Industry News

There is a big banking reform bill working its way through the Senate right now. It is sponsored by Chris Dodd, Chairman of the Senate Banking Committee. It has a long name I can't remember, so I'll call it the Dodd Banking Bill.

What does a bill attempting to regulate the banking industry have to do with startups? Well unfortunately, it contains two provisions that are quite problematic and hurtful to entrepreneurs and startups. They are:

1) Changing the definition of a "qualified investor" in angel and venture deals. Not just anyone can invest in a startup company. You have to be a qualified investor. A qualified investor is currently defined as anyone with a net worth of over $1mm or net income of over $250k. Dodd's bill would increase that to $2.3mm and $450k respectively. And then index those numbers to inflation.

2) Eliminate the existing federal pre-emption over state regulation of "accredited offerings." Angel and venture financings could be regulated state by state creating a fairly burdensome set of rules  and regulations that each financing would need to be subject to. Currently there is a federal pre-emption that makes getting these kinds of deals done fairly easy.

I have no idea why either of these provisions ended up in a bill designed to regulate the banking industry. Entrepreneurs and startups don't use banks to finance them. They get their initial capital from angel investors and then VCs as they grow. This system works well, did not blow up in 2008, and is not in need of reform of the type Dodd wants to throw at us.

In fact, what we need is to eliminate all accredited investor requirements for small investments of up to $25k. Why does someone have to be a millionaire to invest in a friend's startup? I understand that we don't want someone mortgaging their home, or betting their entire life's savings on a startup. But for a small amount, like $25k, we should not be regulating angel investing.

My dad sent me an email the other day pointing out a news story about an incubator in Texas that was cranking out startups and creating jobs. He told me that he believes that the work entrepreneurs and the people who work with them (ie me) are doing is incredibly important to the health of our economy. He's right and we need to explain that to Chris Dodd and his friends in the Senate. If they are going to reform accredited investor regulations, they should liberalize them, not constrain them further.

I'll get on the phone and call my Senators and Representatives. Hopefully you'll do the same. This is nonsense.

Related articles by Zemanta

• Mendelson's Musings (Jason Mendelson)
• Why Does Financial Reform Punish Startup Companies And Angel Investors? (techdirt.com)
• Robert E. Litan: Proposed 'Protections' for Angel Investors are Unnecessary and Will Hurt America's Job Creators (huffingtonpost.com)
• Too Small To Fail (guidewiregroup.com)
• Shane: How Dodd's Plan Hurts Startup Finance (businessweek.com)
• Proposed Financial Regulations Could Cripple Angel Investing (readwriteweb.com)
• Dodd Bill Could Render Startups Too Small to Succeed (xconomy.com)

Adknowledge, which runs a huge private advertising network, is announcing today a new way for online merchants to make money. Its new Cambyo offering is an ad-sponsored payment gateway that lets consumers pay for goods and services by participating in sponsored ad offers.

Cambyo gives consumers the choice of paying in standard currency (with a credit card, mobile payments etc.) or participating in sponsored offers. They can get a product or service for free by completing a highly-focused ad offer, such as filling out a research survey or signing up for a movie subscription service.

Special offers are currently popular with free-to-play social games on Facebook, where players use the offers as an alternative to real money when they pay for virtual goods such as fuel for a tractor in FarmVille. But with Cambyo, Kansas City, Mo.-based Adknowledge is attempting to broaden that practice beyond the gaming community.

Just as in the online games, real-world online merchants can increase sales from existing customers by giving them an alternate way to pay. Advertisers get access to good sales leads via the special offers. And shoppers earn a free product or service by participating in an offer. This payment gateway will become part of Adknowledge’s market for online advertisers. Through its ad network, Adknowledge already has thousands of advertisers such as CNN, Virgin and Dell; those advertisers create ads that are placed into web sites run by Adknowledge’s participating publishers.

The whole idea is to convert users of free trials into buyers, said Jason Bailey, general manager of Adknowledge’s Virtual Currencies division. Right now, the Cambyo gateway has a big inventory of offers from 50,000 advertisers who are part of the ad network. The company tries to match the right offers to the best target consumers.

Adknowledge has 220 employees and raised $48 million from Technology Crossover Ventures in 2006. The company was started by Scott Lynn in 2004.

Companies: Adknowledge

LAS VEGAS -- The wireless phone is becoming a great equalizer between the haves and have-nots around the world, according to multiple keynote speakers at the CTIA Wireless conference here this week.

Wireless industry pioneer John Stanton provided his audience of the most dramatic examples of the spread of wireless technology when he showed a video that described how cell phones helped save lives in the aftermath of the Jan. 12 Haitian earthquake .

Stanton is the chairman of Trilogy International Partners, owner of Voila, one of three mobile operators in Haiti. He traces his wireless roots to mobile innovator McCaw Cellular in the 1980s.

In the video, one relief worker said that while some military-grade communications had failed in the earthquake, his ordinary cell service continued operating. Stanton said he learned of at least 100 people trapped in earthquake rubble who used cell phones to deliver voice and text messages telling rescuers where they were.

In an interview, Stanton said the enduring value cell phones in poorer countries like Haiti, where landlines are limited, is their use for banking and e-commerce transactions as well as for emergency communications.

Some Haitian workers today use cell phones as mobile wallets -- getting paid via mobile credits that are later converted to cash. Thousands of Haitians also offer up their mobile phones to others to make microcalls for a fee, Stanton said.

"In America, we grew up with the notion of wired telecommunications, but wireless has a 21st century role," Stanton said. "In Third World countries, [wireless] is really leapfrogging the wired platform. "

Haiti, Stanton believes, can be the world's first "copper-free" country-- not needing to install the copper wires used in traditional wired telecommunications. Instead, the country would primarily use a first rate telecom infrastructure based entirely on wireless technology.

Other CTIA keynoters also showed examples of how mobile technologies are used worldwide.

Biz Stone, co-founder of Twitter, offered who several examples of Twitter has been used in various countries to organize street protests.

"It's striking, we had no idea Twitter would become so widely used," he said. "Often protests are organized over Twitter. Letting people communicate openly can have a profound influence ... you have a sense of yourself as a global citizen."

