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Microsoft unveils e-commerce plan

The company unveils pieces of its e-commerce strategy for helping businesses sell to each other.

4 min read
Microsoft today unveiled pieces of its e-commerce strategy for helping businesses sell to each other, putting its emphasis on getting other software vendors to write industry-specific applications based on Microsoft technology.

That differs from Microsoft competitors such as Netscape, Connect, IBM, and Oracle, which have developed e-commerce applications for the inter-business market themselves.

"Our strategy differs from competitors, but in the long term, it's good for our customers," said Todd Weatherby, Microsoft's group marketing manager for retail and distribution.

"It's a pretty smart play on Microsoft's part," Erina DuBois of Dataquest said. "They don't want to actually build the applications. They want to be the people who build the platform."

Microsoft also said the next version of its e-commerce software, due for release by mid-1998, will include a new feature called Commerce Interchange Pipeline (CIP) that allows Internet merchants to support both eXtended Markup Language (XML) and links to electronic data interchange (EDI) applications.

That news came today as Microsoft talked up its Value Chain Initiative (VCI) and a technology demonstration on Thursday of a dozen software companies integrating 20 separate applications in a supply-chain scenario for a computer hardware manufacturer.

Microsoft is pushing its core technologies--Windows NT Server, Site Server Enterprise Edition, and its Back Office suite of applications--as the basis for software developers to write applications for specific markets.

But Vernon Keenon, an analyst at Zona Research, questions that approach. "Today VCI is really not much more than marketing hype, but if the Microsoft evangelism machine does its job, then perhaps in mid-1998 this strategy might start to get Microsoft NT into e-commerce. Currently, Microsoft doesn't seem to be a big player."

Jonathan Weinstein, lead product manager for Microsoft's e-commerce software, Site Server Enterprise Edition, said Commerce Interchange Pipeline is an interface for application developers based on Microsoft's Component Object Model (COM).

The issue, particularly in tying together applications from different vendors, is how to move data in one application's format into another application with a different format. This process is often called "translating" or "mapping" data.

"For true electronic commerce, you need different computer applications to talk to each other," said Torrey Byles, an independent e-commerce analyst. "To do that, you need data mapping or a data transforming engine."

He likened that function to "EDI translators," which translate data from one application automatically into a standard form to send to a trading partner. EDI automates the exchange of standard forms directly from computer to computer without human intervention.

A translation engine could map to other formats, too: XML, which lets tags in a file describe its format; or Open Buying on the Internet (OBI), a format for standard Web catalogs.

"[CIP] is a solution for businesses to move these kinds of business data objects from one NT system to another over the Internet," said Microsoft's Weinstein.

In pursuing an e-commerce strategy encouraging others to build on its enabling technology, Microsoft is playing its traditional role as a platform provider, Weinstein said. In addition, software for supply-chain management generally requires a lot of customization, even for applications that many companies need, such as routine purchases of office supplies and equipment.

"Netscape is taking a slightly different approach in the Actra space, where they are trying to deliver applications," Weinstein said. "I don't think Actra will be very successful in pure supply-chain management because I question the extent to which the functionality is purely horizontal."

Dataquest's DuBois suggested that Netscape and Oracle are trying to sell both software applications and their base platforms. Netscape is pushing the applications from Actra as well as its Netscape One platform and CORBA (common object request broker architecture), while Oracle sells its Internet Commerce server and promotes its Network Computing Architecture.

The e-commerce application market probably isn't big enough yet to gain much focus from a multibillion-dollar behemoth such as Microsoft.

"But we do see clearly the forest here, the big picture of how companies are going to trade with their partners or customers," Weinstein said. "We have every intention to provide technology to enable forms of automated commerce around the Internet."

Microsoft has other elements of its e-commerce strategy, although most other examples involve using Microsoft software for Web sites to sell to consumers. Among the Web sites running Site Server Enterprise Edition software are Dell Computer, now selling $3 million in PCs per day; hip clothier The Gap; and bookseller Barnes & Noble.

Likewise, a separate Microsoft initiative called ByteComp involves more than 20 computer resellers and distributors, most in software, using Microsoft software to set up Internet stores. Those include Comp USA, Computer Discount Warehouse, and distributor Tech Data.

The group has even set up a prototype Web storefront called ByteComp that demonstrates site design, navigation, and how-to pages with software code developers can incorporate into their own Web sites.