The Internet 3 can beat Microsoft in the `intranet' race
By Joe Jennings
LAST WEEK Microsoft turned up the heat in the Internet and ``intranet''
markets. Announcing a new intranet strategy, products, allies, and
customers, Microsoft sought to seize the initiative for the future of the
Internet and computing.
To experienced industry hands, it is another example of what Microsoft calls
its ``embrace-and-extend'' strategy, and what I call smooch and smother.
The key to the smooch-and-smother approach is four steps: Kiss up to
competitor's benefits, promise more, make it free and deliver it later.
Microsoft ``promises that it is hard core about the Internet'' and now makes
the same promise about the intranet. And Microsoft announced that the
browser will be free with Windows Office 97. The Web server, Web publishing
and site management tools also will be free with NT servers. Result: you
have been smooched and smothered.
How to get there
The goal is ambitious: dry up Netscape's browser and server revenues; block
Sun Microsystems from expanding its UNIX-based Internet Web server market
share and Sun's Java language and products from becoming the new standard in
application development; and deny Oracle further growth in database sales.
Microsoft's goal is to either gain or maintain account control at valuable
corporate enterprise accounts.
Before the pundits declare the war over, we should examine how Microsoft's
strategy has been beaten before, and what today's Internet market leaders
can do to stay on top.
Examining Microsoft's history you can see how companies have beaten them
successfully in the past:
-- Start the category and grow to dominant share before Microsoft enters.
Example: Oracle started the SQL-RDBMS enterprise market and gained dominant
share before Microsoft could effectively enter.
-- Be closer to customers and provide better, more tailored products to meet
their needs. Example: Defying conventional wisdom at the time, Intuit's
Quicken invented the truly stripped-down, easy-to-use home application for
writing checks and balancing your checkbook.
-- Develop your own sales channels, so you are not dependent upon a channel
shared with Microsoft for sales. Example: Sun Internet Servers have 35
percent market share. They are sold through the direct Sun sales force and
partners into the enterprise and Internet service provider markets.
-- Over-communicate. Use the Web, public relations, direct response and
advertising to build deep relationships between the sales channels,
customers and users and your company. Example: Stac Electronics
outcommunicated Microsoft and won the public opinion and legal war against
Microsoft in the data-compression market.
A solid start
By these four criterion, the Internet leaders have a chance to beat
Microsoft. They started the category, they are much closer to the Internet
customers than Microsoft, they have their own sales channels, one of which
is the Web itself, and no one can deny the level of communication about the
Internet has been deafening. The key will be in leveraging how the Internet
itself has changed the game, and what they need to continue to do to win.
If the network is the computer, Microsoft is in trouble. Network-based
computing views the desktop as a way of using information, but views the
intra- and Inter-network that you have built as a company's real strategic
asset.
If browsing is inherently different than a graphics user interface
experience, Microsoft is in trouble. Browsing assumes that the information
you are looking for is not fixed, that there should be a free-form,
limitless amount of information available to you, the act of looking is part
of the benefit of finding. GUI-based database access, the old model -- is a
fixed, rigid view of data from a specific source.
If Web servers that scale are inherently different than NT servers with Web
services bolted on, Microsoft is in trouble. Today, the opportunity on the
Web is supporting the huge growth in demand for information, communication
and entertainment. The servers that support this growth must scale beyond
the capabilities of NT, no matter how you cluster NT servers together.
Focus on Microsoft
The key to winning the war against Microsoft is in turning up the
communications war against Microsoft, defending your semantics and lexicon
against theirs, and marketing the qualitative and quantitative advantages of
browsing, network-based computing, and the World Wide Web against
Microsoft's legacy Windows Everywhere strategy.
To win, the Internet 3 -- Netscape, Sun and Oracle -- will have to fight as
allies, defend their innovations from copying, and lead the computing
industry away from the desktop to the network.
Joe Jennings is chairman and chief executive officer of GCI San Francisco, a
technology marketing firm. |
