Coop's Corner

SAN FRANCISCO--The FBI agent whose undercover sting operation led to the dismantling of an international cybercrime ring believes that increasing transnational police cooperation is turning the tide against digital criminals.

J. Keith Mularski, a special agent who works in the Federal Bureau of Investigation's Cyber Division, says that when it comes to fighting cybercrime, the bad guys may still hold a technological upper hand but that the good guys are getting better.

"We're not far behind," says Mularski, who spent a couple of years infiltrating a crime network that offered a range of stolen data--including credit card numbers, bank numbers and personal log-in information--to buyers online. The Web site, DarkMarket.ws, got shut down last October after a German radio network broke the news about the sting operation.

"I wouldn't say that we're winning the battle," said Mularski. Still, he insisted that law enforcement agencies are catching up. "I expect to see great strides" in the near term, he said.

So far, Mularski said police authorities around the world have arrested 60 people in connection with the FBI's targeting of DarkMarket. Despite what clearly marks a big victory, this remains a very long and complicated battle against shadowy opponents. What's more, the traffic in stolen IDs has grown into a multimillion business dominated by crime figures from the Russian mob.

Shutting them down is a matter of luck and perseverance and security experts liken the effort to a game of Whac-a-Mole, where underground forums easily emerge to serve as clearing houses or virtual supermarkets for myriad criminal activities over the Internet.

"The Russians got involved in cybercrime in the early 1990s and organized around software-based piracy," said Dmitri Alperovitch, an executive at the software security firm McAfee.

Since then, he said, Russian organized crime organizations have become more adept, moving on to financial fraud through the use of Internet worms and phishing attempts. He estimated that as much as 70 percent of the spam now sent over the Internet bears the fingerprints of Russian cybercriminals.

Making a rare public appearance at a San Francisco security conference hosted by RSA, Mularski said the plan to infiltrate that closely-knit network was predicated on winning the trust of the other members and that only took place over a period of months. He began his undercover work by assuming the nickname "Master Splinter," based on a character from the Teenage Mutant Ninja Turtles cartoon--"My son is a 'Teenage Mutant Ninja Turtle' fan," he said--and then becoming a participant in the various groups and forums on the DarkMarket site.

The FBI's big break came when DarkMarket got hit by a denial-of-service attack launched by a rival online site. By this time, Mularski, or "Master Splinter," had built up a reputation with the roughly 2,500 people who were members and had even been appointed to be a discussion moderator.

"I said that I was good at securing sites and said we can move (DarkMarket) to my server," he said.

They agreed and the FBI now had hosted one of the world's biggest one-stop shops for conducting ID theft.

Tallying up the results of the sting operation, Mularski said the FBI had prevented more than $70 million in potential economic loss at banks and brokerages. It also collected six complete new malware packages while recovering data on more than 100,000 credit cards.

"It was a great operation, especially internationally," Mularski said, sharing credit with transnational law enforcement agencies from the United Kingdom to Ukraine. As for Russia, he said interaction with local authorities was improving markedly and predicted that "in the future, you'll see more cooperation."

Back from vacation and it's grand to see that the blabosphere's obsession du jour with all things Twitter remains as rabid as ever. For a while, at least, I suppose it elbows aside the other obsession du jour--the truly distressing state of newspaperdom--at least until word of the inevitable next bankruptcy hits the wire.

Twitter again?

(Credit: flickr user johnc24)

But with all due respect to the armchair commentariat, I'm sure there's something more interesting to write about in the wider world of technology. You wouldn't get that impression after randomly scanning headlines on the tech news aggregation sites. That's where the usual suspects are again cluttering up the transom with their latest random brain farts about what Twitter co-founders Evan Williams and Biz Stone ought to do with their amazing little toy.

And I'm not letting us off the hook, either. At one point on Friday, CNET had five--count 'em, five--posts on Twitter (and unfortunately, I'm No. 6).

I can understand why certain folks might be drawn to Twitter--even to the point of pondering the existential import of Oprah's tweets, but come on already. Twitter's a terrific conversational and research tool. Still, can we get a grip?

