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The WAVE Report on Digital Media
3D --- Media Creation --- Shared Space ---Published by 4th Wave, Inc.--- Issue #0520------------------5/20/05 |
The WAVE Report is Searchable on
http://www.3dlinks.com
http://www.wave-report.com
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0520.2 Digital Pen Advances
0520.3 Scanner Software Advances
A2iA Introduces World’s First Keyword Spotting Tool for Unstructured Cursive Handwritten Documents
0520.4 High Tech Appliances
Homeowners Rejoice in the Era of the Shrinking, Smart Home Products
0520.5 Phishing Threat
Cyota Identifies Major New Phishing Threat - Personalized Phishing Attacks
0520.6 Telephone Interoperability
Leading Telecommunications Providers Join Together to Create Critical OS Standard
0520.7 Venture Investing
European Venture-Capital Investment Climbs in First Quarter Of 2005
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0520.1 Story of the Issue
***Biometrics World 2005
By John Latta
Singapore
April 27 – 28, 2005
Terrapin Pte Ltd. has produced Biometrics World in the large convention center, Suntec Singapore. This is being held simultaneously with Cards Asia, R.F.I.D. World Asia and Kiosk World. There is a corresponding trade show exhibit which is mostly focused on RFID and smart cards. Biometrics World pulled together speakers worldwide with a strong emphasis on the Asia Pacific. As we have seen in our coverage of biometrics, some of the most interesting applications of biometrics are in Asia. This event only reinforced that perception. Given the immature state of biometrics, we have found that each event, even if relatively small, nets more insights into the developing markets for biometrics. Biometrics World certainly fits this condition.
Privacy, Privacy and More Privacy
Biometrics has become a lighting rod for privacy concerns. As we have seen in earlier events, biometrics has the potential of actually protecting privacy if used properly. However, here at Biometrics World, the public perception is much higher that the potential for privacy lapses will increase when biometrics are used. The issues revolve around:
Failure to inform the public; Lack of adequate safeguards; and Poor use of biometrics.
John Secker, Chairman and Director of the Biometrics Institute in Australia, described two applications:
The use of Iris scans in an elementary school library check out system, and
A fingerprint application for time card submittal identification.
The example was simple – biometrics was used in a time card application. Yet, some employee refused to participate due to privacy concerns and were fired. This caused considerable press coverage and only served to fuel the suspicions of the public. As a result, one element of the privacy code developed by the Biometrics Institute in Australia, is for an opt-out choice.
In each of these applications, there was considerable negative press publicity which only reinforced public concerns about privacy. As a result, a privacy code has been developed. One of the objectives of the Biometric Institute’s code is to accomplish regulatory compliance. Being an organization which was launched with Australian government funding, it is hoped that the code can accomplish this.
In the U.S., the US-VISIT program has instituted a privacy program that includes:
Rules on information use;
A Redress policy for corrections; and
Privacy impact assessment.
Even the CrimTrac Agency in Australia, which is responsible for biometrics in criminal investigations, has an extensive privacy policy. This includes:
A privacy commissioner
Stringent IT security
Audit Logs
Privacy requirements in contracts
Privacy training by the staffs
Implementation of FOI processing procedures.
Thus, privacy concerns map across all the applications of biometrics.
Interoperability, Interoperability and More Interoperability
John Secker, Chairman and Director of the Biometrics Institute in Australia, also listed, as one of the challenges of the industry, the assurance of the interoperability of technologies based on the same biometric. We have seen this in the IBG testing of Iris biometric equipment testing. At Biometrics World more interoperability issues surfaced.
Brad Wing, US-VISIT Program, described the interoperability issues that surfaced in the early testing of systems to meet the ePassport mandate. This began in February 2004 and exposed many issues. As a result, there have been four subsequent testing events to resolve interoperability issues. Another test is scheduled in September 2005.
