(InfoWorld) - Small and medium-size outsourcing companies in India are getting marginalized as customers look for larger outsourcers with big brands and strong financial results, according to Forrester Research.

Staff too prefer to join larger Indian outsourcing companies, Sudin Apte, Forrester's senior analyst and country head for India, said on Friday. In a?tight labor market, small and medium-size companies have to compete for staff with both large Indian outsourcers and the Indian operations of multinational services companies like IBM and Accenture.

As a result, the revenue gap is widening between India's smaller outsourcers and the top three, Tata Consultancy Services (TCS), Infosys Technologies, and Wipro.

The top three companies are expected to account for 41 percent of India's outsourcing export revenue in the Indian fiscal year to March 31. Three years ago, the same three companies accounted for 26 percent of outsourcing export revenue. The gap is likely to widen further as the revenue growth rates of the top three are almost double that of other Indian outsourcing companies, Apte said.

While the top three Indian outsourcers have annual revenue ranging from about $2 billion to $3 billion, most of the other small and medium-size companies have revenue of less than $500 million a year, except for three companies that have annual revenue of about $1 billion. The small and mid-sized companies are still growing, but revenue growth is slowing down, and new customer additions have slowed down as well, Apte said.

The small and medium-size outsourcers have to differentiate to survive. These companies generally spread their limited staff and monetary resources too thinly among different services and lines of business, according to Apte. "They usually want to be mini-TCSs or mini-Wipros," he said.

Small and medium-size companies are better off if they pick a few service lines, and vertical markets, and focus on creating domain expertise, Apte said. They also have to invest more in their marketing, and in processes offshore, besides investing in skills for negotiations, deal management, and customer engagement management, he added.

(InfoWorld) - In an apparent attempt to boost its?disappointing Web search market share, Microsoft is giving financial incentives to large enterprise customers whose employees use Microsoft's Live Search engine.

The program is being tested with "a select number of enterprise customers based on the number of Web search queries conducted by their employees via Live Search," Microsoft said in a statement provided via e-mail through the Waggener Edstrom public relations agency Thursday evening.

In exchange for their employees' Live Search usage, Microsoft is providing "service or training credits" to these enterprise customers, the company said. The program also allows the vendor to gather feedback from these users regarding Web search use in an enterprise, Microsoft said.

When asked what type of usage commitment participating companies must make, a spokesman for Microsoft declined to provide further details about the program.

This is a shrewd move by Microsoft to boost Live Search by tapping into its loyal and well established enterprise customers, but the strategy has its risks, said industry analyst Greg Sterling from Sterling Market Intelligence. Specifically, employees could resent being forced or encouraged by higher-ups to use a specific search engine, he said.

"Ultimately you have to compete at the product level. The product has to stand on its own merits. There's a fairly high risk this will not succeed at the grassroots level, because they're using a top-to-bottom approach here," Sterling said. "I'm very skeptical of the long-term prospects for success at the level of the ordinary worker."

While Live Search is a good search engine, this program hints at a mixture of anxiety and frustration on Microsoft's part, in wanting to use its wealth and muscle to improve its Web search position, Sterling said. "It's a bit of the old Microsoft behavior," he said.

News of this program comes soon after Microsoft announced another initiative to promote use of its Live family of online services, including Live Search. On Wednesday, Microsoft said computer maker Lenovo Group will pre-load Windows Live services on its ThinkPad notebooks, ThinkCentre desktops and Lenovo-branded PCs.

Despite heavy investments and efforts in recent years, Microsoft hasn't been able to come close to rival Google?in Web search. Consequently, Microsoft hasn't capitalized as much as expected on the boom in search engine advertising, upon which Google has built its increasing revenue and profit.

In January, Google captured 47.5 percent of search engine queries in the U.S., compared with 10.6 percent for Microsoft. This week, Microsoft acknowledged that its highest-ranking search executive, Christopher Payne, corporate vice president of Windows Live Search, is?leaving the company.

Microsoft confirmed the existence of the incentives-for-search program after details leaked out Thursday afternoon. The news was first reported by technology publisher and author John Battelle?in his Searchblog Web site, where he discusses Internet search issues.

"As search evolves into more of a productivity tool, and revenue sharing becomes more commonplace across the industry, we are engaging in mutually beneficial partnerships such as this and our recently announced deal with Lenovo to more easily enable customers to choose Live Search," Microsoft's statement said.

(InfoWorld) - In an apparent attempt to boost its disappointing Web search market share, Microsoft is giving financial incentives to large enterprise customers whose employees use Microsoft's Live Search engine.

The program is being tested with "a select number of enterprise customers based on the number of Web search queries conducted by their employees via Live Search," Microsoft said in a statement late?on Thursday.

[ Blog: Microsoft's gateway drug??]

In exchange for their employees' Live Search usage, Microsoft is providing "service or training credits" to these enterprise customers, the company said. The program also allows the vendor to gather feedback from these users regarding Web search use in an enterprise, Microsoft said.

When asked what type of usage commitment participating companies must make, a spokesman for Microsoft declined to provide further details about the program.

News of this program comes soon after Microsoft announced another initiative to promote use of its Live family of online services, including Live Search. On Wednesday, Microsoft said?computer maker Lenovo will pre-load Windows Live services?on its ThinkPad notebooks, ThinkCentre desktops, and Lenovo-branded PCs.

