Business Tech

Here's a little statistical cheer for online retailers bracing themselves for what many have been predicting will be a dismal holiday sales season.

The latest online retail spending report released Tuesday by ComScore shows that consumers last weekend spent almost double what they spent on the corresponding weekend before Christmas last year. U.S. consumers online spent $677 million last weekend, December 20 and 21, compared to $341 million the weekend before Christmas in 2007, which was December 22 and 23.

It should be noted, however, that there are five fewer days this year between Thanksgiving and Christmas, making it harder to make perfect year-to-year comparisons. For example, the $677 million in sales last weekend--which was also the fourth weekend after Thanksgiving--is actually down 17 percent from last year's corresponding fourth weekend after Thanksgiving, December 15 and 16.

Whether you see the glass half full or half empty, the statistics suggest "that many consumers opted for the cozier confines of online shopping rather than having to brave the severe cold and snowstorms affecting much of the northern half of the country," ComScore Chairman Gian Fulgoni said in a statement. He added that the compressed shopping season probably resulted in some consumers buying online later than they did last year.

Regardless, the report is further evidence that holiday sales aren't a total disaster and might even be holding their own, which is no small feat in the throes of a recession. U.S. online spending to date this holiday season (from November 1 to December 21) totals $24.71 billion, down 1 percent from the corresponding timeframe last year.

Considering we're in the throes of a recession, online holiday sales appear to be generally holding their own.

(Credit: ComScore)

One of the biggest misconceptions in software is that open source equals free. The early commercial open-source vendors like MySQL and JBoss were able to build decent businesses on top of a license/support-only business model, but over time we've seen that approach become difficult to grow beyond a certain threshold.

I suspect that in 2009 it will start becoming clearer as to what you pay for and why you should. Redmonk analyst Michael Cote made the prediction that next year "it will be cool to pay for software" and I agree. It's one thing to consume open-source software and quite another to pay for it.

Most open source vendors have tweaked their business models to include some kind of additional value only available as part of a subscription. This has brought various cries of derision suggesting that the code is no longer good as the community doesn't get to do QA, along with welcoming arms from investors and developers who want to monetize the code.

Without a doubt, the cloud and all its forms and meanings were big news in 2008. Besides the huge growth of Amazon EC2 and Google App Engine, we saw Salesforce launch Force.com, a true platform-as-a-service.

My picks for the most interesting software of 2008 are Hadoop and Eucalyptus.

Hadoop is an Apache project, the "open source implementation of MapReduce, a powerful tool designed for the detailed analysis and transformation of very large data sets," which basically means you can process a ton of data on commodity hardware.

Hadoop is going commercial through Cloudera and while details are not publicly available, let's just say there are some very important and interesting foundations being laid for the way that people deal with computing and processing power.

Alan Cox

(Credit: Russ Nelson)

After 10 years with Red Hat as one of its highest-profile developers, Alan Cox is moving on to Intel, as he announced to the LXer editors:

I will be departing Red Hat mid January having handed in my notice. I'm not going to be spending more time with the family, gardening or other such wondrous things. I'm leaving on good terms and strongly supporting the work Red Hat is doing. I've been at Red Hat for ten years as contractor and employee and now have an opportunity to get even closer to the low level stuff that interests me most. Barring last minute glitches I shall be relocating to Intel (logically at least, physically I'm not going anywhere) and still be working on Linux and free software stuff.

I suspect the impetus for the change has much to do with Cox's interest in the "low-level stuff" that Intel needs, and Red Hat much less so. Implicit in Cox's note is an indication of where Red Hat is going: up the stack.

This shift will not happen overnight, but it very clearly has been happening. From the JBoss acquisition to Red Hat Exchange, Red Hat has slowly but surely been moving ever closer to applications. This makes sense for Red Hat as it seeks to increase its relevance (and deal size) to the enterprise, selling solutions rather than just cheap bits.

No, Red Hat is not going to magically become an applications company and will likely never fully relinquish its hold on the "low-level stuff" that keeps people like Alan Cox engaged. But as Red Hat seeks for ways to also engage business users it will almost certainly have to make more trade-offs on engineering emphasis that will give Alan Cox-esque super-geeks pause, but will simultaneously give enterprise buyers cause to rejoice.

In short, Alan Cox will be missed at Red Hat, but the new customer value proposition Red Hat is selling should more than compensate.

Updated at 1:40 p.m. PST with pricing information.

Intel is now shipping 160GB solid-state drives as it vies with Samsung and Toshiba to deliver high-capacity SSDs that rival hard-disk drives in capacity. Price, however, remains a big obstacle for many consumers.

