MS's Internet strategy cooling?

Rohit Khare (khare@mci.net)
Thu, 24 Jul 1997 23:33:57 -0400


It's been three-five web years since the December 95 Pearl Harbor Day
Internet strategy briefing, and this is a good look back. Heck, I almost
forgot Blackbird, and I was set to be the Blackbird evangelist! -- RK

This is a feature, not a bug: "Some of our technology does not take
advantage of Internet Explorer. ActiveX was not specifically designed for
the Internet."

Some folks still don't get it: "It's a tricky question, because you have a
sophisticated system on the Exchange side, and the Internet side is
somewhat slapped together and incomplete,"

===============================================
July 21, 1997

Caught in the Web?
After a spurt of Internet initiatives, Microsoft seems to be losing momentum

By Bob Trott and Lynda Radosevich

Not far from the ever-expanding Microsoft campus is the Redmond Plateau, a
neighborhood of suburban homes, many of which are occupied by Microsoft
employees.

But these days, "Redmond Plateau" could refer to Microsoft's Internet
strategy. A year and a half after Microsoft took a sharp right turn to
"embrace and extend" Internet standards, the company is running into
several road blocks in its rush to the information superhighway.

Among the major impediments: delayed products, security problems, trouble
scaling down rich, proprietary products to work with the Internet's simple
protocols, and lack of support for emerging standards.

Internet Explorer 4.0, originally due last December, is scheduled to ship
later this year, after being redesigned to add new functions and to address
security problems, such as the bug uncovered last March in Version 3.0 that
lets Web-page authors run friendly or malicious programs on visitors'
computers by using .LNK and .URL files.

The security issues raise questions about the viability of Microsoft's
plans to use the browser as a window into the desktop operating system as
well as the Web.

"If the browser gets you down to the file system, it can get you into
memory allocation, and with a Java component inside, it can do a lot of
unknown things," said Lam Truong, chief information officer at LSI Logic,
in Milpitas, Calif.

Internet Information Server (IIS) has also had security problems,
exemplified by the bug found in June that enabled users to crash the
company's own Web site.

Microsoft received points for slapping a Web browser front end on most of
its products. But now that the company needs to get beyond superficial
features, some observers say Microsoft is on slippery ground. The company
needs to both embrace Internet standards and distinguish the advanced
capabilities of proprietary products.

That won't be easy to do with products such as Microsoft's Exchange
messaging platform. In April, officials confirmed that the company would
merge Exchange Server and the Microsoft Commercial Internet System for mail
and news into a common code base by 1998. But how?

"It's a tricky question, because you have a sophisticated system on the
Exchange side, and the Internet side is somewhat slapped together and
incomplete," said Eric Arnum, editor of Electronic Mail and Messaging
Systems, in Washington.
Some products that were originally conceived to live in a Microsoft-only
world have been scrapped and revived with the Web in mind.

Products such as the Blackbird multimedia authoring tool demanded a total
overhaul after Microsoft's famous Internet epiphany, because its business
has evolved around the standards that it set, rarely those established by
others.

"As Microsoft moves into the wild, woolly world of the Internet, it is
finding that things don't work quite as easily as in a world where it is
the dominant player," said Dan Kusnetzky, an analyst with IDC Research, in
Framingham, Mass.

Widespread adoption of Internet protocols as well as other existing
protocols, such as the Object Management Group's Internet Inter-ORB
Protocol (IIOP), has also helped to galvanize Microsoft's competitors on
the standards front. For example, Microsoft is now the only major vendor
that has not embraced IIOP for distributed application development, because
IIOP competes with Microsoft's proprietary Distributed Component Object
Model for Windows.

Giving it a rest?

Ironically, the company's Internet plateau may come as a relief to some
users.

"Attaching an Internet focus to every product may be carrying things
further than people want," Kusnetzky said. "There's a large number of
people, especially corporate citizens, who don't use the Internet on a
daily basis and wonder if they are being penalized with increased memory
and storage requirements just to be able to check the box that says
`Internet-enabled.'"

One user believes that if Microsoft slows down its Internet push a bit,
products can be better tested.

"Since we will not be rolling out Internet Explorer 4.0 and the Active
Desktop for quite some time, Microsoft will have a chance to fix
everything," said an IT manager at a large U.S. company who asked not to be
identified.

Microsoft's pause could be the most prominent example of an emerging trend
among vendors and users.