Despite heavy investments and efforts in recent years, Microsoft hasn't been able to come close to rival Google in Web search. Consequently, Microsoft hasn't capitalized as much as expected on the boom in search engine advertising, upon which Google has built its increasing revenue and profit.

In January, Google captured 47.5 percent of search engine queries in the U.S., compared with 10.6 percent for Microsoft. This week, Microsoft acknowledged that its highest-ranking search executive, Christopher Payne, corporate vice president of Windows Live Search, is leaving the company.

Microsoft confirmed the existence of the pay-for-search program after details leaked out Thursday afternoon. The news was first reported by technology publisher and author?John Battelle in his Searchblog Web site, where he discusses Internet search issues.

"As search evolves into more of a productivity tool, and revenue sharing becomes more commonplace across the industry, we are engaging in mutually beneficial partnerships such as this and our recently announced deal with Lenovo to more easily enable customers to choose Live Search," Microsoft's statement said.

(InfoWorld) - If you're paying taxes to the U.S. Internal Revenue Service there is only one URL you need to know: IRS.gov.

That's what the U.S. tax collecting department said this week in a note on its Web site, warning taxpayers of tax season scams and reminding them that Web sites like IRS.com are not affiliated with the U.S. government.

"Taxpayers may be confused by the proliferation of Internet sites that contain some form of the Internal Revenue Service name or IRS acronym with a .com, .net, .org or other designation in the address," the IRS said in its note. "Since many of these sites also bear a striking resemblance to the real IRS site, taxpayers may be misled into thinking that the site they have accessed is indeed the official IRS government site."

The IRS's warning comes just weeks after Representative Edward Markey, a Massachusetts Democrat, wrote the IRS, the U.S. Federal Trade Commission, and the Department of the Treasury complaining that the operators of the IRS.com, IRS.net and IRS.org Web sites "may be trying to pass themselves off as official IRS websites."

All of these sites contain notices on their front pages indicating that they are not affiliated with the IRS, but that was not enough for Markey. "I am not convinced that the fine-print disclaimers at the bottom of these sites stating that they are nongovernmental provide any meaningful protection to consumers," he wrote.

Markey, who is chairman of the House Subcommittee on Telecommunications and the Internet, called on the government agencies to intervene and put an end to what he called a "threat to the public interest."

IRS.com is the third result that comes up in a Google.com search for the term "IRS." The site itself appears to generate revenue by referring readers to a variety of tax-related services from companies like American Express, Visa, and 2nd Story Software, makers of TaxACT software.

The IRS note also warned of an ongoing phishing scam where consumers are told that they have qualified for a federal tax refund. They are then referred to fake IRS sites that ask them for information like Social Security and credit card numbers.

Security experts say they have yet to see these phishing scams in 2007, but they are expected to begin popping up around the April 15 U.S. tax filing deadline. Last year, about 75 such Web sites were seen, beginning on April 12, said Robin Laudanski, team lead with the Phishing Incident Reporting and Termination Squad, a volunteer-run antiphishing group.

The IRS could do more to address the cybersquatting problem, said Enrico Schaefer, an attorney with Traverse Legal PLC who specializes in domain name disputes. "This IRS press release is of zero value," he said. "When someone ends up at IRS.org, .net, and .com they think it's affiliated with the government, and they never see this. They would be much better served by simply taking control of those domains."

The IRS could do this under Internet Corporation for Assigned Names and Numbers' Uniform Domain-Name Dispute-Resolution Policy, he said.

In 2001, the?Canadian government used this procedure to claim a total of 31 Web domains, including canadiancustoms.com, thebankofcanada.com, and thegovernmentofcanada.com.

Representatives of IRS.com, IRS.org, and IRS.net could not be reached immediately for comment.

(InfoWorld) - Foundry Networks gave its IronPoint wireless line a boost yesterday, unwrapping two new infrastructure products and an update to its IronPoint Wireless Location Manager application.

The new IronPoint Mobility RS4000 Radio Switch is a thin access point (AP) that can handle a large number of clients -- up to 256 -- making it useful for environments that have many concurrent users (such as 300 students in a college lecture hall all logged on to the wireless network during class). It has two 802.11a radios and two 802.11b/g radios for service to multiple 802.11a/b/g channels.

Scalability is also the driving force behind Foundry's new AP150 access point, which supports 802.11a/b/g. The AP150 is a single-channel solution and will intelligently interact with other APs on a network to prevent interference -- eliminating the need for an admin to carefully plan out channels when deploying APs.

New updates to the IronPoint WLM (Wireless Location Manager) 2.02 focus on security. The application can now do real-time mapping and scanning of the wireless network and location tracking, helping to sniff out rogue APs. Existing APs act as a sensor network, eliminating the need for a second set of sensors to detect location information. WLM combines the network mapping with location-based access information to detect unauthorized users and send alerts to admins when problems crop up.

The main idea behind these products is to smooth out traditional bumps -- deployment difficulties, client density, and security -- in the enterprise wireless road, said Michael Hong, senior product marketing manager for Foundry's wireless solutions. Wireless deployments "are no longer one-size-fits-all," he said, because large, high-density wireless architectures need solutions that can handle not only the bandwidth demands of concurrent users but also the company's security requirements.

There's a bit of a chicken-and-egg situation when it comes to the argument about whether technology innovation drives adoption, or whether adoption drives tech innovation, added Hong.

In the case of wireless, Foundry sees wireless VoIP breaking out in the next 12 to 18 months, and "we believe wireless VoIP is going to force the hand of these enterprises" to start thinking about providing seamless, available wireless coverage across an entire campus, he said. "As you see the adoption increase, the demand will drive the new technologies."

