by Dana Blankenhorn
Volume I, No. XXII
Microsoft was a no-show at Internet World in Chicago last week. They chose to announce Windows 98 instead, which features such tight integration with Internet Explorer it's literally impossible to get some OS features without it.
Netscape didn't have a booth in Chicago, either, but their Empire did strike back. The message of 100% Pure Java on servers (instead of clients) was the theme of Novell CEO Eric Schmidt's keynote. It was also the message of IBM's San Francisco announcement, a set of object-based tools for building Java programs which link "middle-ware" systems like the AS-400 (and their enterprise software vendors) to the databases in corporate "big iron" on the one side and "clients" (NCs or PCs, take your pick) on the other.
Here's the deal. The folks whose applications run real businesses (and are most threatened by Windows NT) won't support Microsoft's extensions to Java, but will have a high-quality tool-set to keep themselves relevant to their customers in the world of the Web. Microsoft, meanwhile, it having real trouble scaling-up Windows NT. Wal-Mart reportedly dropped them for their Web site, which was supposed to be the "reference client" for the Microsoft Merchant Server (formerly eShop) and have you heard anything from that quarter at all lately?
All this means that Microsoft may indeed seem to dominate the client world. But the object technology in computers that matter to big companies will be CORBA-based, from IBM, 100% Pure Java that doesn't use Gates' extensions. IBM trotted out a platoon of software vendors from around the world for its announcement, and also showed its latest NC, based on a 66 MHz PowerPC chip and costing $800.
(The older Series 100s are being remaindered at $100 - by this time next year you may get 'em in Happy Meals.)
Your clue from all this. There is a big difference between the computing world we know, where Microsoft battles Netscape, and the computing world most businesses know - a three-tier structure of big-iron databases (SAP is the Microsoft of this space, with even Microsoft using SAP software), Unix or NT-based middleware (where IBM's platoons face-off against Microsoft's NT moves) and clients (where it's PC vs. NC, and the lowest administration cost wins).
Business is picking up. Check out the next issue of DOSV, Softbank's Japanese computer magazine, or the next issue of Internet & Electronic Commerce Strategies, to cite two examples. And AccessAtlanta is finally running my "Internet Insider" column.
That's good for you. Because it's Journalism -- checking the news, calling people, listening carefully, writing on deadline -- which keeps the clues coming, although I also handle consulting and commercial writing (ask about those rates via e-mail). If you're looking for excellent work -- like that found in my column at Atlanta Computer Currents or my regular work for Net Marketing magazine don't wait for the e-mail -- give me a call at 404-373-7634.
The assumption that the present "bandwidth bottleneck" will let the Bells, MCI and UUNet squeeze-out their 4,000 small-fry competitors was challenged skillfully at Internet World by Steve Hess, a former market researcher now working at AboveNet.
AboveNet will wait until ISPCon in San Francisco to formally launch its co-location service, dubbed ISP Condo, but here's how it works. AboveNet's chief technologist, Dave Rand, has managed to get complete peering with UUNet, MCI, and Sprint (50% of the Internet), as well as peers to all the ISPs with peering to all the major switches - MAE East, MAE West, PacBell and Ameritech. When "the Internet goes down," he knows who's at fault, re-routes traffic, and notifies his customer of what happened within 5 minutes.
ISP Condo will lease racks, and bandwidth, to any big Web site, corporate network, or (here's the good part) small ISP who wants it. Want reliable, variable-bandwidth connections for your Web store, with 24-7 care of the hardware? If you're big, contract direct with AboveNet. Small ISPs will be re-sellers for smaller customers.
Here's the good part. The small ISP can now offer better connections to his Web site customers than the big boys (it'll take years of technical work and negotiation to duplicate this), plus superior personal service and the value-adds (page development, commerce systems, etc.) that AT&T still hasn't mastered because they must bring thousands up to speed while Joe's ISP only has to train Joe (maybe Mrs. Joe and Little Joe). With AboveNet, everything you think you know about ISPs is wrong.
Lots of folks. At Internet World I sat down with Andy Parker of
Like who? Like Ken Crain's Laserdisks, a southern California chain of stores which put together a Web site with SoftKart which brings in $4 million a year, 30% of which comes from New York, where he could never afford to expand. "It's his largest store," says Parker. Like Salami.Com , a Queens deli which now sells meat all over. Like Macy's, which took 8 weeks to decide to go online, and 3 weeks to actually do the work. "They offered Waterford Crystal for $90, and sold out their stock in a week," he says. "They have a personal shopper now...send an e-mail, they'll get it, box it, ship it, and charge your credit card. That's customer service." Adding a bridal registry to such a system is a no-brainer.
Parker's also got some interesting thoughts on running an Internet company. Don't go public. "Why should I go to Wall Street for friends and family money, for venture capital money?" he asks. "When you go public, you can no longer make long-term decisions. Miss your quarterly number, and you're vulnerable" in many ways - the media, the courts, and takeover bait. "I won't go public until I'm profitable and convinced of my stability," he concludes. Don't think of losses in a high-growth industry as losses - think of 'em as spending. And you want to spend enough to secure your niche. Two clues in one interview...
Clued-in this week is Ralph Liniardo of Manheim Online. Manheim runs auto auctions for car dealers, and it's the most profitable piece of Cox Enterprises, the Atlanta-based publisher. It's also the most profitable piece of Cox' business online, too. Liniardo's moved slowly, putting pictures of cars to be auctioned online for dealers to view before they bid (he moves 5.2 million vehicles per year through 65 locations), and recently, launching CyberLot sales, starting with Lexus, where cars going off-lease can move quickly to dealers - he's moved $50 million worth of Lexus' iron alone in the last year. And that's just in his test phase. He's got 12 nameplates lined-up for CyberLots, and he really hasn't changed the underlying structure of his business one-bit in going online. He simply modeled what he does on the Web, and reaped a profit.
Clueless is Microsoft. More precisely, all those who think that Big Green is automatically going to own everything. Despite its swagger, and despite the obvious anti-trust problems with Windows '98, Microsoft's rivals (IBM, etc.) are still much larger, they're together, and they've got ample resources (Java, etc.) with which to compete. Windows NT doesn't scale, Office '97 isgarbage (thus the lateness of this week's issue), most big companies (including Microsoft) rely on SAP software and mainframe computers, not NT, and business logic is still housed on Unix or IBM-based systems which won't be replaced by NT and canned solutions - not in 2 years, not in 10 years. So why is Mr. Bill worth over $40 billion? FUD - Fear, Uncertainty and Doubt, which Gates & Co. spin as well as the Watsons of IBM ever did.
A Clue...to Internet Commerce is a weekly publication of @Have Modem, Will Travel. It's sent free to a qualified e-mail list. Like Netscape Navigator, it carries a list price -- $49 per year. Subscribers can receive either a .txt file or an .htm file. The .htm version features links which become active when online with a browser, or an e-mail package like Netscape 3.0. (Let us know which you prefer.) To take your name off the list, simply write REMOVE as the subject, or content, of a message replying to this post. To request your free copy, write us at Dana Blankenhorn@worldnet.att.net. We're on the Web at www.tbass.com/clue and www.ppn.org/clue.
A Clue...to Internet Commerce -- Copyright @Have Modem, Will Travel and Dana Blankenhorn, 1997