(Credit: Intel)

Intel said Monday that it will add 160GB versions of its X25-M and X18-M Serial ATA (SATA) solid-state drive. To date, Intel has limited shipments to its 80GB versions. Laptop-size 2.5-inch versions of the 160GB drive are shipping now; 1.8-inch models for ultraportable laptops will ship next month, Intel said.

Larger-capacity drives from other SSD suppliers are also on the way. In November, Samsung said it had begun mass production of 256GB SSDs. And Toshiba recently said it would show a 512GB drive at the Consumer Electronics Show in January that would ship in the second quarter of 2009.

Solid-state drives are generally faster at getting data than hard-disk drives (and in some cases, much faster) but pricing is a big hurdle for consumers. Toshiba indicated last week that sample quantities of its new solid-state will range in price from $220 for the 64GB drive to $1,652 for the 512GB drive.

That kind of pricing--even if it's for pricey sample drives--is hard to swallow when a laptop-class 500GB hard-disk drive sells for well under $200.

"Introductory" pricing for the Intel 160GB solid-state drives is $945 for less than 1,000 units, Intel said.

Currently, adding an Intel 80GB solid-state drive option to an HP EliteBook 2530p ultraportable laptop adds $659 over the cost of a 5400RPM 1.8-inch 120GB hard disk drive.

Adding a 128GB solid-state drive to an Apple MacBook Air ups the price by about $500.

Additional comments:: Note that the only first-tier PC vendor to publicly say it is using Intel SSDs is Hewlett-Packard. This is a significant customer for Intel since HP is the largest PC vendor in the world. HP offers Intel SSDs in all of its EliteBook notebooks.

Intel and Nvidia are entering into a new, nasty phase of competition. What's at stake? Only the future of the personal computer.

Although the Santa Clara, Calif., neighbors (located only a couple of miles from each other) have never really been on speaking terms, the rivalry is intensifying with the emergence of the Netbook--small, lightweight laptops priced below $500.

The competitive backdrop is still the same--Intel's longstanding (and very successful) vision of a CPU-centric universe versus Nvidia's creed that graphics processing matters more and more in a multimedia-intensive world.

The challenge for Nvidia is that as laptops downsize into Netbooks, a graphics vacuum has been created. And Nvidia abhors a graphics vacuum.

Nvidia's vision of the Netbook core

(Credit: Nvidia)

Inside almost every Acer, Asus, Hewlett-Packard, and Dell Netbook beats an Intel silicon core. Intel accounts for both central processing unit (CPU) and graphics processing unit (GPU)--the latter in the form of the Intel Graphics Media Accelerator 950.

Nvidia wants in. It maintains that Intel-only Netbooks choke on high-quality multimedia content and, as a result, consumers will demand better graphics hardware as the Netbook increases in size to 10-inch diagonal screen sizes and beyond. (The Netbook began as a tiny 8- or 9-inch form factor, but it has been moving to 10-inch and even a 12-inch screens, in the case of Dell's Inspiron Mini 12 Netbook.)

This is where it gets complicated. Intel has fairly strict parameters for the Netbook. It would rather not see Atom-based systems with 12-inch screens or extra silicon (read: horsepower) that kicks thermals (read: power consumption) into laptop territory. Need I explain why? (Cannibalization.) Netbooks should not aspire to be notebooks because the Atom processor is not nearly as capable as a Core 2 Duo, according to Intel.

At a recent demonstration, Nvidia claimed that 1080p video is smoother with a GeForce 9400M graphics assist to the Atom processor (screen on left shows lower CPU utilization).

(Credit: Brooke Crothers)

Nvidia, on the other hand, sees the silicon and screen size as an artificial restriction. It believes that Atom is a fairly capable processor that simply lacks a capable graphics engine.

And here's where it gets nasty: chipsets. Apple serves as a perfect example of why it may get rough-and-tumble, and what's at stake. In the newest MacBooks, Nvidia not only seized graphics turf from Intel, but it also took the chipset socket. Intel was relegated to supplying only the processor. That's analogous to Nvidia snagging a piece of prime Manhattan real estate right from under Intel's nose. While Intel holds on to Times Square, Nvidia walks off with Rockefeller Center.

To put it charitably, Intel doesn't like to lose socket space. But that is exactly what Nvidia is aiming for with Netbooks.

Will Nvidia be able to convince Netbook makers like Acer and Asus to make the switch, in the face of Intel's very persuasive bundling offers? (The word "persuasive" may not be strong enough.) These vendors may not be as open-minded as Apple, which has always prided itself on a feisty independence (i.e., no one takes center stage but Apple, and no Intel stickers).