Hong also expects to see the emergence of "stronger, beefier handsets" that can handle the stronger encryption, streaming media, and other mobile applications customers want. And of course, networks will need to be strong enough and dependable enough to instill user confidence.

"People will expect [wireless network] performance to be there all the time, the way they do with their land lines and the way they do now, to a certain extent, with cell phones," said Hong. "To do that now, a lot of the existing technology is somewhat lacking."

All three IronPoint Mobility products will be available in April. The RS400 costs $2,075 for the 180-degree directional antenna and $2,195 for the 360-degree omnidirectional antenna. The AP150 is priced at $525. WLM 2.02 is available at a price of $7,995.

(InfoWorld) - Although Microsoft may be overlooked in the SaaS (software as a service) arena, the company is a leader in this space and views subscription-based software as a way to enhance revenues, a Microsoft official said at the OpSource SaaS Summit 2007 in Monterey, Calif. on Thursday.

During a keynote presentation and a subsequent interview, Cliff Reeves, general manager of the emerging business team at Microsoft, stressed that the desktop and server software giant is a SaaS proponent. Between applications like the company's Office Live platform, hosted Exchange services, and its upcoming Dynamics CRM online package, Microsoft boasts a large contingent of products delivered via SaaS, Reeves said.

The company is "more significant than most of the other players" in the SaaS space, Reeves said. Revenues can increase with SaaS, Reeves noted, saying, "It's tremendously revenue-enhancing for us."

"The notion of delivering software that you pay for when you use it is, in the long run, I think [a way to deliver] revenue streams," said Reeves. He cited as an example of the services model cell phone subscribers who pay their bill based on what they use.

Another opportunity for Microsoft is developing offline clients for SaaS applications, Reeves said.

SaaS is evolving to entail partnering on the provision of services. Reeves cited partnerships such as one between Rearden Commerce, which provides online procurement services, and American Express Business Travel. American Express is providing analytics services as part of the arrangement, said Reeves.

The SaaS conference is taking place right as Cisco Systems announced on Thursday its planned $3.2 billion acquisition of WebEx, which provides online collaboration services via a SaaS model. A WebEx executive had been scheduled to appear on a panel at the conference but was not present.

SaaS is more than just the software being delivered to the customer, said Treb Ryan, CEO of OpSource, which provides hosting and other services for software companies looking to deliver their products via SaaS

A SaaS company needs to think like a Web company instead of a software company, Ryan said. A Web company uses business practices like having more iterative development and focusing on marketing and attracting users, Ryan said.

"Good SaaS companies make it very easy for people to come in and try out their software ... and then focus on monetizing those users," Ryan said.

SaaS helps users with regulatory compliance because the software already is certified for regulations like Sarbanes-Oxley and HIPAA, he said. Ryan also noted the concept of SaaS 2.0, in which SaaS systems can link to other services over the Web to provide such critical capabilities as billing and document management. This allows the SaaS vendor to focus on its own specialty.

On-demand, SaaS is more than just hosting of software, said Ken Rudin, CEO and co-founder of LucidEra, which offers business intelligence services via SaaS. Hosting is about moving software from a customer premise to the software provider's, while on-demand software includes simplicities in setup, usage, and the ability to buy, Rudin said. Rudin served on a panel session about whether SaaS companies are software companies or Web companies.

Pondering the question of which software products might best be delivered as a service, Rudin said, "I ask, which products wouldn’t be delivered better as a service?"

But panelist Mark Binford, business development manager at BMC, dismissed this notion.

"I don't fundamentally agree that every solution is best delivered as SaaS," Binford said.

"On-premise software [and] packaged products are going to be around much longer than any of our careers are going to be around, in my prediction," said Binford. BMC is providing business service management and sees SaaS as a tool to help serve SMBs.

SaaS presents a challenge for the technology sales channel, Rudin said. The channel is used to selling software and making margins, he said. But channel vendors in a SaaS world must switch their focus from selling licenses to providing total contract value, Rudin said. They need to offer value-added consulting services, he said.

SEE ALSO:

(InfoWorld) - Skype has released a new version of its Internet telephony and instant messaging software that adds a feature to let users create business reviews and another one to sell expertise as the eBay subsidiary promotes interaction among its users.

Skype 3.1, available for Windows, features SkypeFind, designed to let Skype users post and find reviews of business establishments. It also introduces a test version of Skype Prime, a marketplace where Skype users can market knowledge and advice to others.

The company unveiled SkypeFind last month in a beta version of Skype 3.1. Already, SkypeFind contains around 4,500 listings from 124 countries, and Skype expects it to have over a million listings by year's end.

Meanwhile, Skype Prime made its debut last week in another prerelease version of Skype 3.1 as an expertise marketplace open to both individuals and businesses interested in selling their advice. Unlike SkypeFind and Skype 3.1, Skype Prime is still considered to be in a beta, or test, phase.

With these community-oriented features, Skype wants to deepen the engagement of its 171 million registered users and extend the scope of the product beyond its core telephony and IM functionality.

Allowing end users to participate in online services and share material including photos, videos, anecdotes, and opinions is a cornerstone of the Web 2.0 era and has become a principle that most providers of Internet services are embracing.

User participation is the fuel powering the intense popularity of video sharing sites like YouTube, photo sharing sites like Flickr, and social networking sites like MySpace.

