Top Ten IT News Stories of the Week: Microsoft Hit with $357M E.U. Fine

1. “Microsoft Hit With $357M E.U. Fine,”

CIO.com, 7/12. The European Commission fined Microsoft 280.5 million euros (US$357 million) this week for failing to respond in a timely manner to the provisions of a March 2004 antitrust ruling against it. The organization and the software giant have been at loggerheads about what constitutes compliance with those provisions for many months. Microsoft intends to appeal the fine and claims it has committed huge resources to complying with the ruling, notably in relation to documenting its software interfaces. The vendor already paid a 497 million euro fine as a result of the 2004 judgment, where the commission found that Microsoft had used its near-monopoly in the PC operating systems market to gain advantage in the markets for workgroup server operating systems and media players. Should the commission determine that Microsoft still hasn’t complied with the 2004 ruling by July 31, it plans to double the fine from 1.5 million to 3 million euros per day.

2. “Intel to Cut 1,000 Management Jobs,”PC World, 7/13. The chip giant has embarked on a more substantial phase of its strategy to streamline operations that was first announced in April. Intel plans to lay off 1,000 of its managers around the world by the end of this month. The vendor realized the company was too top-heavy with the number of managers having grown faster than the number of employees over the past five years. Since April, Intel has been reticent about how substantial the eventual bloodletting will be among its 100,000-strong staff, but rumors continue to swirl that the ultimate number of layoffs will be in the vicinity of 15,000. More details on which 1,000 managers will be let go are expected when Intel announces its next quarterly earnings on July 19.

3. “Microsoft to Take Dynamics CRM Live in Q2 2007,”CIO.com, 7/11. Probably the most significant news at the software giant’s worldwide partners conference this week was Microsoft’s choice of Dynamics CRM as its third major Live hosted service. The vendor plans to debut a software-as-a-service version of its customer relationship management software in the second quarter of next year, initially only in North America and aimed at small businesses. Over time, Microsoft hopes to offer the service elsewhere, and analysts expect Dynamics CRM Live may also appeal to departments in large enterprises.

4. “Why Dell, Apple Declined,”

BusinessWeek, 7/13. Could the U.S. computer industry be headed for a larger slump than previously expected? Initial reports from some players in the industry including Apple and Dell suggest that may be the case, analysts said. There’s concern that PC price wars are on the horizon, coupled with the impact of product delays in both hardware and software. As to when a market rebound may occur, some analysts are pegging it for next year, while their more optimistic peers think an uptick could come as early as the third quarter.

5. “FBI Grapples With Out-of-Date Computers,”CNET News.com, 7/14. The U.S. Federal Bureau of Investigation has long struggled with attempts to modernize its computer systems. Previous implementations have resembled a comedy of errors complicated by  management blunders and financial missteps. However, the FBI now claims it’s back on track with the Sentinel overhaul of its IT operations due to be completed in 2009 by defense contractor Lockheed Martin. Critics both on Capitol Hill and elsewhere remain skeptical, saying they have yet to see any evidence to suggest that Sentinel will be any better managed than previous projects.

6. “Chip Makers Face Price-Fixing Suit from 34 States,”

CIO.com, 7/14. California and 33 other U.S. states are filing a joint antitrust lawsuit against seven makers of dynamic random access memory (DRAM) chips over alleged price fixing between 1998 and 2002. The suit charges that the companies, including Micron Technology, Infineon, Hynix and NEC Electronics America, violated antitrust laws and conspired to fix prices through artificial supply restraints, harming both computer makers and consumers. Companies like Apple, Dell and Hewlett-Packard had to pay more for DRAM chips and then passed on those added costs to consumers. An ongoing investigation by the U.S. Department of Justice that began in 2002 has already resulted in some DRAM manufacturers having to cough up a total of US$732 million in fines.

7. “Ohio University CIO Resigns in Wake of Data Breaches,”

Computerworld, 7/13. Several weeks after Ohio University revealed a series of five information security breaches, Williams Sams, the educational institution’s chief information officer, submitted his resignation. The breaches between late April and early June included one attack that exposed the personal information of 137,000 students and alumni. The university has already suspended two of its top IT staff and may fire them over the incidents. At the same time, the university is reorganizing its central IT operations assigning formal roles, responsibilities and accountability to the staff there.

8. “Judge Questions Telecom Merger Agreements,”CIO.com, 7/12. U.S. District Court Judge Emmet Sullivan said this week he has “doubts” that the U.S. Department of Justice approvals of two major telecommunications mergers were in the public interest. He may look to call new witnesses to examine the DoJ’s approvals of SBC Communications’ acquisition of AT&T and Verizon’s acquisition of MCI; the deals closed in November 2005 and January 2006, respectively.

9. “Congress Begins Push for Energy-Efficient Servers,”

Computerworld, 7/12. The approval of a bill by the U.S. House of Representatives was music to the ears of some server manufacturers, notably Sun along with IBM and Hewlett-Packard. The bill would require the U.S. Environmental Protection Agency to undertake a study as to how using energy-efficient servers reduces power consumption in data centers. The bill’s author hopes the study will result in an energy-rating standard for servers similar to the Energy Star rating for appliances and some computer equipment. Server vendors have been talking up the energy efficiency of their latest offerings. For their part, users see energy efficiency as only one check mark on their list of features, a list that’s dominated by processor speed.

10. “Paralyzed Man Uses Thoughts to Move a Cursor,”New York Times, 7/13. Matthew Nagle, who was paralyzed below the shoulders after being stabbed, became the first man to have a small sensor implanted in his brain. The BrainGate sensory implant containing 100 tiny electrodes was implanted in the area of his brain responsible for arm movement and connected up to an external computer via a cable coming out of his skull. By imagining his arm moving to hit various targets, Nagle was able to operate a computer, a television set and a robot using his thoughts. There’s plenty of work to be done to make such implants practical, notably in discovering why the electrodes’ ability to detect brain signals start to deteriorate after several months.

-China Martens, IDG News Service (Boston Bureau)

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