Nvidia's GeForce 9400M may appear initially (perhaps circa the Computex convention in June) in Netbooks from smaller vendors. Larger suppliers may wait to see if turbo-charged graphics are the Netbook wave of the future--or not.

Lenovo is apparently planning to unveil a ThinkPad notebook with a dual display.

As much as I'd love to post a photograph of a laptop with two screens, I cannot do so in good conscience. Several sites reporting on the laptop included photos that allegedly came from an IBM site that accidentally published on December 2. But none of those sites list the source of the photo. They also link back to the original IBM page, but a photograph of a laptop with two screens does not appear there.

The story was apparently first reported on NotebookReview.com on December 4. But no one paid much attention to that site's information until this week when a number of sites started following one another.

eWeek apparently got its hands on one of the ThinkPad W700ds laptops and posted in-house photos.

The information on an IBM site does confirm the dual screen's existence. According to that site, the main screen is 17 inches and the secondary screen is 10.6 inches. According to eWeek, the dual-screen setup is designed for "photographers, graphic artists, and application developers."

According to the IBM site, the second screen adds more than two pounds to the machine, bringing it up to 10.9 pounds and putting it in the category of a desktop replacement. Other stats from that site: it offers either an Intel Core 2 Quad Core or a Core 2 Dual Core, and it can be configured with a solid-state drive.

The notebook will make its official debut at the Consumer Electronics Show next month in Las Vegas, eWeek said.

After some 25 years, Apple has decided that it can do without the Macworld Expo.

Apple announced that CEO Steve Jobs had given his last keynote address at Macworld in San Francisco and that January's Macworld would mark its last year participating at the show. Apple said Phil Schiller, the company's senior vice president of worldwide marketing, will deliver the keynote, usually handled by Jobs.

An Apple representative declined to comment on Jobs' health, a prominent topic of discussion this year. Jobs' keynote addresses at Macworld have become almost legendary events, launch pads for some of the company's most important products and strategies. His absence from what many in the Apple community consider their Super Bowl has once again revive rumors that Jobs is ill.

Steve Jobs in January 2008 giving what we know now was his final Macworld keynote.

(Credit: Corinne Schulze/CNET Networks)

The decision reveals an Apple that has decided it no longer needs to make an appearance at the event that has come to define the company in recent years. In doing so, it's also preparing for a future when its iconic founder no longer dominates the stage the way he currently does while confirming a shift in its strategic thinking when it comes to reaching customers.

But industry events like Macworld Expo have been losing their luster inside Apple for some time. This is not a company that spends much time hanging out with its peers in the personal computing and mobile phone industries. And quite simply, the nature of technology marketing has changed a great deal as tech has evolved from something reserved for professionals to something that almost everyone uses on a day to day basis.

The announcement "completely blindsided" IDG, according to a source familiar with the negotiations, coming just weeks before the event was scheduled to take place. IDG World Expo, a division of tech publishing giant IDG, had no reason not to expect Jobs would make his customary appearance at Macworld. Then came the word from Cupertino, Calif.

What is not clear is when Apple decided Jobs would skip the keynote. The source indicated that Apple had strung IDG along for weeks, implying that it was business-as-usual concerning Jobs' pending appearance up until the moment that it wasn't. One big question is how this will go down with the Mac faithful who have flocked to this annual event through good times and bad. To be sure, there will be official Apple events in the future, like the Worldwide Developers Conference. But most fans--the civilians--likely won't be able to gain access to such events, which are usually reserved for press, analysts, VIPs, and developers.

So, as one colleague put it, Macworld has long been the public carnival for Mac fans, and Apple's decision to get out after the 2009 version doesn't bode well for Macworld's future or for the future of a single, mass event for the hardcore Mac community.

Chips are down
Apple provided the rare bit of light for the generally bleak chip market when it took a small stake in a British chip designer, revealing how the company plans to power the graphics in future iPhones and iPod Touches. Apple acquired a 3.6 percent stake in Imagination, which will cost Apple 3.2 million pounds, or about $5 million. Imagination designs chip cores for a variety of applications, but its most prominent designs are its PowerVR cores for graphics in mobile phones.

However, semiconductor sales may set a record for consecutive yearly declines. Market research firm Gartner predicted that in 2009, the chip industry will see back-to-back yearly declines for the first time in its history, with global chip revenue expected to decline 16.3 percent, to $219.2 billion.

