Trial Opens Over Damages in Oracle Copyright Case With SAP

NY Times

 

The dispute between the software giants Oracle and SAP, in one of the most closely watched court cases in Silicon Valley history, is not over whether SAP engaged in a copyright infringement scheme, but over how much damage was done to Oracle.

SAP has already admitted that it infringed on Oracle’s copyrights and has conceded liability. At issue in a jury trial that began on Tuesday in Federal District Court is how much money SAP will pay in damages. Oracle has argued for $2 billion, and SAP has countered that tens of millions of dollars would be enough. It has set aside $160 million to cover the cost.

For most people in the technology industry, though, the trial is a forum for Lawrence J. Ellison, Oracle’s outspoken chief executive, to go after Léo Apotheker, SAP’s former chief executive and now chief executive of Hewlett-Packard. H.P. had been a close partner of Oracle’s, but in recent months the companies have become rivals.

In the weeks before the trial, Mr. Ellison publicly castigated Mr. Apotheker for overseeing the infringement. He also criticized H.P. for hiring Mr. Apotheker, who succeeded Mark V. Hurd. Mr. Hurd was hired by Oracle as co-president after he resigned from H.P. over an ethics question.

The opening arguments in the trial, which is expected to last four weeks, highlighted the cutthroat business tactics of competitors in the business software industry.

Jo-Ellen Pozner, a professor of management and organization at University of California, Berkeley, said that Mr. Ellison was using the trial to sully the image of his rivals. She likened his attacks to a negative campaign advertisement, calling them nasty but memorable in the minds of potential customers.

“He’s killing two birds with one stone,” Ms. Pozner said.

Geoffrey Howard, a Bingham McCutchen lawyer representing Oracle, told Judge Phyllis J. Hamilton, an eight-person jury and a packed courtroom that SAP executives had been well aware of the theft carried out against his client, and that, in fact, they had encouraged it. He painted a picture of a company so fearful of Oracle’s growing power that it chose to purloin its software in an effort to steal its customers.

“The scope is vast,” Mr. Howard said. He also quoted from a 2005 e-mail written by Mr. Apotheker that said, “We need to inflict some pain on Oracle.”

SAP’s lawyer, Robert A. Mittelstaedt of Jones Day, was contrite about the copyright infringement, telling the jury that SAP admits “that it did something wrong.” But he minimized its scope by saying that other than some lost profits and lost customers, Oracle suffered little damage.

“They want a windfall,” Mr. Mittelstaedt said. “They want a bonanza that is all out of proportion to the harm.”

The theft stems from SAP’s acquisition in 2005 of TomorrowNow, a company that provided technical support to some of Oracle’s customers. TomorrowNow routinely downloaded copies of Oracle’s software and maintenance manuals onto its computers and distributed some of those copies to clients — all without paying Oracle.

One of the biggest questions about the trial is whether Mr. Apotheker will testify in person. Oracle’s lawyer was vague on the matter, leaving the door open to his appearing in a video deposition.

Mr. Ellison has suggested that Mr. Apotheker, who started work at H.P. on Monday, is trying to dodge an appearance by staying outside the country. H.P. declined to comment on Mr. Apotheker’s whereabouts.

Ray Lane, H.P.’s chairman, defended Mr. Apotheker’s integrity in a statement last week. He emphasized that Mr. Apotheker had known little about the infringement, and he called Mr. Ellison’s criticism merely an effort to harass Mr. Apotheker and “interfere with his duties.”

At the trial, each side produced e-mails and internal documents that shed an unflattering light on the other.

Oracle’s lawyer showed an e-mail in which an SAP executive had warned Shai Agassi, then SAP’s president, of the potential copyright liability of acquiring TomorrowNow. John Ritchie, a TomorrowNow employee, offered another blow in a video deposition by saying that his superior had ignored his concerns about copyright infringement and went so far as to tell him never to write anything down.

SAP’s lawyer countered with e-mails in which Juan Jones, an Oracle employee, had referred to Toyota, an Oracle customer, with an expletive and boasted of refusing it a lower price on software. The lawyer said the contents had showed that Oracle’s poor service led to some customer defections and that SAP should not be held liable for those.

