AOL/Sun: Down to the nitty-gritty

An 800-pound gorilla just landed in the middle of the Internet marketplace.

Sun Microsystems Inc. and America Online Inc. finally, after four months of waiting, detailed on Tuesday just how the Sun-Netscape Alliance, as the companies are now calling it, will work.

For starters, it is a quasi-independent company. It has its own sales staff, its own developers and its own suite of products culled from both Netscape Communications Corp. in Mountain View, California, and Sun in Santa Clara, California. It has its own executives, who are supposed to be autonomous from the two parent companies, Sun and AOL. (AOL closed on its acquisition of Netscape two weeks ago.) In total, it will have more than 2,000 employees, gathered equally from Netscape and Sun.

"We are going to operate in a fashion that is indistinguishable from a regular software company," said Mark Tolliver, president and general manager of the alliance, at a presentation here at the posh aldorf-Astoria Hotel on Tuesday. But many details are still to be worked out. Don't expect the drab Sun-Netscape Alliance name to stick. Executives hope to have a name for their newborn e-commerce giant before they leave for a nationwide road show in May.

And this is hardly a company that's financially independent. AOL and Sun will share revenue, profits and expenses from the alliance under a complicated agreement the two companies hashed out before the deal was signed.

But there is one unarguable point about this foundling alliance, now only 13 days old: If developers can integrate products from Sun and Netscape and if executives can integrate the efforts of all the employees, this will be a company matched in e-commerce clout only by Microsoft Corp. and IBM

Tolliver offered a road map across several product lines, including messaging application servers and directories. None of Netscape's applications have been dropped, but many of them will merge by early next year with similar products already under Sun's umbrella. Officials said that, because of prior commitments to customers and outside developers, most products will have at least one more rev before they are integrated across company lines.

The one suite that will remain untouched is Commerce Exchange, Netscape's wide-ranging e-commerce server software that includes everything from EDI translation software to online bill presentment software.

The products under the umbrella of the Sun-Netscape Alliance include:

  • Netscape Messaging Server 4.1, which will ship in the second quarter. Sun's Internet Mail Server 4.0 will ship in the fourth quarter. The Alliance Messaging Server 5.0, a combination of the two, will ship in the first quarter of next year.

  • Netscape Calendar Manager 4.0 will ship in the second quarter. The Alliance Calendar Server 5.0 will ship in the first quarter of next year.

  • Netscape Enterprise Server 4.0 will ship in the third quarter. Netscape FastTrack Server 4.0 will also ship in the third quarter. The Alliance Enterprise Server 5.0 will ship in the first quarter of next year. The Alliance FastTrack Server 5.0 will also ship early next year.

  • The Alliance 5.0 Directory Server, based on Netscape directory and security technology, will ship in the second half of this year, as will an Alliance Meta Directory. A Certificate Management Suite 4.0 will ship in the first half of this year. Sun will also add high-end firewall software to the mix.

Application servers were perhaps the most speculated-about product line, since Netscape purchased Kiva Systems Inc. for its application server (now called the Netscape Application Server) while Sun purchased Net.Dynamics Inc. for its server. But Tolliver said the products will be merged. "It will combine the ease of use of Net.Dynamics as well as the high availability of the NAS side," he said. Net.Dynamics 5.0 shipped just two weeks ago, while NAS 4.0 will ship in May. The Alliance Application Server 6.0 will ship in the first quarter of next year. The Commerce Exchange e-commerce suite will eventually be built on top of the Alliance Application Server, but executives said it should not be that difficult a project since only about 10 percent of their code base relies upon the application server.

Executives at both companies believe they've got a market primed for the products of the new alliance. They hedged on whether it will eventually become a truly independent company through what could be a lucrative IPO, but they said they'll have only themselves to blame if the company flops. "If we can't pull this thing off," quipped Barry Schuler, president of the Interactive Services Group at AOL, "we'll go to the Moron Hall of Fame."

Wall Street apparently agreed, as shares of AOL jumped more than 10 percent following the release of details about the alliance.

AOL's shares in early afternoon traded at 145 15/16, up 14, after reaching a new 52-week high of 149.

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