Diane Fraser, Canada Border Service, described one of the more impressive and successful applications of Iris recognition. They have two similar programs called CANPASS, which operates within the Canada, and NEXUS Air, a pilot program between the U.S. and Canada. Both use Iris recognition. They are frequently asked – Why use Iris? In response, after evaluating other biometrics, Iris has an advantage of being: accurate, safe, fast, non-invasive and highly secure. A problem highlighted during the talk was the constraint imposed by obsolete equipment. That is, the iris scanner used in the initial deployment was made by LG. Now, when the program is to be expanded, this unit is no longer available and they must cannibalize units in the field which are not a part of the passage Kiosks in order to build more Kiosks using the LG scanner. Thus, interoperability is a factor which limits the expansion. As Diane stated – buy all the equipment needed at one time. This is a solution that many projects, including enterprise deployments, cannot accomplish. (Note that the iris interoperability issues are consistent with the tests run by the IBG on multiple iris biometric systems.)
Cynthia Musselman, Authenti-Corp, gave an overview of the Seafarers’s ID (SID) program. This is under auspices of the International Labour Organization, a specialized agency of the UN. There are 175 member states and the impact of agreements under the ILO is that those agreements have the same force as a treaty among the member states. There are 1.2m seafarers who work on ships for months at a time. They, in large part, do not have visas when ships enter port and the seafarers frequently have to move between ships. After 9/11, the seafarer ability to leave the ships in port was severely limited. This has an impact on the means by which 90% of the world’s trade is delivered. As result, ILO Convention No. 185 was passed in June 2003. This allowed for the use of a biometric on an ID card which assured determination of the ID. There are two fingerprint biometrics on a card. A testing program was conducted at sea in September 2004 that became the foundation for an actual scenario test. Systems were submitted by seven vendors for which the interoperability results were poor. The criteria was a FAR and FRR of less than 1%. This simulates an individual on a ship collecting 100 IDs and assurance that only one such ID will work with that particular individual. After additional testing, it was found that only three systems could meet the minimum requirements.
Training, Training and More Training
In the high volume applications for biometrics, such as a border crossing, a set of early deployment issues provided valuable lessons learned. One of these is the need for training in the use of the equipment by the public.
Raymond Wong, Hong Kong Immigration Department, showed a video of the automated entry gates. The failure-to-pass rate is <2%. At the first gate there is a moist cloth for the preparation of the thumb. This allows enough fluid to be present on the thumb so that is can be scanned. On exit, the same moist cloth is used to clean off potentially too much fluid. Thus, the public has to be trained both in the positioning of the thumb on the scanner and its preparation for insertion over the scanner.
One of the issues being faced by the Canadian Border Service is that some passengers seek to bypass the Kiosk which takes the iris scan for entry. It was found that those that did this had not taken the training when they were enrolled. Thus, the effectiveness of the system is closely related to the training received when enrolled.
Where is Biometrics Going?
Clive Reedman, Chairman of the International Association of Biometrics, UK, gave an overview of cross border security and how the UK is responding. The most interesting comments came at the end when Clive asked:
Is the future vision of biometrics – Ambient Biometrics?
Clive sees the possibility that biometrics will be embedded everywhere. Fittingly, he called this Ambient Biometrics. Such a notion is not that unreasonable. But much lies ahead to accomplish such an end game.
This is certainly consistent with the work in Europe on Ambient Intelligence. The point of the comment in this talk was that biometrics allows for a degree of personalization and privacy protection which is tagged to the individual. Thus, it is not unreasonable to consider how all our actions would be linked to ourselves and biometrics would be a key enabling technology. Interesting.
WAVE Comment
It is our contention that most of these examples are about large scale government projects. They do not relate to enterprise applications and, therefore, really miss the point. Is this true?
We only need to remember the early years of computing. Without the ANSI character set, even text had a hard time being interchanged between computers. Software written in the same programming language was not always interoperable between different brands of computers. It is easy to see biometrics in this same early state of affairs. While the events of 9/11 are driving uses of biometrics, there are many limitations:
Standards will play a major role but this is a work in progress.
The public has a concern about the technology - as deployments move ahead, not enough is being explained to the users.
Interoperability is one of the biggest issues. It is very similar to the computer language analogy. A unique set of tailored middleware and operational procedures must be developed. This is not the foundation of a mass market.
There is yet another factor which underlies the use of biometrics – convenience. As more stringent security measures are put in place using many biometric applications, there are just not the resources to support the application. As Raymond Wong, Hong Kong Immigration Department, said - 1.8B persons a year are crossing the borders. This is more than the 1.3B population of China. When the immigration official takes on average of 13 seconds to pass a Hong Kong resident and the electronic gate takes 9 seconds, this is a big deal. On an average day there are 400,000 individuals crossing the Hong Kong-China border. Convenience is important to both the user and those seeking more security.