In his keynote, James Cameron, director of Avatar and other motion pictures, said the ubiquity of easy-to-use texting and other mobile communications widely influences political discourse, even in the U.S. "Now you have bottom up political power," Cameron said. "All these [wireless] tools help people function together at a micro level."

Cameron said he recently learned of a tree planting program in India that would require using one-tenth the normal amount of water for the plants. The government found that the details could be delivered to farmers more easily via one-to-one wireless communications than through normal government channels. "[By] using social networking ... these innovations were down at the level of the peasant farmer," he said.

Aneesh Chopra, the U.S. chief technology officer, joined Stone and Cameron on a keynote panel and described how cellular technology can transform the lives of people in need throughout the world.

For example, Chopra described a "Text4Baby" program set up by the White House in February to help pregnant women get necessary diet and medical tips several times a week. He praised cellular providers for waiving text fees so the information can be distributed free-of-charge. Expectant mothers can set up the service by texting the word "baby" or in Spanish "bebe" to 511411.

"Already we have 25,000 moms registered," Chopra said. "There's a great deal of innovation taking place."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld . Follow Matt on Twitter at @matthamblen , or subscribe to Matt's RSS feed . His e-mail address is mhamblen@computerworld.com .

Read more about mobile and wireless in Computerworld's Mobile and Wireless Knowledge Center.

For the second year in a row, computer science enrollments in the U.S. have increased, according to an annual study of enrollment trends, giving hope that the degree program is seeing a revival that's here to stay.

The decline in technology-related enrollments that began with the dot-com bust has been worrisome to business and government leaders. President Obama, in particular, has pushed for programs to train more secondary school teachers in science, technology, engineering and mathematics. He has gone so far as to urge students to eschew finance degrees in favor of technology areas.

The total number of undergraduate majors in computer science increased 5.5% in 2008-2009, the second consecutive year that the number of computer science majors has increased, according to the annual Taulbee Survey by the Computing Research Association. Over a two-year period, the number of such students increased to 14%. The survey looks only at a subset of computer science enrollments -- those students attending Ph.D.-granting institutions -- but it's typically the first data to identify enrollment trends in advance of government data. The figures represent a total of 32,706 computer science majors enrolled at these institutions, the survey said.

But the multiyear decline in enrollments has reduced the number of graduates and competition for jobs.

"Employers cannot find enough people who are graduating to hire," said Jeff Hollingsworth, a professor of computer science at the University of Maryland who also heads the undergraduate program. This past month, the university held a job fair specifically for computer science graduates in response to employer demand, he said. "The demand exceeds the production," he added.

At Maryland, there were 141 first-year computer science enrollments in the 2008-2009 academic year. For the 2009-2010 academic year, it had 210 first-year students.

Hollingsworth blamed some of the earlier enrollment decline on fears of offshoring, but he said most tech companies want their most interesting development work done in the U.S. "There are some concerns about offshoring, but I think the concerns were much greater than reality," he said.

Computer science enrollments may have also been helped by the collapse of some major Wall Street firms . Mathematically inclined students who might have once considered a degree in finance now see computer science as "the safe choice," said Peter Harsha, the Computing Research Association's director of government affairs.

Obama has also urged students to turn to technology areas. In an appearance on The Tonight Show with Jay Leno last year, Obama said: "We need young people -- instead of a smart kid coming out of school ... wanting to be an investment banker, we need them to decide if they want to be an engineer, they want to be a scientist, they want to be a doctor or a teacher."

But computer science is also being helped by its broadening application into other academic areas, such as computational biology, Harsha said. This "makes the problems of computer science more intellectually compelling," he contended. The decline in enrollments also prompted academic departments to revisit curricula to see what they could do to spice up programs, he added.

The enrollment gains are happening despite a tech market that has shrunk as a result of the recession . Although the students may be betting on an improving job market by graduation, Hollingsworth said that graduates from his program are finding jobs.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld . Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com .

Read more about education/training in Computerworld's Education/Training Knowledge Center.

China's Taobao.com, a rival to eBay, plans to open up site-wide transaction data so users can learn about buying trends in the world's biggest market, a person familiar with the plans said.

Taobao will next week announce plans to open up a large swath of its transaction and demographic data, which will be aggregated from across the site and will exclude any personally identifiable data, the person said. A user could, for instance, compare how well various brands are selling in an item category such as clothes or mobile phones, or call up certain demographic data to see how factors like gender and age range affect buying habits.

Taobao, a subsidiary of e-commerce outfit Alibaba Group, lets users sell items at auction or through a virtual store. Users shop for everything from lipstick to laptops and household appliances, and companies like Japanese clothes brand Uniqlo have official shops on the site.

Taobao hasn't determined if it will charge for access to its data, but users will be able to access the raw data itself or to contract with certain research companies to analyze it, the person said.

Taobao had 170 million registered users at the end of last year and transaction value on the site in 2009 reached 200 billion yuan (US$29 billion).

Other online retail Web sites also share parts of their transaction data with users. eBay, for instance, has a portal that shows the most popular searches in various categories, along with a user subscription service for data like average selling prices and the most successful keywords for item listings.

Taobao's strategy has been moving from acquiring new users to offering more services to existing users, said Dave Carini, managing director of Maverick China Research, a technology consultancy. Sharing transaction data would fit with that trend, he said.

The move could also help fill a hole for economic data in China, where government statistics are often questioned and other data can be hard to come by.

"Lack of accurate data is something that people have long complained about regarding China," Carini said.

Speculation that publishers would have the final word on eBook pricing may have been inaccurate judging from a leaked screenshot of the iBook store that shows Apple assuming Amazon's current $9.99 price model. The picture, grabbed by App Advice's Alexander Vaughn, shows four bestsellers priced at $9.99 per download.

"I had the chance this week to be presented a not-so-NDA-complying preview of [the iBook store] and it looks like Steve [Jobs] is not to be doubted. This is not a rumor, as I have seen the iBook store and its pricing first hand," Vaughn writes.

Vaughn further states that "out of the 32 eBooks featured in the New York Time's [sic] Bestsellers section, 27, including the entire top 10 are priced at $9.99." Of the remaining five eBooks, the highest priced is Jackie Collins' Poor Little Bitch Girl, clocking in at $12.99 (the same eBook sells on the Kindle and Nook for $8.83 and on Sony's Reader Store for $14.99). (Click on the image below, from AppAdvice.com, for a closer look at Vaughn's shot.)