Sales in the fourth quarter of 2008 will post a historic decline, too, sinking to a record quarter-over-quarter decline of 24.4 percent, surpassing the 20 percent decline record set in the second quarter of 2001, the firm forecasts. Gartner's preliminary 2008 market share results, released last week, showed 2008 revenue reaching $261.9 billion, a 4.4 percent decline from 2007.

And as chip equipment goes, so goes the electronics industry and the rest of high tech. Netherlands-based chip equipment maker ASML announced that it was cutting 10 percent of its workforce amid an "unprecedented" downturn.

"Never before have we witnessed such a sharp and sudden fall-off in lithography system demand," said Eric Meurice, chief executive officer of ASML, in a statement. He attributed this to "an unprecedented mix of falling end-demand for semiconductors, weak memory prices and restricted access to capital for our customers."

Those customers include Toshiba, Taiwan Semiconductor Manufacturing Company, Samsung, and Intel, which supply the electronic guts to customers like Sony, Nokia, Compal Electronics, and Hewlett-Packard.

Patches and privacy
Microsoft released a critical security patch to plug vulnerabilities in Internet Explorer, a move that comes amid malicious attackers taking advantage of the flaws. The patch is designed to prevent attackers from downloading malware onto users' computers if they visit a malicious Web site, or a legitimate Web site that has been infected.

This zero-day exploit has been in circulation since the first week of December and potentially could have infected a wide swath of users. The vulnerabilities are found in not only IE 7, Microsoft's latest browser, but also Internet Explorer 5.01, Internet Explorer 6, and Internet Explorer 6 Service Pack 1.

Mozilla released updates to its popular Firefox browser, its Thunderbird e-mail client, and its SeaMonkey application suite, aiming to address highly critical security flaws that could expose users' sensitive information. Users are advised to update to version 3.0.5 of Firefox, which was released Tuesday. They are also advised to update to version 2.0.0.19 of Thunderbird and version 1.1.14 of SeaMonkey.

Mozilla also notes that another set of critical vulnerabilities in all three could redirect users from a legitimate site to a malicious one, where users' private data could be stolen. And a third set of critical flaws noted in all three could lead to the launching of arbitrary JavaScript within a different Web site.

Yahoo said it will make its user logs anonymous within 90 days as it ups the ante on data retention policies. The Web pioneer also said it would also make user data on page views, page clicks, ad views, and ad clicks anonymous as well as its user logs. The only exceptions would be for "fraud, security, and legal obligations."

Clearly, Yahoo, Google, and others are racing to the bottom on data retention policies. In particular, Google and Yahoo have been playing a game of privacy leapfrog.

Also of note
Engineers in Microsoft's Live Labs have released the company's first application for Apple's iPhone--even before making it available on Microsoft's own mobile platform...Delta Air Lines began offering Wi-Fi service to its passengers on some East Coast flights...Toy maker Hasbro withdrew its copyright and trademark lawsuit filed against the creators of the ad-supported online application Scrabulous.

Oracle reported Thursday a 6 percent rise in fiscal second-quarter revenue over last year, fueled by growth in software sales and its support and maintenance business.

Net income for the quarter, however, declined 1 percent to $1.3 billion, or 25 cents a share, for the period ending November 30, compared with the previous year. Excluding special items, Oracle posted non-GAAP net income of $1.7 billion, or 34 cents a share. That was below Oracle's September forecast of 35 cents to 36 cents a share.

Oracle was up less than 1 percent in after-hours trading to $16.70 a share. Investors may have seen some encouragement in its growth in software sales.

The company, which had previously issued a forecast of a 2 percent to 12 percent rise in new software sales, posted an 8 percent increase to $4.5 billion in the quarter.

Another growth area running counter to the downturn in the economy included its steady-as-she-goes support and maintenance revenue, which rose 14 percent to $2.9 billion.

But new software license revenue, a metric that investors tend to keep a close eye on as a means to gauge future growth for the company, fell 3 percent to $1.6 billion. Oracle's services revenue also fell, slipping 2 percent to $1.1 billion.

Microsoft announced Thursday it expanded its Exchange ActiveSync IP licensing program and posted technical documents to spur development of prototype applications that link to its Exchange Server and Exchange ActiveSync-enabled mobile phones.

The Exchange ActiveSync software is designed to allow mobile phones to receive wireless push e-mail, as well as synchronize calendar, contacts and tasks. It also aims to allow companies to manage wireless devices and enact security policies.

The software giant also posted the protocols on the Microsoft Developer Network and expanded the licensing program to establish greater clarity on the steps and licensing terms that are needed when other companies want to commercialize the ActiveSync applications.