A recent study by Forrester Research, in Cambridge, Mass., predicts a
looming slowdown in the breakneck pace of Internet innovation, according to
Donald DePalma, a senior analyst.

"Of the organizations we spoke with, only 16 percent had anyone who they
were able to point to as the keeper of their corporate Internet strategy,"
DePalma said. "These people are running into problems with their budgets."

These concerns have reached Redmond, and officials insist that they are
not falling on deaf ears.

"The pace of `the browser of the day' does have to slow down," said Yusuf
Mehdi, product manager in the Internet Tools and Platform Division at
Microsoft.

Competitive pressure

Microsoft's general slowdown in Internet adoption may be perceived by
competitors as an opportunity, but the company's biggest asset is its loyal
developer base.

"Microsoft has an excellent developer relations program that keeps us
informed about forward movement and strategies," said Bob Zurek, vice
president of Web-development tools at Concord, Mass.-based Powersoft.

But others said the Internet interlude may also benefit Microsoft by
giving it a chance to re-examine whether it has over-marketed the Internet
at the expense of other features, such as ActiveX.

"They're exclusively marketing it as an Internet phenomenon, but ActiveX
is a development phenomenon," said Mike McCamon, director of product
marketing at Visual Components, in Lexena, Kan., which bundles its First
Impression, renamed MS Chart, with Visual Basic 5.0. "Some of our
technology does not take advantage of Internet Explorer. ActiveX was not
specifically designed for the Internet."

In fact, Microsoft is frequently at odds with itself. Microsoft's Java
efforts frequently conflict with its commitment to ActiveX, as it seeks to
ensure that the Java phenomenon doesn't overwhelm Windows. This leads to an
"embrace and extend" strategy that adds proprietary hooks into its Java
implementation.

For example, in July the company added J/Direct, which will let developers
write Java directly to 32-bit Windows APIs and to the Java virtual machine
in IIS and Internet Explorer. The trade off: While these Java applications
will run faster on Windows, they are not portable like other Java
applications.

Turning billions on a dime

Even Microsoft-haters, in weaker moments, admit to harboring some
admiration for the way the gigantic company turned on a dime to focus on
the Internet. Even before Bill Gates declared the Internet the target, the
industry was wondering what was taking Microsoft so long.

Eyebrows were raised especially high over Microsoft's embrace of Internet
protocols and its willingness to form partnerships with other companies. On
both issues, Mehdi said, Microsoft has scored well.

"People are now shipping and building on top of Internet Explorer," Mehdi
said. "We're now at almost 30 percent browser share, which, considering
that we didn't even have a browser two years ago, is great."

Many users believe that Microsoft will overcome the challenges causing its
plateau and will continue, albeit more slowly, toward Internet market
dominance.

"Microsoft has proved its agility. If you told me a year ago it would be
where it is today, I would have been surprised," said Chris Sagovac, a
senior programmer and analyst at American Credit Indemnity, an insurance
company in Baltimore.

Indeed, Microsoft's Internet about-face has proven that almost all
questions, eventually, will be answered, either voluntarily or through
pressure from the market.

"It is incredibly light-footed for a company that is so big," said IDC's
Kusnetzky. "The music changes, and it changes from a two-step to a waltz so
quickly that it is hard to believe. And so many people rely on it that, if
it moves in the wrong direction, people will yell."

Bumps in Microsoft's Internet road

(a) Internet Explorer 4.0 several months late

(b) Security problems with Explorer 3.x that raise questions about
browser-Windows union

(c) Bugs plaguing Internet Information Server

(d) Trouble convincing users to pay for content such as The Microsoft
Network (MSN) and online magazine Slate

(e) Caught between the merger of Exchange Server and Microsoft Commercial
Internet System code

(f) U.S. Justice Department's probe of Internet-related business practices

(g) Blackbird technology, developed as proprietary development tool for
MSN, becoming Internet Studio, then Visual InterDev

(h) Unresolved strategy regarding whether to break up Office suite as
components for use in browser

(i) Confusion over role of Java

(j) Java embraced by tools division as a programming language while
Java-based NCs and Java OS may threaten Windows

(k) Lack of support for Internet Inter-ORB Protocol

---
Rohit Khare /// MCI Internet Architecture (BOS) /// khare@mci.net
Voice+Pager: (617) 960-5131  VNet: 370-5131   Fax: (617) 960-1009