The Skype 3.1 page contains more information about the new and enhanced features as well as downloading instructions.

(InfoWorld) - SAP is demonstrating a beta version of its new hosted midmarket application to select groups at the Cebit trade show in Hanover, Germany.

The application, known internally as A1S, is currently being tested by around 150 customers, said SAP CEO Henning Kagermann following a demonstration of the software Thursday.

No firm date has been set for a commercial launch, but general availability is expected in the second half of this year, according to Kagermann.

"This is a completely new model for us," Kagermann said. "We have to ensure that not only the product but also the service are tops."

A1S will target midmarket customers who seek an inexpensive, easy-to-deploy, low-risk suite of business applications, including ERP, CRM,?and SCM. The hosted application will be available as a monthly subscription. It will give smaller, cost-sensitive companies the flexibility to set up and test the software on their own before deciding to make a purchase, using a "try, run, and adapt" model.

Users who see the browser-based application for the first time will notice an interface that blends in with "the Windows environment," Kagermann said.

"A huge effort" went into designing a simple, intuitive, and uniform user interface, said SAP board member Peter Zencke, who heads the A1S product development team.

A "help" icon appears on every screen. When clicked, users are shown a list of options, including "frequently asked questions" or a video link if they want to see how to perform a task.

For technical problems, users can click another icon and send an e-mail to the SAP service team, which will be able to provide support.

The application conducts a dialog with users, asking them what type of business tasks they need to perform and how they would like to manage them, offering examples in simple language.

Some businesses will be able to set up A1S on their own, others my need some initial coaching, according to Kagermann.

"We expect a new breed of consultant to help some businesses get started -- but only to get started," Kagermann said. "Once businesses have used the application, they'll get the hang of it pretty quickly."

Kagermann expects even some senior managers of companies, who typically don't spend much time with software issues, to show an interest and master many functions on their own.

Traditionally, the software industry has developed applications and businesses have had to adapt their processes, according to Kagermann. "Now with A1S, users define their software requirements," he said.

The new hosted midmarket application, which runs over the NetWeaver middleware platform, is designed to integrate with mySAP ERP business suite. Kagermann expects subsidiaries of large enterprises to be interested in the product.

Could users of SAP's All-in-One licensed midmarket offering, which is a slimmed down version of mySAP ERP, be attracted to the new hosted application to save money?

"Let me make a comparison to the car industry," Kagermann said. "You can buy a basic car that transports you from point A to point B. But if you want to have other special features, you pay for them. That's the difference between All-in-One and A1S."

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(InfoWorld) - Security vendor Trend Micro will release a new version of its mobile security software for Nokia smartphones next month that adds a built-in firewall and improves malware detection, the company said Thursday at Cebit in Hanover, Germany.

The product, Trend Micro Mobile Security 3.0 for Symbian S60 3rd Edition, is compatible with all Nokia E-series devices and many N-series ones. The new software is aimed at business customers whose employees travel and use their devices with different mobile operators and Wi-Fi and Bluetooth connections, Trend Micro said.

Security vendors are predicting a rise in the number of hacking attacks directed at mobile devices as more are used. Hackers have written malicious software for some mobile OSes, but their impact has been small compared to attacks on desktop computers.

Trend Micro's version of the software for Microsoft's Windows Mobile 5.0 OS has been available since November. The cost is the same as the Windows version, starting at $34.95 per device, the company said.

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(InfoWorld) - Another role could soon be added to the many already performed by home gateway devices: identifying video pirates.

Home gateway manufacturer Thomson SA plans to incorporate video watermarking technology, which it also developed, into future STBs (set-top boxes) and other video devices. The watermarks, unique to each device, will make it possible for investigators to identify the source of pirated videos.

By letting consumers know the watermarks are there, even if they can't see them, Thomson hopes to discourage piracy without putting up obstacles to activities widely considered fair use, such as copying video for use on another device in the home or while traveling to work.

"The idea is to slow down piracy without limiting the use of the consumer. They should not be upset about this unless they are widely redistributing content," said Pascal Marie, responsible for strategic marketing at the company's content security division.

Thomson developed the technology, NexGuard, to identify individual copies of the films distributed digitally to cinemas or on DVD as preview copies for reviewers and awards juries. In the past, pirated copies of films available over the Internet or in street markets have been traced back to such sources.

Now, the availability of high-definition video-on-demand services is multiplying the points at which high-quality video can be pirated.

Thomson's plan is to watermark video with a unique code before it leaves the home gateway or STB. To do that, it is working with semiconductor manufacturer STMicroelectronics to incorporate NexGuard into digital video chips. STMicro has already incorporated NexGuard into its 7100 series of chips for STBs. NexGuard can mark video encoded in MPEG-2, MPEG-4 AVC (H.264), and VC-1 formats.

At Cebit in Hanover, Germany, this week, Thomson is demonstrating how the chips might be used, and at the National Association of Broadcasters show in Las Vegas next month, it will show prototype STBs incorporating the technology.

Also next month, the company will unveil system capable of directly watermarking content produced with Windows Media Video 9 codecs, Marie said. "We are able to process directly this format without the need to decode it, watermark it, and re-encode it."

Thomson sells its gateways and STBs to network operators -- one of its biggest customers is Orange SA, the Internet access subsidiary of France T?l?com, which packages the devices as the LiveBox, an all-in-one terminal for telephony, television, Wi-Fi, and Internet access.

