What Does Microsoft's .NET Mean for E-Commerce?

Microsoft (Nasdaq: MSFT) .NET has been widely heralded as the next big thing in the Internet world, but how this new technology will affect e-commerce is decidedly less clear.

According to some analysts, the answer is simple: not much. "Overall, it is going to be a nonevent for e-commerce," Giga Information Group analyst Andrew Bartels told the E-Commerce Times. ".NET is more at the infrastructure level than at the commerce level."

Behind the Scenes

But while.NET may not have an immediate and direct effect on e-commerce, it will make an impact behind the scenes.

According to IDC analyst Albert Pang, .NET will serve as a glue that links a company's IT infrastructure with its customers, enabling Internet companies to build e-tail sites more rapidly.

"That, in turn, is likely to influence and produce greater numbers of commercial transactions on the Internet," Pang told the E-Commerce Times.

More Convenient

Down the road, .NET adoption will increase the convenience of Web transactions as Internet companies use this technology to share information.

"There will be greater ... convenience for shoppers if some of these back-end systems are linked so that data can be extracted and exchanged more easily," Pang said. "For example, you probably don't need to type in your credit card number every time when you visit sites that are built using .NET architecture and components."

In the Field

Citigroup (NYSE: C), for example, said it plans to use Passport, Microsoft's .NET-enabled authentication and single sign-in product, as well as .NET Alerts, an instant messaging service that provides Web users with customized information.

Consumers visiting Citigroup sites will be identified automatically after signing in to Passport, and they will be able to navigate across multiple Passport-enabled sites without logging in again, according to the company.

With .NET Alerts, Citigroup customers will be able to sign up to receive key information like payment due date or when a credit limit has been reached. Alerts can send information via e-mail, cell phone or mobile device, based on the user's preference.

Travel site Expedia also has announced it will support .NET Alerts, allowing travelers to receive instant flight updates.

Cost Savings

In addition to making the shopping process easier for Web buyers, .NET will likely make Web site development more affordable for e-commerce companies.

"It might make the task of building an e-commerce site cheaper, but in most cases that has been the smallest part of e-commerce investment anyway," Bartels said.

Technology costs tend to be far smaller than the costs of customer acquisition and fulfillment, accounting for just 20 to 30 percent of the total investment required.

Bartels estimated that Microsoft .NET might save companies 10 percent of those technology-related costs.