The biggest company in the Info Tech 100, IBM, derives most of its growth (and market capitalization) from services. The top-ranked company for shareholder returns, PeopleSoft Inc., has more revenue from services than from software.
In the analysts' picks ("Tech stocks: What the Street likes"), the only category with increasing stock prices over the past year is IT services. This industry has maintained its balance even while other tech sectors are still in the down cycle of their bungee-jump, with a long and slack cord.
Gartner/Dataquest IT Services
"The era of efficiency" (Information Technology Annual Report, June 18) states that IT does not do a good job of improving revenues, but then concludes that technology should be used only to reduce costs. An alternative conclusion is that IT should get better at improving revenues. Research sponsored by the Marketing Science Institute, conducted by Christine Moorman, Peter Dickson, and me, confirmed widespread difficulties in making technology expenditures profitable. But our research also showed that companies emphasizing revenue expansion fared better than companies emphasizing cost reductions, with respect to financial outcomes such as return on assets and stock returns. In other words, companies would be better off using IT to improve service and drive revenues, rather than using it to frustrate customers through cheap but inept automated systems.
Roland T. Rust
University of Maryland
College Park, Md. "Is the EPA sandbagging business?" (Government, June 11) appears to take at face value the electrical power industry's claims concerning the Clean Air Act. The Environmental Protection Agency lawsuits, as well as other lawsuits brought by New York and many other states, are solidly based on clear, longstanding law.
The power industry claims that what constitutes a "significant modification" is not well-defined and that plant owners are being sued over "routine" repairs. EPA guidance memoranda, however, provide that whether an activity was routine should be determined by reference to the modification's nature and extent, purpose, frequency, and cost. Each of these factors, in turn, has been defined in court cases. The modifications at issue in the current power plant took months to complete, required board of director approval, were done by outside contractors (not maintenance staff), cost millions of dollars each, and were, in some cases, described by utility witnesses in rate hearings as necessary since routine maintenance was no longer enough.
The power industry also argues that the Clinton Administration came up with "a whole new interpretation." This is not true. The lawsuits rely upon EPA memoranda from the previous Reagan and Bush Administrations. The most important court precedent dates from 1990 and arose out of the industry's attempt to overturn an interpretation of the Clean Air Act advanced by EPA administrators for Presidents Reagan and Bush. The underlying regulations date from the 1970s.
The industry knew what the law was. Any attempt to argue otherwise is disingenuous.
Environmental Protection Bureau
State Attorney General's Office
New York "Ford vs. Firestone: A corporate whodunit" (News: Analysis & Commentary, June 11) incorrectly states: "No one has yet studied whether a tire failure on an Explorer is more likely to result in a rollover."
In fact, Ford Motor Co. has conducted many tests over the past year comparing the Explorer with competitive sport-utility vehicles. By inducing a tread separation at speeds approaching 70 mph on Explorer and competitive vehicles, with various load conditions, engineers demonstrated that the Explorer's performance before, during, and after a tread separation was typical of other SUVs. This study was shared with government regulators and Bridgestone/Firestone Inc. in March, 2001.
Chief of Staff
Ford Motor Co.
Dearborn, Mich. "Arresting Alzheimer's" (Science & Technology, June 11) says that, by the time a patient develops Alzheimer's disease, the damage is done. The availability of cholinesterase inhibitors, however, has rendered this notion obsolete. It is imperative that families and physicians alike realize that this disease can and should be diagnosed and treated by primary-care physicians. A number of one-year studies have shown that cholinesterase inhibitors can slow symptom progression in most patients with mild and moderate Alzheimer's.
Health-care providers in Alzheimer's organizations have worked very hard to dispel the myth that early diagnosis has no value. Perpetuating that myth does a disservice to readers of BusinessWeek.
Bennett P. Leifer, M.D.