In brief: WorldCom back in government’s good graces

Also: VeriSign plans changes to DNS; Palmisano challenges IBM to move to Linux in within 2 years; RFID set to explode; IBM slashes jobs

• The U.S. government’s General Services Administration last week lifted restrictions against WorldCom, better known by its MCI brand name, which prohibited the telecom company from bidding on federal contracts. The GSA placed MCI in its Excluded Parties Listing System last July after the accounting scandal that forced the company to seek bankruptcy protection. At the time, the GSA cited problems with the company’s internal accounting controls and business ethics. Since then, the GSA has conducted an “exhaustive review” into the company’s business practices and now has concluded that MCI has remedied its problems in the two areas. The GSA, which sets government procurement policy, also had been conducting debarment proceedings against MCI, which would have resulted in longer-term restrictions.

• VeriSign said last week it is planning changes to a DNS component that coordinates updates to the .com and .net domains throughout the DNS system. The changes are intended to prepare .com and .net for more frequent daily updates of information such as address changes. Internet users and organizations managing Web sites on .com and .net will not notice the change, VeriSign said. However, some network experts worry that the change, which is scheduled for Feb. 9, might have unanticipated consequences that could interrupt traffic to some .com and .net Web sites and other online services. The modifications will change the way part of a DNS component called the Start of Authority Record is generated for .com and .net domains. The records are used to manage areas of an Internet domain that are controlled by a single DNS server. VeriSign Naming and Directory Services will change the serial number format in the .com and .net zones’ Start of Authority Records. Currently, the serial number format is YYYYMMDD, plus an additional two-digit number (00 to 99) that is updated whenever the zone data is updated. Under the new system, VeriSign will change the serial number to a unique value equal to the number of seconds since 00:00:00 Greenwich Mean Time on Jan. 1, 1970. The move will let VeriSign make better use of its Advanced Transaction Lookup and Signaling system to make more frequent and efficient updates to .com and .net, from the current system of two daily updates.

• Two acquisitions announced last week continue the CRM market consolidation that’s been going on the past few years and highlight the importance of adding a personal touch to companies’ online customer service efforts. Both acquisitions pair a knowledge management tools vendor with a Web collaboration technology vendor. CRM suite vendor Kana is acquiring Hipbone, which specializes in online customer service technologies such as co-browsing, file sharing and chat, for an undisclosed amount. Meanwhile, LivePerson, which makes chat, e-mail management and customer self-service software, acquired some of Island Data’s assets – specifically its knowledge management technologies – in a $3 million stock and cash transaction. Kana plans to integrate Hipbone’s chat and co-browsing features into its iCare suite, which includes knowledge management, e-mail marketing, call center, marketing and analytics applications. Kana also will continue to offer Hipbone as a stand-alone product, the company says. For its part, LivePerson acquired Island Data’s Express Response, a hosted knowledgebase and frequently asked questions service. Existing Express Response customers – which include Adobe, Canon U.S.A. and Cox Communications – will be transferred to LivePerson.

• IBM Chairman and CEO Sam Palmisano has challenged his company to move to the Linux desktop over the next two years, according to an internal memo from IBM CIO Bob Greenberg. “Our chairman has challenged the IT organization and indeed all of IBM to move to a Linux-based desktop by the end of 2005,” Greenberg wrote. “This means replacing productivity, Web access and viewing tools with open standards-based equivalents.” The company has formed a new initiative called the Open Desktop project office to facilitate the move, which will involve contributions from Greenberg’s office and from IBM’s software and research groups, according to the memo.

• Retail spending on radio frequency identification technology will increase more than tenfold over the next four years, according to projections announced last week by IDC. The research firm predicts RFID spending for the U.S. retail supply chain will grow from $91.5 million in 2003 to nearly $1.3 billion in 2008. Mandates for RFID tagging from Wal-Mart Stores and the U.S. Department of Defense will drive this accelerated spending – but it won’t be sustained, IDC says. Once manufacturers’ and distributors’ initial deployments are complete, RFID spending will level off as the industry prepares itself for the next wave of RFID: item-level tagging.

• IBM said last week it has cut about 300 U.S.-based software jobs and 100 positions in its services division. The job cuts come as part of an effort to reduce costs and emphasize other areas such as software telesales and technical sales, IBM said. The 300 software job cuts represent less than 1% of IBM’s 38,000 worldwide software positions.