Microsoft relents, issues XP patch

Plus: HP braces for another tough year; AT&T will take advantage of tough times; and Premonitia closes up.

Microsoft has responded to criticism from users and issued a software patch for a major security vulnerability in the Windows XP operating system, reversing an earlier decision to require users to upgrade to XP Service Pack 1 to remove the vulnerability. The security hole exists in the XP Help and Support Center and affects the Microsoft Windows XP Home Edition, Professional and 64-Bit Edition operating systems, according to Microsoft. Taking advantage of a code flaw for a feature that sends information on new hardware to Microsoft, an attacker could remotely access a vulnerable machine from a Web page or a link in an e-mail formatted in HTML. Soon after the discovery of the vulnerability, Microsoft issued XP Service Pack 1, which patched the vulnerability and also a number of other security holes in the XP operating system.

Hewlett-Packard is bracing for another rough year in 2003 when it comes to IT spending. CEO Carly Fiorina last week told analysts the company expects single-digit growth in IT spending next year. In the longer term, Fiorina said she expects growth rates of less than 10% for the industry. “I am talking about the economy because clearly the economy is a huge pressure on the IT industry,” she said. “It is clear that economics are driving the slowdown in IT spending.” The HP chief criticized other CEOs for overspending on technology in the last decade. The executives were caught up in trying to find the fastest servers and best software. “Most CEOs know they overspent on technology in the 1990s,” Fiorina said. “They spent on hot boxes and killer apps.”

AT&T President David Dorman hopes the slumping telecom industry will turn around, but until it does, he said AT&T isn’t shy about taking advantage of opportunities where it sees fit. Dorman, one of several telecom industry officials who spoke last week at The Yankee Group’s Telecom Industry Forum, compared AT&T’s situation with that of the U.S. and the Soviet Union in the 1980s. “It’s a bit like in the Reagan era at the end of the Cold War when the United States was able to invest in armaments at a level the Soviet Union couldn’t keep up with . . . bringing an end to the Cold War,” Dorman said. “We find that the nearest competitors are forced to cut back and disinvest.”

Start-up Premonitia, an Acton, Mass., fault-management company that boasted network industry icon Paul Severino as its chairman, has closed up shop. “The challenges of maturing our technology for the diversity and rigors of production IP networks were deeper than our research, and therefore we have discontinued efforts to commercialize the technology,” says Peter Vicars, who was CEO of the company, which was founded last year on $3.2 million in seed financing. “Maybe we will find a partner with deeper research pockets where [our] algorithms will be evolved and adapted in the future for the benefit of the industry.”

Palm today is expected to unveil the first handhelds of its recently announced Tungsten product line, which is aimed at the enterprise market. For enterprise users, Palm is finally introducing the Palm OS 5.0, rewritten for powerful 32-bit RISC microprocessors, such as Texas Instruments’ 175-MHz OMAP1015 ARM chip, along with a Texas Instruments digital signal processor. The combination of chip, operating system and a Secure Digital format expansion slot will let Tungsten devices handle bigger applications, more data and integrated wireless communications options. The devices also will have better graphics and multimedia features than the current devices based on Palm OS 4.1. Palm is expected to show two Tungsten devices: a high-end device focused on handheld applications; and a GSM/General Packet Radio Service smartphone. Palm has kept quiet about pricing. Users are speculating that the devices could be about $500.

A new study has found that not only do many Fortune 100 companies lag in responding to general online inquiries, 37% do not reply at all. Conducted by Customer Respect.com, a division of International Ventures Research, the study rated Fortune 100 companies’ overall online “customer respect,” based on factors such as privacy, principles, attitude, transparency, simplicity and responsiveness that consumers encounter at the companies’ sites. The companies performed the lowest in responsiveness, garnering a 4.8 rating out of 10. Forty-one percent of the companies replied to inquiries within 48 hours, while just 9% received a perfect score in responsiveness. PG&E and Ford ranked among the worst in terms of responsiveness, while Freddie Mac, Costco and Verizon rated among the best.