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Chevron abandons Navigator

As Netscape Communications approaches the final rollout of its most ambitious Internet project to date, one of the company's largest customers is defecting.

As Netscape Communications (NSCP) approaches the final rollout of its most ambitious browser yet, one of the company's largest corporate customers, Chevron, has had second thoughts about Navigator.

An early--and widely publicized--user of Netscape Navigator 1.0 and 2.0, the oil company has decided to outfit the majority of its more than 25,000 computers with Microsoft's Internet Explorer Web browser. The reasons behind the switch include lower costs--Explorer is free--and better integration between the browser and the operating systems used at Chevron, namely Windows 95 and NT, according to employees in the company's information systems department.

While the defection of a large corporation like Chevron is a blow to Netscape, many of the company's other customers remain committed to Navigator and its successor, Communicator, for the foreseeable future.

But how firm that commitment is remains to be seen. Some Netscape customers say they are beginning to experiment with Explorer on a limited basis and might consider using the browser more widely in the future.

Netscape has a lot more than its reputation as the leading Internet company riding on its browser market share. Last quarter, Navigator accounted for 51 percent of its revenues.

According to a recent survey by Zona Research, Navigator is the primary browser in 70 percent of companies, compared with 80 percent in September. Internet Explorer, meanwhile, has risen to 28 percent, compared with 8 percent in September.

Chevron's decision to switch Web browsers is partly an indication that Explorer has become a more competitive offering, with many of the same features as Navigator. But some companies that have already standardized on other Microsoft products, such as Exchange server and Windows 95, may turn to Internet Explorer so they can deal with one company for support instead of two.

Also, it doesn't hurt that Internet Explorer is free; Navigator carries a $49 price tag. (Netscape does gives volume discounts for large purchases of the browser, but the company is also raising the price of Communicator to $59.)

"Our focus is very cost-driven," said Jim Nathlich, a technical analyst at Chevron. "One of those [cost concerns] is simplifying our vendor relationships."

Another employee at Chevron said the company was attracted to Explorer's support for ActiveX controls, a feature that will allow its developers to use Visual Basic code for its intranet application. "The final reason [for switching] is that Internet Explorer was better integrated into Windows than Netscape," said Philip de Louraille, a Unix systems analyst at Chevron.

Chevron's switch also reflects the relative ease with which companies can change products that are based on open Internet standards. Chevron employees said they decided to make Explorer the company's primary browser several months ago. Netscape publicly touted Chevron as a customer as recently as last October.

Some customers said they believe that Netscape's software is more open than Microsoft's and that this will help them as they form extranets with other companies.

"We are starting to forge unique partnerships with other companies," said Andy Frush, systems analyst and Webmaster at Shell Services. "Microsoft has great solution if everything you have is Microsoft. But you can't count on that if you forge partnerships with other companies."

Netscape representatives say that they are committed to maintaining the openness of their products and that they will keep customers simply by making better products than their competitors.

"Any large enterprise has to evaluate any software commitments...on an ongoing basis," said Daniel Klaussen, group product manager at Netscape. "If we didn't know that IS departments were doing that on a regular basis, we'd be fooling ourselves. Customers should continue to evaluate overall software solutions. If we continue to build the right product with the right functionality, customers have shown that that is what they want and appreciate," he added.

Still, other Netscape customers said they might consider Microsoft's Explorer in the future.

"The market is too fluid to be able to put your stick into anything under the mud," said Norm Hickel, manager of marketing and Internet applications at 3M. "We evaluate on a year-to-year basis. We may lean toward Microsoft; we may lean toward Netscape."