Thomson will apply the watermarking at two levels, Marie said. One watermark will identify the network operator distributing the content, while a second, carrying 40 bits of information, will identify the individual device, he said.

The watermarks are robust, Marie said. Films projected digitally and captured by a camcorder can still be traced, although "we need a longer period of detection to identify it," he said. Clips recorded directly from an STB, re-encoded at a lower bit rate, and then posted to an online video sharing service might be identifiable after just a few seconds, he said.

(InfoWorld) - One of the best known computer brands of the 1980s, Commodore, is back at Cebit 2007.

The name is most commonly associated with the Commodore 64 computer, which hit the market in 1982 and went on to become the best-selling computer of all time, according to some estimates. That machine was on show at Cebit, but these days, the name is being attached to a new generation of gaming PCs.

[Talkback:?Has the time come for Commodore's return? Share your memories of the legendary personal computer brand.]

"That's really where the essence of the Commodore brand is, and there's huge potential, and that's the idea now," said Bala Keilman, CEO of Commodore Gaming. "At Commodore, we feel the time is right now. Gaming is such a mass phenomenon worldwide, and the variety of consumers that it talks to is really a broad demographic. The Commodore brand is really a good brand to speak to consumers on that level."

There will be four basic models of PC available, and consumers will be able to pick between multiple skins. Additional skins to suit almost any gaming taste will also be available via Commodore Gaming's Web site.

The machines will also be preloaded with a Commodore 64 emulator and more than 50 classic games.

Commodore will begin selling Intel-based gaming PCs from next month.?They'll be available online first and then in shops in Europe in May. Then the company will look further afield.

"It's from America, huge in America, a lot of fans there, so that's where we want to go very soon afterward. We're not holding back, we're already preparing plans for that, and we'll see," Keilman said. "Hopefully, it will be coming around summertime. I don't want to preempt anything, but the U.S. will be the next big focus, and then we'll see."

(InfoWorld) - A new Google gadget lets users embed the company's Talk instant-messaging service in Web pages, expanding the reach of the product, which was originally introduced as a downloadable PC application.

The Google Talk Gadget, released Wednesday, displays a Flash-based interface on Web pages for users to exchange text messages with people on their Google Talk contacts list. Unlike the Talk PC application, the gadget requires no software download. It loads automatically with the Web page it's on.

By inserting a line of code, the gadget can be added to Web pages, including Google's Personalized Home Page, a customized Web portal users can tailor with Google and third-party online services and information sources. For the gadget to work, users must have version 8 or above of Adobe's Flash Player.

In addition to text messaging, people can use the gadget interface to initiate a voice chat, but the Talk application is needed to host the conversation, said Mike Jazayeri, Google Talk product manager. However, Google hopes to extend this functionality so that voice chats can happen within the gadget interface, he said.

The gadget has some features the PC application lacks, like the ability to organize multiple text chats with tabs and to share and watch photos and videos within the Talk interface from Google's Picasa photo manager and YouTube video site, he said. When asked if the Talk application will gain these features, he declined to comment.

Conversely, the gadget lacks some of the PC application's features, including the ability to transfer files and the voicemail functionality.

This isn't the first time Talk has been available in a format other than the downloadable application's interface. For example, last year, Google integrated Talk with the Gmail Webmail service. Likewise, thanks to Talk's open architecture, third-party developers have created mobile, Web, and PC interfaces for the instant-messaging service.

Like most consumer instant-messaging services, Google Talk is free. It is growing in popularity, although it hasn't caught up with competitors like AOL's AIM, Microsoft's Live Messenger and Yahoo's Yahoo Messenger, Radicati Group?analyst Matthew Anderson said.

(InfoWorld) - Document and mail management vendor Pitney Bowes said Thursday it plans to acquire MapInfo, a provider of location intelligence software and services, for about $408 million in cash.

Pitney Bowes plans to use the purchase to expand its location intelligence business, which developed nearly three years ago with its acquisition of Group1 Software, said Matt Broder, a spokesman for the company. The segment is a natural extension of the software, services, and hardware Pitney Bowes already offers to manage mail and documents, he said.

"You can build different value chains -- one is around the mailstream and documents -- knowing the physical location of an address," he said. "That's what MapInfo has done a great job at exploiting, and we think it has tremendous potential to grow [at Pitney Bowes] in a major way."

In the next seven business days, Pitney Bowes will begin a tender offer at $20.25 per share in cash for the outstanding common shares of MapInfo, the company said. Pitney Bowes expects the deal, pending regulatory approvals, to close in the second quarter.

MapInfo provides software and services to help companies analyze various business assets and other data and their relationships to geography in an effort to make business decisions. For example, banks use MapInfo's products to decide the best places to put ATMs, while retail outlets use the vendor's offerings to decide where to open new stores. Eighty percent of business data used in key decision-making contains a location component, according to MapInfo, and the company helps businesses tap into this information.

MapInfo earned $165 million in revenue in fiscal year 2006, and more than 7,000 organizations worldwide use its products. In addition to its Troy, New York?office, the company has locations in the U.S., U.K., Canada, Europe, Australia, and Asia.

Pitney Bowes expects the acquisition to reduce its earnings per share by $.04 in 2007. Within 18 months, however, the company can cut $10 million to $15 million from expenses by reducing administrative infrastructure and increasing its marketing leverage, it said.

Pitney Bowes, a $5.7 billion company, serves more than 2 million businesses in 30 countries.

(InfoWorld) - In an open letter to the media and customers, BenQ Chairman K.Y. Lee Thursday defended his company over allegations of insider stock trading and said its CFO is innocent.