Match-on-Card Technology Advances
At CardTechSecurTech, we heard from Sharp on its Smart Card with an embedded 32bit processor, 1MB of memory and potential application to HSPD 12. We have now heard of another significant card which is highly integrated – e-smart card from e-smart Technologies. The key feature of this card incorporates a fingerprint biometric reader on the card. Thus, true card only, match-on-card verification can be provided. This means that multifactor identification, such as PIN and fingerprint biometric can be accomplished without access to a data base in real time. The fingerprint sensor is only .33mm thick, however, the characteristics of the sensor are not discussed other than to state patent pending. It is claimed a FRR of .01% and a FAR .0000001% which seems preposterous.
The smart card without the fingerprint sensor is in use in Pusan, Korea now and it will be upgraded to the one with the fingerprint reader in June.
JCB Tries Biometrics
JCB (Japan) has a history of evaluating technology which supports its customers. The company has 53.6m card holders and 13.22m merchant outlets where the cards can be used. One of its pilot trials was the elimination of PIN entry by using biometrics. This was a limited trial with 50 JCB employees using a NTT DoCoMo phone with a fingerprint reader. The user results were quite interesting, on one hand, and a disaster on another.
Convenience – 80%
Feel Assured – 20%
Cumbersome initial registration – 33%
Dissatisfied with accuracy of verification – 67%
This creates cause for pause in evaluating similar fingerprint biometrics.
Dormitory Access via Biometrics
The problem was unique:
How to manage access, time record keeping and presence for 6,000 worker immigrants who are working on construction projects in Singapore.
The center of the access issue was the dormitory where the workers stayed after the work day. The workers are semi-literate and others seek to gain illegal entry. When the workers get off at the end of the day, they arrive in large numbers. Unless secured, the dormitories can be a hot bed of illegal activity including riots. One point stressed is that it is very important to keep illegal immigrants out of the dormitory. Initially a fingerprint system was installed for access and construction worker tracking. But this was a failure due to the high variable condition of the fingers – soiled and cut. Further, if the workers needed any training to pass the entry portal, this failed. It was found that the accuracy of the system fell off dramatically in 2 weeks. Another approach was tried – the combination of a facial recognition and RFID system. This was contactless and fast. The result was a much superior system. It also allowed for the video logging of attempted access by illegal workers.
WAVE Comments
With each event, the level of understanding biometrics increases. Biometrics World gave an important perspective of developments in the application of biometrics in the Asia Pacific and also the larger context of the role that biometrics can play.
The three big biometrics are facial, finger and iris. With each conference, it becomes clearer that no single biometric is superior. Here at Biometrics World, we saw a practical high-volume iris application in border crossing while this biometric has been a failure in other such attempts. Yet, there were two significant failures of fingerprints. At the same time, many factors outside of the biometric will determine its success or failure. Cited over and over again was training. Thus, the end-users can do much to determine if biometrics is a winner or dud. Likely more important is the prospect that biometric performance can fade with time. This was cited in the fingerprint application for physical access.
Increasingly it has become evident that the major system costs for a biometric implementation are not the sensors but the infrastructure. In the large government projects, this is the responsibility of the integrator. Smaller projects, including enterprise implementations, still have an infrastructure. Some of the early identity management suites illustrate how rich this can be.
The fact that a biometric exists does not stop there. Privacy has a large impact and, at Biometric World, we saw an early indication that this will be a factor in enterprise implementations. Thus, one must also consider the record components – that is, the data base which underlies the biometric.
It is easy to see convenience as a byproduct of biometrics use. However, the greater the convenience, the lower the security. While we are coming to accept the fact that convenience and necessity are closely related, this does not dismiss the role of security as a factor in the implementation. The parallelism of convenience and necessity are illustrated in US-VISIT and Hong Kong Immigration programs. We have spoken many times about US-VISIT. However, the Hong Kong Immigration problem is unique in terms of volume. With more than 400,000 border crossings per day, convenience is critical. Measured against an electronic gate passage of 9 seconds and a manual method of 13 seconds per person, the electronic gate would not work if it were not convenient to the user. With a failure rate of less than 2%, this might be also called a “convenience failure rate.” Thus, there is a practical cost to convenience.
