Netscape Gets Breakup Fever

spunkanado (
Mon, 4 Aug 1997 20:17:46 -0400 (EDT)

Here is a litttle bit of unbundling karma comming back to netscape.
Breaking Up Is Hard To Do
(08/04/97; 10:00 a.m. EDT)
By Lisa Picarille and Deborah Gage, Computer Reseller News

MOUNTAIN VIEW, Calif. -- Facing mounting pressure from all sides,
Netscape Communications is mulling a decision to break out its browser
from its Communicator Internet suite.

Partners, third-party vendors, company insiders and large potential
customers are strongly urging Netscape to reverse an October 1996 decision
to leverage the popularity of its Navigator browser to help sell its
Communicator suite of Internet products along with a wide range of Web
servers in the enterprise market.

One developer close to Netscape said he approached the company in March
after noticing that Communicator's feature overlap with Lotus Notes was
causing trouble in one corporate account. Notes was firmly entrenched and
Communicator's features were seen as "bloat," the developer said.

Netscape employees encouraged him to lobby Rick Schell, senior vice
president and general manager of the client platform products division,
the source said.

"Customers and partners ask us for all kinds of things," said Dave
Rothchild, director of client product marketing. "There is constant
interaction and feedback."

Despite Netscape's public claims it will not do a version of Navigator
that is unbundled from Communicator, IBM executives said work on a
stand-alone version of Navigator 4.0 for OS/2 is underway. Netscape
officials refused to comment on its deal with IBM, in Armonk, N.Y.

Lotus executives said if Netscape changes its tune about unbundling
browser capabilities from Communicator, Lotus, in Cambridge, Mass., would
like to offer customers a choice.

Last week, Lotus unveiled plans to integrate Microsoft's upcoming
Internet Explorer 4.0 browser with the next Lotus Notes client, Release
4.6, due this quarter.

Lotus was bundling both Netscape Navigator and Internet Explorer with
SmartSuite and Notes. Lotus pulled the plug on Navigator in April after
discussions between Lotus and Netscape executives made it clear Netscape
was "going forward with its Communicator-is-holier-than-Notes strategy,"
said Steve Sayre, Lotus' senior vice president of corporate marketing.

The two companies are "having an active dialog, but there are no
announcements at this time," Rothchild said.

A war of words began when Netscape decided to take on Notes and Domino
with its own Communicator and SuiteSpot offerings.

USAir's IS department in Winston-Salem, N.C., a large Notes installation,
is planning to deploy Communicator only because Internet Explorer lacks
the security features the company needs, said Ralph Marshall, manager of
technology deployment.

However, if IE's security issues were fixed, the fact that it comes
bundled with Notes would make it a more attractive solution than
Communicator, Marshall said.

Several other sources close to Netcape said they partnered with Netscape
only to have their market usurped.

"They are like an octopus. They start playing in an area and then they
make substantial investments. That leads to stepping on a lot of partner's
toes." said one Netscape partner, who requested anonymity.

Netscape executives said the company tries not to compete with partners.

"It's rare. Not that it doesn't ever happen," said Marty Cagan,
Netscape's director of evangelism.

"I believe Netscape is going to be unable to make it to a tier-one
vendor. Their key sales channel into the Fortune 1000 has been through
hardware vendors who were happy to be the channel when they were selling a
simple Netscape Web server and browser," said Tim Sloan, director of
Internet infrastructure research at the Aberdeen Group, in Boston. "Now
that Netscape is asking them to sell complex systems, those hardware
vendors are saying no, because in most cases they offer products
[security, groupware, E-Mail, directory services] that are competitive to

If Netscape continues to bundle the browser with Communicator, they be
will "forcing the issue and have to go head to head with Sun Microsystems,
Hewlett-Packard, Digital Equipment and IBM. That puts Netscape between a
rock and hard place," Sloan said.

One analyst disagreed.

"At $30 a pop, losing browser sales and bowing to [Internet] Explorer as
the inevitable winner, doesn't hurt [Netscape]. They gain more sales, as
well as functionality from integration," said Ezra Gottheil, director of
Internet business strategies at Hurwitz Group, a market research company,
in Newton, Mass.

One reseller, however, said he was committed to Netscape. "Netscape would
be smart to break out the browser for IBM, but I'm betting my deal on an
integrated client," said Dick Schmoekel, president of Houston-based
Diginet who applauded Netscape's responsiveness to the channel