Microsoft Moves Internet Battle Beyond Browsers

DEC, EDS and BBN are poised to propel developer into enterprise Internet services

Well known for its no-holds-barred attacks on Internet wunderkind Netscape Communications Corp., Microsoft Corp. is mobilizing yet another weapon in the war to conquer cyberspace -- enterprise systems integrators.

Large, complex integrators have long been prized partners of industry software developers, but few have been as resourceful as Microsoft when it comes to cultivating integrator loyalty.

To date, much of that loyalty has surrounded the developer's 32-bit, NT Server platform, a fact that Microsoft now plans to leverage as it takes its Internet initiatives beyond the desktop browser wars into the enterprise server marketplace.

Steve Balmer, Microsoft's senior executive vice president of sales and support, said the developer's maturing NT integrator relationships will soon spur a host of new Internet services opportunities.

"There will be some specialized services that you'll see coming out of our existing integrator partners that target not only intranet opportunities, but also Internet opportunities," said Balmer, who indicated integrators such as Digital Equipment Corp. and Electronic Data Systems Corp. would likely begin offering Internet-related services as part of Microsoft's expanding Premier Support program for enterprise customers.

"If there is a place where there has been more maturation in our relationships with large integrators than anywhere else, it would actually be with the contractors here in Washington, D.C.," said Balmer, while alluding to the government market, one of Microsoft's fastest growing NT market segments.

Just how the loyalty of Microsoft's NT integrators is expected to propel Microsoft's growing Internet ambitions became clear earlier this month with the release of the developer's Internet-friendly Windows NT Server 4.0.

"We've been seeing aggressive, 32-bit upgrade campaigns where NT is being added to almost every major contract vehicle and where agency migration plans are starting the deployment phase of building their server-based applications on top of NT's back office suite," said Philip Lavery, manager of Microsoft's federal district.

When NT Server 4.0 was released, Microsoft began urging veteran integrators to educate their commercial and government enterprise customers about the new server's Web authoring and management tools. Moreover, Microsoft is looking to augment its list of NT service providers with a new group of Internet-savvy integrators.

For instance, earlier this month Microsoft's Balmer began wooing BBN Communications, a supplier of Internet services, which today remains largely in the UNIX camp.

"I think BBN would wind up being a great integrator partner because of its Internet expertise. We are now reaching out to players like BBN who can provide soup-to-nuts outsourcing and management services for a client's Internet facility," said Balmer, who said he decided to visit BBN after hearing a number of the company's largest customers were considering adopting a UNIX platform instead of NT since BBN did not offer NT-related services. But BBN is not the only door Balmer has been knocking on.

"I've been spending a lot of time lately trying to understand who it is at Andersen Consulting that is in charge of deciding what to train all those new MBA graduates on and how do we get it to be NT-based," said Balmer, explaining the proactive approach Microsoft is now taking as it attempts to gain greater integrator support for its products.

Another integrator partner expected to help dish out Microsoft's new Internet services offerings is EDS of Plano, Texas.

Since its spin-off from General Motors Corp. last June, the integrator has formed an Internet and New Media division employing about 250 people. The new unit will operate as a horizontal Internet support group for the integrator's vertical strategic business units and offer a suite of new media products incorporating CD-ROM and electronic books.

"The culture of the industry we're in is driving all parties to be highly interdependent," said Stan Ratcliffe, vice president of marketing and strategic planning for EDS client/server sales and marketing.

Ratcliffe said the integrator is already working with Micro-soft as a component of the developer's Premier Watch service, a program that offers 24-hour monitoring for mission-critical servers. In addition, a segment of EDS' financial strategic business unit is building banking applications for branch automation that are optimized around NT Server, Ratcliffe said.

Despite its inroads at EDS, Microsoft may have some catching up to do.

"I think there is a noticeable change over the last year with our Microsoft relationship, but I'd have to say there is a noticeable change with Netscape as well.

We're working across the board with Netscape and we're driving this relationship through one of our horizontal segments," said Ratcliffe, referring to the integrator's new Internet unit.

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