The pricing variances set a particularly intriguing scene. Last month Amazon engaged in a loud public brawl with the publisher Macmillan over eBook prices. The spat was settled when Amazon conceded to raise tags and many blamed Apple's iPad for the row. But here's the thing: Macmillan owns St. Martin's Press, which publishes Poor Little Bitch Girl, meaning Apple isn't receiving the favoritism some predicted.

Given the fact that many publishers detest Amazon's price point, $9.99 eBooks on the iPad does sound a little odd; however, this news was already reported by the New York Times : "According to at least three people with knowledge of the discussions, who spoke anonymously because of the confidentiality of the talks, Apple inserted provisions requiring publishers to discount e-book prices on best sellers -- so that $12.99 to $14.99 range was merely a ceiling; prices for some titles could be lower, even as low as Amazon's $9.99."

It's also worth mentioning that this "Kindle matching" price structure is based on 32 bestsellers. Kindle Review states, "If that insightful analysis (27 of 32 bestseller prices match so entire store prices must match) is correct then B&N prices ought to be the exact same as the Kindle Store -- Given that B&N matches Kindle Store prices on nearly all bestsellers. But they're not -- Amazon Kindle prices are lower than B&N prices across the entire store."

Though App Advice would like you to believe this is not a rumor, it should be considered carefully. Keep in mind that Random House, the world's largest publisher by sales volume, still hasn't inked a deal with the iPad for fear of an all-out price war, meaning the entire battlefield could change overnight -- especially if this rumor is true.

There’s been a lot of debate over whether Adobe’s Flash and AIR technologies, which power many videos and games on the web, are going to be significant on smartphones and upcoming devices like Apple’s iPad. Accel Partners’ Rich Wong, who specializes in mobile startups, weighed in on the debate today at a developer event hosted by mobile advertising startup AdMob.

“I don’t think Flash plays a relevant role,” Wong said. “Flash missed its window.”

Adobe pursued the wrong strategy by building a stripped-down version of Flash called Flash Lite, Wong said. Meanwhile, the iPhone has built a thriving app ecosystem without supporting Flash, and it won’t be supporting Flash on the iPad either. I’ve heard something similar — many of the startups that I interview that have built their websites in Flash are thinking about building versions using HTML5, which will work on the iPhone and the iPad.

On the other hand, Adobe has announced versions of Flash and AIR that will work on most major non-Apple platforms, and we’ve seen some cool AIR tablet apps, like Wired’s. So the battle isn’t over yet.

Tags: AIR, Flash, iPhone

Companies: Adobe

People: Rich Wong

Omar Hamoui, founder and chief executive of mobile advertising startup AdMob, offered a catchy way today to think about the evolution of mobile applications and the mobile web — we’re in “the Yahoo phase,” he said, because it’s still possible to find applications using directory-style app stores.

Hamoui spoke at AdMob’s developer event in San Mateo, Calif. One of the attending developers asked whether the HTML5 format will become powerful enough that websites accessed via mobile browsers might overtake applications sold in app stores like Apple’s, but Hamoui replied that the real issue isn’t the web’s technical capabilities.

“I think it’s possible in HTML5 to do what most apps do,” Hamoui said. “I think what people sort of ignore there is distribution. The whole point of the app store is distribution, and a lot of its power is distribution. Until that problem is solved, I’m not sure that HTML5 wins.”

However, Hamoui added, as the number of apps grows into the millions and tens of millions, it’s going to become impossible to find the cool ones. He didn’t say whether that will lead to new methods of application discovery in app stores, or whether we’ll see a shift to mobile websites that users find through search. If we stick with the web metaphor, the Google phase comes after the Yahoo phase, and Google (which plans to acquire AdMob, assuming the deal isn’t blocked due to antitrust concerns) has certainly been advocating for the mobile web over downloadable apps.

Another attendee asked which smartphone platform will emerge victorious over the next few years — Apple’s iPhone, Google’s Android, or someone else?

“My guess would be that I don’t see the future being all that different from today,” Hamoui said. The iPhone and Android will continue to duke it out, and some other platforms like Microsoft’s Windows phones and Research in Motion’s BlackBerry will recapture some of their buzz to become contenders as well. The only real difference compared to a few years ago is that all of these platforms realize they need to reach out to mobile developers, because that’s how they differentiate themselves.

Hamoui also cautioned against taking his predictions too seriously. For example, when the iPhone first came out, AdMob expected that most ad impressions would be from mobile websites rather than apps, and the opposite was true. Luckily, AdMob released tools to include its ads in both mobile websites and apps. In other words, when developers make their plans for the future, the key is to “try and make sure that you’re going to be okay no matter what happens.”

Tags: Android, iPhone

Companies: AdMob, Google

People: Omar Hamoui

BlueScope Steel has gifted CSC a four-year contract renewal for the delivery of IT services.

The deal is an extension of an arrangement that goes back to May 2000 and involves CSC providing the resource giant with consulting, applications development, systems integration, end user services and disaster recovery.

BlueScope Steel chief information officer, Andrew Baker, said in a statement that the company had been pleased with the relationship.

"The further cost saving initiatives and service delivery improvements we plan to deliver with CSC are important to us," he said. "This new contract recognises the benefit of working with CSC and we look forward to continuing our relationship."

In December, CSC netted an $8 million contract with the Australian Electoral Commission (AEC) to provide mainframe and network communications services.

The contract runs until 2013 and is an extension of an existing arrangement, plus the implementation of a new disaster recovery system.

In June, financial services giant AMP entered into a revised $150 million outsourcing contract over six-years with CSC, with the option for additional services to a total of $300 million.

And in May, the Western Australia Police entered into two five-year IT service contracts with CSC for application support and consulting services.

Both deals came after CSC joined a throng of ICT companies in announcing staff cuts in April. Since the economy began picking up, however, CSC has signaled its intentions to increase its headcount.

It's no secret that Netflix has been gearing up to stream movies and TV shows via the Nintendo Wii console, but now it appears the launch is near. Netflix today announced that it has shipped instant-streaming discs to some of members for testing. "Their feedback will ensure that we deliver a great experience to everyone when we launch," writes company spokesperson Jessie Becker on The Netflix Blog.

