Interesting comments about the AOL / Netscape deal: Internet landscape shifts as a result of Netscape-AOL deal
November 27, 1998
InfoWorld Electric:
America Online's acquisition of Netscape
Communications last week, along with a broad
alliance with Sun Microsystems, significantly alters
the global Internet-commerce terrain, albeit with
plenty of new fault lines.
Major unresolved issues resulting from the
proposed alliance include system-integration
hurdles; the creation of a viable software
architecture across a patchwork of products from
Netscape and Sun; potentially confused channel
strategies; and unclear relationships with potential
partners such as IBM, Oracle, and Novell. In
addition, the alliance is likely to draw a concerted
response from an embattled, yet still powerful,
Microsoft that now has something specific on
which to focus.
But if AOL's brand and global reach can be
cemented with Netscape's Netcenter portal
technology -- while Sun and Netscape
simultaneously combine to create a truly
integrated product strategy -- then the deal has
the potential to be one of the most important in
the history of the industry.
"Conceptually, we have a good deal. The devil is
in the details," said Tim Sloane, an analyst at the
Aberdeen Group, in Boston.
"If all of this happens, we may have two centers
of power -- AOL and Microsoft," added David
Marshak, an analyst at the Patricia Seybold Group,
in Boston. "This balances the power, and that's
key to business people. It helps to assure that
one or the other doesn't completely dominate."
But other analysts are worried that AOL plus
Netscape still doesn't equal an enterprise-class
provider.
"I would not go to AOL to manage my
mission-critical messaging system, " said Anne
Thomas, an analyst at the Patricia Seybold Group.
Nonetheless, the shared goals of Sun and AOL
should help to accelerate the acceptance of
enterprise-class I-commerce via Sun's technology,
promote new classes of client devices, and speed
the development of new corporate portal
strategies for the Internet, AOL companies
officials said.
The deal requires shareholder and regulatory
approval, which will likely take at least 90 days.
Once approved, the new triumvirate of AOL,
Netscape, and Sun said they will offer
"end-to-end" services and products for both ISPs
and large businesses.
That kind of simplified approach appeals to some
users.
"I would consider this new alliance a very
formidable one, and we would certainly look in
their direction as we develop our plans," said
Frank Petersmark, assistant vice president of
information technologies at Amerisure & Co., in
Farmington Hills, Mich.
But others questioned the validity of
vendor-specific approaches, such as this alliance,
to electronic commerce given the reach of IBM,
Hewlett-Packard, and Electronic Data Systems
(EDS).
"There's one piece missing. The e-commerce game
is becoming less one of development and more one
of integration. As companies develop sites, the
key question is integration of their e-commerce
site into back-end systems," said Andrew Bartels,
a research analyst for e-commerce at the Giga
Information Group, in Cambridge, Mass. "IBM is
very strong in that area, and the so-called 'dream
team' of HP and Cisco with EDS are also building
up strength in that position. The name of the
game lies in integration."
In addition to the broad implications for
I-commerce, the alliance also has important
implications for the continued evolution of Java as
a platform. Sun and Netscape said they will jointly
develop new Java browser clients for PC and
Web-enabled devices.
"The deal guarantees to ISVs that if you write
Java applications, there will be a Java client
there," said Bill Raduchel, Sun's chief strategy
officer, in Palo Alto, Calif.
The deal does bode well for Java, agreed an
executive at a large systems vendor.
"This gives me renewed confidence that there's a
high-volume distribution vehicle for Java on the
client. Not only on Windows, but on all the
devices, " the executive said.
But another Java licensee also expressed concerns
that the deal may provide a distraction from Sun's
Java and Enterprise JavaBeans (EJB) development
efforts.
"I think that the group doing EJB and Java will not
be affected by this merger," said David Skok,
chairman and founder of SilverStream Software, in
Burlington, Mass. "Having said that, the senior
management at Sun would be in a distracted
mode; they have to change their business."
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