After being surprised by the success of the Internet and products such as Sun Microsystems' Java and Netscape Navigator, IBM, Apple Computer, and Microsoft are scrambling to catch up.
All three companies are integrating browsers into their operating systems in an attempt to head off the heretical Netscape and keep the OS at the centre of the universe. But so far, only Microsoft has presented a coherent strategy that leverages its current dominance in applications and Windows, although Apple did finally detail its plans as part of a reorganisation announced last month.
It remains to be seen how well Microsoft will pull off its plans, although the company is likely to be successful despite strong competition and the fact that the Internet is likely to remain based on open standards. If Microsoft can succeed, it will be a remarkable feat in an industry whose stars burn out every decade or so when the computing universe shifts to a new platform.
In the short run, the Internet has turned up the competition against Microsoft, giving its users viable alternatives to Microsoft products (an outcome that has pleased even dedicated Microsoft shops) and forcing the company to incorporate Internet technologies into its products faster than it has ever accommodated new technologies before. But the Internet is unlikely to break the Intel-Microsoft hegemony, as Sun's CEO Scott McNealy, Oracle's Larry Ellison, and others have predicted.
They say the Internet will level the playing field because the Internet is based on open standards such as TCP/IP and could potentially be used to deliver applications on any platform. In the future, they say, we'll get all of our applications off the Internet; PCs won't have to be anything more than simple devices with a fast Internet connection, and the operating system and hardware platform won't matter any more because new applications will be written in Java or other operating-system-independent languages that will run on any platform.
It is a nice idea but rather unrealistic, industry experts and analysts agree. Although it's true that corporations are already putting up intranets by the thousands (generally to publish static documents), the bandwidth and security to deliver serious business applications over the Internet simply do not exist. And even if these simple devices were to be thriving 10 years from now, and all new development was written for the Internet, there would still be a backlog of old client/server applications, just as today's client/server applications coexist with mainframe systems. Of course, if this were to happen, the market for PCs would be likely to decline as corporations stopped upgrading. But even Internet devices would still need some kind of OS.
Centre of the universe
In the meantime, Microsoft is trying to accomplish on the Internet what it achieved on the desktop: control of the market by setting standards, the same way it conquered the desktop with the Windows API. But can the same trick work again? Today the Internet is an open place. It runs on TCP/IP, most users use Netscape's Navigator Web browser, and most development is done for Navigator. A majority of Internet servers are still running Unix, although Windows NT is starting to make inroads. Common Gateway Interface, HTML, Virtual Reality Modeling Language, and Perl are still the most popular development tools, and none of them was created or controlled by Microsoft.
Windows is popular primarily because it is a standard - in that so many applications run on it. But Microsoft also sells a lot of its own application software, because buyers believe Microsoft products work well together. On the Internet, Microsoft is pursuing the strategy of giving away what others sell - Internet Explorer, its Web browser, and Internet Information Server, its NT-based Internet server - to make sure users keep buying Microsoft OSes, particularly NT, analysts say.
"The Internet Information Server is free, but it works on NT," says Brad Chase, a Microsoft manager. "The Internet Server has contributed to the NT server momentum, which is pretty strong right now."
Even users who have already standardised on Navigator will probably find it difficult to avoid Internet Explorer once the company ships Nashville, the next version of Windows 95, later this year. Nashville will feature a browser metaphor as its user interface, although the more familiar desktop metaphor and icons will also be available.
If Internet Explorer becomes popular, developers might start using Microsoft extensions that would require users to view content with Microsoft's browser, much like Netscape currently does with its plug-ins.
Today, however, Microsoft's free offerings are facing an uphill battle against Navigator.
"We've tried to help [various groups in our company] understand that nothing is free," says an MIS manager at a Fortune 500 food company. "You have to give up something in return - freedom and flexibility. We've just purchased 2,000 seats of Netscape's Navigator because they're the leader and they are setting the standards."
It's possible that the world of Microsoft applications - from Internet Explorer to Visual Basic - will work better with each other than with third-party products, which could prompt users to standardise on Microsoft-only platforms.
For example, Internet Explorer will support ActiveX components slightly better than Navigator, says Nat Brown, Microsoft project team leader for Distributed Component Object Model (DCOM). ActiveX components, which make up the next generation of OLE custom controls, will provide services to Internet applications, such as audio and video playback. They work with a variety of development environments from Microsoft, Borland International, and others.
"Anything you do with ActiveX can be used in Netscape Navigator because we offer a plug-in that hosts ActiveX controls inside Navigator," Brown says. "But it definitely has a lesser user interface experience than what you'd really want."
For example, the Navigator plug-in won't let a viewer take up the entire screen, which could be limiting if a user needs to view a Microsoft Word document, Brown adds.