I'm so thoroughly bored by the mandatory wide-eyed wonder that now accompanies any news event where the story is that people actually post updates on Twitter. "Wow, they're tweeting about the earthquake;" "they're tweeting about the airplane in the East River;" "they're tweeting about the bunion on the president's left toe." Blah, blah, blah.

Despite the outpouring of attention, not everyone is so enamored. I was recently at a dinner hosted by venture capitalist Bill Gurley, whose company, Benchmark Capital, is an investor in Twitter. The person sitting next to me that evening was only a few weeks into her Twitterhood. She didn't get what all the fuss was about. I did my best to convince her that Twitter was a game-changer but she wasn't buying.

Maybe in time her opinion will change, but her lukewarm response offered a reminder. A lot of serious, smart people take a more sober view of Twitter, viewing it as one (possibly useful) technology tool among others in their daily routine. They're not close to drinking the Kool-Aid, and that's something the media forgets.

Well, if Ev & Biz ever do figure out how to harness Twitter's financial potential, wonderful, that would rate as news, and at that point, I'll give a damn. Until then, I'm leaving the daily hand-wringing to others.

Telecommunications providers on four continents are testing a plan to provide so-called virtual desktop computing to their business customers.

People familiar with the outlines of the pilot program say the idea is to offer Internet access to companies via dumb terminals connected through the so-called cloud. The tests are said to involve companies in the United States, Europe, Australia, and China.

The testing period is slated to run through the middle of the year. If it works out to participants' satisfaction, the pitch to customers will be why it makes more sense in an economic recession to outsource their computing infrastructure to the telcos, according to the sources. The hope is that more companies now have an extra incentive to turn over the costs and complexity to outsiders. Any savings they realize could thus get redirected for more valuable purposes.

Although details of the plan are said to vary according to the provider, the basic idea would be to build a system where a user's login information would be recognized on a terminal, essentially creating a virtual desktop that could be accessed anywhere within the network.

In a way, it's a reprise of the late '90s idea of a thin client hawked unsuccessfully by Oracle's Larry Ellison and Scott McNealy of Sun Microsystems. More than a decade later, broadband is faster and less expensive and the concomitant growing interest in cloud computing may convince more companies to give this a serious look.

But however interesting the idea, it still faces obstacles, not the least being concerns over the management of network security. At the same time, corporate inertia is a fact of life as companies often like to do the same thing because, well, that's the way they've been doing it.

There's an even earlier, though inexact, precedent. The breakup of Ma Bell in 1984 spawned seven regional bell operating systems. Some of them, like Nynex and Pacific Telesis, for a time operated retail outlets that sold personal computers. Of course, this was back in the early development of telephony and management wanted to convince serious numbers of customers to buy bundled offers of computer and telecommunications services. It didn't work out that way and the experiment was subsequently abandoned after a few years.

Faced with stepped-up margin pressures on their traditional businesses, however, the telcos do have an incentive to push into new businesses. Indeed, AT&T already offers Netbooks to some customers for $50 if they sign up for an Internet service plan.

"The bottom line is that telcos have commoditized bits on their pipes, so there is no customer loyalty and very little value-add," said a person involved in the testing. "What this does is offer a viable option that would let everyone one a PC and have access from anywhere."

This is shaping up to be quite a winter of discontent. Mass layoffs at home and mass demonstrations abroad have combined to foster a seething desperation around the world that would have warmed the cockles of Dickens' Madame Defarge.

But shouting "off with their heads" only gets you so far. Whether we like it or not, the deterioration of the global economy has forced companies everywhere to take hard looks at how well they generate value. Especially in the Internet age, where your competitor may only be a mouse click away.

Infosys co-chairman: Nandan Nilekani

We Americans were first to figure this stuff out. But that was a fleeting moment in history. The rest of the world has since caught up-and in many cases surpassed us. Case in point: the success of the overseas entrepreneurs who have built multi-billion dollar outsourcing operations that have since become so integrated with the United States' technology industry.

The New York Times' Tom Friedman was spot on in his 2005 book "The World is Flat" when he argued that inexpensive and ubiquitous telecommunications have helped to foster international competition. So it is that in the aftermath of the dot-com bubble burst, companies like Infosys have been able to grow exponentially. (One should note that Infosys derives over half of its revenue from on-site and near-shore assignments in India.)

