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Microsoft touts e-commerce strategy (1999)

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Microsoft joins the e-business party with XML-based BizTalk

By Nancy Weil and James Niccolai, IDG News Service


San Francisco (March 4, 1999) Microsoft Corp. pitched a broad electronic commerce strategy here today that includes three new software products and new services for the company's MSN Web portal. Microsoft's goal -- aside from boosting its own bottom line -- is to bring 1 million new businesses into the world of e-commerce within a year, the software giant said.

"The Internet is the ultimate marketplace," said Bob Herbold, executive vice president and chief operating officer of Microsoft, who talked up the strategy at a three-hour press conference here today. Herbold was filling in for Microsoft President Steve Ballmer whose wife has just had a baby.

The buzzword for the day was BizTalk, a new technology framework based on XML (Extensible Markup Language) that is designed to allow firms with different computer systems to exchange the data required for e-commerce -- such as product information and purchase orders -- more easily.

BizTalk provides the "glue" that will bind together all the services and products outlined today, said Bill Gates, Microsoft's chairman and chief executive officer. The software vendor is working with partners and vertical industry groups to define schemas for BizTalk, which will be supported in all Microsoft software and will be made freely available for other vendors to support, company officials said.

The strategy leans heavily on Microsoft's Web portal, MSN, where the company will offer new services that let consumers shop online more easily, and where companies will be able to list products in a vast, searchable product directory. The site will also feature comparison shopping software thanks to Microsoft's acquisition of CompareNet Inc., announced today. The new features will start to appear in MSN in the second half of this year

With the products described today not due for release until after Windows 2000 -- which is due in the fourth quarterï·¯ -- one analyst said Microsoft is a little late to the e-commerce party. Many big businesses are already conducting commerce on the Internet, and those that aren't yet doing so are in a hurry to get there, said Albert Pang, a manager with market research company International Data Corp. (IDC) in Framingham, Massachusetts.

"Yahoo (Inc.) signed up 4,000 merchants in the fourth quarter, so for Microsoft to try to play catch-up will be hard," he said.

But with its immense marketing clout and the breadth of offerings on show here, Microsoft could succeed if it executes well, said Tim Bajarin, president of Creative Strategies Inc. in Campbell, California. BizTalk gives Microsoft "all the parts of the solution and the hooks to put them together," he said.

Microsoft announced three products that will support BizTalk, all of which are due to appear in beta form in the second half of the year and scheduled for release soon after Windows 2000:

  • Small Business Commerce Services is a software and services package that allows smaller firms to build an online store using a browser-based wizard. Smaller companies can choose to integrate their e-commerce site with MSN, or else have it hosted by an ISP (Internet service provider), Microsoft's Herbold said. Pricing for the product wasn't announced.

  • For larger businesses Microsoft will offer Microsoft Commerce Server, an upgrade to Site Server Commerce Edition 3.0, which will allow companies to build complex storefronts and includes direct marketing and data analysis features.

  • BizTalk Server will be the "translation device" allowing two companies using different platforms to share information about products, pricing and invoicing.

While Microsoft will obviously support the technology in its own products, the company's level of success with its e-commerce strategy will depend on getting other software vendors to do the same, analysts noted.

Microsoft was joined today by several e-commerce and enterprise software vendors, including Clarus Corp., Sterling Commerce Inc. and DataChannel Inc., who said they are backing the framework. ERP (enterprise resource planning) software vendors PeopleSoft Inc. and SAP AG were also on hand to lend support. Both companies said they will use BizTalk to add new capabilities to upcoming enterprise applications.

Microsoft hopes BizTalk will become a complement to EDI (electronic data interchange) -- the current standard for exchanging product and payment information between companies -- and is not designed to replace it, said Graham Clark, Microsoft's director of industry marketing.

BizTalk also plays a role in the MSN portal, providing the foundation for the shopping directory and enhanced search functions. MSN will also include a feature called Passport, which basically allows users to enter their credit card number and other personal information once, rather than at every Web site they shop at.