Indeed, Oracle claimed that SAP had been trying to steal thousands of customers it provided support to, pointing to an internal SAP presentation. But SAP responded that despite its rosy projections, the company lured only 358 of Oracle’s 9,000 or 10,000 support business customers, and that many of them would have left anyway.

IBM Rises to Record as CEO Palmisano Focuses on Software, Services‏

Bloomberg

 

International Business Machines Corp. rose to the highest level since it went public in 1915 as investors show support for Chief Executive Officer Sam Palmisano’s strategy of remaking the 99-year-old company.

IBM gained 88 cents to $138.72 at 4:01 p.m. in New York Stock Exchange composite trading, topping the previous record of $137.88, adjusting for stock splits, reached in July 1999. Palmisano has focused on services and software, making the company once known for mainframe computers into the world’s biggest computer-services provider.

Since Palmisano became CEO in March 2002, IBM shares have risen a third as he divested hardware units, including the personal-computer business sold to China’s Lenovo Group Ltd. in 2005. In May, he said he expects Armonk, New York-based IBM to almost double operating earnings to $20 a share by 2015, as he continues to focus on more profitable software and services.

The shares are also benefiting as investors predict corporate customers will invest in information technology, said Lou Miscioscia, an analyst at Collins Stewart Plc.

“There was a big concern investors had about IT succumbing to the macro slowing -- that was overblown,” said Boston-based Miscioscia, who has a “buy” rating on the shares and has the highest price target of any analyst tracked by Bloomberg, at $160. “Companies continue to want to invest.”

IBM has also boosted shares by buying its own stock. Since 2002, the company has spent more than $68 billion on buybacks, equal to almost 39 percent of its current market value.

Help From HP

Of the 26 analysts who rate IBM, 18 recommend buying, including nine who predict the stock will reach at least $150. Eight analysts recommend holding the shares and none recommend selling them.

The Dow Jones Industrial Average, which includes IBM, lost 19.07 points today to 10,948.58.

IBM shares are also likely gaining as investors leave its closest rival, Hewlett-Packard Co., amid uncertainty at the company, Miscioscia said. HP’s CEO Mark Hurd retired Aug. 6 after an investigation found he violated business-conduct standards. Last week, HP hired Leo Apotheker, former CEO of software maker SAP AG, to replace him.

“Given that the new CEO at HP has to prove himself, that does create more of a cloud of uncertainty,” Miscioscia said. HP shares have dropped 12 percent since the announcement of Hurd’s departure.

The company that became IBM was incorporated on June 16, 1911, as Computer Tabulating Recording Co. Created by a merger of three businesses, CTR sold items ranging from punched cards to cheese slicers, according to the company’s website.

Watson, Gerstner

Thomas J. Watson Sr., known as IBM’s founder, joined the company in 1914. He became president less than a year later, and began focusing on building large tabulating machines for businesses. In 1924, after expanding the company outside the U.S. and building other corporate machines, he changed the name to International Business Machines Corp.

By 1993, the company had posted three straight years of losses, including $8.1 billion that year. The company faced a possible breakup when IBM chose Lou Gerstner as its chief that year -- the first time IBM went outside the company for a CEO.

He helped increase the share price about ninefold by cutting thousands of jobs, keeping the company’s units together and marketing software and services along with hardware. Gerstner wrote a book about his experience called “Who Says Elephants Can’t Dance?”

IBM Investments

Palmisano continued the transition of what was once the world’s largest computer maker. The focus on software and services has helped expand IBM’s gross-profit margins more than 8.5 percentage points since he took over. He’s spent more than $20 billion on over 100 purchases.

In May, Palmisano said he plans to spend another $20 billion in acquisitions through 2015. Last month, IBM announced three acquisitions, including the $1.7 billion deal for storage- analytics maker Netezza Corp. and a purchase of software maker OpenPages Inc. for an undisclosed sum.

