The Bloor Perspective: mmO2's first move, Microsoft's bugbear and smartcard strategies

In this week's package of analysis, the Bloor Research team assess mmO2's staff cuts, what the future of smartcards holds and Microsoft's battle against its own bugs...

With only a few months since its historical launch, BT's mobile arm mmO2is already showing signs of trouble. The company revealed plans to slash 1,900 jobs from its European workforce this week. It says the cuts are essential for its survival but shouldn't it have figured this out a while ago? The cuts will run deep across Europe as 1,400 of BT's staff are culled from the UK and a further 500 from mm02's German operations. This brings the company's total workforce down to 6,100 in the UK and 3,400 in Germany. The move is said to be a result of the rapidly slowing mobile phone marketplace and, in some ways, it's not a great surprise. Last year, as the tech industry sank and mobile operators lost favour with the stock market, Vodafone and other UK operators undertook similar cost-cutting measures. mmO2is simply following this trend having had a disappointing start to its life. The last set of customer figures the company pumped out showed that uptake to its service was not happening quite as well as it had hoped. In the third quarter of this year it only added 453,000 new subscribers, which was considerably less than had been anticipated by analysts. Having said that there is probably slightly more to it than you might think. One of the criticisms often levelled at BT is that it's a bloated old dinosaur. When mmO2was created it was intent on shedding this image - so job cuts were always going to be on the cards. It's just a shame that this is the first corporate action that mmO2has taken since its separation from BT. That's one excuse anyway. The other opinion is that mmO2is simply recreating the mismanagement and bad judgement the mothership is often criticised for in the UK. mmO2is, after all, the company that missed the marketing opportunity of the century - to sponsor the turn of the year at every event possible: 2002/mm02, seemed like a pretty obvious tie up. Smartcards by stealth We have two obsessions that make the use of smartcard technology an easy solution - security and personalisation. Whatever we do, wherever we go, we want an easy mechanism that will authenticate our identity and then deliver the solution exactly as we like it. However, there is a deep-seated fear in many individuals - especially in the UK - that, somehow, the powers that control our lives will use information about us to restrict our freedom and discover things about us we don't want them to. This is the biggest barrier to the acceptance of the technology. However, bit by bit that resistance will be eroded because ultimately we like an easy life. The trick to gaining acceptance is going to be stealth. Many businesses already issue passes to employees to get them through doors, buy food in the canteen and connect to computer systems. Nobody argues too much about these even though they could be used to track exactly where somebody is in an office, measure lunch breaks and so on. We have no choice with payment cards. Credit and debit cards will all come with an embedded chip by 2005 because otherwise the merchant becomes liable for any fraud. Eventually, we will end up needing carriers for all of the different smartcards we need - then we will find it more convenient to consolidate the cards and the information held on them into useful, shared blocks. Maybe we will see cards for government use (voting, payments), retail (loyalty schemes), business and banking. Think of a smartcard as a quite powerful thin client device with no user interface. It would plug into a device that can provide the input and output interfaces. The resources on board will easily support a virtual environment so technologies such as Java can be used to download specific capabilities required for authorised activities. As punters get used to smartcards and overcome the basic paranoia, they'll find more and more useful things to do with them. Combining activities into multi-purpose cards will make life even more convenient. It doesn't mean we shouldn't retain a respectful level of paranoia - just so we stay in control. Microsoft's fly swatter Bill Gates has declared Microsoft products will become more secure and reliable. He sent round a memo last month to staff declaring security would be at the heart of the company's forthcoming activities. It seems the message has been taken very much to heart. Microsoft developers have stopped writing new code and are going to spend the next month splatting the bugs. The aim is to get rid of as much of the flaky code in major products such as Office, Windows and the .Net components. Principally, the developers are seeking out the security holes that are a regular filler of IT press columns and making the Microsoft environment acceptable for businesses in the security-conscious world that we now inhabit. The whole 'Trustworthy Computing Initiative' has been brought about because Microsoft's enterprise credentials have taken a constant battering. The ongoing war against all that is bad and the threat from supposedly secure operating environments - especially when it comes to virus control - is beginning to affect Microsoft's ability to trade in higher circles. The truth is that Microsoft is more vulnerable because more individuals want to have a go at bringing its technology to its knees. To many this story will seem too good to be true. The whole idea that after all these years Microsoft would take time out to put right some of the horrendous failures for which it has become famous is just bizarre. Thousands of developers sifting through the Windows operating system, .Net and other strategic products in search of those famed memory leaks, security holes and so on. Just how many will they find and how many can they fix in a month? The answer to that question is probably 'enough'. Any seasoned software developer will tell you that a single coding anomaly (let's not call them bugs) can manifest itself in any number of ways. All of the 'blue screen' experiences we have seen in the past are probably caused by a few innocuous-looking mistakes. The problem is finding them. But if they do it will be great news for me, you and Microsoft. ** Bloor Research is a leading independent analyst organisation in Europe. You can find out more at http://www.bloor-research.com or by emailing mail@bloor-research.com