But this is more than just a low-cost game. When I spoke earlier this week with the company's co-founder and current co-chairman, Nandan Nilekani offered a piece of advice that every U.S. company would have heeded-had they had the opportunity for a do-over.

"All of this global growth the past few years gave us a pass on making fundamental reforms," he said. The boom times, he continued, essentially papered over the cracks in the system "that should have been addressed."

Nilekani advocates a back-to-basics approach where companies invest in their most precious asset: their human capital. How's that for a role reversal? But Infosys has taken the lessons of America's great success in high-tech to heart and spends millions of dollars annually on corporate education programs that ultimately produce a better trained cohort of employees.

Infosys spent about $400 million to build its campus in Mysore, India, where it teaches around 13,500 company "students." The follow-up course work includes yearly refresher courses. It's a coveted place to work. Infosys received 1 million applicants last year for 25,000 job postings.

Infosys may be a proverbial one-off. In a deep recession that sometimes appears close to slipping into a depression, you won't find many companies, big or small, eager to invest big bucks on education and training. Not when budgets are getting slashed and the visibility about what the next quarter may bring is opaque.

But one day--and I can't predict when--all of this will end. One wager, though, I will make: when the economic miasma lifts, watch companies that had the means and the will to invest in the best trained workforce money could buy. They're going to be ready to kick butts and take names.

It was to be expected. When a one-time tech powerhouse winds up bankrupt and sold off for chump change, that's bound to ignite the daily bloviation fest.

So it was that one and all are today offering their dutiful ruminations on the cosmic import of SGI's acquisition by Rackable Systems for a paltry $25 million.

This is not so complicated. SGI was a comet, soaring through the tech firmament during its brief moment of glory. But it's only one in a list of former high-flyers to come crashing back to earth, a roster that includes the likes of Novell, Borland, WordPerfect, Digital Equipment, Wang, Data General-well, you get the point. The company made mistakes, like a big bet on Intel's Itanium. Also, management was slow to respond to the emergence of lower-cost alternatives to SGI's fancy (read: expensive) computers. If Harvard's Clayton Christensen ever wants to add another chapter to his previous work on the impact of disruptive technologies, SGI offers the classic example.

But somehow, I can't muster the necessary shock, especially when you consider the hard times in Detroit. Seriously, who ever expected to see the day when General Motors--General Motors!--would totter on the verge of bankruptcy? Now that's a shock of near-existential proportion.

GM was an icon of American manufacturing while SGI briefly figured among the leading lights in the tech firmament. But the companies' twin fates underscore how right Andy Grove was about the fate of companies that fail to be sufficiently paranoid. Here's what he wrote in 1996 and it's worth repeating:

"...when it comes to business, I believe in the value of paranoia. Business success contains the seeds of its own destruction. The more successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing left."

Amen to that and SGI proves the point in spades. Today's news should get printed out and pasted to cubicles all across the tech world. Will it? What with Silicon Valley's famous chronic self-absorption, it's anyone's guess whether any of this is going to make much of a dent. But the optimist in me wants to believe that even the most raging egos must know that all glory is fleeting.

We'll see.

In the 1990s, Lotus Notes gained notoriety, in part, for the nifty collaboration features it brought to corporate e-mail. IBM's CEO at the time, Lou Gerstner, was so impressed that he paid a premium to consummate what began as a hostile tender to buy Lotus in 1995.

Notes went on to become an unqualified commercial success with some 145 million users around the world who use the product. Still, Lotus hasn't quite secured for itself the reputation of offering the must-have enterprise collaboration technology in the age of the Internet.

What with the proliferation of competing Web-based technologies targeting that market, it will be tough for any one company to claim that moniker for itself. But Big Blue will stake its claim with its upcoming entry--courtesy of its Lotus division in Cambridge, Mass.--with a cloud computing angle.

The work comes out of a project that got under way at Lotus last fall to develop an Internet-based collaboration and social-networking service. In Web 2.0 parlance, the idea was to meld social networking with business-collaboration tools in a way to make it easier for corporate users to use and share information. The project was to culminate in finding a way for users to tap the Web to access applications such as instant messaging or document sharing.