Wii owners need a broadband connection, a $9 or higher Netflix unlimited plan, and an instant-streaming disc to watch thousands of movies and TV episodes via the Internet. They can order a free disc at the Netflix site.

Console Catch-Up

Some critics have knocked the Wii's streaming capabilities, which admittedly don't compare favorably with newer, more advanced living-room hardware. For starters, the Wii requires a Netflix disc, unlike the latest breed of Blu-ray players, set-top boxes, and other devices. And as Matt Peckham from PCWorld's Game On Blog points out, the Wii doesn't do high-def video either:

"Nintendo's little-console-that-could, for all its game-related kudos, is strictly locked at 480p, the high-end spec for standard-definition TVs (sometimes called EDTV or "enhanced definition"). That amounts to just 640 by 480 (or 720 x 480, wide) lines of resolution in NTSC-based countries like the US. Microsoft's Xbox 360 and Sony's PlayStation, by comparison, run at 720p or 1080p, i.e. 1280 by 720 and 1920 x 1080 lines of resolution, respectively."

Good Enough for Now

For many, the Wii's relatively low-res output may not be that big of a deal because their broadband connections lack the bandwidth required for HD video. And given their investment in the Wii, many users probably won't switch to an Xbox 360 or PlayStation simply to watch high-def flicks. Note: While Netflix access is integrated into the Xbox 360's Dashboard interface, PS3 users currently need to use an instant streaming disc, too. Netflix says it hopes to have an embedded solution available for PS3s via a system software update later this year.

Today's Wii console and its (admittedly clunky) Netflix streaming disc represent an interim and relatively cheap solution for Wii owners who'd like to give online streaming a try. Eventually, these users will upgrade to more advanced hardware--perhaps an HDTV with built-in Netflix streaming and Wi-Fi. Or they'll move up to a newer Wii console that's better equipped to stream Internet content.

Until then, the free Netflix disc is better than nothing. After all, all Wii owners have to lose is $9 a month for a Netflix subscription. And if the picture stinks, they can cancel at any time.

Contact Jeff Bertolucci via Twitter (@jbertolucci) or at jbertolucci.blogspot.com.

The Apple iPad is coming, and--thanks primarily to the iPhone revolution--it is guaranteed to break out of its consumer-oriented shackles and start showing up at work. A quote from Star Trek: The Next Generation comes to mind: "Resistance is futile." Your business data will be assimilated.

Despite the fact that Apple has targeted the tablet as a consumer-oriented device built for media consumption, emerging polls suggest that leading reason that consumers want the iPad is specifically for work, with media consumption and game playing not far behind.

Why not? Notebook computers are heavy and unwieldy by comparison. The iPad is perfectly capable of performing most business tasks that roaming workers need it to, and it can do it on a device that is intuitive and instant-on. It delivers a multitouch interface with 10 hours of battery life on a device that can is functional even one-handed.

Andrew Storms, Director of Security Operations for nCircle, emailed to share his thoughts on the iPad in the enterprise. "The biggest question I have about the iPad concerns how it will be used. Either people will use it as a laptop replacement or they will use it as supplementary tool in a few specific situations."

Storms clarified his concerns "This has everything to do with what kind of data ends up on the device and that's the real concern for enterprise security. How enterprises treat the iPad from a policy perspective depends completely on what kind of data is on the device."

Businesses and IT administrators have reason to be concerned, too. At the CanSecWest conference in Vancouver this week, a pair of security researchers was able to compromise a fully-updated iPhone 3GS in a matter of seconds--accessing the data contained on the hacked iPhone. The iPad is built on the same iPhone OS that was hacked.

Bradley Anstis, vice president of technical strategy for M86 Security, agrees that there are some serious questions to be answered about protecting confidential or sensitive company data on a device like the iPad. Anstis commented via e-mail to warn "It has a cool factor so expect senior executives to force it on IT to support this new device, or simply start using them in their corporate infrastructures."

Anstis recommends that IT admins consider the possible ramifications of the iPad and how to protect data on it. Businesses should define acceptable use for Web browsing with the device.

Anstis explains "If the iPad is using the corporate Wi-Fi to access the Web, then this should be controlled by company's current Web security technology, but what about Web surfing via the iPad's 3G connection, that goes nowhere near the corporate infrastructure?"

By default, users with iPads will want to sync up basic information like e-mail, contacts, and calendar events. Users may also store files on the iPad, and the company needs to determine how that information will be protected.

The iPhone has presented many of the same concerns--again, the two devices use the same iPhone OS. The difference is that the iPhone--while it is a smartphone capable of much more than placing phone calls--is still too small to do much else from a practical perspective. The iPad represents a shift in how the iPhone OS will be put to use.

Whether or not Apple steps up with more business-friendly security controls for the iPad, they will almost certainly exist. The iPad will be used as a business tool and companies have to protect data, so there will have to be apps and tools that accomplish that.

M86 Security's Anstis points out one other sticky area for business use of the iPad. "If a device is supplied by the business, then you can reasonably expect that business to install security and control software on the device, but what about devices that are supplied by the employee? Also, who pays for the 3G connection? How can a company force control over 3G access in the workplace if it doesn't pay for it?"

Those are very valid questions when it comes to protecting corporate data. The business has an obligation--and possibly even a compliance mandate--to protect data, but doesn't legally have control over employee-owned equipment. Ensuring that data on the iPad is encrypted, or otherwise protected could be an uphill battle.

Tony Bradley is co-author of Unified Communications for Dummies. He tweets as @Tony_BradleyPCW. You can follow him on his Facebook page, or contact him by email at tony_bradley@pcworld.com.

The United States Patent and Trade Office is planning a complete redesign of its IT systems and a move to a cloud platform.

USPTO director David Kappos is calling the project "Trademarks Next Generation," and said the office wants to take advantage of virtualization and cloud technologies to provide "full end-to-end electronic processing for Trademarks."

"We'd like to provide trademark applicants and trademark owners the ability to manage applications and registrations on-line, as well as an automated 'watch' service to notify requestors of status changes in applications and registrations, just to name a few functions," Kappos said in a blog post this week.

Part of what the agency wants to do is improve its internal operations. It has long been criticized for patent delays in processing, and high turnover of its patent examiners.

Kappos' blog post follows Federal CIO Vivek Kundra's comments earlier this month about the patent office. He cited it as an example of an agency using outdated systems and can take years to process a patent.