The letter comes just two days after officers from the Taoyuan District Prosecutor's Office raided BenQ offices and detained three executives over alleged insider stock trading and irregularities in the payment of stock options to overseas employees.

Two of the executives have been released on bail, but the third, CFO Eric Yu, 51, remains in custody, a BenQ representative confirmed.

"Contrary to media speculation that BenQ might be involved in insider trading or irregularities involved in the selling/buying of stock, this speculation is false," Lee wrote in the letter. "Negative media stories about Mr. Eric Yu are baseless and untrue...Eric has selflessly served BenQ for many years, and I believe that his name will be cleared as soon as possible."

The Taoyuan District Prosecutor's office alleges that some company executives sold off shares of stock ahead of announcing a loss in the first quarter of last year caused by troubles related to its takeover of BenQ Mobile OHG, the German mobile phone division it obtained from Siemens AG in 2005, as well as stock options problems.

Lee said the allegations have affected the company's longstanding reputation and raised concerns among customers, employees, and the public, therefore he wrote the letter to clarify the allegations and media speculation.

"While these are serious allegations, we respect the legal process and will cooperate fully with the ongoing investigation. We trust that the results of the investigation will vindicate BenQ of any wrongdoing," Lee said.

The allegations caused BenQ shares to drop 6.8 percent to end Wednesday at NT$13.05 (US$0.40) on the Taiwan Stock Exchange. But on Thursday, its shares rebounded, gaining 6.9 percent to end at NT$13.95.

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(InfoWorld) - Cisco announced?on Thursday plans to acquire?online collaboration service WebEx for $3.2 billion, giving the network equipment giant a foothold in the software-as-a-service market.

WebEx, the popular online collaboration service, gives Cisco access to small and midsize companies and puts Cisco in competition with Microsoft's LiveMeeting collaboration service. The deal is expected to close in the fourth quarter of Cisco's 2007 fiscal year. The deal is Cisco's largest since its acquisition of cable TV equipment maker Scientific-Atlanta in 2005, for $6.9 billion.

"With the acquisition of WebEx, Cisco is continuing to invest in intelligent network technology and innovation and to use the network as a platform for the next-generation explosion of business and consumer applications," said Cisco Chief Development Officer Charlie Giancarlo during a conference call with investors, analysts and media.

"[WebEx's] network-based technology is a natural extension of Cisco's vision for unified communications and collaboration."

Buying WebEx now makes Cisco a software-as-a-service provider for the first time. Cisco offers similar functionality to WebEx through its MeetingPlace and Unified Communications products, but these offerings are geared to large corporations who can afford to build internal collaboration systems.

"It's about time" Cisco made this kind of move, said Zeus Kerravala, an analyst with the Yankee Group. "This is huge for Cisco.... Collaboration needs to be delivered in a number of ways. Not everyone wants to buy their own hardware and software to do it. If you want to sell collaboration applications to the small and midsize market, it's much easier to do in a hosted model."

Because WebEx is a Web-based service, it lets users set up meetings more easily with outside parties, which is harder to do with internally built collaboration systems, Kerravala says.

"Collaboration has been a big push for Cisco in the last 12 to 18 months," said Scott Sinclair, an analyst with Technology Business Research.

Acquiring WebEx should help Cisco to expand from its usual territory in the enterprise market into the consumer and small and medium-sized business markets, Sinclair said. The merger plays into Cisco's recent moves to build a greater holding of social-networking tools, such as the Tribe.net deal, and a similar?acquisition in February of Five Across.

The boards of directors at both companies have approved the deal, so the merger now has to clear antitrust regulations in the U.S. and abroad. Cisco said it expects the deal to close by the end of the fourth quarter.

The deal is the third acquisition in recent weeks for Cisco, which announced March 13 it would buy the file storage management company NeoPath Networks, and said March 5 it had?purchased a share in Utah Street Networks, the operator of the social-networking site Tribe.net. Both companies were privately held, and Cisco did not announce the terms of the deals.

WebEx, based in Santa Clara, Calif., has 2,200 employees. It was founded in 1995 and went public in July 2000. The company reported $380 million in revenue in 2006.

WebEx has more than?2.2 million registered users in 85 countries, the company says. WebEx CEO Subrah Iyar and the WebEx business will continue to operate normally, and will report directly to Cisco's Giancarlo.

Ben Ames of the IDG News Service contributed to this report.

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(InfoWorld) - International roaming fees within the European Union will be regulated before mobile phone users set off on their summer holidays, the European Commissioner for Information Society and Media, Viviane Reding, said Thursday.

Consumers will pay a maximum of ?0.50 (US$0.66) per minute, excluding value-added tax, once regulations are introduced, she said.

Reding expects the necessary regulations, which will affect wholesale and retail charges, to be in place by the end of June, so "there will be no last summer for operators, no last ?3 billion," she said, following a meeting of the telecommunications ministers of the European Union's member states.

The figure of ?0.50 will disappoint European consumer groups, which last month called for charges to be limited to ?0.33 per minute for calls made from one European Union country to another while roaming. At the end of 2006, charges averaged ?0.62 per minute, according to figures published in February by the GSM Association, which represents mobile phone operators.

There are three kinds of roaming charges: the cost to receive a call while roaming, the cost to make a call within the country being visited, and the cost to make a call back home or to a third country. For roaming within the European Union, consumer groups including BEUC, the European Consumers' Organization, called in February for those charges to be limited to ?0.16, ?0.25 and ?0.33 per minute, respectively.

