One company, Novell, has been quietly building an e-commerce business in the shadows of the giants. Neither a household name nor a Web start-up, Novell just might be best positioned to create an e-commerce directory that doesn't raise controversial privacy questions.
Novell has created a directory system for individual users, called Digital Me, that mirrors the network management software sold by the company to power users for many years.
The system lets individuals act much like the network manager at a large company, setting parameters for the kinds of information about themselves that is disclosed to Web sites. The preferences are generated by a form filled out at Novell's Web site.
Privacy experts call this process a "negotiated privacy" system. Users can provide their credit card numbers or other personal information they wish to share, and list preferences: Will they accept cookies (the digital footprints that some Web sites put on users' hard drives in order to track their visits to the site)? How do they want to filter unwanted spam?
Novell, in effect, is selling privacy as a byproduct of its directories. The software offers privacy protection, while giving users an identity that allows them to disclose enough about themselves in order to do business.
"Looking forward, whether it's consumers or business-to-business, e-commerce is not going to work long-term without a very strong directory service underneath it," said analyst Bob Sakakeeny of the consulting firm Aberdeen Group.
Novell is already casting itself as "the world's leading provider of directory-enabled software" and focusing on the Internet as a way to revive business after faltering badly in recent years.
One of the creators of corporate network technology, Novell has 50 million users worldwide. But like many other Silicon Valley giants, it was slow to catch on to the importance of the chaotic network growing outside the corporate firewalls.
Eric Schmidt, who took over as chief executive in 1997, has made the Internet Novell's central focus, a fact not lost on Web-crazed investors who have tripled the value of its stock over the past year. Schmidt has continued to repeat his message that whoever controls the directory of the Internet will harness e-commerce. "Novell views directory and identity as two sides of the same coin," Schmidt said.
"Identifying your consumer is pivotal to setting up a business relationship," Samm DiStasio, director of Novell Directory Services, said.
DiStasio said the Internet itself is doing just fine, with scores of companies building ever-faster point-to-point wires, making the Net more robust all the time. "But that's just creating the connections; the way it's being carried forward is with the directory," he said.
Web directories need to be two-way, interactive systems that can verify users on both sides of transactions. Yahoo and others have created voluminous directories of Web sites, but that's just the starting point, according to DiStasio.
"The thing that sets us apart is that other directories are just yellow pages. In our view, the directory has to be more of a relationship manager, capable of dealing with multiple systems and databases," DiStasio said. "It has to be much more than just a look-up system. It has to infer things about me and make it work for me."
If a Melissa-type virus threatened a computer network, the directory could be adjusted to ensnare the virus before it does any damage. A corporate systems manager could handle Melissa across thousands of computers with a single set of commands. Likewise, an Internet service provider could make similar adjustments via the directory, DiStasio said.
But if network administrators already recognize Novell as the most widely used software systems for setting up corporate LANs, or local area networks, it's relatively unknown to the general public -- something that has to change. "They need mind-share," Aberdeen analyst Sakakeeny said.
That may be the biggest problem the company faces when competing head-on with IBM, which is increasingly promoting itself as the Internet-friendly giant concerned about privacy and consumer rights. Another familiar company, AT&T, is also aiming products at the market.
Whoever comes out on top will have to compete by providing products that are acceptable to both consumers and businesses.
For privacy advocates, Digital Me is a step in the right direction, but not the Holy Grail. Jason Catlett, president of the advocacy group Junkbusters, said the Digital Me system doesn't do enough. "I'm not intrinsically opposed -- but I think with this technology people still have to be careful that they're not letting in a wolf in sheep's clothing."
He prefers anonymous surfing technology like Anonymizer, which lets Web users completely cloak their identities when using the Internet. But that technology has the serious drawback of making it difficult, if not impossible, for users to buy things over the Internet. Novell says that its solution makes purchases possible while protecting privacy.
"We are not on a mission to invade people's privacy and create a master database of identities," DiStasio said. "That is not our goal. We're trying to facilitate e-commerce and let users define the level of privacy they want
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