"One reason is because the USPTO receives these applications online, prints them out, and then someone manually rekeys the information into an antiquated system," Kundra said earlier this month .

The White House has made moving to the cloud a broad IT goal. IT officials at the patent office weren't available for an interview, but the agency did respond to written questions about its plans.

The agency said its broad IT goal was "migrating dedicated, distributed systems to cloud platform." It now has dedicated specialized systems, including mainframe- and Cobol-based.

More than 60% of all its applications are processed electronically, but moving those applications and others to a cloud environment means overcoming a number of potential impediments, incuding "time, money, and keeping the legacy systems operational while replacing them all," the agency said.

Neither the project cost nor timeframe for the move to the cloud has been calculated yet. The annual IT budget for this agency is $232 million.

The plan is to create an internal cloud until there is a "federally approved and secure cloud platform available," the agency said.

The USPTO says it is moving to cloud platform for reasons involving disaster recovery, redundancy, scalability, and reducing provisioning time and operational costs.

It expects that the new platform "cost for enhancing, maintaining, and operating the systems to decrease significantly and, hopefully, by more than the investment cost. The reduction in the system costs would provide the ROI (return on investment)" the agency said.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld . Follow Patrick on Twitter at ? @DCgov or subscribe to Patrick's RSS feed ? . His e-mail address is pthibodeau@computerworld.com .

Read more about saas in Computerworld's Saas Knowledge Center.

McAfee has announced plans for the latest version of its data loss prevention solution. McAfee Data Loss Prevention (DLP) technology is planned to include a common policy across all components, database crawling, workflow through the McAfee ePolicy Orchestrator platform and support for Microsoft Active Directory, said a statement.

"Due to limitations inherent in legacy DLP solutions, organizations have had to take a brute force approach to protecting data," said Gerhard Watzinger, Executive Vice President and General Manager of McAfee Data Protection Business Unit. "These approaches are like using a sledge hammer to crack a nut and are usually used because of the high cost and complexity with deployment of traditional DLP. With McAfee Data Loss Prevention technology we can now enable the deployment of DLP that is cost effective and quick to value," he added.

Novell today announced the availability of a new ZENworks Configuration Management virtual appliance. In addition, Novell announced ZENworks enhancements to help customers migrate to Windows7. Additionally, Novell announced a technology preview of ZENworks 11, which integrates endpoint security into a single console with systems management, said the statement.

"Today's IT environment is dynamic, and ZENworks continues to evolve to meet the challenges that customers are facing in both managing new devices and delivery models as well as in securing these systems," said Jim Ebzery, Senior Vice President and General Manager, Novell Security, Management and Operating Platforms business unit. "From cloud computing to Windows 7, ZENworks offers the most comprehensive and flexible set of solutions to reduce cost, complexity and risk and help customers make their IT work as one."

Is the Anti-Counterfeiting Trade Agreement (ACTA) a harmless attempt to quietly harmonise intellectual property laws and enforcement around the world, or a threat to civil liberties that will require fundamental legislative changes to implement?

The views of officials and lobby groups differ widely on what ACTA entails, as was evident in Wednesday's ACTA briefing in Auckland, organised by InternetNZ. Speaking on background at the briefing was a Ministry of Foreign Affairs and Trade (MFAT) negotiator who leads the New Zealand team at the ACTA talks.

ACTA is an attempt to update earlier intellectual property regimes such as the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) from 1994 and is aimed at large, commercial counterfeiters and copyright infringers, MFAT says.

ACTA won't impact on the activities of ordinary New Zealanders, the spokesman says, nor is treaty is not designed to be intrusive or to have an impact on consumers' ability to purchase and use legitimate goods. Parallel importing and access to generic medicines will still be available under ACTA, he says.

According to the ministry, the negotiations won't change existing intellectual property rights standards as set out in TRIPS and the World Intellectual Property Organisation (WIPO). Also, it won't change existing consumer rights or interfere with the Privacy Act or the Bill of Rights Act.

However, InternetNZ's senior research fellow in cyberlaw, Jonathon Penney, intellectual property lawyer Rick Shera of Lowndes Jordan and independent technology consultant and media commentator Colin Jackson also spoke and warned of the potential consequences of ACTA.

There has been no economic analysis on ACTA, Jackson pointed out, saying that instead of providing benefits to New Zealand exporters, overseas industries are the ones that will reap the rewards.

InternetNZ's Penney says the spirit of the treaty will have to be adhered to under international law, and New Zealand can't enact legislation that contradicts ACTA. As it stands, ACTA is essentially an extension of the US Digital Millennium Copyright Act or DMCA, according to Penney and introducing it will alter New Zealand law, especially the Copyright Act.

MFAT says New Zealand joined a group of like-minded countries in the ACTA negotiations to foster innovation, productivity and economic prosperity. International standards and cooperation will provide New Zealand exporters with certainty.

There is a growing trade in counterfeited and pirated goods, the spokesman says. In 2009, NZ Customs seized in the order of" 270,000 counterfeit items including clothing, footwear and electronic goods.

He says there will be efforts to produce counterfeit products in relation to the upcoming Rugby World Cup and also referred to an unnamed 2005 study that estimated the losses due to copyright infringement for New Zealand's film industry at $70 million.

MFAT confirmed that software patents are on the table at ACTA, with some members wanting these to be covered. There is, however, no agreement on this.

The mandate for ACTA goes back to the previous Labour government in 2008, and has been re-endorsed by the present National government.

The process behind ACTA is no different to how New Zealand conducts other negotiations and treaties, and once the talks are concluded, the government can decide whether or not it wants to sign it. MFAT disputes suggestions the negotiations are being held in secret, saying the New Zealand government is pushing for the process to be as transparent as possible and welcomes feedback.

Once the negotiations have concluded, the text will be publicly available, and there will be a National Interest Assessment (NIA) that weighs up costs and benefits for government and parliament to review.

Penney, however, says the plurilateral treaty came about as the rich countries couldn't push a similar deal through multilateral bodies such as WTO and WIPO where developing nations are represented in larger numbers.

ACTA is likely to be used as a bargaining device with developing countries, Penney says.