So it is that IBM on Wednesday will announce a service called LotusLive Engage, what it bills as an integrated social networking and collaboration cloud service. You can go up on the Web site today and take a tour, but this is a teaser test run. Although the official announcement will take place at the O'Reilly Web 2.0 Conference, which opens in San Francisco, LotusLive Engage becomes commercially available on April 7.

Brendan Crotty, program manager of LotusLive said the project, initially geared at the small to mid-size business market, benefited from often frank feedback by beta testers who told IBM what they liked and disliked about the interface. In the hour-long demo I had Tuesday afternoon, it appeared that IBM's designers had taken those comments to heart. The console layout was lapidary and intuitive. Enterprise users who previously worked with products like Notes or Microsoft Exchange shouldn't have any trouble figuring out what does what.

LotusLive Engage's communications and collaboration tools work both within and beyond the corporate firewall so that employees can interact with clients, partners, or suppliers. IBM's phrase to describe what's going on is "extranet collaboration." The short list of the features include profile and contact management, online meetings, file sharing, instant messaging, and project management capabilities.

Any information warehoused on LotusLive services will live in a cloud managed by IBM. Pricing will range from $10 to $45 per user.

I don't think the question is so much whether the product's bells and whistles will spark the same keen interest evinced by the corporate world when Lotus Notes debuted. Cloud computing may be the buzzword du jour, but let's take a breath. Fact is that enterprise customers are still in the tire-kicking phase. There remain myriad questions within IT about security and the guarantee of up time for companies which rely upon the cloud.

But the fact that this is coming out of IBM helps account for the approximately 30,000 businesses that were involved in the pilot program leading up to Wednesday's announcement. Let's make no mistake about it: here's one case where size really does matter.

As cloud computing edges forward in fits and starts, one recurring question is whether more companies will opt to put their IT services on so-called public clouds or private ones.

The former are available to any individual or business, which essentially rent out a menu of scalable resources. That's a popular option for startups and fledgling outfits, which can't afford to sink much money into paying for an extensive hardware infrastructure. Private clouds, on the other hand, typically offer stronger security and reliability and are thought to have special appeal to IT managers keen on keeping their use restricted to company employees.

Now LongJump, which sells an on demand enterprise applications platform, is licensing technology that will let IT managers build apps on a cloud platform as a service and keep local control of their data. LongJump's CEO, Pankaj Malviya, said the product also will reduce the time involved in a company creating a private cloud where it can build build customized applications.

The company is also hoping to reach software developers, who want to put out branded software-as-a-service products. Malviya said that this is a group which heretofore has been priced out of the market for "comprehensive, multi-tenant platforms." In other words, the users and applications will share an infrastructure and code base that will be managed centrally.

Malviya said LongJump would charge on a CPU basis, rather than by the number of users. The price ranges between $60,000 to $240,000, depending on the platform and range of options selected.

LongJump is one of the signatories to the Open Cloud Manifesto unveiled on Monday.

Faced with a growing protectionist backlash in the United States, the co-founder of one of the world's biggest IT outsourcing companies remains confident that the political controversy over exporting technology jobs overseas will ebb.

Infosys co-chairman: Nandan Nilekani

"Given the economic climate, there will always be protectionism. When the economy slows down, it's a reasonable thing to happen," Infosys Technologies' co-chairman Nandan Nilekani said Monday, adding that cooler heads ultimately will prevail. "We continue to believe that outsourcing adds value to the economy."

Nilekani, who is touring the United States on a book tour, said that both the United States as well as the larger global economy would benefit by resisting the temptation to erect trade barriers or rules which slow the flow of labor and capital.

"But," he quickly added, "I can understand the sentiment about these matters."

And it is a sensitive issue as the issue of moving IT jobs overseas is a perennial topic of discord. Now, with technology companies handing out tens of thousands of pink slips as the recession gathers force, the question is that much more fraught. Late last year, word leaked to the Wall Street Journal that IBM would transfer 5,000 jobs from its U.S. payroll to India, where the cost of labor is lower.

Separately, the employee organization, Alliance@IBM, contends that Big Blue will fire around 10,000 people during the current quarter.

