THE DAY AHEAD: Andreessen: Microsoft sellout or just savvy?

Larry Dignan
3 min read

The world of technology is known for its holy wars. Linux vs. Windows. Java vs. Windows. Everything vs. Windows. In the end, however, all the posturing gets tossed out as soon as money enters the picture.

We see it all day on the talkbacks to ZDNet stories. The passion in the tech sector is intense. That's what makes this sector so much fun. You just can't get caught up in the emotion -- especially when playing tech stocks.

Don't believe me? Ask Marc Andreessen, chairman of an e-business infrastructure startup called Loudcloud. You remember Andreessen. He's the guy who was the Web's original poster boy. He co-founded Netscape, made initial public offerings a dinner topic and sold out to America Online (NYSE: AOL) after Netscape lost the browser war to Microsoft (Nasdaq: MSFT).

You'd think Andreessen, a key figure in the Microsoft antitrust trial, wouldn't be so supportive about the software giant's latest plan to rule the world via interactive services. You'd be wrong. Life is too short to hold a grudge.

Andreessen's Loudcloud announced an alliance with Microsoft Thursday and backed its new integration-on-steroids plan, dubbed Microsoft.Net. Microsoft will give Loudcloud's services a boost, and Bill Gates gets Andreessen in his corner for once. Microsoft products and technologies are now the preferred platform for Loudcloud's suite infrastructure services.

And it gets better. ``Microsoft products are key to providing highly scalable and reliable infrastructure services to Loudcloud's customers,'' said Andreessen, chairman of Loudcloud, in a statement. ``Our strategic alliance with Microsoft in combination with our vision of delivering best-of-breed software infrastructure as a service will enable breakthrough performance for our eBusiness customers.''

Some observers would say Andreessen is a sellout. After all, he's essentially in bed with the company that helped make Netscape an Internet footnote. That's too harsh though. Andreessen is just following the money.

You had to see it coming. In an interview with Inter@ctive Week a little more than a year ago, Andreessen tipped his hand. "This is a ruthlessly logical business at the end of the day. And you can fight that, but I would rather not spend a lot of effort fighting that. I would rather spend more effort trying to figure out what to do as a result of that."

Andreessen's point is clear -- religious wars don't pay. The tech sector is a place where Microsoft would buy Novell (Nasdaq: NOVL) if it weren't for antitrust regulators. It's a place where Apple (Nasdaq: AAPL) teams up with Microsoft, and Oracle (Nasdaq: ORCL) wants to emulate Microsoft's business practices. What's next? Sun Microsystems (Nasdaq: SUNW) and Red Hat (Nasdaq: RHAT) getting chummy with Microsoft?

Andreessen's partnership with Microsoft can be cooked down to three letters -- IPO. Even though his Loudcloud isn't even a year old yet, you can bet your bottom that it'll have a hot IPO at some point. Loudcloud has the buzzwords (e-business and infrastructure), the backing (Benchmark Capital and Morgan Stanley Dean Witter) and the high-profile tech partner (Microsoft). It should be a lucrative IPO. The Netscape-Microsoft war is long gone; now it's time for Andreessen to make some money.