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To: Lizzie Tudor who wrote (15787)	1/17/2003 4:45:47 PM
From: stockman_scott	Respond to of 57684

CEOs see no recovery in 2003 January 17, 2003 (Reuters) — After two years of hoping in vain for a recovery, which many said was only six months away, companies are now writing off all of 2003 and focusing on 2004 for any improvements in their markets. Two weeks into the new year, key European and U.S. companies have toned down their hopes for economic bloom. Slow consumer spending, a possible war in Iraq and the resulting high oil prices could further dampen business activity. In the past week, airlines, technology and chemicals companies, banks and retailers have all said they are hesitant to predict the upturn for this year, opting for caution after misreading their markets during the past two years. The chief executive of telecoms equipment giant Cisco, John Chambers, started off the miscalculation season in January 2001, when he said he was confident the downturn could be over in six months even though his clients' businesses had hit a brick wall. ``I believe we're probably talking a two-quarter phenomenon, although it could last longer. I'm talking the first half of this year for most companies in the U.S.,'' Chambers said then in Davos, Switzerland, where many of the world's business leaders will gather again next week to discuss the future. DAVOS MANTRA Chambers wasn't alone with his turnaround prediction in early 2001. A second-half recovery became a mantra in the cramped corridors of the conference at the Swiss ski resort. Now, however, few CEOs express such bold dreams. Gerco Goote, head of equity research at ABN Amro Asset Management in Amsterdam which oversees 30 billion euros ($31.96 billion), said firms are clearly afraid to stick their neck out. ``The word 'caution' is on every page of our research. Companies might be overdoing it, but nobody knows,'' he said. Bank of America Chief Financial Officer James Hance said this week he felt positive about consumer and mid-markets, but was ``not comfortable with some segments of the large corporate book.'' He expects quarterly charges to remain high in 2003. Hopes for a recovery are also slim in the airline industry, where U.S. players are experiencing their worst ever crisis following the September 11, 2001 attacks on the United States. U.S. airlines lost between $8 billion and $10 billion in 2002. German airline Lufthansa abandoned its 2003 operating-profit target last week, following in the footsteps of Dutch carrier KLM, while Delta Air, the third largest U.S. airline, expects to book another loss in 2003. Investors are a bit miffed about so much doom and gloom. Florian van Laar, asset manager at Amsterdam-based Eureffect: ``I'm surprised when I hear people writing off all of 2003. It's like when you start a 500 kilometre trek and say after 100 metres: 'This trip ain't worth it'.'' Two weeks into the year, it's really impossible to tell what's going to happen at the end of the year, he added. U.S. chemicals giant DuPont said on Wednesday it was struggling with anaemic demand and higher oil prices, up as a result of war looming in the Middle East. Chief Executive Cees van der Lede of DuPont's smaller Dutch rival Akzo Nobel said in his New Year's speech there was no reason to expect that 2003 would be any easier than 2002. British electronics retailer Dixons said last week that pressure on profit margins would continue and like-for-like sales would remain static for the time being. The firm was hit by sluggish Christmas sales due to the economic uncertainty. ``A poor December has rocked management's optimistic assumption that the product cycle is more important than the consumer cycle,'' investment bank WestLB Panmure said. CHIPS DOWN The technology sector remains particularly weak after it was badly bruised in the last two years as companies — telecoms firms in particular — spent less on computers, software and IT services after the Internet bubble burst in 2000. U.S. chip behemoth Intel sees little improvement in its markets for the first six months, and cut its 2003 investment budget to below $3.9 billion from $4.7 billion. Dutch chip equipment maker ASML said on Thursday a recovery in the battered sector, in its worst downturn ever, could happen in the second half, but the company declined to give a forecast and showed a thin order backlog entering 2003. The same day, U.S. computer maker Sun Microsystems failed to reiterate a November target of turning a profit by the end of its fiscal year in June, blaming a murky economy. France's Alcatel's Chief Executive Serge Tchuruk this week forecast another down year in the telecoms equipment market after a 50 percent fall over the last two years. Software makers see no recovery either. U.S.-based Microsoft said sales for the fiscal year ending in June would fall short of expectations. ``Our view continues to be that there has not been much change in the health of the PC ecosystem where things have continued to be soft,'' said Chief Financial Officer John Connors. U.S.-based IBM, which has its fingers in virtually all technology pies, said on Thursday it thought the environment had begun to stabilize. But the company had already said this last April, when CFO John Joyce announced that IBM could achieve 2002 earnings of $4.16 a share on flat revenues of $83 billion. On Thursday the computer services-to-chip giant reported 2002 sales of $81.2 billion and earnings of $3.07 per share, well below its April hopes, even if integration and restructuring charges of $0.88 per share would be added.

