MS e-commerce strategy shifts
Posted by Webhost - 05/05/97 at 02:05 amMicrosoft’s announcement of new Internet commerce software marks a turnabout
for the company from what it espoused in its first e-commerce release late last
year, according to industry analysts and software competitors.
“It’s pretty clear that the original Microsoft strategy wasn’t getting very
far. This is a much better strategy,” said Allen Weiner, an analyst at
Dataquest.
In a series of announcements yesterday, Microsoft said it would update its
e-commerce offerings, essentially abandoning the Merchant Server 1.0 software
it shipped in December. Its replacement, Commerce Server 2.0, is in beta now
and due to ship this summer as part of Site Server, Enterprise Edition.
The new pricing at $4,999, with additional commerce sites on a single server
for $499 each, is a huge price cut from Merchant Server 1.0, which was listed
at $18,490 per server and $3,495 for each hosted site for Web hosting services.
“This basically not an update of Merchant Server but a new product,” said Craig
Danuloff, CEO of iCat, which last week released version 3.0 of its flagship iCat
Web storefront software.
“This is an explicit recognition that this is a toolkit for commerce,” agreed
Jack Corsello, senior product manager for Actra, a joint e-commerce venture of
Netscape Communications and GE Information Services. Actra expects to roll out
its e-commerce software May 19.
“Microsoft had initially put Merchant Server in a higher part of the market,”
Corsello added. “It’s a toolkit, and there are tremendous hidden costs to
develop a full-fledged commerce site.”
In another Microsoft announcement yesterday, the company said it would build
Microsoft Wallet, buyer software for making secure purchases over the Internet,
into future versions of its Internet Explorer browser and its Windows operating
system.
Signaling a new focus on business-to-business commerce, Microsoft also said it
would promote a new “Open Buying on the Internet” protocol to be published
later this month by the Internet Purchasing Roundtable, an American
Express-sponsored consortium of Fortune 500 corporate buyers.
“The emphasis on business to business makes so much sense,” said Torrey Byles,
e-commerce analyst with Giga Information Group. “That’s where the action is.”
Dataquest’s Weiner concurred, saying Microsoft will let companies market to
consumers or to businesses with the same software.
“This will be an impressive platform, especially in light of the
Hewlett-Packard announcement,” the analyst said, referring to today’s news of
Microsoft teaming with HP and VeriFone to market turnkey Internet commerce
systems for banks and online merchants. (See related story)
Microsoft itself emphasized new business-to-business capabilities in Commerce
Server 2.0. Among the 68 partners announced as supporting Microsoft’s strategy
were Harbinger, Premenos, and Sterling Commerce, three prominent names in EDI
(electronic data interchange). EDI is a popular way for big companies to buy
from suppliers in transactions handled computer to computer, without human
intervention.
“Microsoft will give tools to companies to integrate traditional EDI into the
commerce operation,” Weiner said. “This puts a lot of other
competitors–Netscape and Open Market, for example–in a defensive mode.”
Although some analysts see iCat as a potential casualty of Microsoft’s new
positioning–it’s Electronic Commerce Suite of template-based software to set
up and run Internet catalog sites is priced at $3,495 for Windows NT–CEO
Danuloff is optimistic.
“I would contend our NT product is attractively priced compared with their
$5,000 product,” he said, pointing out that iCat’s Professional version, priced
at $9,995, runs on Unix platforms.
“This is classic vaporware, something Microsoft will deliver six months out,”
Danuloff added. “Microsoft’s price alone would kill Merchant Server 1.0 sales
if 1.0 sales were doing anything at all. We’ve heard of a dozen to two dozen
cases where Microsoft is giving away the software with two weeks of free
consulting.”