Intellectual property lawyer Shera says New Zealand is a minnow in ACTA. "If we can get Australia, Canada and Singapore in some areas alongside us, then it makes a difference," as it will add weight to New Zealand's position, Shera says.

Shera says that the entertainment industry has a consistent position worldwide and will use copyright laws, termination regimes and TPM rules enacted in other countries to push its agenda in other jurisdictions. Countries need to be vigilant here, Shera says, and pay attention to what happens elsewhere.

New Zealand is also likely to be pressured into forcing ACTA on the Pacific nations, Shera says, by other signatories of the treaty.

The public briefing comes ahead of the eight round of ACTA negotiations, which will be held in Wellington between April 12 and 16. Commerce Minister Simon Power has called for submissions on digital rights enforcement before the Wellington ACTA talks with a paper published on the Ministry of Economic Development website.

Submissions on digital enforcement can be sent to trademarks@med.govt.nz.

Cisco introduced the CCIE certification in 1993 to aid the industry in distinguishing the top inter-networking experts worldwide.

Fifteen years later, the company has announced the results of a comprehensive end-customer survey conducted by the international CCIE community. Through this survey, Cisco is trying to gain insight into what digital infrastructures will look like over the next five years.

Perspective of IT professionals

This research was conducted by a strategic research firm Illuminas, and commissioned as part of Cisco's overall 25th anniversary celebration. The survey was designed in a manner to know the unique perspective of some of the most knowledgeable information technology professionals in the networking industry.

According to Cisco, there are several factors that are driving innovation such as virtualisation, security and risk management, unified communications, video, and real-time collaboration.

The majority (two-thirds) of the CCIE holders surveyed expect virtualisation to be the top networking investment over the next five years. Virtualisation is seen as an energy-, space- and cost-saving measure and the respondents believe that a holistic and comprehensive virtualisation strategy can increase operational efficiency and simplify management.

Avoid security breaches

Cisco emphasises the importance of networking professionals to stay ahead of the increasing number of internal and external security breaches. About 64 per cent of respondents said security and risk management will be the networking skills in greatest demand in the coming three to five years.

About fifty per cent expect more companies to adopt unified communications leading to increased collaboration in the workforce. Thirty per cent of those surveyed expect that over the next five years, CIOs will especially focus on accommodating the needs of a highly collaborative, global workforce.

Real-time video solutions such as Cisco TelePresence will be one of the top green initiatives affecting networks and network engineers, according to 52 per cent of the respondents.

"CCIE holders have established a reputation for leading the networking industry in deep technical networking knowledge and are typically deployed into the most technically challenging network assignments," said Jeanne Beliveau-Dunn, general manager, Learning@Cisco. "As a result, they have an unparalleled depth of knowledge and experience."

Disclosure: The companies listed are among those chosen by VentureBeat to launch at the DEMO Spring 2010 event taking place this week. These companies do pay a fee to present, but our coverage of them remains objective.

The organizers and audience at this week’s DEMOSpring10 conferencehave already chosen their winners, but the team of VentureBeat writers covering the event also took time to vote on our favorite companies. We were impressed with the quality of the 65 companies that appeared at the show, but some of them naturally stood out for having the most potential. Here’s our list in order, starting with our favorite company at No. 1. Please take the poll and vote for your own favorite out of all 65.

1. InVisage Technologies — camera phone image sensor maker — Hardware companies have done well at DEMO in the past. They’re still pretty rare, so we were surprised to see a chip company surface among the presenters. Fortunately, InVisage Technologies had both a cool idea and a great way to get to market fast, as well as $30 million in its pocket. The company’s QuantumFilm chip taps nanotechnology for a material that is great at absorbing light. InVisage says its quantum-dot technology is about 90 percent to 95 percent light absorbent, compared to just 20 percent to 25 percent for most silicon-based image sensors. It’s also easy to manufacture, as InVisage simply splashes the material onto the top of a traditional silicon chip. In doing so it could create an image sensor that is four times better at absorbing light than current chips, and the image sensor also has twice the dynamic range. Using sputtering machines that are already in chip factories, the company can make the chips with a small amount of manufacturing cost added to the typical price for a traditional chip. We expect that, if InVisage does what it says, it will shake up the $5 billion image sensor chip market.

2. Phone Halo — loss prevention device — “Honey, where’s my keys?” Hopefully Phone Halo will stop you from asking where you left your keys or phone every morning.  The company has a $70 device, dubbed Phone Halo Protect, which you can put on your key ring. You download software to your phone and then turn it on so that the phone is paired to your key ring device. If you walk out of a room without your phone, your key ring will start making noise. And if you leave your keys behind, then your phone starts an alarm. The application will also send you an email alerting you to the loss and then tell you the location on a Google Map of where the separation occurred. That’s because the Phone Halo can tap Global Positioning System (GPS) navigation information. Phone Halo can also alert your friends or family by sending them an email, so they can tell you where you need to go to find your phone. Of course, if you leave both your phone and your keys behind, you’re out of luck. Rivals include Loc8tor, a device manufacturer that can track objects through the use of censors, as well as Zomm, a censor that notifies you if your phone moves beyond a specific distance or has a call.

3. eXaudios — the MagInify Call Center, which recognizes caller emotions — Call centers get a lot of calls from stressed out people. It would be great if the call center managers could figure out who is the most upset and if the call center employee is talking the person down. This Ramat-Gan, Israel-based company says it has the answer. eXaudios spent 15 years doing research on recognizing the emotion in someone’s voice and predicting the person’s state of mind. With MagInify Call Center, the software shows happy people in green and angry callers in red. The software detects which customer is about to lose his or her temper in real time and warns a manager, who can step in to defuse the situation. At the same time, the software tells the manager which employee can best handle tense calls. The company says it is about 80 percent accurate. It wasn’t perfect at recognizing our emotions, but it was good enough to win the $1 million DEMOgod audience grand prize from DEMO.

4. Gwabbit – the Gwab-O-Sphere automatic contact cloud — This company won a DEMOgod award a year ago for its Gwabbit for Outlook software which automatically detects a contact in an email and enters the data into your Outlook contact address book. Now Gwabbit is launching a cloud-based service that backs up your data to the cloud. Once there, the Gwab-O-Sphere will keep your contacts synchronized with a bunch of other repositories of contact information, from Salesforce.com to LinkedIn. It also lets you know the Facebook or Twitter handles for your contact. To date, more than 5 million contacts have been automatically collected and Gwabbit estimates it will have 200 million by 2011. Gwabbit is making a lot of progress taking the pain out of organizing your contacts.

