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The New Microsoft E-Commerce Crusade

By James Hollander
Mar 4, 1999 12:00 AM PT

In the midst of legal wrangling with the U.S. Department of Justice and preparations for the much anticipated release of Windows 2000, Microsoft (Nasdaq: MSFT) shifted its focus on Thursday to announce a broad e-commerce strategy. At a press briefing held in San Francisco with chairman and CEO Bill Gates, the company outlined a comprehensive strategy to make it easier for businesses and consumers to conduct business over the Internet, using the Microsoft platform. Most notably, Microsoft announced a new e-commerce software protocol known as "BizTalk," which will be integrated into the upcoming Microsoft operating system and Office suite.

The New Microsoft E-Commerce Crusade

"The Internet has forever changed the way that business is conducted," Gates said. "With these tools, our hope is that the e-commerce opportunity is opened up for everyone. You don't have to be a big corporation with a well-known brand or a company with lots of available dollars to throw at e-commerce solutions." Gates projected that the new Microsoft tools will accelerate the market, and help a million new businesses get online within the next year.

While the Redmond, Washington-based software giant released a slew of related announcements, privacy advocate group Junkbusters, Inc. slammed Microsoft for "failing to provide the fundamental privacy protections" that consumers expect on the Internet.

Enhancements to the Microsoft

Commerce Platform

Microsoft outlined plans to expand its popular commerce platform with three new software products and services. Microsoft Commerce Server, a future update to Microsoft Site Server Commerce Edition version 3.0, will make it easier for medium-sized and large businesses to build sophisticated e-commerce sites. A new Microsoft BizTalk Server will be added to provide the tools and services related to data exchange among Microsoft e-commerce applications.

The official Microsoft positioning of BizTalk is that it will, "greatly accelerate the adoption of e-commerce because it provides a common vocabulary for software across any platform or technology." BizTalk will be natively supported in Microsoft commerce products and services and in future versions of the Microsoft Windows® operating system, Microsoft Office, and the BackOffice® family.

A third new offering, called Small Business Commerce Services, will enable small businesses to quickly build Web sites, promote their business and sell online.

Support of BizTalk in all three offerings will enable tight integration with new promotional services on MSN, thereby making it easier for companies to reach qualified consumers over the Internet.

MSN's Got a Plan

Plans were announced for creating an "open marketplace" on MSN, through broader service offerings, and the acquisition of CompareNet, an Internet shopping service for comparing prices of various products.

In addition, a new software technology known as Microsoft Passport will enable a faster, more secure purchase process for MSN consumers.

Reaffirming Its E-Commerce Positioning

To bolster its claims of a strong e-commerce presence, Microsoft reminded the press that some of the world's leading online vendors use its products to power their businesses. Dell Computer Corp., for example, currently uses the Windows NT platform to generate upwards of $14 million (US$) per day in online sales, and 1-800-FLOWERS averaged 100,000 shoppers per day on its site during the week of February 14th.

"Today, Microsoft and its partners are helping customers realize the promise of e-commerce," said Bob Herbold, executive vice president and CEO of Microsoft. "Our platform, combined with the skill and experience of our partners, allows customers to benefit from best-of-breed products and services to rapidly deploy affordable, integrated solutions that scale to meet the broadest range of customer need."

Reliance on Alliance

Microsoft is realizing that its ongoing success in the e-commerce arena is largely dependent on buy-in from systems developers and online sales consultants. To this end, the company highlighted its (MCSP) technical certification program as being focused on e-commerce implementation.

"Microsoft offers the best e-commerce platform for customers and enables us to build a variety of solutions," said David Fry, president of Fry Multimedia Inc., an MCSP that recently developed the Eddie Bauer e-commerce site. "We've seen our business grow as customers in need of e-commerce solutions are seeking out Microsoft solutions."

Microsoft announced in January the availability of Complete Commerce, a packaged e-commerce solution for medium-sized to large enterprise businesses looking to host commerce-enabled Web sites through hosting service providers. In addition, Microsoft has teamed with 10 commerce-hosting service providers, including Compaq Computer, Intel Corp., and USWeb/CKS for hosting e-commerce sites.

Privacy Conerns

Junkbusters Corp., a consumer privacy advocate released a report arguing that Microsoft's ability to coerce mass registration of personal information from users in Windows 2000 may threaten both consumer privacy and competitiveness.

According to Junkbusters Corp. president Jason Catlett, documents released during the Microsoft trial indicate that the company is considering requiring periodic payment for Windows 2000, which would virtually compel users to identify themselves.

Catlett also criticized Microsoft, its MSN division, and other electronic commerce sites for failing to provide the fundamental privacy protections that consumers need before they will be willing to participate freely and fully in the online medium.


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