GartnerGroup's Dataquest Says Sun-AOL-Netscape Alliance has Strong Market Share; Now It Needs a Leading Message; New Report Examines the Pros and Cons of the Alliance
BUSINESS WIRE - June 07, 1999 08:38
SAN JOSE, Calif., Jun 7, 1999 (BUSINESS WIRE via COMTEX) -- The recent alliance between America Online (AOL), Netscape, and Sun Microsystems has positioned the companies as the dominant player in the Web and commerce server software market, according to Dataquest Inc., a unit of Gartner Group, Inc. (NYSE:IT). The alliance would have accounted for more than 35 percent of U.S. Web server software market share during each of the last three quarters of 1998, but Dataquest analysts said the alliance has some major challenges ahead to maintain its market share.
"It's important for the alliance to build an exterior focus during the transition to a single product line, to be able to execute significant change in response to market conditions," said Kathey Hale, principal analyst for Dataquest's Internet Software Strategies Worldwide program.
The alliance has not put forth the general who will drive the compelling market positioning from a solution sell starting point (inside the alliance) into Sun (the networked hardware company), and then collectively out to prospective buyers. "The alliance dominates the Internet software market in terms of revenue, but in the minds of prospective buyers, there is plenty of selling to do," said Ms. Hale.
Dataquest analysts said the alliance gives Sun Microsystems a much more comprehensive Internet/e-commerce software line. "Commanding a gatekeeper position in the Internet and commerce software market requires critical mass--far more than Sun had before the Netscape alliance," Ms. Hale said. "Sun has an opportunity to use the alliance to extend its hardware-centric business model to a solution sell, which includes software and services."
Dataquest analysts said the alliance team is unlikely to be able to focus well on innovation during the transition period, so this is the time for other software vendors to release new products. "While the alliance is busy reconciling products through the first quarter of 2000, software competitors in every segment need to announce or allude to innovations that in some way leapfrog current Netscape/Sun offerings, " said Ms. Hale.
Now part of the alliance products, Netscape server software faces challenges that can be addressed. In contrast, Dataquest analysts find no indication that AOL management sees strategic value in Netscape's browser software beyond a narrow role at Netcenter, indicating a less promising future for Netscape browser products as owned and run by AOL.
Additional information on this alliance is available in the Dataquest Perspective "Extending the Reach: AOL and Sun Digest Netscape." This report presents an analysis of the structure, impact, and potential outcome of the Netscape-AOL-Sun deal, a review of software product plans, and a critique of participants' marketing efforts to date.
This report is produced for Dataquest's Internet Software Strategies Worldwide program. This program provides in-depth analysis of the companies, products, technologies, and user issues driving growth of Internet-centric software markets. More information on this program is available on Dataquest's Web site at dataquest.com insswwds19981130.html.
To purchase the report or subscribe to this program, please call 800-419-DATA or 408-468-8009. More information about Dataquest's programs, descriptions of recent research reports, and full text of press releases can be found on the Internet at dataquest.com.
GartnerGroup's Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.
As the world's leading authority on IT, GartnerGroup provides clients with a wide range of products and services in the areas of IT advisory services, measurement, research, decision support, analysis, and consulting. Founded in 1979, with headquarters in Stamford, Conn., GartnerGroup is at the center of a global community serving Fortune 1000 clients from 80 locations worldwide. Additional information about the company is available on the Internet at gartner.com.
|
