Do computer application patents promote innovation? The answer is not devoid of controversy. While open source defenders call on the sector not be overpowered by the patents of big producers, the latter are taking steps to reconcile both positions.

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Title: IT Simplification in Financial Services
Source: The Boston Consulting Group
Date: 1st February 2005
Abstract: In a short time, the Information Technology of financial institutions has gone from being a mere transactional tool to being an essential and integral element of virtually every aspect of doing business. But the growing complexity of the information systems in financial institutions gives rise to serious problems for most of them, problems that must be solved. One example of these is the existence of multiple applications, which often throw up inconsistent and incorrect data, with their resulting inefficiency and above all, the negative perception customers have of all this. For many banks, the cost of the IT effect on morale and staff productivity is much greater than the economic cost. According to this report by Boston Consulting Group, the best way to work out all those problems is by radically simplifying information systems. The Group even helps by recommending the following steps. The first one, and probably the most critical, is to make a diagnosis of the current IT architecture to determine the exact number and functionality of the different applications, interfaces, data bases and infrastructural technical elements, as well as their age, size, long-term viability and interoperability. The idea is to actively look for the overlapping possibilities between applications, or on the contrary, the lacks in the support to the business process. The second step is to define the objective of this simplification: what long-term business targets are we striving to reach with our IT infrastructure? The third step implies moving into action and developing a series of programmes to aggressively attack the complexity of IT. Examples of this would be to unify data bases and eliminate redundancies, align and standardise the different applications so that they can take part in a central network or to substitute the multiple platforms for a single integrated one. In other words, this means cleaning out the information systems of financial enterprises, which have been superposing new applications on the existing ones to the point that they turn their IT infrastructure into a tangled mess that is difficult to undo. Although the simplification process can be costly and not without risk, according to the Boston Consulting Group the effort involved would be more than compensated for. This is particularly so if you take into account that between 60% and 80% of the financial institution IT budget goes to maintenance and only a minority is allotted to investment and IT updating.

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Title: La Sociedad de la Información en España 2004
Source: Grupo Telefónica
Date: 18th January 2005
Abstract: Broadband now makes up 43% of domestic connections in Spain, which places us fourth in the European Union and a full 12 points above the community average. Within these broadband connections, which have more than doubled since 2003, the ADSL option is clearly leader (71%), although cable modem (23.7%) and access through local telephony via radio (2.7%) are also used. These are data from 5th edition of the report on the Information Society in Spain that Telefonica publishes annually.
The number of web surfers in our country has reached the 12 million mark, of which 56% are men and 44% are women. By age groups the 14 to 19 year-old range is the most connected (65.4%), followed by the 20 to 24 year-olds (60.4%). This is about the same as in the rest of Europe. The vast majority of them access the Internet from home.
The report also evaluates the situation in the business environment: although 76% of companies use the Internet, only 32.8% have a web page with corporate information. Only a minority use it for electronic business (23.5%). This area still trails behind the average especially in the small and medium sized enterprises.
Finally, the report points out the need to continuously teach and train citizens and provides a series of recommendations to follow such as the fact that the Administration is the one that should lead the use of new technologies and promote actions to encourage their use among the small and medium sized enterprises.

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The so-called “thin clients” are back in force in Europe and the United States where more and more companies and state agencies are substituting the traditional desktop PCs of their employees for these other computers.
Connected to a central server that stores and processes practically all the data, “thin clients” can only run programmes that require very few resources. The advantages of these terminals for companies are obvious: less cost (in both investment and maintenance), more control over the activities of employees and less exposed to the risks of viruses or the disloyal use of private information.
IDC estimates that the sales of “thin clients” in Western Europe could reach 800,000 units this year (up 17% on 2004), which would mean an accumulated growth of 75% over the last three years. By 2008 a full 10% of all desktop PCs of the small and medium sized enterprises in the United States will be “thin clients” as against the 5.4% they currently represent.
But, according to IDC, what is truly going to be a winner in the next three years is the “Blade PC”, whose sales will reach 6.5 million units by 2008, way above the 350,000 units this year. Unlike the “thin client” terminals, which depend on big central servers, the “Blade PC” systems give each employee a reduced version of an ordinary PC. The true saving is not in their low cost (in fact the “Blade PCs” are more expensive than traditional computers), but in the reduced cost of maintenance. Among the happy companies enjoying this new source of income are HP and Siemens.

