The Roundup: The Boss May Be Watching

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A report issued this week by the Denver-based Privacy Foundation says more than one in three online workers in the United States have their Internet or e-mail use under “continuous surveillance” by their employers.

The report says the monitoring targets 14 million employees in the U.S., meaning more than half of the estimated 27 million online workers worldwide have their usage overseen by the boss. Concerns over liability and productivity are prime motivators to implementing the software, which is becoming cheaper to install and run — now about $5.25 per employee per year.

The study, called the first attempt to estimate the extent of workplace monitoring, is based on self-reported user and revenue figures from publicly traded companies that sell e-mail and Internet monitoring software. The report covers only continuous, systematic monitoring, not random spot checks.

Websense is the most frequently used Internet monitoring product, with MIMEsweeper the most used e-mail monitoring product. Buyers of the software (according to vendors’ disclosures) include top companies and government agencies, including 20th Century Fox, Glaxo Wellcome, Nike, Duracell, Barclays, Marriott, Texaco, and American Express, as well as the Small Business Administration, the National Park Service, and the City of Boston. The Privacy Foundation reports that the U.S. Army recently purchased a 200,000-seat installation from Websense, for about $1.8 million, including hardware (about $9 per seat).

The Privacy Foundation says the report raises the question of whether employers are giving workers sufficient notice of continuous Internet and e-mail monitoring.

“Notice alone might not go far enough,” says Andrew Schulman, chief researcher for the Privacy Foundation’s Workplace Surveillance Project and the study’s author. He says employers “are basing firing and suspension decisions on the employee-monitoring reports. Yet employees are generally not told beforehand what information will be gathered and how it will be judged. Companies can use employee-monitoring logs as a kind of ‘wishing well’ to justify actions against employees, including dismissals and layoffs.”

CRM Investments: Money Well Spent

Internet research firm Jupiter Media Metrix recently reported that three out of four businesses will spend more money on customer relationship management (CRM) tools in 2001 than in 2000, as they respond to the increasing numbers of consumers seeking online customer service. Some companies will increase their CRM spending by as much as 25 to 50 percent.

According to New York-based Jupiter Media Metrix, the number of people seeking online customer service will jump from 33 million in 2001 to 67 million in 2005. A warning, however: companies investing in online-only solutions will “fail to advance customer satisfaction because they will not build a consistent customer experience across all channels,” Jupiter analysts warn.

Though the ailing economy is causing companies to cut costs in many areas of their business, customers still expect the same level of service, says Jupiter analyst David Daniels. “Customer satisfaction has always been a key metric for positive financial results. Businesses must not make CRM investments only to keep pace with growth — they should view their CRM spending as a strategic benefit that will bring higher levels of customer satisfaction and retention.”

The Return of Snail Mail?

Office products maker Pitney Bowes Inc. has released a survey of the most effective method for reaching customers, and the results may surprise you.

Direct mail, the offline world’s precursor to e-mail spam, is the most effective method, the company reports. (But keep this in mind: Pitney Bowes is a giant producer of postal meters, mailing equipment, and copy machines). The report is based on a collaborative study with Norwalk, Conn.-based management consultants Peppers and Rogers Group. More than 350 U.S. households with annual incomes greater than $35,000 were surveyed via telephone.

The results concluded that e-mail and the Internet are not as effective for building customer relationships as traditional direct mail. Direct mail solicitations currently account for 65 percent of the total mail received by a household, up from 56 percent in 1987.

According to the study, 34 percent of respondents said direct mail contributes most to establishing a relationship with them and keeping them involved with a business, followed by print ads (30 percent), television (25 percent), radio (5 percent), e-mail (4 percent), the Internet (2 percent) and telemarketing (0 percent).

App Server Market Soaring

According to the latest crop of statistics from IDC, the worldwide application server market bucked all trends and grew 128 percent, reaching almost $2.2 billion in 2000.

This comes on top of 1999’s worldwide revenue growth of 110 percent, to $957 million.

IDC expects this strong growth to continue through 2005.

“It’s difficult to overstate the significance of this growth rate. When a market reaches the level of maturity that the (application server software platform, or ASSP) market reached in 1999, annual growth usually slows, not accelerates,” said Steve Garone, IDC’s vice president of application development and deployment research.

BEA Systems and IBM claimed the largest chunk of this still-growing market, with revenue shares of 18 percent and 15 percent, respectively. Sun trailed in third with 8 percent.

“Survival in the ASSP market requires more than just ASSP products. Vendors need to provide an e-business platform that includes all the functions necessary to build and deploy e-business applications, leveraging the ASSP as the foundation layer,” Garone said. “BEA and IBM both understand this requirement.”

This item was first printed in ServerWatch, an internet.com site.