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News In Review

March 1, 1999

Microsoft Expands E-Commerce Strategy

New Commerce Server technology and online marketplace take aim at retailers

By Justin Hibbard

Related links:
  • E-Commerce: Old Line Moves Online
    • And from our sister publication:
  • InternetWeek Web Proves It's Good For Business
    • M icrosoft will introduce an E-commerce strategy this week that combines software upgrades and a service for hosting commerce sites on its MSN Web portal. Like other portals, Microsoft's MSN is targeting millions of small and midsize merchants that have yet to open shop on the Internet.

    As part of its announcement, Microsoft will unveil the next version of Site Server Commerce Edition, tentatively renamed Commerce Enterprise Server and set to ship after the release of Windows 2000 later this year. The upgrade will feature improvements in personalization, site analysis, and transaction processing. In addition, integration with Windows 2000 is expected to improve the commerce server's scalability.

    Florist 1-800-Flowers Inc. in Westbury, N.Y., plans to take advantage of the improved scalability. Currently, the company can run Site Server on only 1.5 CPUs in each of its Compaq Proliant servers, requiring it to string together up to 30 boxes during peak shopping periods on its Internet flower store. With Windows 2000, the company will be able to run Commerce Enterprise Server on as many CPUs as one box will hold. Commerce Enterprise Server "will be able to take better advantage of the power of one server, so we won't need to use as many boxes," says Norman Dee, director of network services at 1-800-Flowers.

    Also this week, Microsoft will introduce an add-on for Commerce Enterprise Server, tentatively called Commerce Interchange Server, that's based on a feature in Site Server Commerce Edition called Commerce Interchange Pipeline. Commerce Interchange Server will add support for new document formats based on the Extensible Markup Language standard that allow companies to connect their own product catalogs to a central product catalog on the Internet and update it regularly. Like Commerce Enterprise Server, Commerce Interchange Server will follow the release of Windows 2000.

    Microsoft will use Commerce Interchange Server to offer a hosted service tentatively called MSN Marketplace, a shopping catalog set to launch on MSN this summer. Merchants will list their wares in the catalog, and MSN users will be able to search for them. Microsoft will also host merchants' sites on MSN's servers, which will run Commerce Enterprise Server and Commerce Interchange Server. Microsoft officials declined comment.

    Microsoft's introduction of MSN Marketplace follows similar moves last month by Yahoo and Lycos. The Web portal companies are aiming their services at small and midsize businesses, many of which are poised to adopt Internet retailing.Research firm Keenan Vision Inc. will release data this week showing that less than 1% of the 5 million U.S. merchants that accept credit cards sell on the Web. Keenan Vision expects the number of Internet merchants to grow from 17,500 last year to 45,000 by year's end-an opportunity portal companies don't want to miss.

    See sidebar: "Site Server Includes Portal Plan"


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