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Netscape jacks up prices

The war for the corporate intranet market is in high gear as Netscape and Microsoft bolster their top-tier software-service offerings.

The war between Netscape Communications (NSCP) and Microsoft (MSFT) for control of the corporate intranet market is now in high gear as both companies are bolstering their top-tier software-service offerings to appeal to large corporations.

Today, Netscape jacked up per-package pricing for its client and server software and announced a revamped per-user pricing option and support program aimed at garnering a larger share of Fortune 500 customers.

Meanwhile, Microsoft officials detailed a new enterprise service plan intended to erase any lingering doubts about the company's ability to support Fortune 500 customers.

Netscape raised pricing for its SuiteSpot server bundle from $3,995 for a 100 user package to $4,995. Enterprise Server has been raised from $995 to $1,295. Communicator, a client package which includes the Navigator browser and a number of other tools, will cost $59. For the timebeing, Navigator is still available for $49 but will not be available as a stand-alone product once Communicator ships.

Netscape also introduced new per-user enterprise pricing for its SuiteSpot server and Communicator client software designed to make it easier for large customers to license the software, said the company. The per-user prices are only available to companies licensing the software for 500 or more users, according to Mike Homer, senior vice president of marketing at Netscape.

Beginning April 1, Netscape's enterprise license will be available in three configurations: $69 per year per user for its SuiteSpot server bundle; $104 per year per user for SuiteSpot and Communicator; and $119 per year per user for Netscape Communicator Pro and SuiteSpot. All three options include free software updates, the company said.

Netscape SuiteSpot server prices
  Old New Per user
Basic price $3,995,
up to 100 users
$4,995,
up to 100 users
$69/user; minimum 500 users
Cost per additional 100 users $995 $995 N/A
Support Basic phone $25/
incident
Installation support
Updates No No Yes
Server applications N/A Choice of 5 out of 10 included All 10 included
Analysts said the pricing changes from Netscape are no big surprise. "The increase signifies that Netscape's software pricing is moving to a more traditional per-seat model," said Daniel Rimer, Internet analyst at Hambrect & Quist. "The per-seat pricing means there is a maturity and an acceptance of Netscape's software in the marketplace. It makes a lot more sense."

Rimer was quick to add that while Netscape has, at least on the surface, increased pricing, most corporate deals were priced on a case-by-case basis. That means that in the past, customers most likely did not pay "list" price anyway.

The pricing increases are also not likely to negatively impact the company's sales. In fact, the increases and per-user pricing should legitimize Netscape's standing among other enterprise software providers, Rimer noted.

"There should not be any negative impact to sales," he said. "The reason is that prices for Internet software, at the moment, are not price-prohibitive. The packages are still attractive in comparison to other software. Ask IT managers what portion of their budgets is taken up by Internet software. It's minimal, and prices are a fraction of what SAP or PeopleSoft packaged software costs."

Yet support, which has been included in the per-package prices, must now be purchased separately from Netscape. The new options will replace Netscape's current prices, which include bundled support.

The company detailed five new support options varying in price and support levels to address the needs of both small businesses and global corporations. The new service options, which add to the company's free online support, will begin in March.

Homer said support options range from the top-of-the-line Expert Alliance program, which provides businesses with a dedicated Netscape engineer, for $125,000 per year to telephone support, which costs $25 per call.

Microsoft also is revamping its Service Advantage enterprise service program to include several new options.

The company will announce next week that it will offer large corporations a Premier Support On-site program, which places a Microsoft engineer at a customer's site, starting at $200,000 per year. The company will also offer additional support through third-party vendors such as Digital Equipment and Hewlett-Packard.