close this bookVolume 2: No. 02
View the documentNews -- computer industry
View the documentNews -- women's issues; discrimination
View the documentNews -- investment
View the documentDiscussion -- bankruptcy; home sale; moving expenses
View the documentDiscussion -- leases
View the documentDiscussion -- U.S. law; expert-system liability
View the documentDiscussion -- patents
View the documentNews -- Asian computing
View the documentNews -- job opportunities
View the documentComputists -- Kurt Christensen; corrections

Rear Admiral Grace Hopper, 85, died in her sleep on New Year's Day. Her Navy programming career began in 1943 with the Mark I -- for the Bureau of Ordnance Computation at Harvard University -- after getting a Ph.D. at Yale and teaching at Vassar. She worked with John Von Neumann, then joined the Eckert-Mauchly Corporation (later absorbed by Rand and then Sperry) in 1949 to work on the Univac I. She is considered the mother of COBOL, which grew from the Flow-Matic language she developed for Sperry Rand. Admiral Hopper has long been a spokeswoman for language standardization, innovation, and youth. "If it's a good idea, go ahead and do it. It's much easier to apologize than it is to get permission." [John S. Garavelli (garavell@gunbrf.bitnet),, 1/3; and Mitch Betts, CW, 1/6.] Much of her innovation in machine-independent compilers and relocatable object code stemmed from her lack of computing budget at the Pentagon. Her team had to load and test their code in whatever time was left at the end of production shifts. Although she's had many successes, she nearly got in trouble for teaching a Pentagon computer to speak German. It was a simple keyword substitution (SPRUNGE for JUMP, etc.), but raised enough hackles that she had to deny the stunt and ridicule the idea of an American computer reading German.

The last five years have been good for technology companies, according to the Inc. 500 list. Firms offering PC-based products and services account for 10% of the list, and 40% of the technology firms were based on software-related products or services. (Hardware and service companies grew faster than software companies.) [Nell Margolis, CW, 1/6.] Many other companies have entered bankruptcy, unable to survive rapid growth.

New-business incorporations are down from 1986. Reasons may be lack of bank credit or the elimination of capital-gains tax breaks. People are finding jobs rather than starting businesses. Start-ups should increase again in a couple of years, as more people reach the entrepreneurial age of 40-50. [David Birch, Inc., 10/91.] A Dun & Bradstreet report shows that California incorporations in 1990 were down 19% over 1989; New England was down 11%. Two regions -- the Pacific Northwest and South Central regions -- showed slight increases. [Inc., 10/91.]

Business purchases, however, are more popular than ever. Susan Pravda (Milgrim Thomajan & Lee, Boston) recommends finding an elderly seller who has no idea what the business is worth, but who wants you to "take care of his baby." [Inc., 10/91.] If you can't agree with a seller on the value of a business, consider an earn-out agreement. If the business does as well as the seller predicts, you pay a bonus. This works especially well if the seller will still be contributing to the business for several years. Be careful: short-term earn-outs may discourage R&D or other long-term investment. [Jill Andresky Fraser, Inc., 10/91.]

Many companies have gone public recently, which is usually a good sign for the companies and for the economy. Some of the IPOs this year were: Thinking Machines Corp. (Cambridge, MA), with 30% of the business market for massively parallel systems; Compression Labs, Inc. (San Jose, CA) and Picturetel Corp. (Peabody, MA), two video-conferencing companies; Go Corp. (Foster City, CA), developer of the Penpoint object-oriented operating system; Ross Systems, Inc. (Redwood City, CA), VAX software developer; Input/Output, Inc. (Stafford, TX), specialist in data acquisition systems for exploration; Platinum Technology, Inc. (Lombard, IL), DB-2 software and training; Quarterdeck Office Systems, Inc. (Santa Monica, CA), PC memory management utilities; Sybase, Inc. (Emeryville, CA), relational DBMS; and Bachman Information Systems, Inc. (Cambridge, MA), CASE and re-engineering tools. [Alan J. Ryan, CW, 12/23.] (Watch for job openings due to the newly available capital.)