IBM is investing in markets such as analytics software, which helps companies predict trends, and cloud computing, which lets them store and access information on shared servers. The company is also developing services to monitor highways, electrical grids and other infrastructure systems to help them run more efficiently.

Increased sales of those technologies, along with growth in markets such as Brazil and China, will add $20 billion to revenue by 2015, IBM has said. The software segment, the company’s most profitable, will make up about half of total profit by then.

HP Board's selection of new CEO raises new Questions‏

Associated Press

 

Hewlett-Packard Co.'s new CEO signaled Friday that expanding the company's software business will be a top priority.

HP announced the hiring of Leo Apotheker, the former head of business software maker SAP AG, late Thursday. On a conference call Friday morning, Apotheker called software the "glue" that holds together the different parts of the company.

"Software is how we can make sure that the various parts of our technology actually fit well together," he said.

HP has been trying to build on its personal computer and printer businesses by expanding into technology services, data storage and security.

Analysts have questioned the hiring of a CEO who resigned abruptly from his last job after less than two years in the position.

But the company defended its pick Friday, saying Apotheker was the only candidate offered the CEO job.

HP Director Robert Ryan pointed out that Apotheker helped SAP post 18 consecutive quarters of double-digit growth in software revenue between 2004 and 2009.

Thursday's announcement caught almost everyone off guard, causing HP's shares to slip back into a funk that began in early August after the board ousted the well-regarded Mark Hurd amid allegations of sexual harassment and deceptive expense reports.

In morning trading, HP shares were down $1.26, or 3 percent, at $40.81.

Most analysts had expected HP to hire from within, or tap an outsider with a more impressive resume than Apotheker's.

"I thought it would be difficult for HP to hire an outsider and have its stock to go down, but this board seems to have found a way," Gleacher & Co. analyst Brian Marshall said.

Apotheker, a 57-year-old German, spent most of his career at SAP AG before being promoted to CEO in April 2008. SAP decided not to renew his contract when it expired nearly eight months ago, largely because SAP's financial performance faltered after Apotheker raised the fees that the company's customers paid to maintain and upgrade software.

HP to Buy Software Security Company Fortify

Reuters

HP announced this morning that it’s acquiring Fortify, a company that specializes in software security. The terms of the deal were not disclosed.

The purchase would allow HP to offer a way for businesses to “reduce business risk, meet compliance regulations and protect against malicious application attacks by integrating security assurance.” It would also give customers the best of both worlds in software security — Fortify specializes in static application security analysis (scanning software for flaws or malicious code before deploying), while HP is more familiar with dynamic security analysis (scanning code while its live).

The two companies previously worked together on Hybrid 2.0 (PDF link) — which HP calls “The Next Generation of Integrate Static and Dynamic Security Analysis.” The union will push development of this technology even further.

HP plans to run the company as a standalone unit, and it will eventually be integrated into its Software and Solutions business.

Based in San Mateo, Calif., Fortify was founded in 2003, and received initial funding by Kleiner, Perkins, Caufield and Byers.

IBM to Buy Unica for $480 Million to Gain Software

Bloomberg

 

International Business Machines Corp., the world’s largest computer-services provider, agreed to buy Unica Corp. for about $480 million to gain technology that lets customers build more targeted marketing campaigns.

Unica shareholders will get $21 a share in cash, Armonk, New York-based IBM said today in a statement. That’s more than double the stock’s closing price yesterday.

IBM Chief Executive Officer Sam Palmisano said this year he is planning to spend about $20 billion on acquisitions in the next five years. The software unit, IBM’s most profitable, will make up about half of its earnings in 2015, the company said in May. The unit has made about 60 acquisitions since 2003.

Unica, based in Waltham, Massachusetts, makes software that helps organizations analyze and predict customer preferences, helping their marketing efforts.

“Done well, marketing becomes less of an annoyance and more of a service,” Craig Hayman, general manager of IBM’s Industry Solutions unit, said in an interview.