Articles in BusinessWeek and The Wall Street Journal (Payment Service)
Report in IDC

Free music! This was the slogan used on 3rd February by a popular movement against the trials in France for illegal downloading of music from the Internet. This movement already has more than 30,000 people including artists, professionals from the music world, politicians and associations, whose aim is to open up a public debate against the prosecutions they describe as absurd. “Just like at least eight million French people, we too downloaded music from the Internet one day. We are potential delinquents” they declare in their statement.
This is the way they show their support for the first people accused of this offence. On the same day as they published their statement, a French court condemned a 28 year old teacher to pay a fine of 3,000 euros plus another 10,000 euros in damages to the music industry for sharing music through the P2P networks. This is the first time that French courts –with more than 500 cases pending –have condemned this offence. For this reason, the judge applied a mitigating factor: if he does not reoffend, Allain Oddoz (who had 10,000 music files in his computer) could get off without having to pay the fine and so avoid having a police record.
Among those who signed the declaration were singers such as Manu Chao, Yann Tiersen and Dominique A; Christian Paul, a French Solialist Party Member of Parliament; and associations like the Civil Society for the Administration of Artists’ Rights or the Union Fédérale des Consommateurs, the main French consumers organisation. Evidently, they do not want to “kill off” music. But they sustain that millions of people download songs today from the Internet just like others recorded songs from the radio on cassette tapes, and that it is useless trying to eradicate piracy by prosecuting a few “scapegoats”. They say they are in favour of royalties, but without prejudice to the rights of consumers. Moreover, they are of the opinion that they are not at all sure that downloading songs from the Internet damages the music industry. After all, never before has so much music been consumed. Lastly: who knows how many web surfers would in fact buy what they download? Or how many of them decide to buy a full album after having downloaded one song?

Libérez la musique! Statement in Le Nouvel Observateur
Articles in Le Monde and The Register
News in VNUNet

Although voice over IP services (VoIP) have added many followers to their list of users, this technology still has a few problems to iron out. For example, North American suppliers of free VoIP services alerted the public about the security problems this service poses. According to them, there are technical limitations that make it tremendously difficult to locate and listen to calls made over the Internet because the communications data are encrypted. So, in the event the police were able to tap a communication, all they would hear is gibberish.
In order to face the challenges that voice over IP poses, a VoIP Security Alliance has recently been set up. This is a combined effort by more than twenty security and network companies –Avaya, Alcatel, Comcast, Symantec and TippingPoint, among others–  to report on these and other risks associated with VoIP, such as spam or attacks on the privacy of the user. The Alliance will also watch closely the quality of a minimum service (which, according to the experts, should imply investment by operators and stimulate the change to the new version of the Internet Protocol IPv6) and the privacy of the communications to eventually promote VoIP as a new channel of communications that will do away with traditional calls.
In Spain, these questions have not yet been posed because the service has not yet taken off. However, the National Commission for the Telecommunications Market has already seen where the shots will be called as far as laws and regulations are concerned to regulate this service. After making public the conclusions of the public investigation carried out last year, it proposes a regime of “minimum regulation” for VoIP that safeguards the rights of users. To be more specific, it will defend the creation of a specific numeration for VoIP and will demand that operators of the service offer portability (as it did with fixed line and mobile telephony), that is to be sold together with additional services to the traditional telephony (second lines) and personalised telephony (each member of the family will be able to have his own number), and that the offer is complemented with additional special services.

News in InfoWorld
Articles in Wired News and Financial Times (Payment Service)
Report in Forrester Research (Payment Service)

Vijay Gurbaxani, Information Systems professor at the Graduate School of Management of the University of California, Irvine, will participate in the fourth annual conference held by the e-business Center, entitled “How to Govern Information Technology. Criteria and Experiences”. In addition, the event will include IESE professors Josep Valor and Sandra Sieber who will partake in a session that will analyze the IT decision criteria in Spanish companies. If you wish to sponsor this event, please contact Gemma Golobardes.