Novell, Inc. will invest $700K in Serius Corp., an object- oriented software developer for Apple. Two venture firms are also contributing. Novell's immediate goal is to improve network directory services. A larger goal is to match every advantage that Microsoft's NT operating system might deliver. Serius makes Serius Programmer, a graphic language with 45 application functions -- spreadsheet, word processor, etc. -- that can be integrated with custom code. [Jim Nash, CW, 1/6.]

Grant Dove, chairman of MCC, will take on additional duties as a "special partner" in Technology Strategies & Alliances (Menlo Park, CA), a high-tech strategic-planning and investment-banking firm. [CW, 1/6.]

Many insurance companies are replacing old mainframes in order to stay competitive through the next decade, according to David Schmaltz of Standard Insurance Co. Such companies are willing to consider AI, LANs, pen-based computers, CASE, open systems, client/server architectures (or distributed systems), document imaging systems, OCR, and other advanced technologies. Expert systems are being tested for systems design as well as assisting claims adjusters and brokers. There are excellent career (and sales) opportunities for people who understand the mainframes and the incoming systems. [Emily Leinfuss, CW, 12/2.]

What makes a company undertake a software development project? A recent survey of 123 IS managers and chief information officers showed that 39% of projects were critical to core business, 27% affected profitability, and 24% were for competitive advantage. That leaves just 10% for other justifications. [CW, 12/2.] You're more likely to win funding if you understand your client's business. Another inference is that an industry on hard times (such as the advertising industry, at the moment) is likely to make funds available for essential projects.

Tim Finin ( has been active in AI applications conferences and journals. He'd like to remind Computists of the 8th IEEE Conference on AI for Applications (CAIA-92), March 2-6 in Monterey, CA. Some of the talks and panels will cover NASA applications; standards for knowledge representations; software patents; and fuzzy If-Then rules. Contact for an advance program.

The International Network of Women in Technology (WITI) will hold its first general meeting in Mountain View, CA, on 1/19 and in Los Angles on 1/26. (Paid reservations of $15/$25 required one week in advance.) The announced speaker is Kathleen Bernard (NC Supercomputing Center), a former senior policy analyst in the White House Office of Science and Technology Policy. WITI will have seminars, workshops, electronic communications, a newsletter, job hotline, resource database, and a statistical database for social research. The Founding Executive Director is Carolyn Leighton (; (818) 990-1987; MCI 439-6466), president of Criterion Research in Southern California. For Bay Area information, contact or call (415) 336-1007. [Michelle Levander, SJM, 1/6, and Scott Hazen Mueller (, ba.announce, 1/5.]

There's a new discussion list, SWIP-L, for the Society for Women in Philosophy and for others interested in feminist philosophy and jobs for feminist philosophers. Send a "sub SWIP-L " message to [Linda Lopez McAlister/Hypatia (dllafaa@cfrvm.bitnet), Arachnet, 1/6.]

Newsweek (12/9) had an article about million-dollar settlements for age-discrimination cases. It takes years to win money, though, and victors claim that they get little except vindication. Discrimination in forced retirements is hard to prove, and discrimination in hiring is even more so. Further, one federal court has ruled that it is not discrimination to replace expensive people with cheaper ones -- as long as age is not a factor.

Employers are unhappy with the immigration act of '86. They face thousands of dollars in fines if they hire illegal aliens, and similar fines if they discriminate against legal immigrants. The net result may be an increase in discrimination. Victims of discrimination can contact the Office of Special Counsel, U.S. Dept. of Justice, (800) 255-7688. For questions about the law, contact the U.S. Immigration and Naturalization Service, (800) 755-0777. To report illegal hiring practices, write to your local INS office. [Steve Johnson, SJM, 11/3.]

Mutual funds based on health and biotechnology averaged a 74% return last year, creating pressure for fund managers to find equally lucrative investments in the coming year. Financial- service funds made 61%, small-company funds made 52%, and science/technology funds made 45%. The average across all funds was 30.7%, vs. 26.3% for the Standard & Poor's 500. Domestic funds beat international ones, and equity funds did better than long-term fixed-income funds. [AP. SJM, 1/4.] Why work, if you can afford to invest? Well, last year the equity funds lost 7.3%. This year the gold funds lost 4.5%. As factories and jobs become more automated, though, an increasing percentage of U.S. incomes may have to come from investments.