To: Lizzie Tudor who wrote (15787)	1/17/2003 4:50:31 PM
From: stockman_scott	Respond to of 57684

Dancing around Web services By Paul Festa Staff Writer, CNET News.com January 17, 2003, 4:00 AM PT Disagreement over intellectual property issues could derail efforts to create new Web services standards. The World Wide Web Consortium (W3C) this week established a working group to define and establish rules for Web services choreography, which seeks to map out how Web services interact to form business transactions. Web services is an increasingly popular way to build and link business software. The W3C hopes that by establishing a standardized language for choreography, businesses will be able to more quickly build complex applications that involve interlinking several Web services. Without a common language for choreography, the world of Web services risks balkanization, the W3C warns. "There's this division of labor that's emerging between those who can develop (Web) services and those that can put them together to make an application," said Eric Newcomer, chief technology officer at Iona Technologies and a member of the W3C's Web Services Architecture committee. "Choreography (is) about getting business analysts to put Web services together to build an application." But questions about the intentions of some high-profile W3C members--Microsoft, IBM and BEA Systems--threaten to derail the possibility of an industrywide standard, said analysts and other observers. Specifically, some W3C members, notably Microsoft, favor a plan that allows the collection of royalties for the use of intellectual property. "The W3C is trying to take a hard stand on royalties and patents," Newcomer said. "Microsoft is trying to move to a royalty-based model for the specification. This stalemate between Microsoft and the W3C is about the patent and royalties question." The newly chartered Web Services Choreography Working Group has its work cut out for it. While standards organizations, including the W3C and the Organization for the Advancement of Structured Information Standards (OASIS), have defined standard specifications for various components of Web services architecture, the means for combining and ordering those processes have yet to be ironed out. "Some observers predict that if no steps are taken to develop a choreography specification in a vendor-neutral forum, the Web services marketplace may be divided into a number of non-interoperable subnetworks," states the new working group's charter. "A vendor-neutral choreography specification which commands consensus and wide support, on the other hand, can make it much easier and cheaper to create composite Web services which integrate services from multiple vendors." Vendor-neutral, as always in the standards process, is easier said than done. Among the many technologies considered relevant to Web services choreography, two have been embraced by the W3C: Hewlett-Packard's Web Services Conversation Language (WSCL, pronounced "whiskle"), and Web Service Choreography Interface (WSCI, pronounced "whiskey"), submitted by BEA, Intalio, SAP and Sun Microsystems. Other choreography languages potentially vying for inclusion under the W3C's imprimatur include the Business Process Modeling Language (BPML), ebXML's Business Process Specification Schema (BPSS), IBM's Web Services Flow Language (WSFL), and Microsoft's XLANG. Joining forces Together with BEA, both IBM and Microsoft jointly drafted the Business Process Execution Language for Web Services (BPEL4WS) and two correlative specifications, Web Services Coordination (WS-Coordination) and Web Services Transaction (WS-Transaction). The sheer number of variously complementary and conflicting specifications that have cropped up in the past six months indicate "a great deal of interest within the industry in addressing this problem area," the W3C's new working group said in its charter. The onslaught of proposed standards reflects not only the complexity of integrating different business processes with Web services, but also the strategic nature of the proposed standards. Third-party software companies that would eventually build software based on any standards would be reluctant to pay royalties on an ongoing basis. At the same time, some industry executives have speculated that standardizing business process integration could risk making the technology a commodity, which threatens the established business of the larger IT providers. Where there's interest in Web services, conflict is not far behind. The