InformationWeek

September 29, 1997

NetObjects: Web-Site Tools For Control

he corporate intranet is a paradox. On one hand, it fosters the creation of a centralized architecture, where easily managed, server-based application code and data are available instantly to any user with a Web browser. But moving code and content to the server is only a first step in reining in the excesses of the client-server era. The very nature of corporate intranets-thousands of continually updated Web pages, images, scripts, components, and applications-can be a management nightmare.

"If you don't have the right tools, you can lose control fast," says Phil Easter, a technology strategist with Greyhound Lines Inc. in Dallas. Easter is building a corporate intranet at Greyhound that will provide universal access to the company's applications and corporate content to 12,000 employees nationwide. To keep the intranet from sprawling out of control, Easter's team selected Fusion, a Web-site production system from NetObjects Inc.

Fusion brings automated site-management features to conventional Web publishing. In fact, Fusion users say the software all but eliminates the complexity of managing enterprisewide Web sites. They also say Fusion delivers all the functionality that development teams expect in a page-publishing system. In a market in which Web-page design and publishing systems have become commodities, providing users with centralized site- management capabilities becomes the key differentiator. "All we have to worry about, from a configuration-management standpoint, is the NOD [NetObjects database] file, and an assets directory," says Brian Ehorn, VP of global financial Web development at a Nations-Bank office in Chicago. "If I have a single NOD that generates a thousand Web pages, I don't have to worry about managing a thousand pages. I only worry about managing and backing up that one NOD file."

Since NetObjects released Fusion last September, the system has quickly become one of the industry's most popular Web-site development tools, second only to Microsoft's Front Page, according to International Data Corp. But competing head-to-head with Microsoft takes more than great technology. It also takes money-lots of it.

To build the company's war chest, Samir Arora, NetObjects' 31-year-old founder and CEO, raised $5.5 million from venture capital firms and private investors in the company's first round of funding in February 1996. That was followed in January 1997 with a $4.5 million infusion. But that still wasn't enough to push NetObjects into the big leagues.

Then, in March, IBM stepped in, investing an estimated $100 million in NetObjects for a 50% stake. IBM's interest in NetObjects' technolo gy also brought the company to national attention. That, in turn, encouraged corporate IT shops, including NationsBank, to add Fusion to their Web-tools shortlist. "We built some critical apps with a development environment we bought, and the vendor died in the space of six months," says Ehorn of NationsBank. "That's why the IBM funding was a big deal for us. We've moved into an area where we are developing mission-critical applications on the Web, and we can't have that throwaway mentality anymore."

Now, CEO Arora hopes to turn his 150-person startup into a much larger player by focusing on Web-site building, publishing, application development, and electronic commerce. The company plans to create a complete product line dedicated to Web development.

More immediately, NetObjects has slashed Fusion's street price from roughly $500 to about $200, after upgrade, to better compete with Microsoft. "We believe now is the time to really go for market share," says Arora. Industry analysts agree. "Microsoft, by bundling and price-slashing Front Page, is turning Web-site design into a commodity, just like what happened with HTML editing," says Evan Quinn, director of Java research with IDC. "You buy Navigator Gold, you get an HTML editor. That tore the bottom off the HTML-editors market. So the trick for Fusion is to not get caught standing still."

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