Unica has 500 workers and its customers include EBay Inc. and Best Buy Co. It helped ING Groep NV customize its marketing across websites and branch offices to appeal to individual preferences, said Yuchun Lee, chief executive officer of Unica.

“We help make sure the messages are personalized and relevant,” said Lee.

IBM said it expects to close the deal in the fourth quarter.

Microsoft set to release Record-Breaking 'Fix-It' Patch

Computer World

Microsoft today said it will deliver a record 14 security updates next week to patch a record-tying 34 vulnerabilities in Windows, Internet Explorer (IE), Office and Silverlight.

But people still running Windows XP Service Pack 2 (SP2) will receive only a few of those fixes.

"Call it Massive Patch Tuesday," said Wolfgang Kandek, CTO of security risk and compliance provider Qualys. "It's a huge update, and more importantly, everybody's involved. I'm actually a little surprised at how large it is."

Eight of the 14 updates were tagged with Microsoft's "critical" label, the highest threat ranking in its four-step scoring system. The remaining six were marked "important," the second-highest rating.

Next week's Patch Tuesday will be a record on several fronts.

The 14 updates -- Microsoft dubs them "bulletins" -- are a record, beating the count from both February 2010 and October 2009 by one. The 34 individual patches equals the single-month record, which was first set last October and repeated in June 2010. And the eight critical updates next week will also tie the record set in October 2009.

Microsoft has been shipping alternating large and small batches of fixes, with the larger-sized updates landing in even-numbered months, so the month's big numbers shouldn't have come as a complete shock. In July, for example, the company issued just four bulletins that patched five vulnerabilities. June's collection, however, amounted to 10 bulletins that fixed 34 flaws.

IE is also patched on an every-other-month schedule. Microsoft last fixed IE flaws in June.

"This is big, not only because of the numbers, but also because they'll affect everybody," said Kandek, referring to next week's lineup.

According to Microsoft's monthly advance notification, the company will deliver 10 updates for Windows, half of them critical, the other five rated important. Two updates will patch one or more critical bugs in IE and Silverlight, while another pair affect Office.

All currently-supported versions of Windows are impacted by multiple updates, Microsoft said, with Windows XP Service Pack 3 (SP3), the oldest edition that receives patches, affected by all five Windows-only critical updates, as well as by the critical IE and Silverlight fixes.

Nor will Windows 7 escape next week: Two of the five critical Windows updates apply to the newest operating system, as do the critical IE and Silverlight patches. Windows 7 will receive at least 10 of the 14 planned updates.

The Office updates are aimed at flaws in Word and Excel, and affect all versions of the word processor and spreadsheet with the exception of those in Office 2010. Both updates also apply to the Mac editions of Word and Excel, said Microsoft.

"A large month was expected," said Kandek, "but my main worry now is for Windows XP SP2 users who haven't upgraded."

Last month, Microsoft retired Windows XP SP2 and Windows 2000 from "extended support," which means security patches will no longer to crafted or supplied for those operating systems.

Microsoft made that clear earlier this week when it released an emergency, or "out-of-band" update, to quash a critical bug in Windows shortcuts that hackers have already used to hijack PCs, including machines in multiple companies that oversee important industrial control systems. It did not provide a patch then for XP SP2.

Although Microsoft's policy prevents it from confirming whether unsupported software contains vulnerabilities, it's likely that XP SP2 harbors the same bugs as XP SP3, which will be patched next week.

"All of those for XP SP3 are quite probably also in XP SP2," said Kandek.

Not only will Microsoft not offer the applicable Windows updates to PCs running XP SP2, but it will also deny those machines the critical IE update.

The Office updates may be delivered to users running Windows XP SP2, however; Microsoft evaluates Office's patching needs using the version of the suite running on the system, not on the operating system.

"There's no free pass just because Windows Update doesn't offer you patches," said Kandek, talking to XP SP2 users, who might think they're safe because they won't see any updates offered on Tuesday.

Qualys has offered users of obsolete operating systems a hand by testing some exploits against out-of-support versions of Windows. The company publishes the results on its Web site.