5. ABJK NewCo — Zosh, a digital signature app for mobile devices — Joshua Kerr, founder of the company, is shown here smashing a fax machine, which he says has stubbornly hung to life in the digital era. People still need fax machines to send signed contracts. But the company’s Zosh app can get rid of that paperwork. It lets you use a touchscreen phone such as the iPhone to write your name on the screen and transfer it into any document. You can insert your signature into a document and adjust it to fit exactly in the right part of the page. This “mobile document execution platform” also lets you search for signed documents in your email system, rather than forcing you to fish through files on paper.

6. Everloop — Facebook-like social network for kids — The social networks such as Facebook and MySpace have served people well, from ages 13 and up. But for kids younger than that, social networks can be dangerous because of the risks of meeting strangers. Everloop has designed its service to abide by child safety laws, making a safe place for tweens ages eight to 13 to hang out together. Hilary DeCesare, chief executive, refers to it as a “Facebook for kids.” It lets members customize their profiles, chat with each other, upload photos and videos, watch a web video series or play from a catalog of 1,500 online games. At the same time, the service has a Privacy Panel for parents to monitor kids activities and enable the service to meet the rules of the Children’s Online Privacy Protection Act. Brands can advertise within the site, but Everloop evaluates each submission.

7. Widgetbox – ClickTurn Ad Builder, marrying rich media with banner ads — The boring banner ad box is rapidly being replaced by real-time rich media ads which feature two-way communication such as Twitter feeds or YouTube videos where you can leave comments. But only one out of eight advertisers can afford the time, money and effort that it takes to build these rich media ads. Widgetbox’s ClickTurn Ad Builder automates the process, enabling just about anyone to create a rich media ad within a matter of minutes. Using a template, you can drag and drop media into an ad and then start a brand new ad campaign that you can track from start to finish.

8. Hillcrest Labs — Kylo web-based TV browser — Hillcrest Labs has created the Kylo browser to run on any Mac or PC so that it is easier for people to browse through web video on their TV screens. Kylo is meant for viewing at a distance and it gets rid of the need to enter unwield URLs for web sites. You can easily navigate through aggregated web video collections on a variety of video services, but you can also access the larger Internet as a whole. So this is a way to get a lot more video and pay less for it than subscribing to cable. It also has a Loop pointer which goes with the browser, but will also work with a regular mouse. Hulu gave the company a lot of publicity when it decided to block the Kylo browser.

9. Bloson – web site that combines philanthropy and e-commerce — One of the most promising aspects of this year’s DEMO conference is the number of companies geared toward doing something good for the world. Another example, KarmaKorn, one of the AlphaPitch companies had a similar bent, namely changing the way we think about giving to charity or supporting causes. But Bloson stands out because its model allows people to make a difference by using the web exactly as they always have. Once you join the Bloson network, you simply go about your business sharing videos, songs and blog posts with your friends via Facebook, Twitter, or any other social network, or buying things on e-commerce sites. For every action you take, you earn points toward a particular cause of your choice — the site lists 15 different causes point to organizations that support animal rights, women’s rights and gay and lesbian issues, to name a few. Every quarter, the Bloson team totals the points for each cause, and divides a certain amount of money between them, proportional to the number of points they earned. It’s engagement with social networking habits, and unique approach to philanthropy set it apart, and could eventually change the way we think about doing good in the world.

10. Nyoombl — Greypfroot video conferencing on your TV — This company’s goal is to make video conferencing simple on your TV. Its Greypfroot device connects to your TV and enable video chat with other Greypfroot users via a broadband connection. You can click to call someone and answer an incoming call with the click of a mouse as well. You can also talk to Gmail users on PCs and Macs with Google voice and Google chat installed. Competitors include rivals such as Skype, whose video call service will be available on some models of TVs soon. Nyoombl says its device will work on standard TVs as well as high-definition TVs and support a number of resolutions.

Do you think we got it wrong? Please vote in our poll below. The top 10 choices are listed in order, and the rest are in a random listing.

What is your favorite DEMOspring10 company?survey

Tags: DemoBeat, DEMOSpring10

IBM announced Tuesday in Xi'an, China that the previous SPSS lab in the city of Xi'an has become Big Blue's global hub for analytics development.

Big Blue paid US$1.2 billion to buy the Chicago-based high-end analytics software company in mid-2009.

According to Steve Mills, senior vice present and group executive of IBM Software Group, the Xi'an facility now serves as a gateway to China's remote western region and well as a global hub for analytics development that will help clients around the world adopt predictive analytics capabilities tailored for their industry-specific requirements.

As part of IBM's China Development Laboratory, the Xi'an lab will include a dedicated team of more than 200 software engineers and IT architects, said Mills.

Mills declined to provide details on additional R&D investment and headcount growth to be brought by this current move, but a spokesperson from the Xi'an facility estimated that headcount for the lab will grow from 202 last year to 219 in 2010.

Prior to the IBM acquisition, the Xi'an lab established in 2004 was already SPSS' most important R&D facility worldwide, said the lab spokesperson, adding that the lab had more than half of SPSS' R&D resources and contributed to all product lines of the analytics firm.

According to IDC (www.idc.com), market opportunity for business analytics in China is expected to grow 10 percent annually from 2009 to 2013, faster than the average IT market growth of 8 percent. The demand is driven by risk management, compliance mandates, and the desire to adopt business analytics into their operations, said IDC.

On the same day, IBM also announced a west China business unit for its software group and a development lab for the west region that Big Blue has high expectations.

In 2000, the Chinese government launched the western region development strategy to help the under-developed regions catch up with the coastal provinces in eastern China. Driven by stimulus investment, the average annual growth for the past 10 years was 11.6 percent, which was significant to the 370 million people, said IBM.

"Xi'an is the largest and most developed city in the west. In its course of further industrialization and urbanization, software helping decision-making is on higher demand," said Mills.

According to IBM, Xi'an City Commercial Bank is working with Big Blue's Xi'an lab to explore how it can transform its operations through improved insight on their business information and predict new outcomes for improved customer service.

