Oh, man, where do I begin?
YOUR POINT ONE:
I don't disagree that MS's position has strengthened immensely in the last six months, nor that the battle was only recently joined. I do disagree with your last point that, "y the time IE 4.0 hits towards the end of the year the browser market will be effectively closed for the 80%+ of the computers on the planet which run Windows."
Closed for whom? Certainly not for Netscape, which controls 75-85 percent of the browser market and has seen very little change in that figure in spite of MS hype. And don't forget that Netscape SELLS its browsers, while MS GIVES THEM AWAY.
With an MS browser on every new copy of Windows, "market share" will become pretty meaningless, since everyone with Windows will have a copy of MS Explorer. What's the share of the word processing market held today by the Windows 95 text editor? No one cares because no one considers the Win 95 text editor, which is OK for very basic word processing to be a true substitute for Word or Word Perfect. The same thing could become true for IE Explorer -- it could become a good, basic browser, but people who want real performance would want to buy something more. I doubt that's what MS has in mind, but it is a possible outcome. The real question is, will people use IE to the exclusion of Netscape? My answer: no, unless it does something really well that people need to have done that Netscape doesn't do better. I'm a classic example of that phenomenon: I have MS IE3 on my desktop, but I only use it once in a blue moon because I see no reason to use it. I'm writing this letter in Netscape. Thus, even if MS IE4 gets 99% market share, in the sense that it is on every computer in the world, it doesn't matter if everyone uses something else to browse the web, just as they use Word Perfect or Adobe Page Maker instead of the Windows 95 text editor for their word processing and document publishing.
I think that if Microsoft were smart it might consider making the IE
that will be "part of the Operating System" in Windows a good, basic browser, and then try to sell in competition with Netscape something else that has the bells and whistles people need to do their jobs. Each industry would have a differently configured browser, and Microsoft might be able to develop a reputation of superiority in some industry segment that it could then market to other, closely related segments. Right now, though MS is not doing this: it is just dumping its browser on the market to deprive Netscape of sales.
Of course, the real question is not market share numbers, but who has the critical mass needed to set standards and lead the course of innovation. What matters isn't whether people have MS Explorer on their desk top, but whether they USE IT. And even if MS gets a 40% usage share, Netscape will still control the standards, in my view.
Making the browser the metaphor for viewing all documents on the web and on the desk top does not change this analysis; it merely raises the stakes, since the entire user interface, and not merely one application, becomes at stake. People will get a good, basic user inferface with WIndows, but they might want something better that enables them to do things they cannot do with the "Active Desktop." And that something, that interface, that "desktop" just might come from Netscape.
YOUR POINT TWO:
The momentum is NOT on MS's side, and MS is NOT setting the agenda. As far as I can tell every feature of MS Explorer showed up in Netscape first, with the excpetion of Active-X. Is Active-X "setting the agenda"? I doubt even hard-core MSer's would make that claim.
In drawing analogies to WWII battles like Pearl Harbor, Gates forgets that, before they learned what they needed to know in order to win the war, the allies went through a lot of defeats. And they didn't jump from Pearl Harbor to Normandy in 6 months. It took years of preparation and strategic positioning to set up the conditions for the battle of Normandy to be a success. The Allies went through Dunkirk, the battle for France, the initial Philippines campaign (remember when MacArthur said, "I shall return"?), the Africa Campaign, Stalingrad (the truly decisive battle of the European War for which the Russians seem never to get their due credit) etc. With all due respect to Gates, as far as I can see, MS has gone through none of the strategic preparation and positioning necessary to justify calling its "Normandy" product by that name. "Normandy" was the beginning of the end of World War II. MS is at the end of the beginning of its battle with Netscape. The Normandy analogy does not apply, and I think it is presumptuous at this early point in the "war."
Normandy the battle was a high-risk proposition even though the Allies had beachheads in North Africa and Italy, and the Russians had turned the tide at Stalingrad. Normandy the server is a high-risk proposition because, as far as I can see, Microsoft has not achieved any genuine domination of any specific market segments (i.e., they have not yet fought the North Africa and Italy campaigns) which would set "Normandy" up as the "final push" into the heart of "Netscape-occupied territory." What if Normandy the server fails to live up to the high expectations that one associates with the name "Normandy"? What if all those MS troops in their life boats get shoved off the beaches and sink in the Channel because of lack of proper strategic and tactical preparation? Gates should have called his new server "North Africa" if he wanted to draw a meaningful analogy to what I think his immediate objective should be.
YOUR POINT THREE:
"MSFT has made it very clear that they aren't confined to the Windows world. IE 3.0 and ActiveX will be offered on Mac and UNIX by 1Q97."
This and Normandy are the first indication I've seen that MS is starting to take an offensive, proactive posture, instead of just defending the Windows turf. Now, MS has to come up with a compelling answer to the questions: "Why should I choose IE over Netscape? What can it do for me that Netscape can't?" I have yet to see any answers at all to those two questions. Everything from MS so far has been: "We are just as good as Netscape, and we're free." That is a Monkey talking, not a Chimp or a Gorilla.
"Between MSFT and Apache, just how is NSCP going to compete in the UNIX market going foward?"
I would guess they are going to do it the same way they've been doing it so far: by making better software. Why should the presence of MS and Apache exclude Netscape? Since Netscape controls the standards for web browsers, they have a leg up in this battle.
YOUR POINT FOUR:
"In this regard, MSFT is in the driver's seat since the Active Desktop is the canvas on which the Intranet is going to be viewed."
Oh, really????
I'm sure Netscape will have something to say about that. See my point one above, especially he part where I talk about how making the browser the user interface raises the stakes. And, as I said before, we now know something about MS's response to what Netscape has done so far. We have not yet seen what Netscape's next step will be.
What happens if Netscape gets to market first with its own version of "active desktop" and its version turns out to be better?
YOUR POINT FIVE:
"To compete with MSFT, NSCP must convince the world that they are the applications platform of the future. . . . But right now the odds of this happening are very long."
I agree that this is what Netscape has to do. I disagree that "the odds of this happening are very long." This is EXACTLY what is happening, and it is why MS views its struggle with Netscape in terms of Wordl War II. Of the time you spend on your computer, what percentage is in your browser? That percentage, whatever it is, is the best measurement there is of whether you, in your actions, are demonstrating that Netscape's platform is the paradigm of the future.
By the way: Microsoft certainly thinks Netscape's platform is the paradigm of the future: their copying of Netscape and their planned adoption of a browsing metaphor in the "active desktop" is proof positive of that.
YOUR POINT SIX
I must agree that "the prospects of NSCP the stock in this market are doubtful over the short term" and that "NSCP longs should weigh their risk/reward ratios very carefully." However, that has more to do with the market than with Netscape the company, whose fundamentals are sound and whose business plan appears to be on track.
I also think the rewards are the same they've always been because nothing has really changed with regard to Netscape the company, and the risks at these new, lower prices are significantly reduced from what they were when NSCP was trading in the 60's and 70's. |