"We'll continue to do this to substantiate our suspicion that [XP SP2] is very vulnerable now that it's not being patched," said Kandek."

Ford Overcomes Alien Status in Silicon Valley as Carmakers Clamor for Apps

Bloomberg

When Ford Motor Co. came to Noah Shanok’s San Francisco startup about using his technology, he expected it to be like meeting strangers from another planet.

“We thought we might have been like aliens,” said Shanok, the 35-year-old chief executive officer of Stitcher, whose software lets users collect talk-radio programs on one custom channel. “It became quickly clear when talking to the leadership at Ford that we were smart people looking at problems together.”

The meeting, which led Ford to add Stitcher to its voice- activated Sync entertainment system, typifies Detroit automakers’ new approach to technology. Ford, Chrysler Group LLC and other car companies are counting on Silicon Valley to help boost sales and shake off their image as slow adopters of innovations. That means working with startups on iPhone-style apps, adding staff in the Bay Area, and giving drivers freer range over the software and hardware that go into their cars.

The three biggest sellers of vehicles in the U.S. --General Motors Co., Ford and Toyota Motor Corp. -- are all banking on so-called infotainment technology to help them gain market share, said Jim Hall, principal with consulting firm 2953 Analytics Inc. in Birmingham, Michigan.

While Ford has been selling Sync for three years, the company stepped up its focus on technology as it tried to pull out of the recession. Ford buyers cited the Sync system as critical to their purchase 32 percent of the time, the company said in January. The technology, available as a $395 option on some models, also helps make cars more profitable. It’s included standard on higher-end vehicles.

No Winner

“The winner on this ain’t known yet,” Hall said. “The company that can accommodate as many different mobile devices as possible, and integrate them in the car -- they’re the guys who are going to win long term. But it’s a very difficult job.”

It’s harder for automakers to take risks with car software than with smartphone apps, because people keep their vehicles longer -- and their lives depend on them. Infotainment technology, which lets customers use social networking, search for nearby businesses and access the Internet, also has to be designed to avoid distracting drivers.

“Do you think Apple cares if your iPod works four years after you buy it?” Hall said. “With a car, you have to.”

Correcting a glitch in an iPhone app usually just requires a software update. Fixing a flaw in a vehicle can cost millions, require a recall and damage a company’s reputation. Toyota is trying to burnish its image after recalling more than 8 million vehicles for defects linked to unintended acceleration.

‘An Expensive Phone’

“The car is an expensive phone,” said Sal Dhanani, co- founder of Sunnyvale, California-based TeleNav Inc., a maker of software for global positioning systems on mobile phones. TeleNav is working with Ford to handle navigation on Sync.

Ford has been touting its new technology features in commercials, showing drivers customizing touch-screen buttons to get directions, portable music and text messages. Getting to this point took the company at least a decade, said Doug VanDagens, director of Ford’s Connected Services Solutions.

“We had all kinds of stodgy and frumpy management,” VanDagens said in an interview. “At best, we were a fast follower with regard to technology.”

Now the company’s executives fly out to Silicon Valley once a month to meet with startups and software developers. Ford is working directly with companies such as Stitcher, TeleNav, Oakland-based Pandora Media Inc. and Emeryville-based Gracenote, while inviting others to its developer network site for instructions on how to make an app work with Sync. The latest version of the system will debut later this year on the company’s 2011 cars.

Better Reputation

Ford’s image is already improving, according to Standard & Poor’s. The ratings service raised the automaker’s debt grade two levels earlier this month, citing expectations the company will remain profitable and signs that customers have a better impression of its vehicles.

“They are trying to eliminate what’s been a perception gap about the vehicles and just the general brand, and we think they’ve had some success over the past few years,” said Gregg Lemos Stein, an S&P analyst in New York. While quality of the vehicles has been the biggest contributor to Ford’s improved image, “certainly some of the technology offerings haven’t hurt,” he said.

Market Share

The Dearborn, Michigan-based company aims to make gains on GM, which remains the top seller of cars in the U.S. following its bankruptcy last year. Detroit-based GM has 19 percent of the market so far this year, compared with 17 percent for Ford and 15 percent for Japan’s Toyota.