Here at Biometrics World, we heard about the International Labour Organization’s Seafarers’s ID (SID) efforts and important issues in fingerprint systems interoperability. NIST is the catalyst for standards development. US-VISIT is driving performance. Where the money is being spent is setting the direction of the technology. There is nothing new here but we must keep in mind that corporate use of biometrics, and even transactional biometrics applications, are not on the radar screen in shaping the biometrics industry. HSPD 12 will be another major driver which has the potential to define the framework for logical access but this is too early to assess. Thus, it is important to keep in mind that “commercial” applications of biometrics are a trace market.
At CardTechSecurTech, we received early indications that smart card technology is playing an increasing role in the ability to implement sophisticated biometric systems. Sharp in HSPD 12 and now e-smart with a built-in fingerprint biometric reader are two examples. If there is a part of biometrics that parallels Moore’s Law, it is the smart card. While the smart card is not required for biometrics, it is yet another factor in a multi-factor approach. ePassports are embracing smart cards and so is HSPD 12. Because smart cards are migrating to a platform, for applications and sensors, developments in smart cards are showing that they can drive biometric programs. This is an important area to monitor.
***Logitech io2 Digital Writing System Integrated With ACT!; Digital Pen and Contact Management Application Saves Time for Sales and Service Professionals
FREMONT, Calif.
May 16, 2005
Logitech has announced that the Logitech io2 Digital Writing System is now available for use with ACT! 2005 and ACT! 2005 Premium for Workgroups contact and customer management products from Best Software. This digital pen and paper solution gives sales and service professionals a way to seamlessly transform handwritten notes into ACT! entries.
Logitech collaborated with the ASDS Computer Company, a provider of ACT! Consulting Services and an ACT! Add-on Partner, to develop DigitalNotes for ACT! 2005, the first integrated digital writing solution for ACT! The solution eliminates the need for ACT! users to type notes into their contact database, vastly improving their productivity.
During an interaction with a contact, ACT! users can take notes with the Logitech io2 Digital Pen on digital paper, just as they would with standard pen and paper. When the meeting or phone call is completed, they can then upload those handwritten notes by simply docking the pen with the PC. The information can then easily be transferred into a contact's "history" or "notes" field within the ACT! database.
The DigitalNotes for ACT! 2005 software can be customized based on specific individual needs. For example, users can define settings so that the software routes notes to the database by searching for an account number, contact person, organization, or any other available database field. Also, digital notes can be imported into the ACT! database exactly as written, or they can be converted to text. Users can also take advantage of the Logitech io2 software interface to edit and select portions of the notes to file in the database.
Availability
DigitalNotes for ACT! 2005 is now available in combination with the Logitech io2 Digital Writing system at
http://www.asdscomputer.com/products/digitalnotes
For professionals who already use both the Logitech io2 Digital Pen and ACT!, the DigitalNotes for ACT! 2005 software download is available at the ASDS Web site and at
For more information, please visit
http://www.logitechio.com/iobusiness
0520.3 Scanner Software Advances
***A2iA Introduces World’s First Keyword Spotting Tool for Unstructured Cursive Handwritten Documents
PHILADELPHIA
May 17, 2005
A2iA Corporation has unveiled the an automated data capture and keyword spotting software for freeform cursive handwriting, making it possible to quickly scan through the content contained within large volumes of unstructured handwritten letters and loosely structured fields within forms. A2iA DocumentReader will be the key to unlocking valuable cursive handwritten information in future generations of content management, knowledge management and workflow systems.
Using A2iA’s Intelligent Word Recognition (IWR) technology, combined with the company’s broad range of document analysis technologies, A2iA DocumentReader enables a computer to mimic a human speed-reader. It locates, segments and processes the information contained in the paper that businesses use and archive every day – cursive handwritten information previously excluded from traditional forms processing and records management applications.
On full-page handwritten letters, A2iA DocumentReader starts by locating the paragraphs composing the main body content and segments the paragraphs into lines and the lines into words. It then converts the handwritten words into electronic data, matching the words against languagespecific and industry-specific vocabularies of between 10,000 and 30,000 words, to produce a rough transcription. This functionality within A2iA DocumentReader gives companies the ability to index – in electronic text format and together with other data entered or captured electronically – the information contained in documents that are typically read, archived and retrieved manually in their native format or stored in image archives. The captured data can fuel customer relationship management and knowledge management applications. Other potential applications include collecting handwritten intelligence from doctor’s notes, prescriptions, accident witness statements, police reports, and litigation support, to name a few.