A related hot button: the H1-B visa for admitting high-skilled workers from abroad. After Microsoft earlier this year announced the first across-the-board layoffs in its history, Iowa Sen. Charles Grassley (R-Iowa) urged the company to rethink its approach and give Americans priority over foreigners for any available jobs.

So with leaders of the world's biggest economies meeting later this week near London for the G-20 conference, companies like Infosys will be closely watching the discussions for hints of protectionism. It's unlikely the meeting will be undercut by the adoption of beggar-thy-neighbor policies. Still, in the aftermath of the global financial meltdown, the free market approach championed for years by the Americans and the English is out of favor with many of the world leaders slated to participate in the conference.

Watching from the sidelines, Nilekani said he was aware of the political problems facing policy makers, but maintained hope that an increasingly intertwined global economy would, ultimately, trump parochialism.

"We believe that keeping free trade open is in everyone's interests," he said. "I hope that when the G-20 meets, they will keep free trade open."

What's it gonna be: my cloud or yours?

If you have the stomach, revisit the heated debates over how Unix or Web services should develop. Strong companies and strong personalities dominated the arguments. Ultimately, Web services flourished while the Unix standard fragmented, ending up with proprietary versions that were too weak to compete against Linux years later.

Such are the birth pangs that attend every interesting new technology. But while they say experience is a teacher, any lessons seem destined to land on deaf ears when it comes to the computer industry. At the dawn of the cloud-computing era, we're about to witness key tech companies again pull in opposite directions.

A document (PDF) making its way onto the Web--the "Open Cloud Manifesto"--makes the case for the vision of what it terms "an open cloud."

"We as industry participants must work together to ensure that the cloud remains as open as all other IT technologies. Some might argue that it is too early to discuss topics such as standards, interoperability, integration, and portability. Although this is a time of great innovation for the cloud-computing community, that innovation should be guided by the principles of openness outlined in this document. We argue that it is exactly the right time to begin the work to build the open cloud."

Nice sentiment, but they'll have to do it without Microsoft and Amazon. Both companies have rejected the initiative. Microsoft, which says that its Azure platform is sufficiently open, slammed the way the manifesto came together and dunned its backers for their take-it-or-leave-it approach.

"It appears to us that one company, or just a few companies, would prefer to control the evolution of cloud computing, as opposed to reaching a consensus across key stakeholders (including cloud users) through an "open" process. An open Manifesto emerging from a closed process is at least mildly ironic."

Amazon, which is building a fabulously profitable business as a cloud services supplier, was even more blunt about why it opted not to sign on the dotted line:

"But, what we've heard from customers thus far, customers who are really committed to using the cloud, is that the best way to illustrate openness and customer flexibility is by what you actually provide and deliver for them."

I can't say which group is on the side of the angels. The document in question is actually a starting point in what its signatories hope will turn into a broader conversation about how to break down barriers to adoption and foster wider acceptance in the IT world. (The full roster of participating companies was not immediately available.)

On the surface, there's not much to find upsetting or controversial with the document. Frankly, it reads like one of those anodyne diplomatic communiques published after a meeting between heads of state. To wit:

"This document does not intend to define a final taxonomy of cloud computing or to charter a new standards effort. Nor does it try to be an exhaustive thesis on cloud architecture and design. Rather, this document speaks to CIOs, governments, IT users, and business leaders who intend to use cloud computing and to establish a set of core principles for cloud providers. Cloud computing is still in its early stages, with much to learn and more experimentation to come. However, the time is right for the members of the emerging cloud-computing community to come together around the notion of an open cloud."

Not exactly the equivalent of "Give me liberty or give me death." But the split represents the divide between a couple of (important) companies with a head start in cloud computing and a larger cohort of wannabes anxious to avoid vendor lock-in. Sound familiar? It should. We've been here before--many times.

Cloud computing, or more precisely, cloud computing in its latest incarnation, is still in a state of becoming. So there's still time and room to figure out how things should work to the betterment of individuals and businesses. What's needed now is the intervention of cooler heads who can rise above the fray to figure out how to heal the rift before it widens.

Henry Kissinger doing anything these days?