Reding would not address those details, talking only of a maximum of ?0.50. She did say that fee could be stricter, as Members of the European Parliament (MEPs), who must also agree to the proposals, are calling for a ceiling of ?0.42 per minute.

The regulations will take effect as soon as they have been agreed by the member states' telecommunications ministers and by the MEPs, without the need for additional national legislation, she said. Those regulations are now on the fast track to be agreed by the end of June, before the end of the German presidency of the E.U.

The telecommunications ministers met informally on the fringes of the Cebit trade show in Hanover, Germany, where they also discussed the future of mobile television services in Europe.

Ministers are convinced that there will be demand for such services, with up to 100 million subscribers by 2010, said German Federal Minister of Economics and Technology Michael Glos.

That level of demand will create more technical jobs in Europe, he said, but for the market to develop, "the first step is coming up with more consistent regulations across Europe," he said.

REFERENCES:
Roaming fee cuts are a smokescreen, consumer group says, Feb. 21, 2007

(InfoWorld) - The same day?HP's former Chairman avoided jail time?in the?Hewlett-Packard spying cases, shareholders met, but rejected a reform proposal that arose from the scandal.

Shareholders rejected a proposal at their annual meeting Wednesday that would allow for shareholders to nominate candidates for HP's board.

Shareholders asked several questions of HP executives at their meeting held in Santa Clara, California, one of them criticizing the "country club" atmosphere of the board. A few miles away in a courtroom in San Jose, a state judge had just dismissed felony charges against ousted HP Chairman Patricia Dunn and three others implicated in the?HP pretexting scandal.

They were charged for their role in a scheme uncovered last year in which phone records of HP directors and reporters were obtained under false pretenses to find out which directors were leaking news of board deliberations to the media.

At the shareholder meeting, HP President, Chairman and CEO Mark Hurd acknowledged the controversy.

"No one is proud of what happened here last year and we will work to create a board you can be as proud of as you are proud of the company," Hurd said.

The scandal prompted the?resignation of Dunn?and two other directors: George Keyworth, who was identified by the internal investigation as the one who leaked news to a reporter; and Thomas Perkins, a wealthy venture capitalist who quit in protest over the pretexting tactics and the treatment of Keyworth, a board colleague.

The reform proposal was presented by representatives of several public employee pension programs in the U.S. that are institutional shareholders of HP stock.

They argued in a statement included in HP's proxy document that shareholders have no meaningful way to nominate directors. Often, nominees from shareholders are screened by a nominating committee, but if they're rejected, shareholders' only recourse is to launch an expensive dissident election campaign. The resolution called for shareholders to directly nominate board candidates and for those nominees to be placed on the ballot.

Management opposed the idea. In a letter to shareholders March 7, Hurd argued that nominations from the shareholders would result in the nomination of "special interest candidates" with an agenda that may conflict with the company's best interests. Hurd also said the matter would be better addressed by the U.S. Securities and Exchange Commission so it would affect all public companies in the U.S.

Hurd alluded to the scandal in his letter: "While HP has faced a number of serious and very public challenges over the past year, the HP board already has acted decisively to address those challenges. The directors involved have resigned, and we believe that the board is now functioning effectively."

Shareholders also failed to pass a resolution to require HP to separate the positions of chairman and CEO. Hurd was hired in 2005 as CEO, but was not given the chairmanship, reversing an arrangement under predecessor Carly Fiorina. But Hurd ascended to the chairmanship anyway in September 2006 upon Dunn's resignation.

Shareholders approved a resolution tying executive pay more closely to performance. Management opposed that resolution but said it "will review its policy."

(InfoWorld) - AOL?has withdrawn its?offer to buy TradeDoubler?after failing to get enough of the online marketer's shareholders to approve the acquisition.

In mid-January, the Time Warner subsidiary announced that it offered $900 million for the Swedish provider of online marketing sales and services. The combination would complement AOL's existing European online advertising effort, which is built upon an earlier acquisition of Advertising.com, and allow it to offer advertisers a wider range of services, AOL said.

At the time of the announcement, AOL had garnered the approval of 20 percent of TradeDoubler's shares. In addition, TradeDoubler's board recommended the offer.

In late February, after winning approval from all necessary competition authorities,?AOL extended its offer?until March 14.

But on Wednesday, AOL said it had received acceptances from the owners of only "a limited number of shares" and since it was clear that it wouldn't reach the 90 percent threshold it set as a contingency of the deal, the company decided to withdraw the offer.

The TradeDoubler bid followed a change of strategy at AOL. The portal operator recently sold its ISP businesses in Europe and began offering its content services free of charge to users. AOL is also offering services, such as online advertising sales management and the supply of content, to Internet service providers for use in their portals. Through Advertising.com, it also offers search engine management and lead generation services.

TradeDoubler sells services including hosted tools that make it easier for customers to create, manage, analyze and optimize online marketing and sales activity.

While TradeDoubler said AOL's offer represented a 20 percent premium on the value of shares, some shareholders may be looking for even more since the company recently recorded significant growth and expects to do the same in coming years. TradeDoubler revenues in 2006 increased by 61 percent compared to the previous year and the company expects 40 percent to 50 percent growth this year.

(InfoWorld) - Google will start making its records about users' searches anonymous after 18 to 24 months under a policy announced Wednesday.

