Netscape's New Push: Government E-commerce

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Netscape's New Push: Government E-commerce

By Shannon Henry

Kevin Fitzgerald, Netscape

The fastest growing part of Netscape Communications Corp. - its government group - will launch a line of electronic commerce products early next month and spotlight new partnerships with integrators and Internet service providers to bolster those offerings.

In a move that also pits the company against resellers with electronic distribution models and archrival Microsoft Corp., Netscape will unveil the Crosscommerce Suite on Oct. 7 to commercial and government chief information officers at the Navy Memorial in Washington.

The product will let federal, state and local agencies build their own e-commerce programs. Service to the citizen, a catch-all term meaning government's use of technology to help its constituents, will be a major use of the technology. For example, the state of California may use the e-commerce product to deliver the 7 million hunting and fishing permits it issues each year via the Internet.

"We're moving into a phase where the business of government is being automated like it never was before," said Kevin Fitzgerald, vice president of North American sales for Netscape's government group in Bethesda, Md. Fitzgerald, who is the No. 2 executive in that office, previously spent nine years in Oracle Corp.'s Herndon, Va., government division.

He and other Netscape executives are spreading the word that the company is creating technologies besides its Navigator World Wide Web browser. And the federal government, which has always been the company's largest customer, is a key part of that strategy. "E-commerce is the real promise that IT has had for years," Fitzgerald said.

Goods and services traded over the Internet will reach a total value of $327 billion by 2002, according to a recent report from Forrester Research in Cambridge, Mass. "That's a big opportunity," said Fitzgerald. Companies are going to have to facilitate electronic transactions."

Netscape's public sector division, which employs 30 people, was founded in 1994 when the corporation was born in Mountain View, Calif. Last year's revenues for the division were $22 million. Netscape executives predict the government sector will at least double each year going forward.

The new Netscape e-commerce offerings, which will be anchored by a product called EXCpert, will let government customers automate the procurement process through electronic data interchange as well as performing a wide range of back office and customer service functions. Peter Thorp, director of federal for Netscape, said the offerings will compete against resellers such as Tech Data Corp. in Clearwater, Fla., and Merisel Inc. in El Segundo, Calif., which have developed electronic distribution methods. "This kind of software becomes a threat to their distribution model," Thorp said.

Fitzgerald stressed the importance of partnerships, especially with systems integrators based in the Washington area, as the company rolls out more sophisticated technologies.

Netscape is close to announcing partnerships with BDM International Inc. in McLean, Va., and Computer Sciences Corp. in El Segundo, Calif., Fitzgerald said. What Fitzgerald likes best about these companies is CSC's emphasis on security and BDM's aggressive movement into the state and local market. In turn, he said, "We're happy that our technology is attractive to them."

Netscape already has significant alliances with PeopleSoft Inc. in Pleasanton, Calif., BTG Inc. in Fairfax, Va., and McLean, Va.-based Litton-PRC Inc. "An integrator will extend our architecture," said Fitzgerald. "That's critical as we maximize our IT investment."

The alliance between Netscape and PRC began this past spring. Projects the two companies have worked on together include transforming the U.S. Patent and Trademark Office's client/server infrastructure into a Web environment.

"It's not shrink-wrapped stuff anymore," said Hal Wilson, vice president of the 'Net Solutions division at Litton-PRC. "This is a very logical relationship."

Wilson said Netscape, which works on all operating systems, is especially valuable on government projects because agencies tend to run a hodgepodge of Unix, NT, Windows 95 and Macintosh rather than just one system.

Netscape and another significant partner, BTG, have been allied since Netscape's founding. "Very early on Netscape put a priority on federal government," said Paul Collins, group vice president for strategic initiatives at BTG. "They understood the Internet was born and bred in the government and they wouldn't have to educate the customer." Collins said there isn't an agency the two companies have not done a project for, but the biggest contracts have been for the Department of Defense.

Netscape officials also are exploring deals with Internet service providers. Two weeks ago, the company signed a new partnership agreement with Bell Canada in which Bell Canada will provide Internet services to Netscape, said Fitzgerald. Fitzgerald said he's currently in talks with many other Internet service providers.

Still, there's Microsoft. "Those two companies are slugging it out," said Collins, referring to the intense competition with Netscape's biggest rival.

Netscape's other challenge is being a pioneer in this still mostly untested e-commerce space. For years companies have claimed ubiquitous use of e-commerce is just around the corner. Collins said it is happening, although slowly. "We see increased adoption of Internet-based technology," he said.

Thorp said government is by far leading commercial in the e-commerce market, in part because of federal requirements. "The acquisition of technology goes faster in the government and the architecture is already established," he said.

However, he said, "Commercial will catch up to government. There's a big return on investment." The market will be based on standards and security - two of Netscape's main focuses, he said.

Netscape's e-commerce push next month, is designed to show the company's broadening focus. "We want to illuminate the fact that Netscape provides these technologies," said Fitzgerald.

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