In addition to full-paragraph handwriting recognition, A2iA DocumentReader is designed for keyword spotting on single images and entire image repositories. Users can define their own set of keywords and phrases to be located. Automatic indexing of unstructured handwritten letters eliminates the time and cost associated with manually reviewing and sorting stacks of mail, archives and other documents, and will permit these documents to be searched as quickly and easily as web pages. In electronic mailroom, Business Process Management and workflow applications, the keywords can be employed to route documents to specific individuals or departments.
Because it also uses technology found in A2iA FieldReader for automatic data capture on forms, A2iA DocumentReader can be used for full-page forms processing, including the capture of constrained, unconstrained and freeform cursive writing. Using its keyword spotting capabilities, A2iA DocumentReader can search through the information contained within loosely structured fields on forms, such as a freeform commentary field in a customer satisfaction survey A2iA Introduces World’s First Keyword Spotting Tool for Unstructured Cursive Handwritten Documents and blocks of handwriting on clinical trial forms, for example. With A2iA DocumentReader, this type of information will be readily accessible through user-defined searches.
Features and Benefits
Low indexing cost and rapid access to information compared to manual transcription.
The ability to perform ad-hoc searches of handwritten information, previously unusable in electronic form.
Automated handwritten document classification and analysis streamlines workflow in paper-intensive industries and mailrooms.
Better compliance as a result of making handwritten documents and their content searchable and by providing more customer information.
Availability
A2iA DocumentReader is a first-generation application available for integration by A2iA’s official licensees and resellers.
***Homeowners Rejoice in the Era of the Shrinking, Smart Home Products; 2005 National Hardware Show Showcases Array of New Home Improvement Products that Provide Ease, Convenience and Ability to Think for Themselves
National Hardware Show 2005
LAS VEGAS
May 16, 2005
From the introduction of the first washing machine to today's robotic vacuums, technological advancements constantly change homeowners' lifestyles, making day-to-day tasks speedier and more efficient. Today, high-tech "smart" products have led to increased consumer interest in technologies that not only enable more efficient home improvements, but also add new conveniences to the home.
The most evident advancement in technology in the home improvement industry is seen where tool makers are offering an increasingly wide range of tools with built-in laser and sonar technology.
One of the most popular technology trends in 2005 is "hybrid white goods," or smart kitchen products. These are appliances that combine old features with modern technologies, such as refrigerators with the capability to monitor the shelf life of their contents and ovens that can download and execute recipes.
Another modern home technology marvel: robotic vacuums, which offer the ultimate convenience, as they clean all by themselves. The Roomba by iRobot is an intelligent vacuum that uses robotic technology to clean floors through "set it and forget it" technology. Only 13 inches in diameter and lighter than the average bowling ball, the smart vacuum roams the room devouring dust and dirt, then returns automatically to its charging base.
In addition, it is predicted that in the near future, countertops will be anti-bacterial with integral sinks that are recyclable when they wear out. Homes will be more user-friendly for all ages, with adjustable countertops, glare-free surfaces and skid-resistant floors. With easy access ramp entries and solar heat and electricity, homes will be totally pre-wired for the electronics of the future.
Other trends signifying the shift to advanced technology in the home include:
-- A survey commissioned by Lowe's Home Improvement Warehouse, which found that 61 percent of home builders currently include or plan to include Smart Home technology in the homes they build.
-- Hands-free faucets, a staple in airports, movie theaters and other public places, are now trickling into the domestic market, particularly in powder rooms and children's bathrooms, according to the Chicago Tribune. Hands-free models have caught on not only because universal design is becoming more popular, but also because manufacturers have improved the installation technology. Consumers can pre-set water temperatures and stylish new models are more suitable for a family bathroom than a public restroom.
-- The number of cordless products continues to grow. Cordless models continue to have huge market gains due to their performance advantages over plug-in models, such as recent improvements to battery life and the introduction of ergonomic, multi-position handles.
