I can't sit back and let this one go by. