InformationWeek
Defining The Business Value Of Technology
March 13, 2000
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"The market is going to introduce standardization and use of XML faster than Microsoft is going to develop a product around it," says Bill Brown, VP of E-business and technology enablement at Mary Kay Inc., a $2 billion cosmetics manufacturer in Dallas. The company, which is migrating to Windows 2000, is adding accessories to its Web-commerce product line and building an XML-based system to pass sales and product ordering data to a new distributor. That capability will come from in-house development and software from Extricity Software Inc., since Microsoft doesn't fill the need, Brown says.
At a developer conference last month, Ballmer said Windows 2000's XML parser, built-in application server, and asynchronous messaging capabilities "start preparing the operating system for this transition to the Internet user experience." These improvements target customers who need to exchange XML messages with business partners and integrate Visual Basic apps with legacy systems, Ballmer says--and that's a good chunk of the companies doing business online.
Quote.com, a Mountain View, Calif., subsidiary of Lycos Inc. that provides real-time stock quotes and financial research to its subscribers, is testing Windows 2000 and hopes an upgrade will improve site performance and lower operational costs, says VP of engineering Kaj Pedersen. The company runs its site on Windows NT 4 and uses SQL Server 7 as part of a caching system that speeds delivery of news and quotes to subscribers. As Microsoft phases XML support into its servers and tools, Pedersen envisions wrapping news feeds in XML tags so customers can build personalized pages based on where they live.
XML uses tags to describe data in ways disparate systems can understand, without altering the data itself. Once a group of companies or a vertical industry agrees on shared tags, communication between heterogeneous systems becomes easier--in theory. Although XML is an open standard, Microsoft's strategy is to ingrain XML within its operating system, applications, and tools, and compete on integration and ease of use--making it easier to write XML apps than by piecing together products from multiple vendors. Two products scheduled for release this year--BizTalk Server and Commerce Server 2000, the next version of Site Server Commerce Edition--will work in tandem, so companies can exchange product catalogs with customers and suppliers using BizTalk for the XML transformations.
"Microsoft's intent is to deliver a single stack of infrastructure to cover new application development," says Yefim Natis, a research director at Gartner Group. The reality is different, he says. Though Microsoft has some popular Web development tools, it doesn't have leading E-commerce technology. "Microsoft hasn't had an integration program for business-to-business yet," Natis says.
Natis says it's notable, for example, that although General Motors runs its Web marketplace on Windows 2000, when DaimlerChrysler, Ford, and GM struck a deal to combine their online purchasing activities last month, Oracle and Commerce One Inc. were the key technology partners. Such an exchange is the target market of BizTalk, but it's not there yet, he says. "Nobody is waiting for it."
Not surprisingly, Microsoft's competitors smell an opportunity. "The area of business-to-business commerce is one where we'll be competing with Microsoft," says Dick Sullivan, VP of integrated solutions marketing in IBM's software division. Last week, IBM, Ariba, and i2 Technologies unveiled plans to develop software suites aimed at online trading communities.
IBM is also taking aim at Microsoft's business-to-consumer products. In January, IBM introduced its WebSphere Commerce Suite, bundling its database, WebSphere application server, Net.commerce application development tools, and additional features such as business-to-business order-management tools, at around $10,000 to start. According to Natis, IBM's E-commerce suite trumps Microsoft's current product, Site Server Commerce Edition, on prebuilt components. But "substantially more" Web apps use Microsoft Active Server Pages than IBM's WebSphere. "Microsoft is having greater penetration in the Web application space," he says.
IGo Corp. plans to evaluate a move from NT 4 to Windows 2000 by June, after the product has been on the market and bug fixes are released, says Ken Stockman, the Reno, Nev., company's senior VP of marketing and E-commerce. But the $21 million distributor and online retailer of electronic accessories is sticking with Net.commerce on IBM's DB2 database. "For the operating system, NT was better for us--we didn't want to go with Unix," he says. But "sometimes as a Microsoft partner you get kind of lost. They don't pay attention to every small business trying to get on the Web, like IBM does. IBM is aggressively trying to build market share, and they provide the support"--including consulting and insight into product development and new releases.
Despite the technical leaps Microsoft has built into Windows 2000 and the promise of more E-commerce-friendly products, the company's toughest task may be convincing customers that it's serious about the Web.
"There's a cultural issue--there are a large number of people who want to stick with Unix vs. Windows," says Quote.com's Pedersen. As Internet startups rush through the cycle of writing a business plan and securing funding, they hire top software engineering talent to bring their site to market, he says--and many of those top engineers are Unix veterans. "As a businessman, you're not expected to know the technical considerations," he says. "So you have engineers in positions of influence and decision-making. It probably works against Microsoft, because they have a large track record of reliability issues."
But Microsoft is changing some minds with Windows 2000. "They've pulled together an impressive number of sites, including our own," Pedersen says. "They've got a long road ahead, though."
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Photo of Pedersen by Gary Parker
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