Users of Microsoft's Visual Basic or all-Windows shops are likely to embrace DCOM, which offers the company's installed base a relatively easy way to connect distributed applications over a LAN or on the Internet, users and analysts say. For instance, programmers could design an application that runs locally but goes over the network to query a database, find all the customers that haven't paid their bills in the past six months, and return the information to the local application. DCOM was designed from the ground up to work well with Windows OSes and applications, although it will be ported to the MacOS, Unix, and other platforms. Microsoft has even proposed it as an alternative to Java (as well as CORBA), in the sense that it will be capable of launching a program on a remote machine, but one is a language and the other is a communications specification.
It looks as if Microsoft is likely to tame Java as well. Sun recently announced that most major companies will license Java, but Sun also said that other companies are free to develop enhancements to the code as long as they give the enhancements back to Sun to incorporate into the product. Analysts say the agreement makes it possible for Microsoft to control the direction of Java.
"If Java is to become the lingua franca, the killer bee of Internet software, then clearly Microsoft has removed its stinger in the Windows environment," says Peter Kastner, an analyst with the Aberdeen Group, in Boston. "Microsoft [now] has the design responsibility for Java on Microsoft operating systems. And Microsoft can use features of Win95 and NT that would be very difficult for other operating systems to support."
Meanwhile, Microsoft isn't writing any Java applications and is developing a paradigm in which the desktop operating system is central to anything users do over the Internet.
"If you want to retrieve an Ami Pro document and you don't have the application, the way we want the world to work is the browser and the desktop will know where to go to get that component for you," Brown says. "Then you'll be told, 'Here's the free read-only version and here's how to purchase the application if you go to this Web page'."
For example, if a user receives a document from an application he or she lacks, the user would find the application or a viewer with Internet Explorer, then download and launch the application or the viewer. Alternatively, the user could find the application with DCOM and launch it on a remote machine.
The Internet for the rest of us
Apple made a good early move by including TCP/IP support in its operating system, but since then it has fallen terribly behind, analysts say. It needs to offer credible mid-range and high-end servers as well as remote dial-up protocols, Web browsers, and e-mail packs, says Bruce Byrd, of Livingston Enterprises, a router and server manufacturer.
Apple is planning to integrate its Cyberdog Internet software suite, announced two weeks ago, into the next version of the MacOS (aka Copland), which will let users browse the Internet from inside any OpenDoc application.
Apple also announced a reorganisation that clearly puts the Internet at the centre of its own universe. Apple Chairman and CEO Gil Amelio says that the company will make all of its Macintosh CPUs "Internet ready" by year's end. And Apple will embed Java in a range of products, including OpenDoc, Cyberdog, and the MacOS. Netscape has announced that it will support OpenDoc components in a future version of Navigator.
IBM could become an important Internet player, but so far it has been playing mainly to a captive audience of loyal IBM customers. To its credit, the company was the first to add Internet access to its desktop operating system (OS/2 Warp), has recently made a big push with Internet advertising, and can offer its own private worldwide network as well as services and integration to customers. IBM announced two weeks ago that it will integrate OpenDoc with Java in the next version of OS/2 Warp, due in the fourth quarter. The company will market and distribute OpenDoc components for OS/2 Warp in June, with plans to deliver components for Windows 95 and Windows NT later this year. Analysts also say the company made a good move by adding Internet access to Notes.
IBM has been adding Internet capabilities to its high-end software development tools and databases on various platforms, but analysts note that it has not been terribly successful with development tools in the past.
Others, however, believe that IBM will stake out a place on the Internet.
"It's too easy and shows no critical thinking to count IBM out on the Internet in May of '96," Kastner says. "But it's fair to say the energy required to get the mass of IBM moving in the Internet direction is huge."
A rising tide
Even if none of these companies succeeds in controlling the direction of the Internet, they'll still benefit from its popularity, as will many other technology companies, and users will benefit from a wealth of products based on open standards.
Businesses will spend the next 10 years connecting disparate systems and leveraging the data in these systems, according to the Federal Bureau of Labor Statistics, and the Internet is the most likely medium with which to do it. Think of the Internet as the next killer application. Corporations, in particular, will buy new development tools, servers, and software for creating and managing Web sites and intranets. Companies say they are already feeling the buoyant effect of the Internet on their businesses.
"The Internet is a significant portion of our business," says John Landwehr, product marketing manager for Next Software. The company announced about 10 large customers for its WebObjects software in April and has grown from about 200 to 350 employees since it closed its hardware business.
Although the Internet may not knock Microsoft out of orbit anytime soon, unexpected successes such as Java and Navigator have forced the company to move faster than usual.
Users who want interoperability between the Internet and Windows are likely to get it much sooner than they received support for multimedia capabilities, for example, in the past. The worst danger Microsoft's strategy poses for users is that the company will force users to adopt technologies that require Microsoft applications and OSes, rather than products people really want and need.
But Microsoft isn't the only company out there trying to seduce users with free or easy-to-use products that just happen to promote its own technologies. It's just the company most likely to succeed because of its huge installed base.