with Primus in other markets outside the US, where both Primus and AOL have businesses.

LOW COST SUPER COMPUTER

A home-made supercomputer, assembled from off-the-shelf personal computers in just one month at a cost of slightly more than $US 5 million ($AU 7 million) may be ranked as one of the fastest machines in the world. Word of the low-cost supercomputer, put together by faculty, technicians and students at Virginia Polytechnic Institute, is shaking up the esoteric world of high-performance computing, where the fastest machines have traditionally cost from $US100 million to $US250 million and taken several years to build. The Virginia Polytechnic Institute supercomputer, put together from 1100 Apple Macintosh computers, has been successfully tested, said Jack Dongarra, a University of Tennessee computer scientist who maintains a listing of the world's 500 fastest machines. The official results for the ranking will be reported at a supercomputer industry event. But the Apple-based supercomputer, which is powered by 2200 IBM microprocessors, was able to compute at 7.41 trillion operations per second, a speed surpassed by only three other ultra-fast computers. The fastest computers on the current Top 500 list are the Japanese Earth Simulator; a Los Alamos National Laboratory machine dedicated to weapons design; and another weapons-oriented cluster of Intel Pentium 4 microprocessors at the Lawrence Livermore National Laboratories. The ranking is a coup for Apple, which for several years has lagged behind, in terms of raw computing speed, the PC world controlled by Intel and Advanced Micro Devices microprocessors.

SPAMMERS MAY BE USING YOUR COMPUTER

Hackers may have moved into your computer to hold a sauna party for Swedish schoolgirls or send out ever-extending penis spam without your knowledge. The Federal Government and anti-spam activists have confirmed a worrying trend in which hackers and spammers seek computers with high bandwidth internet connections as a remote base for their activities. Business and personal computers could be hosting pornographic sites or sending out bulk junk emails -- without the computer being affected or its owner ever becoming aware. A spokesman for the Federal Communications Minister, Senator Richard Alston, said that while broadband internet services were proving extremely popular, "the price of computer liberty is eternal vigilance. Essentially it's like having an open door to the Internet: you need a guard dog to protect that door," the spokesman said. "People should be installing firewalls and taking steps to make sure their connection is as safe as possible." Using someone else's computer in this way is an offence under the Crimes Act. But finding who to prosecute may be difficult, suggests Troy Rollo, chairman of the Coalition Against Unsolicited Bulk Email. Most offenders are based overseas, although Mr Rollo is aware of one Australian hacker who favours the technique. Victims -- if they ever find out -- are often unwilling to come forward. "A lot of people get embarrassed by the fact that their security has been breached, and companies don't want people to know about it because it affects their share price and reputation," Mr Rollo said. The attraction of using someone else's computer is for spammers to hide their identity. "If they're very careful and very skilled you might never become aware. It depends how well you know what's going on with your machine. But typically they're not very careful and, as time goes on, they tend to get more brazen." The director of the new police Australian High Tech Crime Centre, Alastair MacGibbon, acknowledged the potential for invasion, particularly for spamming. He acknowledged that many cyber-crimes were not being reported. Victims should contact police as soon as they become aware of an attack, he said. "There's a lot individuals can do -- such as install firewalls, virus protection software and have procedures in place in the event of an attack."

