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Microsoft holds steady on BizTalk pricing

The software giant looks to play "spoiler" in the integration software market by undercutting competitors.

Microsoft on Wednesday said it won't raise prices for its upcoming BizTalk 2004 integration software, as the company looks to attract new customers.

BizTalk 2004, which is server software that transports data between different applications, competes with products from well-established integration software companies such as Tibco, SeeBeyond, IBM and BEA Systems. The software is expected to ship early next year.

BizTalk is important for Microsoft because it serves as the link between Windows-based applications--both existing ones and new software that Microsoft hopes customers will build using its growing lineup of business products--and existing enterprise systems.

BizTalk Server is the "spoiler" in the integration software market because it is aggressively priced compared to rival products, which typically cost upwards of $500,000, said Gartner analyst David McCoy.

Microsoft said Enterprise edition of BizTalk 2004 will cost $25,000 per processor with an unlimited number of connections; $7,000 per server processor for up to six connections; $1,000 per processor with four connections for a partner edition; and $750 for a developer edition.

"Microsoft's biggest challenge with BizTalk Server is not pricing?they have that licked. The challenge is increasing the average deal size and penetrating the enterprise," McCoy said.

Prices are being forced lower in the integration software market in general, McCoy noted. Purchasing complex integration software is quickly becoming like buying a PC, he said. Customers can buy much more powerful software for roughly the same price by simply waiting a year.

Microsoft said the revamped version of BizTalk is more robust than the existing BizTalk 2000 and will allow companies to use the integration software for more demanding and complex applications.

BizTalk 2004 is also an important stepping stone in the company's long-term Jupiter strategy to tightly link its different server applications. BizTalk will serve as the "integration foundation" for the Jupiter bundle, which will include the BizTalk, Content Management Server and Commerce Server software, according to Microsoft.

The Jupiter bundle had originally been slated for release in late 2004, but Microsoft executives in June said that it had been pushed out until 2005.

Another piece that will be common to the Jupiter bundle is Visual Studio.Net, Microsoft's flagship development tool. With BizTalk 2004, Microsoft will include a license for Visual Studio.Net, allowing developers familiar with Microsoft's programming to build BizTalk applications.

The new edition of BizTalk will also create closer ties to Office 2003 and will ship with the InfoPath forms-creation software. With InfoPath, a person can create a form, such as an expense report, and use the BizTalk work flow server to route documents to different people.

BizTalk 2004 will include so-called business activity monitoring (BAM) tools, which are designed to allow a person to view the progress of a particular business process by feeding performance information into Office applications such as Excel.

BizTalk will also incorporate support for the proposed Web services standard called Business Process Execution Language (BPEL), which uses the Extensible Markup Language (XML) to route data in a predefined work flow.