The infotainment trend may face challenges from groups such as the National Safety Council, which is concerned it will distract drivers. Doing activities that take a driver’s concentration off the road isn’t something manufacturers should encourage, said Dave Teater, a senior director at the council.

“Any automaker who’s making it easier for the driver to do those things is probably doing a disservice to the driver, and the rest of the motoring public,” said Teater, whose 12-year- old son died after a car crash with a driver using a mobile phone.

Ford’s Sync system is less distracting than what drivers already do in the car, the company said. It relies on hands- free, voice-activated technology to ensure that drivers don’t lose concentration.

German Presence

Ford wasn’t first in cozying up with Silicon Valley. Bayerische Motoren Werke AG established its Technology Office in Palo Alto more than a decade ago. The lab works on improving the interface between humans and cars, as well as infotainment and driver-assistance technology.

Another German company, Volkswagen AG, opened a research lab in the area in 1998. The office is working on such innovations as autonomous driving -- the idea of a car navigating itself.

“We’re here to bridge the two different worlds,” said Chuhee Lee, head of infotainment for Volkswagen’s Electronics Research Lab in Palo Alto. “They expect us to surprise them.”

Chrysler, now run by Fiat SpA, worked with San Francisco- based Autonet Mobile Inc. to put Wi-Fi technology inside vehicles. The Auburn Hills, Michigan-based automaker also is using Qualcomm Inc.’s Flo TV to provide live television.

“Silicon Valley is a hot spot and we have relationships with companies in that area as well as others to integrate the newest technology into our vehicles, such as streaming Bluetooth audio and live mobile TV,” said Chrysler spokesman Nick Cappa.

Microsoft Corp., the world’s biggest software maker, is taking a bigger role in the market. The company helped Ford develop Sync, and it worked on an in-car infotainment system for Hyundai Motor Co.

The auto industry also is mimicking the way technology companies introduce features, said Ford’s VanDagens. Rather than heralding innovations years in advance at auto shows, companies are keeping more of them under wraps, he said.

“We’re not going to announce our future products until the day we release it,” VanDagens said. “We don’t want to help our competitors catch up.”

US Suing Oracle Alleging Software Contracts Fraud

Associated Press

 

The U.S. Justice Department said Thursday it is joining a fraud lawsuit against Oracle Corp. related to software contracts worth hundreds of millions of dollars.

The agency said Oracle failed to offer government customers the same discounts on its software that it offered commercial customers, as it was required to do. As a result, the lawsuit alleges, Oracle overcharged the government on a contract that ran from 1998 to 2006.

Paul Frascella, Oracle's senior director of contract services, filed the original lawsuit in May 2007 under the False Claims Act, which allows whistleblowers to sue on the government's behalf and share in any damages recovered.

Oracle did not immediately return messages for comment.

"We take seriously allegations that a government contractor has dealt dishonestly with the United States," Assistant Attorney General Tony West said in a statement. "When contractors misrepresent their business practices to the government, taxpayers suffer."

5 Companies Reported to Police for Misusing Software Licenses

The Jakarta Post

Autodesk Inc, a US-based software company, has reported five Indonesian companies to police between December 2009 and June 2010 for misusing the licenses for its products, the company’s executive says.

The companies had been reported to police after ignoring its warnings, Autodesk Indonesia licence compliance manager Turia Fitriano Helmy said Monday.

“We had approached them and tried to persuade them, but they did not admit any faults,” Turia told a press conference.

During a preliminary investigation police had found the five firms had infringed copyright by using pirated Autodesk software for commercial purposes, he said.

The National Police criminal detective agency are currently investigating the cases, involving a hotel, a financing company, a towel manufacturer and a real estate developer in Jakarta, and a mall in Malang, East Java. 

“We have seen that about 70 percent of Autodesk software used by our user companies are pirated products,” he said, adding that AutoCAD software products were the most frequently pirated Autodesk software, followed by 3D Max and Maya, the company’s most popular software for the media and entertainment industries, also used by animation producers. 