US Software Industry Losing Out To Foreign Competitors

The US software industry is about to lose jobs and market share to foreign competitors unless the government acts quickly to fight protectionist trade policies and double US productivity, Intel Chairman and tech visionary Andy Grove said recently. "I'm here to be the skunk at your garden party," Grove began in his afternoon speech beamed via satellite to an otherwise rosy gathering of software executives in Washington. He predicted that the software and services industry is about to travel the well-worn path of the steel and semiconductor industries. Steel's market share dropped from about 50 per cent to 10 per cent in a few decades. US chip companies saw their market share shrink from 90 per cent to about 50 per cent today. Now the writing is on the wall that software could suffer the same fate, said Grove, whose 1996 bestseller was titled Only the Paranoid Survive. "It would be a miracle if it didn't happen in the software and services industry," said Grove, noting that he was speaking on National Depression Day. Grove's speech comes at a sensitive time for the industry and the Bush administration. The industry is still struggling to get out of a three-year slump. And a year before the US presidential election, the administration is looking for signs that its economic stimulus programs are benefiting industry and turning the economy around. "This administration has very high productivity growth but also job losses, and they're rightfully nervous about that heading into a presidential election," said Bill Whyman, an analyst with independent Washington research firm, Precursor. Why are things looking so grim for software? Grove attributes it to fewer people getting advanced degrees in the United States in science and engineering, the high cost of US labour in comparison to some foreign countries, and the fact that high-bandwidth connections are prevalent and cheaper, making it much easier for US companies to work with developers in countries like India. The phenomenon was not only affecting software, he noted, but is trickling over into other important sectors like health care. Grove's speech was viewed at the Global Tech Summit, sponsored by the Business Software Alliance. "Dr Grove gave a provocative talk with a frank assessment of what the future might hold if governments and industry aren't aggressive about facing some of our biggest challenges head-on," said Business Software Alliance president Robert Holleyman. "But that doesn't mean the future is grim," he said, noting that a study the trade association released that day showed that the industry was set to create more than 1.5 million new high-paying jobs worldwide. He added that software CEOs agreed that the US needed a solid plan for confronting their issues. A group of about 20 executives, including Microsoft's Steve Ballmer, travelled to Washington to lobby administration officials and Congress. Grove said he was hard-pressed to find a comprehensive statement on what the government was doing to address the issue. "We haven't even articulated the problem," he said. The Bush administration rebutted Grove's claim that it hasn't worked to battle the problems facing the industry. "We certainly understand the challenges there," said Phil Bond, undersecretary of technology at the Commerce Department. He noted that the government had a policy to make sure that all children are "technologically literate" by the eighth grade. Funding for science and maths education was also recently boosted by $US 1 billion ($A 1.45 billion). "In trade, I don't think anybody questions the free-trade credentials of this administration," he added. But Grove said all hope wasn't lost. The industry in partnership with the US government could still turn things around if it acts quickly. His recommendations: boost funding for research and development at universities; adopt policies that attract the best workers from around the world; better collaboration between companies on precompetitive technology; and raise the hurdle for intellectual property litigation. "Time is our enemy," he said. After the speech, Grove was questioned on his desire to preserve jobs domestically, while at the same time Intel and the industry as a whole are moving jobs offshore. Grove responded that the industry was facing conflicting goals of serving shareholders and doing "the right thing for the country." In the absence of public policy to help guide us, we have no choice but to export jobs, he said.

REVOLUTIONARY NEW SOFTWARE SIMPLIFIES PROGRAMMING

Almost anyone can throw together a spreadsheet or presentation with the help of Microsoft Excel and PowerPoint. With very little training, you can add up a column full of numbers or create a bulleted list. But when it comes to building a complete application, most of us wouldn't know where to start. Today's applications are so complex that even seasoned programmers have trouble putting them together. Each one comprises millions of lines of code, and no single person can fully understand what they're doing. That's why, no matter how many times it's tested, your favorite application crashes. Help is on the way. Charles Simonyi—the Hungarian-born engineer who built the first WYSIWYG word processor at Xerox PARC and later oversaw the development of Excel and Word as one of the first employees at Microsoft—, has founded his own company, hoping to reinvent the byzantine world of computer programming. His company, Intentional Software, aims to give almost everyone the means to build elaborate applications. You simply tell your computer what you intend to build, and the computer does the rest. "It is clear that the precise recording and editing of human intentions in a machine-processable form is a necessary step to improvements in the building of software," says Simonyi. He calls the idea self-writing software. In much the same way that Excel adds a column of numbers, Intentional's tools will fashion your free-form descriptions into a working application. Is the software really writing itself? Not exactly. Let's say you have an idea for an application but very little programming experience. Today, you're forced to write up a detailed description of what you want, add a few diagrams, and hand your plan to a team of developers, who do their best to build an application that matches your specifications. But they can't meet your needs without a great deal of back-and-forth. With intentional programming, developers create a set of metatools that let you build an application on your own. You input your initial descriptions and diagrams, and these tools create an application without further help from your development team. Trained programmers are still part of the process, but everyone has the power to make their own changes. And programmers don't have to worry about damaging their existing code each time a change is needed. Simonyi elaborates: "For the programmer, the system effectively captures the process of their work, —not just the results, —so they won't ever have to do the same thing again, and they won't ever make the same mistake more than once." Applications will be not only easier to build but more reliable as well. Simonyi points out that his vision is the next natural progression in the evolution of software design. Programming languages have gotten more and more abstract, moving farther from the ones and zeros that computer hardware understands and closer to the languages and images we humans use to communicate. Many companies are already using the Unified Modeling Language, or UML, which takes a small step toward Simonyi's vision. With UML, programmers can model applicationss in easy-to-understand terms. "Both UML and Intentional are driving toward raising the level of abstraction in the world of software design," says IBM Fellow Grady Booch. While UML works with existing programming languages, Intentional does away with today's arcane tools, providing a simple vocabulary powerful enough to build an application. "What Charles [Simonyi] is trying to do represents a state change in development processes," says Booch. "He's building a new programming world unto itself." How far off is this new world? According to Simonyi, not far at all. In a few years, you could be building far more than just a spreadsheet.