A national poll of 31,505 consumers for Casual Living, in addition to a home furnishings-specific study of Furniture/Today of 50,000 homeowners, offered compelling data about generational differences in purchasing patterns and home improvement interests. Among the most critical findings of the study is the growing influence of Generation Y consumers -- those homeowners who were born between 1976 and 1985. By 2010 there will be 78 million Generation Yers who have the potential to outstrip their Baby Boomer parents' influence on the home furnishings market.
Technology is a key driver of Generation Y purchasing habits, with products that not only look cool, but that do more contributing to home improvement-related sales. They expect -- and demand -- two-way communication from retailers and manufacturers; the generation that grew up in an environment of cell phones, PDAs and the Internet has come to expect instant notifications, interactive Web sites, gift registries, and other convenient features.
http://www.nationalhardwareshow.com
***Cyota Identifies Major New Phishing Threat - Personalized Phishing Attacks; Organized Group Now Targeting Individual Accountholders by Name, Using Their Real Stolen Credentials to Trick Them into Revealing Even More Sensitive Information
NEW YORK
May 16, 2005
Cyota has detected a dangerous new phishing attack - which Cyota has coined 'personalized phishing' - where an organized gang of fraudsters is using real stolen information to target accountholders by name to lure individuals into divulging additional sensitive information.
Cyota's 24x7 Anti-Fraud Command Center (AFCC) detected that attack against several of its anti-phishing customers. The AFCC has immediately begun blocking access to and taking down these fraudulent sites as part of its FraudAction anti-phishing and anti-pharming service.
Contrary to a typical phishing attack, where fraudsters send out hundreds of thousands of e-mails and hope for the best results possible, personalized phishing attacks target individual named accountholders at specific banks. In order to achieve maximal effectiveness, the fraudsters use real stolen information about the accountholder - such as the person's name, e-mail address, correct full account number, and other bank information - to make the e-mail look more legitimate and give the accountholder a false sense of security.
The motive behind this sophisticated fraud is to enhance existing lists of stolen credentials with even more sensitive information not yet possessed by the fraudsters, such as ATM PIN numbers or credit card CVV codes. These complete sets of credentials have a much higher resale value among the online fraud communities than just the names and account numbers.
Cyota advises that if consumers get an e-mail from a bank or online merchant requesting personal or account information that they do not to click on any link within the e-mail, but instead go directly to the site to verify the request or complete the transaction.
This announcement comes on the heels of Cyota's last week launch of its anti-pharming service, which is currently in use by 13 of its anti-phishing customers.
0520.6 Telephone Interoperability
***Leading Telecommunications Providers Join Together to Create Critical OS Standard
TeleManagement World
NICE, France
May 16, 2005
With the growing emphasis on reducing operational cost and the need to integrate disparate systems, service providers have never been more in need of operations system (OS) interface standardization. Telcordia Technologies, Inc., Lucent Technologies, Nortel, Siemens, and Cramer have joined together to address this critical requirement and unveiled the Multi-Technology Operations Systems Interface (MTOSI) at TM Forum's TeleManagement World in Nice, France.
MTOSI is a unified, open interface standard for use between operations systems to support network and service management. Built on the successful TM Forum Multi-Technology Network Management (MTNM) initiative that defines the industry standard for an NMS-EMS interface and focuses on network element and network management; the MTOSI model extends the MTNM interface to OS-OS interactions and will support network as well as service management. Bringing together modern software technologies and standard technology models within the TM Forum, the new standard will encourage application inter-working, faster deployment and lower cost of ownership for next generation operations systems.
The MTOSI standard is supported by leading carriers like British Telecom (BT), who believe it is instrumental to lowering the risk and complexity of integrating disparate OS solutions.
Demonstrations were provided in Gallieni Suite 1 and Agora Suite 2.
The Gallieni Suite 1 showcased a demo provided by Telcordia, Lucent and Siemens highlighting both the NMS- EMS and OS-OS aspects of the MTOSI Release 1.0 specifications. Through MTOSI operations, Telcordia Granite Inventory OS retrieves network resource inventory from the Siemens NetViewer Element Management System (EMS) and the Lucent Navis Optical Management System (OMS) (also an EMS). The Lucent VitalSuite Integrated Service Assurance system retrieves all the needed inventory information from Telcordia Granite Inventory OS and then correlates against a collection of active alarms retrieved from the Lucent Navis OMS. The Siemens network is comprised of Microwave network elements supporting PDH and SDH signals. The Lucent STM-64 MS SPRING network is comprised of four LambdaUnite MultiService Switch network elements.