The bank is the first foreign invested commercial bank in western China, said IBM, adding that it is becoming one of the most profitable domestic commercial banks in the region with 113 branches and 2,000 employees.

The bank has also expanded into the newly opened Guanzhong - Tianshui Economic Zone in the province of Shaanxi where Xi'an is the provincial capital.

"The second ten-year plan for the western region development is about to be in action," said Jing Junhai, Vice Governor of Shaanxi Province. "We appreciate and welcome that IBM is enhancing investment in Xi'an. We hope more vendors will come to Xi'an to help make our city better and the western region more developed."

On a global basis, IBM said it has invested more than $12 billion to build a business analytics portfolio which includes organic innovation and acquisitions. With 4,000 analytics consultants, the company is working with more than 250,000 clients worldwide on predictive analytics, including 22 of the top 24 global commercial banks, 18 of the world's top 22 telecommunication carriers and 11 of the top 12 US specialty retailers, said IBM.

There are four distinct behavioural motivators driving the interest in mobile navigation, according to NAVTEQ, a global provider of digital maps, traffic and location data for in-vehicle, portable, wireless and enterprise solutions.

The Chicago-based company has revealed the results of a new global research study focused on finding the appeal of mobile navigation among consumers given their current knowledge and use of navigation applications via mobile phone.

Behavioural motivators

NAVTEQ conducted this study in nine nations including Singapore, and measured interest levels among consumers. It also found few motivating benefits of pedestrian-specific navigation applications.

According to the company, there are four distinct behavioral motivators that drive the interest in mobile navigation: commuting behaviour, transportation attitudes, mobile phone behaviour and past GPS experience.

Mobile phone users in Singapore use a range of commuting methods and people commuting by foot or public transit spend 1/3 to half of their commuting time on their mobile phone. Singaporeans, like consumers in most countries, need more transportation guidance to increase the efficiency of and confidence in their travels.

Mobile navigation demand

A mobile navigation service makes people feel more comfortable when travelling in unfamiliar cities and about 35 per cent of Singaporean respondents said it gives them more peace of mind.

Mapping directions are popular all across the world and the research findings indicate that globally, half of the respondents had already accessed mapping directions on their mobile phone while on foot.

One third of the respondents had accessed it while on public transit and three out of four in a motorised vehicle. More than 55 per cent of the respondents in Singapore had accessed mapping directions on their mobile phones while on public transit.

About two-thirds of mobile phone users demanded an integrated solution for both driving and walking. The demand for this type of integrated mapping services was higher in Singapore at 73 per cent as compared to countries like the US and UK.

"This global mobile navigation study is the first of its kind for NAVTEQ and we are very pleased with the robust insights it has enabled us to share with our customers as they consider how additional functionality may fit into their offerings," said Jeff Mize, executive vice president, NAVTEQ Sales. "Consumers are eager to experience navigation in many forms and the more detailed understanding of their motivators and desires provided by this research will help our industry to develop even more compelling products and services."

Though earnings season won't start in earnest until next month, financial reports and earnings forecasts from companies as varied as Adobe, Red Hat, Oracle and Qualcomm this week indicate that sales across a range of technology products are recovering from the Great Recession.

Oracle on Thursday reported financial results for the three-month period ending Feb. 28, saying profit was dragged down by restructuring charges incurred in the wake of the company's purchase of Sun Microsystems, which closed in January. Earnings declined by 10 percent compared to the year-earlier quarter, to US$1.2 billion.

However, new license sales, key to the growth of any software company, increased 13 percent to $1.7 billion. Total revenue was up 17 percent to $6.4 billion.

Oracle shares declined by $0.27 to $25.82 in after-market trading after the announcement, possibly because investors wanted to see stronger earnings. The bellwether software vendor's revenue increases, however, indicate that enterprise software sales are picking up.

Red Hat, reporting quarterly results on Wednesday, also had a good sales story to tell. Total revenue for the three-month period ending Feb. 28 was $195.9 million, an 18 percent increase from a year earlier. Net income for the quarter was $23.4 million, compared with $16.4 million a year earlier.

Enterprise trends bode well for the company, according to Jim Whitehurst, Red Hat's CEO. "As we look forward, we believe that we are well-positioned at the confluence of several major technology trends in the data center, including cloud computing, virtualization and middleware," Whitehurst said in the company's earnings statement.

Adobe Systems, reporting Tuesday, said revenue for its first fiscal quarter ended March 5 hit $858.7 million, compared to $786.4 million for the same quarter last year. Higher operating expenses did some damage to profit, which came in at $127.2 million compared to $156.4 million a year earlier.

However, the company's forecast for the current quarter topped analysts' expectations. Adobe expects net earnings between $0.39 and $0.44 per share on sales of $875 million to $925 million. Analysts polled by Thomson Reuters were predicting profit of $0.41 per share on sales of $860.5 million.

"Stability in our creative business, combined with strength in our Acrobat and Omniture solutions, helped drive strong financial performance in Q1," said Shantanu Narayen, Adobe's CEO, in the company's earnings report. "The market trends enabling our diverse business remain strong and we are bullish about the upcoming launches of Flash Player and Creative Suite."

Also on Tuesday, Progress Software, which specializes in business-process management software, reported an uptick in sales for its fiscal quarter ending Feb. 28. Revenue was $127.5 million, up 6 percent from the same period last year. Net income amounted to a loss of $1.0 million, compared to a profit of $3.7 million in the same quarter last year, due to restructuring charges.

Though the spotlight was on enterprise software this week, there was upbeat news form the chip arena as well. Qualcomm, which specializes in chips for mobile devices, on Wednesday updated its guidance for the quarter ending March 28. It now expects earnings to hit $0.56 to $0.58 per share on revenue of $2.55 billion to $2.65 billion. Qualcomm's prior forecast was for earnings of $0.49 per share to $0.53 per share on revenue of $2.4 billion to $2.6 billion.

The higher forecast is due to "strength in licensing revenues and favorable volume and product mix in our chipset business," said company CEO Paul Jacobs in a company statement.

Revenue for the worldwide chip industry as a whole will grow 16 percent this year, IDC analysts said at an industry event in Taipei Thursday. That forecast is lower than predictions from other market research companies, mainly because IDC is not as optimistic about consumer sales. However, IDC analyst Mario Morales acknowledged that the sector is "in a full recovery mode."