MICROSOFT MAY INCORPORATE LINUX

Could Microsoft come out with its own Linux distribution? It sure could. There's nothing in the GPL to stop it. And in fact, SCO CEO Darl McBride said at November's CDXPO in Las Vegas that Microsoft's second licensing payment to his company was for the rights to incorporate Services for Unix (SFU) into its operating systems. SFU, for those who don't know it, gives users access to a Unix shell environment that runs on top of the Windows kernel. It also includes a software development kit that includes many Unix application programming interfaces and such basic Unix development tools as make, rcs and gcc. "Historically, Microsoft has used SFU to make it easy for corporate customers to migrate from Unix to Windows," McBride said. "In practical terms, I've found it to be an extremely useful way to manage cross-Windows and Unix network services. I've said it before, and I'll say it again: If I'm running a shop with both Windows and Unix (whether it's AIX, Solaris, Linux or what have you) I want SFU. It's one of Microsoft's best software offerings, and the upcoming version, 3.5, looks darn good, too. "It also looks good as a possible way to host Linux on top of Server 2003. Sound impossible? It's not. Before SCO decided it wasn't a Linux company, it offered Linux Kernel Personalities (LKP), which boiled down to Linux virtual machines that ran on top of UnixWare, so we already know you can run Linux on top of another operating system. "Microsoft already has SFU. For what it's worth, Microsoft has SCO's permission to put SFU's Unix functionality into Windows Server so it's unlikely that SCO could complain about Microsoft using Linux. Mind you, I don't think for a second that SCO would yell at anything Microsoft would do, but Microsoft taking the SFU option finesses SCO's legal claims against Linux. Now, would Microsoft do this? It just might. "I can't see Microsoft coming out with its own independent Linux distribution. Despite the Department of Justice ruling, Microsoft has continued to make its programs and operating systems interdependent. For example, if you really want to get any significant advantage from using Office 2003, you need to buy into Office System 2003, which in turn means buying Server 2003 and SharePoint Portal Server. Microsoft couldn't do that with an MS-Linux. But Linux as a "service" on Windows Server? That, I can see. "Now, the only way I see this happening is if Linux starts eating Microsoft's server market share the way Linux has the older Unixes' market share. In that case, Microsoft will want to make a dramatic move to try to knock out its Linux rivals. I think it's to set up the foundation for such a move (and to help SCO to continue to trouble Linux) that Microsoft obtained the right to place SFU's functionality within a server operating system. "Mind you, running Linux as a service wouldn't add a darn thing to Microsoft's offerings. Indeed, it would hurt them in some ways since it would distract them from their main plans. Linux certainly wouldn't gain anything from running on say Server 2003. But, if Microsoft were to make such a move, it wouldn't be about technical benefits. It would be about stealing Linux's thunder. It would be about saying to customers: 'Linux? We can give you that, only better because you don't have to worry about SCO legal action.'"