A second demo was provided by Nortel and Cramer for the Agora Suite 2. Cramer demonstrated an MTOSI based adaptor to connect Nortel's Optical Network Manager (ONM) to Cramer's inventory management suite. The MTOSI specified XML adaptor enables synchronization between Cramer's ResourceManager and Nortel's ONM effectively providing reconciliation between Inventory and Network with device models 'out of the box'.
***European Venture-Capital Investment Climbs in First Quarter Of 2005; Ernst & Young/VentureOne Quarterly European Venture Capital Report Finds Median Deal Sizes at Highest Levels
LONDON & NEW YORK
May 16, 2005
In the first quarter of 2005, venture-capital investment into European companies reached EUR 880.3 million--a 19% increase over the amount invested in the first quarter of 2004. However, deal flow dropped to less than 200 deals--a 27% decline from the same quarter a year ago--according to the European Venture Capital Report released by Ernst & Young and VentureOne. VentureOne is a unit of Dow Jones Newswires and the publisher of VentureSource.
In comparison, both deal flow and investment in the U.S. declined this quarter. Europe's positive investment trend--which is the largest amount invested in the first quarter in Europe since 2002--indicates investors selectively are willing to back the most promising start-ups and technologies.
Among the bright spots: The overall median deal size in Europe reached its highest level in more than six years at EUR 3 million, compared to EUR 1.5 million in the same quarter of last year. Much of that increase was related to larger investments in first-round deals--a median EUR 2.6 million, also the highest amount since 1999, when VentureOne began tracking the data. The median size of later-round deals grew to EUR 4 million, compared to EUR 2 million in the first quarter of last year. This is the highest median for later rounds since the third quarter of 2000.
By industry, the amount invested into European information-technology (IT) companies climbed upward, reaching EUR 407.3 million--a 16% increase over this quarter a year ago. However, IT deal flow was down 21%. Within the technology industry, semiconductor companies fared well this quarter with deal flow that was fairly steady compared to the first quarter of 2004, and an investment level that tripled to EUR 121.9 million. With 53 deals, software activity declined 30% but the investment level held steady at EUR 160.4 million. Deals for communications companies declined 25%, while investment in this segment dropped 37%. The electronics and information-services segments each posted one more deal than occurred this quarter last year. In addition, the capital invested in the information-services segment nearly doubled from the first quarter of 2004 to reach EUR 40 million.
By industry, the median-round sizes also were at their highest level on record, with EUR 3 million for IT deals and EUR 3.3 million for health-care deals this quarter.
Meanwhile, venture-capital investment in health-care companies grew considerably, while deals declined in a first-quarter comparison. For example, deal flow was down 18% for health-care companies overall, but investment was up 42% to EUR 377 million. Deal flow also was down 18% for the category's largest segment: biopharmaceuticals. However, the capital invested in biopharmaceutical companies increased by 44% over the first quarter of last year. The category was responsible for one of the quarter's largest deals--the EUR 26.3 million later-round deal for Zealand Pharma of Glostrup, Denmark--a developer of drugs for cardiovascular and metabolic diseases. The medical-devices segment posted 21 deals this quarter--the same number as a year ago--and EUR 43.1 million invested, a 58% increase.
By country, France held steady in terms of venture-capital activity, with 38 deals this quarter--the same as occurred in the first quarter of 2004. But investment in French companies decreased slightly--by EUR 5 million--to EUR 106.5 million. In the United Kingdom, deal flow fell by one-third to 68 deals, but investment grew to EUR 270.1 million--a 5% increase. In Germany, investment was steady at EUR 141.8 million, while deal flow decreased 28% to 26 deals. The other European countries most active in venture capital include Sweden, which had 17 deals and EUR 61.4 million invested this quarter, and Ireland, which posted eight deals and EUR 42.1 million invested.
One venture-capital trend that appeared to grow in 2004 fell back this quarter: the investment activity in seed- and first-round deals. While such deals represented one-third of the investments made in the first quarter of 2004 and continued to grow throughout last year, they accounted for only 29% of the deal flow this quarter. They also accounted for only 20% of the capital invested, compared to 25% this quarter a year ago. However, they still represented slightly more deals than second-round financings.
http://www.ey.com/perspectives
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