intellectual property issue roiled the standards world for much of last year as companies with sizable patent portfolios tried to get the W3C to introduce an exception for RAND technologies to the consortium's policy of only implementing standards that are royalty-free. RAND stands for "reasonable and nondiscriminatory." But opponents of the RAND exception, who ultimately prevailed at the W3C, argue that with companies like IBM--last year's patent champion--negotiating within the same group as small firms, no exception to the royalty-free policy truly can be reasonable or nondiscriminatory. With the formation of the choreography working group--which W3C members said was considerably delayed thanks to political skirmishes--the intellectual property issue is once again front and center. "BPEL4WS has an (intellectual property) statement that, as it stands, makes it questionable as to whether it could be used as a foundation piece," W3C representative Janet Daly said. "Given that all three authors come from the W3C membership, and they're all participants in the Web services activity, we're looking forward to them making a decision that's in their interest." By that, the W3C means a decision to drop intellectual property claims on the specification--which analysts don't necessarily expect the BPEL4WS co-authors to do. "I think the W3C should be careful, because the OASIS group could make the claim that the whole notion of Web services flow and choreography is in their purview," said Ron Schmelzer, a senior analyst at ZapThink, a research firm that focuses on XML (Extensible Markup Language) and Web services. Noting that OASIS has a number of key Web services specifications under it already, he added that the "W3C sometimes assumes that they have the position of control, and that's not always the case." Microsoft said it has not decided whether to join the W3C's new working group or what its position will be on the issue of intellectual property and BPEL4WS. IBM could not be reached for comment. Bristling at rejection? One influential W3C member said the dust-up over choreography--and the politics that delayed the working group's formation--had less to do with the actual technology problems than with lingering resentment over Microsoft and IBM's part in the W3C's rejection last year of a RAND exception. "There was a community that wanted to take specifications in this space to groups other than W3C," said the W3C member. "The reason they want to do that is unrelated to anything to do with Web services or choreography. It's basically an in-your-face response to the displeasure with the work going on with respect to intellectual property." Among companies that have signed on to the W3C's new effort, or that plan to, impatience is building for the BPEL4WS troika to make up its mind. "Microsoft, IBM and BEA have been saying for quite a long time that they haven't decided to what standards organization they're going to bring this, and our position is one of puzzlement," said Eduardo Gutentag, a senior staff engineer at Sun and a W3C representative. "How long does it take to decide this sort of thing?" Gutentag said that the worst-case scenario would be if the BPEL4WS co-authors opted not to bring the technology to a standards group at all. But he also urged them not to bring it to OASIS or another smaller group, warning that such placement would result in confusion between the different standardization efforts. Oracle, which for months has been trying to promote a W3C-sponsored solution to the choreography problem and whose W3C representative will be the new working group's co-chair, said the squabbling threatens the whole Web services industry. "In this particular case we are trying to be a compromise maker, a peacemaker, but it's not like we're doing it because we're good and they're bad," said Don Deutsche, Oracle's vice president for standards strategy. "It's a self-serving activity because the industry will not be well served by a fragmentation of these activities." Deutsche acknowledged the political difficulties standing in the way of a widely accepted standard but said he believes one will ultimately emerge. "If others are hell-bent on causing confusion in the marketplace, there's not much we can do," Deutsche said. "But I'm optimistic that sanity will prevail and people will recognize that it's in their provincial corporate interests, as well as those of the industry at large, that this be done right once and for all." News.com's Martin LaMonica contributed to this report.