Michael Murphy, publisher of the California Technology Stock Letter (Murenove Inc., Half Moon Bay, CA), is a bearish investment advisor who helps others make money on declining stocks. Murphy is bullish on certain high-tech stocks, though. He likes to track R&D spending, which he factors into a growth/flow ratio of his own invention. It's like a price/earnings ratio, but adds R&D to earnings. (R&D is usually treated as an expense, which makes high-tech companies look unattractive to Wall Street.) "On average, technology companies spend at least 7% of sales on R&D ... The more companies spend on R&D, the more they can drive their own growth, almost regardless of what is going on in the economy." By the time the research pays off, he and his clients already own the stock. Some of his calls have been wrong, of course, but a recent 5-year ranking put Michael's newsletter #2 in a field of 70. His advice gave a 172% return, vs. 76% for the Standard & Poor's 500. [Steve Kaufman, SJM, 12/23.]

The National Association of Investors Corp. says that 62% of the investment clubs it surveyed beat the S&P 500 over nine years. Only 21% of mutual funds did the same. One secret is to invest new money regularly. [Newsweek, 12/9.] Another is to use home computers. Note, however, that disbanded clubs were not included in the survey.

I don't know if this is legit or just a sales pitch, but Franz Hrazdira (franz.hrazdira@canrem.uucp) is organizing a network group to purchase, study, and use The London Trading System for trading futures and options. $50, or CAN$60, by 1/15/92. [misc.entrepreneurs, 12/28.]

If you're investing -- either money or career time -- be careful about IPOs. Many companies go public because of financial problems, and the root causes may persist despite an influx of cash. The number of high-tech companies going public this year has been more than double that in each of the previous three years. [Margaret Ryan, EE Times, 11/25.] I've heard that working for mid-sized companies has all the problems and none of the career benefits of larger and smaller companies.

One company trying to make sense of the market is Prediction Co. (Los Alamos, NM). Doyne Farmer, VP of Research, claims to have mathematical methods for extracting non-linear patterns from chaotic financial data. [Michael Schrage, SJM, 1/6.]

With a jump in Microsoft's stock to $114, Bill Gates is now considered the wealthiest person in the U.S. [Reuters. SF Chronicle, 1/3.] It's unlikely that anyone will buy out his $6.5B in Microsoft stock -- and doing so would depress the stock price -- but he's going to get an incredible amount of publicity. If publicity equals sales, Microsoft will benefit and the stock should rise. If publicity oversells the stock, it could plummet later. Care to place a bet?

Nearly 1M personal bankruptcies are forecast for 1992. It's not something you want to try. The court may let you keep your house and your car, but only if you keep making the payments. If you have a steady job, you might be able to regain one credit card, but only if you reassume the debt. Only half of all bankrupts get any kind of credit within five years, and only 16% get a loan within one year. When credit is available, amounts are small -- too small to qualify for a new mortgage. The law says that employers can't refuse to hire you because of a bankruptcy, but such discrimination is common. The bankruptcy will be on your credit report for seven to ten years, and lenders can ask about it even after that. [Jane Bryant Quinn, SJM, 12/8.] (Depending on state law, complete bankruptcy may still leave you with your home, wedding ring, and one firearm. I've heard that Texas law allows someone to liquidate assets and buy a fancy home just prior to declaring bankruptcy.)