Autodesk categorizes two types of misuse. First, companies use pirated AutoCAD 2011 products. Second, the number of users of the software products exceeds those stated in its licenses.

“For example, a company has licensed software for only five computers but uses it for 20. We call this illegal practice under-licensing,” Turia said, adding that many companies duplicated Autodesk software in this way.

Autodesk could easily trace such practices via its online activation service. 

“We can trace it from the serial numbers requested for each software activation,” he said.

However, Autodesk would rather attempt to persuade companies involved in the misuse of its licenses, he said.

Autodesk sells a variety of software at various prices, ranging from US$2,000 to $5,000. It also sells a light version of AutoCAD 2D for $1,500. (ebf)

Ford Hits the Road with 'Caravan' App

PC World

Cloud computing will take the place of CB radios this month when Ford Motor leads a subcompact convoy across the U.S. and demonstrates Caravan Track, an application developed by students at the University of Michigan.

Caravan Track was the winning project from a Ford-sponsored Michigan course in which students wrote applications to help travelers. On May 14, a team of Ford engineers and the four students who developed Caravan Track will leave the university and drive two Ford Fiestas, both equipped with the software, to the Maker Faire hobbyist event in San Mateo, California, on May 22. Ford dubbed the trip American Journey 2.0 and will use it to showcase Ford-developed software as well as the students' work.

Caravan Track lets people share route and vehicle information and coordinate stops as they travel in groups of cars, the kind of communication that once was done over short-distance CB (citizen's band) radios. But the Caravan Track development team wasn't trying to emulate that traditional communication tool of U.S. truckers, who broadcast over shared channels and identify themselves with clever handles. The students thought of the application as an alternative to cell phones.

"Calling between cars can be a hassle sometimes, so we figured this might make things a bit easier," said John Ciccone, a member of the development team, who just graduated from Michigan with a bachelor's degree in computer science.

With Caravan Track, users sign up online to join a trip with friends, much like joining a Facebook group. The leader of the trip supplies a four-digit code that allows each participant to log in. Routes to all planned meeting points and the final destination are automatically generated for each car. Once on the road, all the participants can share data from each of their cars, such as speed, location and fuel level. Caravan Track can also provide information on nearby restaurants and gas stations with the click of a button.

Users can send text messages between the cars to coordinate activities. To make things easier, there are prepared messages, such as "We should stop at the next rest area," that can be initiated with one click and played over the speakers in the other cars, as demonstrated in a video about the software. Some features of Caravan Track can be used hands-free with voice commands, while others are accessed through a touch screen with a simple, one-level interface, Ford said. It is designed to be used by drivers and passengers together, and one of the aims of the project is to determine what is the best type of interface to use.

The application was written in C#, and the students used a special Ford development platform called Fiestaware and Microsoft Robotics Developer Studio. Fiestaware gave them access to data from the car's own systems, such as fuel level and speed. For its initial demonstration, the application will run on an Intel-based Windows 7 PC with a custom-designed touch screen. But most of the computing will take place in the cloud, with the client software just sending data to the project's server, which then sends the information on to the other cars in the caravan. The Sprint Nextel 3G network will carry the data.

"The footprint is pretty small for our application. It shouldn't require too much memory or processing power, especially given that in an average caravan, there aren't too many vehicles," Ciccone said.

The application is just a demonstration of what types of software could help drivers in the future, with no date for commercial availability, said Ford spokesman Alan Hall.

Other programs developed in the Michigan class included an audio social-media service with spoken reviews of destinations by other consumers, a crowd-sourcing platform for sharing information about road hazards, and a carpool coordination tool that uses social networking and rates the driver and rider's compatibility on a scale.

The Michigan class and American Journey 2.0 are part of a broader effort by Ford to better link its vehicles to digital technologies. Last month, Ford announced Ford Sync AppLink, coming later this year, which lets smartphone software developers integrate their applications with the Sync hands-free in-car entertainment system. The American Journey project is not directly related to AppLink, Hall said.