Until now, the dominant search company has indefinitely retained a log of every search, with identifiers that can associate it with a particular computer. The new policy, to be implemented within the next year, is intended to better protect users' privacy, two executives wrote in a Google Blog entry posted Wednesday.

Privacy advocates have raised alarms over search providers and other Internet companies retaining information about users' activities because that data could be subpoenaed by law enforcement, be lost by the provider, or fall into the hands of hackers.

Under the new policy, unless Google is legally required to retain them longer, server logs will still be retained but will be "anonymized" after 18 to 24 months so that they can't be identified with individual users, according to the blog entry. It was written by Peter Fleischer, Google's privacy counsel for Europe, and Nicole Wong, the company's deputy general counsel. Engineers are working out the technical details now, they wrote.

Google keeps the server logs so it can improve services and protect them from abuse and security threats, the company said. Each search record includes the query, IP (Internet Protocol) addresses and cookie details.

The Mountain View, California, company instigated the move on its own after talking to "leading privacy stakeholders" in Europe and the U.S., the blog entry said. Data retention laws may force the company to retain logs for a longer time, it said.

Two high-tech civil rights groups on Wednesday called the move a good first step but said more work needs to be done.

"This is a big step in the right direction," said Ari Schwartz, deputy director of the Center for Democracy and Technology, in a written statement.

"Keeping the data around forever significantly compromises (Google's) users' privacy," said Kevin Bankston,?a staff attorney at the Electronic Frontier Foundation, in San Francisco. The U.S. government probably has subpoenaed search log data on individuals in criminal investigations, a move it wouldn't necessarily have to reveal, he said. Another danger is that an angry spouse or business partner could obtain the information in the course of a lawsuit, Bankston said.

"We'd love to see a shorter retention period and more complete anonymization," Bankston said. Google should also extend the policy to its other products, which include Gmail, Google Calendar, Google Maps, and other Web-based tools.

Other major search providers, such as Yahoo?and Microsoft's MSN, haven't even revealed as much as Google has about what they do with server logs, Bankston said.

AOL?last year posted on its research Web site about 20 million?search records from about 658,000 of its members. Each user was identified by a unique number. The move created a scandal that toppled AOL's chief technology officer and two other employees.?Users later sued, asking a court to order the company to stop saving the records.

Bankston believes Google has a better method of anonymizing records but said AOL does so after just 30 days. Still, Google could adopt a better technique, such as removing the associated IP address altogether, he said.

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(InfoWorld) - Microsoft demonstrated Dynamics Live CRM, its planned hosted customer relationship management software, during the closing Wednesday keynote given by CEO Steve Ballmer at its Convergence show in San Diego.

"I'm really pumped up," said an energized Ballmer, predicting a "real snowball of an effect coming on" in relationship to Microsoft's entire Dynamics business which is gradually moving up into the enterprise applications space occupied by Oracle and SAP.

CRM Live is one of three deployment options in the vendor's?upcoming Titan release of its CRM software. Titan will be the first Microsoft CRM release based on a multi-tenant architecture, using a single code base to support three types of usage -- CRM Live, an on-premise version of the CRM application and a partner-hosted release. All three deployment options share a common code base.

CRM Live will be another member of the vendor's growing Live software-as-a-service (SaaS) product family, joining Windows Live and Office Live. "Live is our platform in the clouds," Ballmer said, adding that more of Dynamics will be featured in the future along with Live Search, Mail, Xbox Live, and Mobile. "We're pushing the transformation to SaaS as fast as anyone around," he said.

Brad Wilson, general manager of Microsoft Dynamics CRM, demonstrated Titan pre-release code running on Windows Live data centers in a browser and as an Outlook native SaaS application. He showed a mash-up between CRM Live and a mapping application.

Already in the hands of several hundred partners, CRM Live will begin being offered to customers initially in the U.S. and Canada in the third quarter of this year. The other two Titan deployment offerings will become available around 90 days later, Wilson said.

Pricing for the service and details on when CRM Live will be offered outside North America won't appear until around the time of launch of the service, Wilson said.

CRM is "the most enterprise-focused" offering in the Dynamics range so far, with some user installations ranging between 3,000 and 10,000 seats, Wilson said. Ballmer said the sweet spot for Dynamics ERP and CRM will be "small enterprises and down."

Ballmer reiterated Microsoft's commitment to maintaining its four Dynamics ERP families -- NAV, AX, GP, and SL. "We take a long-term approach to all we do," he said. "We're just going to keep investing, investing, investing and investing."

Microsoft's next step will be to continue to evolve its extensibility model for Dynamics so that when the vendor writes new functionality, it'll be able to plug it into Dynamics SL, GP, AX, NAV, Ballmer said.

The keynote included a concept demonstration of a manufacturing application running on a smart table, which was controlled by touch and gestures and searched via voice. The technologies on show will appear in various products in future, with the smart surface debuting in entertainment devices, Ballmer said.

In a question-and-answer session at the end of his keynote, Ballmer agreed with a questioner that Microsoft's SharePoint portal could be seen as "the definitive OS or platform for that middle tier of capability that brings the world of personal productivity [Office] and line-of-business applications [Dynamics] together."

In response to another questioner, he admitted that Microsoft doesn't always get it right in balancing how much it charges for its software and the complexity of its licensing. "I'm sorry if we did some things in Vista that increased the frustration," he said.

(InfoWorld) - EMC's RSA division plans to launch a new service next month that will help financial institutions take down Web sites associated with malicious Trojan Horse software.