Having trouble selling your home? A Maine couple is running an essay contest for their home and store. (State law didn't allow a lottery.) It costs $250 to enter, and they will return all fees if they don't get at least 800 entries. Just write 300 words or less on why you'd like to own a Maine home and convenience store, to be judged by the local English teacher. (12/11) has been having a discussion about moving expenses. There are three kinds of expenses: those your company pays, those that are reimbursed by your company, and those that you pay. The first two are taxable compensation and will appear on your Form W-2 or a special Form 4782; the latter two are deductible if you qualify and choose to itemize expenses. (You'll want to itemize if you are paying interest on a home mortgage.) Reimbursed or out-of-pocket expenses can be deducted if it's a new job [rather than a transfer], you move more than 35 miles, you work in the area 39 weeks over the next 12 months, and 78 weeks over the next 24 months. If your company pays the movers directly, they may also pay you a bonus to cover the tax on this "income" to you. [Chengi Jimmy Kuo ( reports that IBM did this for him.] The bonus is income, so you pay tax on it as well. Other bonuses, inducements, or extra pre-move flights are also non-deductible. Watch out: Esther Lumsdon ( reports that extra taxes caused by moving income are due in the quarter you receive the income.

If you decide to lease equipment instead of buying, watch for the following terms. A capital lease is carried on your balance sheet as a long-term debt. (Your banker may object to the additional leverage.) An operating lease is usually for a shorter term -- often with maintenance provided -- and does not appear on your balance sheet. Either of these may be a true lease under federal income tax law: you deduct lease payments as expenses and the lessor owns and depreciates the equipment. A true lease may include an option to buy, which typically increases the lease payments. A capital or operating lease can also be a finance lease, which is a noncancelable, long-term lease where you pay the insurance and maintenance. If you are committed to several years of payments, it may be a full-payout lease. (It's like buying on credit, except that you don't get title.)

A leveraged lease is where you put some money down and finance the rest through a third party. The equipment owner -- or "lessor" -- gets tax benefits, which may reduce your cost [if you negotiate]. A master lease is like a credit line where the original terms can be extended to specified additional equipment. A net lease is one where you -- the "lessee" -- pay the insurance, maintenance, and taxes. This is common for long-term leases. Finally, an open-end lease is a conditional sale (of a vehicle, typically) where you guarantee that the lessor will receive a specified minimum value at the end of the lease. [Bruce G. Posner, Inc., 11/91.]

The U.S. has about 800K lawyers, about equal to the number of design engineers. (That's 70% of the world's lawyers. In Japan, the ratio is 1:20.) Although few lawyers are at the $150K level, such salaries will draw 94,000 applicants to law schools this year. Dan Quayle says the result is 18 million new lawsuits per year, at a cost of $300B in legal expenses. [Lawrence Maloney, Design News, 11/4.] AI to aid lawyers really doesn't address the problem -- nor are lawyers willing to pay if AI doesn't increase their incomes. (There is an expert system for screening jurors, and there may be a few others.) Insurance companies might pay, especially for R&D giving one company a competitive advantage.

If you need an expert witness, or would like to be one, or even need to discredit one, get in touch with IDEX. This six- person company maintains dossiers on expert witnesses used by the legal system. They have about 500 subscribers paying $375 to join and $60 per search. Experts earn up to $500 per hour and $2,500 per day, plus expenses. [Brigid McMenamin, Forbes, 10/14.]

Sometimes a handshake or memo of understanding is sufficient, but important matters should be spelled out in contracts. Even then, terms that seem clear to both parties may cause contention. If software is "to perform substantially as described in the documentation," for instance, does that mean software must conform to specs or that user manuals will be written to match software? Dennis S. Deutsch recommends that the following terms be defined if they are used in a contract: trade secret, confidential information, time (e.g., zone), holidays, outsourcing, platform, software, release, upgrade, modification, training, maintenance, support, telephone support, documentation, acceptance, installation, and enhancement. If you guarantee your software, for instance, are you liable for defects in commercial packages you provide? [Computerworld, 11/25.] (The inherent ambiguity of English makes expert systems for legal reasoning difficult -- and important.)

An important ruling in the Minnesota Court of Appeals this year established that electronic data is (are?) property under the laws of common business insurance. Lost computer tapes are covered by property insurance for more than the value of the media. [Mitch Betts and Kim S. Nash, CW, 12/23.] Expect higher corporate insurance rates, and be prepared to prove the value of your own software if you entrust it to a third party.