SUN AND SCO SIGN SECRET DEAL

Sun Microsystems has revealed that it secretly signed a deal to license SCO Group's Unix intellectual property in February, 2003, before Microsoft made a similar announcement in May. The deal expanded one that Sun, a leading Unix server vendor, signed in 1994 to use Unix in the Solaris OS. As part of the deal, Sun may also buy 210,000 US$1.83 shares of SCO stock and use Unix System V Release 4 software in its device driver software components for Solaris. SCO is currently pushing its Unix intellectual property rights hard, hitting headlines this year for its $US 3 billion lawsuit against IBM, which it alleges has violated its Unix contracts. SCO has also garnered plenty of publicity for a public letter it wrote warning users of Linux -- which incorporates code originally based on Unix -- they may be in breach of intellectual property laws. In March, 2003, Sun decided to partner with other Linux vendors instead of basing its Linux products on Sun's own OS. SCO said in May that its Unix license deals had earned the company $US8.3 million in the quarter to 30 April. The company said the Sun and Microsoft licenses are expected to bring the earnings to $US 13.3 million by year-end.

SCO CONSIDERS LINUX LICENSE FEES

[eWeek] The SCO Group is moving to intensify the pressure on IBM and Linux vendors by demanding a royalty fee from businesses for every copy of Linux they use. SCO, in the middle of a $1 billion-plus lawsuit with IBM, has sent letters to 1,500 of the largest global enterprises, warning them that it believes Linux infringed on SCO's Unix intellectual property rights. Now SCO is considering asking business users for a fee for every copy of Linux they run distributed by any of the vendors, including Red Hat Inc., SuSE Inc., Debian GNU Linux and Turbolinux Inc., sources said, adding that individual users would likely not have to pay.The licensing fee would be targeted at all Linux distributions based on the 2.4 kernel; that is where SCO alleges most of the unauthorized Unix code resides. Sources said the price of such a fee or license is expected to be several hundred dollars each. "SCO CEO Darl McBride is going to take another shot across the bow over the next few weeks," said a senior executive at a major software company. "We know it's coming, and there's nothing we can do but wait." Another source told eWEEK SCO is going to tout the license fee as a way to "legitimize" Linux usage. Lawyers and others in the open-source community, however, contend the latest SCO move has no merit, is not enforceable and is merely another attempt by the Lindon, Utah, company to boost its revenue and to force a settlement or buyout with IBM. Since the SCO suit has not yet been heard by the courts, the company cannot legally demand payments from users or vendors, said Tom Carey, intellectual law attorney at the Bromberg & Sunstein LLP law firm, in Boston. "All they can do is try to get money from Linux users by guaranteeing them that if they pay now, they will be compliant and avoid the headache of litigation down the line," Carey said. "But, given the licensing conditions of the GNU General Public License, which governs Linux and does not allow royalty or license payments, any such move is also likely to be strongly contested." Blake Stowell, director of communications at SCO, declined to comment on the licensing possibility but confirmed the company had received feedback to the letter it sent warning that Linux is an unauthorized derivative of Unix. Many CEOs who received the letter asked SCO for guidance on how they could become compliant. "We are in the process right now of considering what they could do to come into compliance," Stowell said. Asked by eWEEK if a fee is a possibility, Stowell said that it "could be." Bradley Kuhn, executive director of the Free Software Foundation, in Boston, said that any licensing, royalty or other fees charged to Linux users would not be in compliance with the GNU General Public License. If a company agreed to pay royalties to SCO, the FSF would be hostile to that notion and would probably sue to enjoin it, Carey said. "From a free-software and open-source perspective, what SCO is trying to do looks a lot like extortion because they believe SCO has no rights to the Linux code and may now be preparing to charge people for its use," he said. Linux users also will not get clarity from the courts soon. SCO's Stowell said the Utah court is not scheduled to hear the company's application for a permanent injunction to stop IBM from shipping AIX until 2005. Carey said this indicates that SCO's strategy is to let "the pot simmer for years and let people get increasingly worried about the legal risk."