The Bloor Perspective: Microsoft's BizTalk, Sun's $75 Solaris, and ecommerce in America

This week, Robin Bloor and his team look at Microsoft's stuttering attempts to control yet another part of the market - XML-based ebusiness communications; Sun's Solaris pricing semantics; and where ecommerce should fit in the corporate value chain

Microsoft has a test case coming round with the now-delayed launch of BizTalk Server, the software giant's long-promised engine for XML-based ebusiness communications. The product is over six months late in shipping to beta testers, with the probable launch date being autumn 2000. The reason, say observers, is that the competition is already ahead of the game. According to recent reports, the missing link is the connection with business processes. This is the ability to link the communications required between organisations with the higher-level business logic, for example ordering a product or handling a customer request. Products from HP and Vitria, for example, already support such a linkage. But as yet Microsoft has no such facility. Microsoft insiders claim that BizTalk is changing to take this into account - but that could give the competition quite a lead. One point in Microsoft's favour however is its ownership of Visio, the de facto tool for business process modelling among many business analysts. It remains to be seen how the company will exploit this advantage, for example by providing a Visio interface to BizTalk. Microsoft's aims for BizTalk are far more than just sales figures for a business communications tool. This represents the battle for the gates [sic] of cyberspace. In the virtual enterprise, business success will be built upon communications and it is likely that a single company will end up the de facto standard. The playing field is currently empty, but soon corporate IT shopping lists will include the item "XML-based business communications facility". Microsoft would very much like to replace this phrase with "BizTalk Server" in much the same way that Hoover and Coke have done in the past. Microsoft has ridden the PC revolution with enormous skill and dexterity, becoming one of the world's most powerful companies in the process. Even now, it seems unlikely that the dream will fade - the PC is moving into the machine room and Windows 2000 looks set to buoy-up the share price for some time yet. However, outside the kingdom where the PC holds sway, Microsoft's less successful ventures should serve to keep the company firmly on the ground. Ballmer and "innovator" Gates are not gods, but mortal men who are no better at predicting the future than anyone else. There are no guarantees, particularly for a company which may see itself divided into three or more parts before the end of the year. *Free operating system - at a price* In software terms "free" has become a relative, rather than absolute, term. Sun's interpretation of "free" seems to mean $75 - the price of the applications to be bundled with the next version of Solaris. For that is all Solaris 8 will cost. This is not meant to be knocking Sun. In reality, there is no such thing as free software unless the user wants to take on total responsibility for support, which in the commercial world is nigh on impossible. Hence even Linux has a price - the price of support. The big deal about Linux is supposed to be the open source model. But for every enthusiast that wants to open up the operating system to see (and possibly change) how it ticks, there will be hundreds of potential users that simply want a reliable, high performance operating system at a low price. Whether the price is zero or $75 is largely irrelevant. It is therefore highly likely that Sun's move in slashing the price of Solaris will persuade many potential Linux users to delay making the move. At the same time Sun will continue to take advantage of the high end of the server market where Linux is currently less of a threat. The impact of this announcement is more likely to be a slowing down in the rate of migration to Linux than a reversal. Sun is plainly able to keep on raising the barrier by reducing the price for larger servers as Linux becomes more mature in that environment. But Linux is not subject to the same constraints as commercial organisations. Linux does not have to be profitable while Solaris does. It is therefore very unlikely that it would be in Sun's interests to introduce the sort of commercial terms that could stop Linux in its tracks. Provided that Linux continues to mature and becomes a viable high-end server platform, we would expect to see ongoing erosion of the commercial operating system market. However, Sun's initiative should ensure that this erosion will be at the expense of other vendors, at least initially. *Measuring the worth of ecommerce* A study from Morgan Stanley Dean Witter has discovered that ecommerce is a strategic priority for 63 per cent of CIOs in the Fortune-300. Most CIOs also understand that businesses have to invest strategically or risk falling behind their rivals. But, according to the study, larger companies are both financially and organisationally more committed to incorporating ecommerce into their overall business strategy. It has been noted that many of the Fortune-300 are already well down the e-road. More than 33 per cent claimed they had implemented a Web storefront and 37 per cent said they intended to take part in a business-to-business (B2B) Internet trading exchange. Application hosting also figured high on the list with 44 per cent considering this option. Another 46 per cent of CIOs said they were in the midst of completing or had already completed the rollout of ERP applications. These numbers confirm a couple of trends. Firstly, that organisations increasingly understand the value of B2B ecommerce - and some are making waves in the space. And the second trend is the increasing interest in application hosting as a way of allowing IT departments to focus on the value add part of their responsibilities. This in particular we feel will take the form of more outsourcing agreements in the corporate sector, although some hardware and software will still owned by the corporation. Smaller organisations will tend towards a "pay per month" or "pay per use" pure ASP model where it is possible that they will own no part of the IT system at all. The underlying message from all of this is that ecommerce has to be an integral part of the overall business strategy. It is no good the main board pointing to the IT director and saying "sort it". The e-marketplace has to be identified, as do factors like revenue potential, cost of servicing, strategic significance and so on. The initiative then has to be considered against other activities that compete for management bandwidth and other resources. These are all business considerations that cannot and should not be left to IT alone. It appears that the large American corporates have got the message. The interesting question is whether ecommerce is being discussed as a strategic business issue in European boardrooms. * For more analysis, see http://www.it-director.com .