A task force within the Netherlands Society for Computers and Law is studying the legal status of decision support systems. To contribute, contact mr ir W.J. van Hattum, Study Committee Artificial Intelligence, Netherlands Society for Computers and Law, c/o A. Beker c.s. Advocaten, P.O. Box 23511, NL - 3001 KM ROTTERDAM, The Netherlands; Fax +31.10.404 6235, Tel. +31.10.414 5411. [Herman J. Woltring (, AIL-L, 12/2.]

Donald Berman ( says that the details of a specific case will weigh very strongly in a court decision. In particular, a judge will weigh the benefits to society of encouraging or discouraging particular uses of expert systems. If an expert-system user is to be treated as a learned intermediary, the system may have to provide an audit trail or justification as part of each recommendation. Then again, the analogy to a reference book or how-to book may be strong enough to limit liability. It won't hurt to add disclaimers of liability to your product literature, but it may not help. [AIL-L, 11/25.]

Liability for the advice of expert systems has not been considered by the courts, but there are precedents that might apply. If your decision logic is open for inspection (perhaps documented with flowcharts), you may be able to claim First Amendment protection in the U.S. You then enjoy the same freedom from liability as do lunatic diet books. If you or your customers provide a service, liability may be limited by the "learned intermediary" doctrine. If your expert system is a product, there is typically no limit on propagation of liability up the chain of production and design. (Passing costs up the chain also passes them down to customers, spreading accident costs among those who benefit from the product.) Courts will assume that you intend your system for unsophisticated users unless either the law or your licensing agreements restrict use to trained professionals. Even complex and dangerous medical devices are treated as "lawnmowers" if the class of users is not legally restricted. Supervision of personnel by a physician does not restrict liability due to poor design or a complex interface. [Edward P. Richards III (, AIL-L, 11/24.]

One survey found that 39% of responding companies had declined to introduce a product because of liability risks, and 25% had ceased product research. Monsanto, for instance, refused to market a believed-safe substitute for asbestos. [Walter S. Wingo, Design News, 11/4.] Ernie Hall once told me that his robot lawnmower couldn't be commercialized because of liability concerns. (Rightly so, I think.)

Need help getting started with a patent application? You can call Elizabeth Robertson, (202) 377-0659, at the U.S. Dept. of Commerce; Fred Hart, (301) 975-5120, at the National Institute of Standards and Technology (NIST); or Raymond Watts, (509) 376-4348, at the U.S. Dept. of Energy. [Design News, 9/23.]

Beware of commercial services that help inventors. A few may be reputable -- especially those run by universities -- but many are in business only to sell you reports. (One report on an automatic golf teeing device assured the inventor that the U.S. has sufficient supplies of plastic and aluminum for his needs.) You do not need a $7,000 report to file a patent application, nor do you need to spend such sums to mail letters to manufacturing companies.

Can't afford to prosecute a patent infringement? Some lawyers are now syndicating lawsuits -- getting investors to line up for a share of the settlement. One Los Angeles bank offers a line of credit for such lawsuits. [Across the Board. Inc., 10/91.]

China's first intellectual-property copyright law has been amended to cover software. There is no corresponding patent protection. [CACM, 12/91.]

Asian multinationals are increasingly emphasizing services over manufacturing, but Asian governments are afraid to deregulate service sectors if it means American-style lawsuits. [Asian Business. Inc., 10/91.]

An IBM Japan member says logic design engineers work at a much higher level of intensity in the U.S. The Japanese are more efficient. They spend a lot of time sharing ideas, so engineers know what other groups are doing. Also, Tokyo is so small that it's easy to meet with suppliers and customers when you need to. [David Lammers, EE Times, 11/18.] As U.S. companies decentralize and outsource, they must be careful not to break apart creative design teams. Foreign manufacturing may be cheaper, but concurrent engineering requires proximity. Perhaps design efforts will also be moved overseas.

