Steve, Jim, Scott.
Bill.
The first three are the leading men in a powerful new alliance that could reshape the electronic commerce landscape. Their latest ad boasts: “Three really is a charm.”
The fourth is the man whose powerful empire they are going after.
And as America Online’s Steve Case, Netscape Communications’ Jim Barksdale and Sun Microsystems’ Scott McNealy take on Microsoft’s Bill Gates, their first clash will be over which side can bring more businesses to the Internet–a race with a multibillion-dollar prize.
As AOL has begun to disclose the strategy behind its $9.8 billion acquisition of Netscape and its alliance with Sun, one thing is clear: A key goal is to create a standard framework that would make it easier for small and large companies to set up shop on-line. And since being on-line is about being connected, the three will work on linking those on-line businesses with millions of customers, whether they are consumers or other businesses, whether they use a PC, a hand-held device or a television set.
Analysts say neither AOL-Netscape-Sun nor Microsoft has the best e-commerce tools in the market. But they are the only ones to have a powerful combination: an impressive breadth of products from operating systems to browsers and from Web server to transaction software, plus millions of customers who march through their Web sites.
“This trio is trying to build a platform for the future,” said Tod Nielsen, general manager of developer relations for Microsoft. “We have a similar vision, and we are competing head to head.”
Microsoft has good reasons to play up the threat. It has argued during the government’s antitrust trial that the AOL-Netscape-Sun deal, announced in November, created a powerful new foe, proving that the computer industry remained fiercely competitive. But regardless of how things shake out with the suit, the rivalry is real, because the AOL-Netscape-Sun alliance brings together three of Microsoft’s most visible foes.
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“We all want to provide the superior foundation on which people want to build their (on-line) offerings,” said Anil Gadre, vice president of marketing for Sun’s computer systems unit.
Gadre declined to discuss specific details of how the companies will combine their technologies and strategies, ahead of joint announcements planned for this week.
But a redacted copy of their agreement, which was included in a Securities and Exchange Commission filing earlier this year, says AOL and Sun are committed to maintaining Netscape’s Internet browser. They also plan to develop a new browser to bolster the alternatives to Microsoft’s Internet Explorer.
The companies have also agreed to use the browser as a delivery mechanism for Sun’s Java technology, which lets software run on all types of computers, breaking the lock that Microsoft’s Windows operating system has on software developers.
Sun and AOL also have far-reaching plans to build upon their existing technologies and create an entire set of software tools to make it easy for businesses to set up shop on-line.
Earlier this month, Gates unveiled Microsoft’s own crop of simple e-commerce tools that plug into the company’s popular Windows NT operating system.
The stakes are high. As electronic commerce skyrockets, the amount spent on building e-commerce sites will boom. Forrester Research estimates that companies will spend $3.76 billion in e-commerce software by 2002, up from $235 million last year.
That does not include the billions spent on computer hardware, services and traditional business software packages that have to snap together with e-commerce tools to tie a company’s back-end operations into the Internet.
“It is way, way deeper than just getting on-line with a Web site and a store,” Gadre said. Indeed, many medium-size companies and virtually all large corporations already have their own technology infrastructure, including massive programs that run across corporate networks and manage things like accounting, inventory, supply chain and customer service operations. Setting up on-line means cobbling those systems together with the Internet and forging links with customers and suppliers, an area where both Sun and Netscape have expertise.
“The big sweet spot is to lure those companies,” said Stan Dolberg, an analyst with Forrester Research.