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The week in review: Sun giveaway challenges Microsoft

Sun Microsystems acknowledges plans to give away Web-based office software, in an unorthodox effort to challenge Microsoft's commanding market position.

Sun Microsystems acknowledged plans to give away Web-based office software, in an unorthodox effort to challenge Microsoft's commanding market position.

Instead of trying to outsell Microsoft Office--a strategy that hasn't been successful for Corel's WordPerfect or IBM's Lotus SmartSuite--Sun will promote its StarPortal package in much the same fashion as Webmail or calendaring services have won widespread popularity. PCs, Internet kiosks, and even Palm Pilots will be able to access the Sun software, which runs on a central server.

Making money
Sun confirmed its intentions following a report that it had bought Star Division, a software maker that competes directly with the Microsoft.

Despite Sun's emphasis on making an end run, the StarOffice software will be freely downloadable to run on individual PCs. StarOffice also will run on Linux, IBM's OS/2, and Sun's Solaris operating systems, as well as Windows.

Sun hopes to make money by selling technical support as well as the powerful "back end" systems that will power StarPortal. It's not the only company that will sell support, however: Sun hired Linuxcare to handle the Linux version.

Microsoft said it isn't threatened, but countered with hints at its own plans for Web-based productivity software.

The news hurt other office software makers, whose stock had been rising because of their Linux products.

Jumping in
IBM jumped into the nascent communications processor market, an explosive arena that parallels the PC processor market of the early 1980s because its underpins Internet-related networking and consumer products. The move potentially puts IBM in a battle with giant Intel.

Separately, Cisco and IBM announced a $2 billion dollar agreement that calls for Big Blue to deliver much of its core communications technology to Cisco, supplying components and intellectual property. In addition, the computer giant also will move its networking equipment customers to Cisco, indicating a retreat from this aspect of the business.

Apple introduced its new "G4" PowerPC chip, running at speeds of 400, 450, and 500 MHz. Designed to speed up such tasks as encoding digital media and running Internet applications like security software or Apple's own QuickTime streaming media software, the processor operates more than two times as fast as comparable Pentium III chips from Intel, based on the latter's benchmark tests, Apple said. The claim will almost certainly be disputed by Intel and others.

Motorola is once again the sole supplier of the advanced chip to Apple, a development that could place Apple in a precarious position should there be a hiccup in Motorola's assembly lines. Since the 1994 introduction of the first PowerPC chip, Motorola and IBM have sold chips for each new family of PowerPC processors.

Pushing ahead
Intel will push to release its "Coppermine" Pentium III processor in October, at a clock speed of at least 700 MHz, according to chief executive Craig Barrett. The surprise underscores the chip's role in staving off the threat posed by AMD's Athlon processor, which performs better than Intel's current Pentium III chips, according to test results.

Also at a developer's conference, Intel bowed to pressure from computer makers and memory manufacturers in committing to the future production of chipsets that will work with standard computer memory, a move that could further stem the rush toward Rambus. Intel's position has been that all of its future chipsets would support Rambus memory. The change had been expected.

Workstation maker Intergraph announced a $20 million charge and layoffs of 400 as part of the company's exit from the PC and generic server business. The Alabama company blamed chip giant Intel for many of its troubles, as the two have been entangled in a antitrust lawsuit regarding whether Intel has withheld chips and technology information.

Seven heavyweight computing manufacturers settled on a new server design standard, but the new specification standard won't arrive until the end of the year, and the first systems shipping with the new architecture won't appear until late 2001. The agreement heals a rift that had pitted Intel, Dell, and Sun against IBM, HP, and Compaq. The standard governs how components such as network cards plug into servers and how the servers connect to each other.

New frontiers
Major Internet companies may embrace a global framework for rating content next week, marking the most aggressive push so far toward a system to filter nudity, hate speech, vulgar language, and other controversial materials. The newly formed Internet Content Rating Association will meet in Munich to try to advance the use of voluntary ratings. Members include America Online Europe, Microsoft, IBM, British Telecom, and the Bertelsmann Foundation.

Washington policymakers are gearing up for a fight over the privacy of email and other personal computer files following the passage of new wiretap rules for wireless phones and other digital networks. Last week the FBI won a small victory from federal regulators that will allow it to listen in on conversations and track the location of wireless phone users, as long as the agency first gets a court order, but the bureau is looking for new powers to break through security software that renders email and other Internet communications incoherent when traveling along a digital network. Privacy advocates, software industry executives, and a growing cadre of tech-friendly legislators are opposed.

Microsoft confirmed splitting its WebTV operations into two in an effort to clarify its TV strategy. Microsoft TV will develop client-server software to be sold to service providers and cable companies that are interested in offering enhanced television services to its subscribers. WebTV will continue selling the consumer TV set-top box and Internet access service. The company is also thinking about integrating the latter with the company's other Internet efforts, namely its MSN portal and Internet service.

In a related matter, as expected Microsoft tapped former Silicon Graphics chief executive Richard Belluzzo to run its interactive operations unit, formally called the Consumer and Commerce Group. The unit includes MSN and WebTV.

Start-ups with money to burn and public offerings on tap have been busy raiding the IT services giants as well as the so-called Big 5 consulting firms. Relative newcomers often hire talented 20-, 30-, and 40-somethings with promises of big stock options and a fun, flexible work environment.

Software pirates are doing a brisk trade on auction sites, as 60 percent of the more popular software titles sold on eBay and two other sites is pirated, according to a survey conducted by the Software & Information Industry Association. The report tracked eBay, Excite Auctions, and ZDNet Auctions for selected sales between August 15 and August 20. The news could intensify the debate over whether auction sites should be required to actively hunt down pirates who operate on their sites.

Also of note
America Online and eBay launched a cobranded site designed to give AOL members access to eBay's auction site but in a familiar AOL format ? A security hole discovered in Microsoft's MSN Hotmail calls into question the free email service's practice of allowing users to log on from any Web page, security experts said ? CompUSA will halve its commercial sales force, eliminating 1,800 jobs, to trim costs and help revive earnings ? Nintendo plans to upgrade its Game Boy by including a powerful 32-bit processor and a port that will allow it to connect to the Net via cell phone ? AMD released a new version of the K6-2 that cranks the processor up to 500 MHz.