China is establishing regional software centers in Beijing, Shenzhen (near Hong Kong), and Shanghai's Pudong development. China has more than 200 software houses with about 40,000 programmers (but few senior systems analysts). Taiwanese PC manufacturers are interested in joint ventures, although these are currently prohibited. IBM has 100 programmers producing Chinese-language software (for Hong Kong and China) at the International Software Development Co. in Shenzen, in cooperation with Shenzhen University. DEC has 30 MIS programmers at the Shenzhen Taiji-DEC Software Center, a $1.2M collaboration with the Taiji Computer Corp. Unisys employs 20 "localization" programmers at Unimac Computer Systems Ltd. Telecommunications companies are also getting switching software from Chinese partners. [Rick Boyd-Merritt and Alan Patterson, Electronic World News, 11/18.]

Taiwan's National Science Council will encourage mergers in Hsinchu Science Park by subsidizing R&D at larger firms. Foreign companies will also be eligible. US$500M over five years is planned, about 1/3 of Hsinchu's R&D budget. [Electronic World News, 11/18.]

The government of Hong Kong hopes to invest US$26M over five years in private-sector R&D. The government will acquire equity, hoping to share in subsequent profits. [Ibid.]

The HCRC Language Technology Group and the Centre for Cognitive Science at UEdinburgh (Scotland) need 1-2 MS/PhD senior research assistant(s) in NLP. Salary to 21,400 pounds/annum, starting immediately. Contact Margaret Rennex ( by 12/13/91. [Henry S. Thompson (, NL-KR Digest, 12/31.]

USydney Basser Dept. of CS, Knowledge Systems Group, needs a PhD Research Fellow in AI logics. Salary to $A48,688. Contact Norman Foo ( by 1/9/92. [Michael Wise (, NL-KR Digest, 12/31.]

The Technion (Israel Institute of Technology) has tenure-track openings in its Information Systems Engineering group within the Faculty of Industrial Engineering and Management. Skills in particular demand are AI, DB, computer vision, software engineering, and telecommunication. [Opher Etzion (,, 12/31.]

Noble II Systems, Inc. needs an experienced BS knowledge engineer to develop CAD/CAM and engineering expert systems. Erin Gibson, 26789 Woodward Ave., #109, Huntington Woods, MI 48070-1334. [Leonard J. Peirce (, m.j.o, 1/7.]

Wright State University (Dayton, OH) needs Ph.D. faculty for tenure-track CSE positions, esp. in distributed systems, parallel computing, and databases. Contact Alastair D. McAulay (amcaulay by 2/15. [Sheila Hollenbaugh (shollen, m.j.o, 1/7.]

SRI International (Menlo Park, CA) needs an experienced MS/PhD senior researcher in OCR. U.S. citizenship required. Contact Prasanna Mulgaonkar ( [m.j.o, 1/7.]

The AI Lab at NASA Ames needs an MS-level research/interface programmer for their SIGMA project, a combination of visual programming, constraint propagation, and frame-based knowledge representation for scientific modeling. Initial applications are planetary atmospheric modeling and ecosystem modeling. Contact Rich Keller ( or Vera Novosel (Sterling Federal Systems, 1121 San Antonio Road, Palo Alto, CA 94303) about job RK-E-T008. [Terry Winograd,, 1/6.]

Kurt K. Christensen ( is President/CTO of Apeiron, a systems integrator in Dallas, TX, and is also VP/CTO of Telenexus, a micro-cellular communications company. Apeiron's current projects include hardware and software development for scientific visualization and for multimedia systems. Kurt has BS and MSEE degrees from Virginia Tech. He then worked for Texas Instruments for six years, on varied real-time projects related to mission and route planning, obstacle avoidance, map verification, data retrieval, and statistical quality control. He recently developed a non-linear systems model that combines neural networks and spline models (MARS, Phenom, etc.) in a superset of traditional neural network theory.

I condensed Rob Pettengill's bio a bit too much last week. He did work on design representation for VLSI, but MCC's DESIRE is a system for hardware-independent Software DESIgn REcovery and REuse.

Larry Press ( points out that Internet access to Relcom permits MCI Mail, CompuServe accounts, and others to send email to Soviet sites. Internal rates (e.g., for SprintMail) may have changed since the Russian deregulation. [Internet is mainly for research and educational use, but mechanisms for permitting commercial traffic are being put into place.]

-- Ken