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Merchants use Net for digital distribution

Two new players jump into the emerging business of distributing digital products such as software and music over the Net.

Two new players announced today they are jumping into the emerging business of distributing digital products, including software and music, over the Net.

Electronic commerce software vendor InterWorld Technology Ventures and Internet service provider InterNex Information Services both offer systems that allow customers to sell and distribute software over the Net without building their own distribution systems.

Electronic software distribution, or ESD, appeals to software publishers because of its low cost and ability to showcase many more titles than can fit on retail stores shelves.

Still, many publishers worry about software piracy on the Net. And in response, ESD standards are beginning to emerge. Guidelines, which mirrored work that Microsoft had done in the first half of 1996, outlining requirements for online software distribution, were issued last month by the Software Publishers Association. Microsoft also has created a certification program for software license clearinghouses.

According to the guidelines, electronic software distribution has three basic elements: a commerce system for managing the sales and distribution process, an encrypted "wrapper" to ensure the software isn't tampered with as it travels over the Net, and a clearinghouse for keeping track of software licenses of goods sold.

InterWorld's Ultimate Solution, to be launched at Comdex next week, uses InterWorld's Oasis commerce engine, its own wrapper technology, and LitleNet as its clearinghouse. LitleNet is certified by Microsoft.

InterWorld's Oasis commerce system is used today by computer cataloguer MicroWarehouse for its Web storefront, but the compnay continues to deliver software in physical packages. MicroWarehouse is expected to distribute Microsoft titles online with InterWorld's software.

InterNex, which specializes in high-speed Internet access for businesses and Web hosting, calls its service PowerCommerce Clearinghouse. InterNex uses Portland Software's ZipLock technology for its wrapper and serves as its own license clearinghouse. It will seek Microsoft certification.

Software vendors use tools from InterNex to package their product inside the ZipLock container. CyberCash, for example, provides secure Internet payment services.

Both InterNex and InterWorld are starting with computer software firms as their target market, but both intend to move into music and video distribution on the Net. InterNex also intends to add other electronic commerce offerings.

A third company, V-Cast, is focusing on delivering large software packages. V-Cast today described its Gig-X transaction and delivery vehicle to computer game developers as a way to distribute game demos of up to 1GB in size, but the company intends to distribute other digital content as well, V-Cast's Mark Fiedler told CNET.

To date, CyberSource is the most active vendor in electronic software distribution, serving as both a turnkey provider and a Microsoft-certified clearinghouse. The company also sells software from its own software.net Web storefront.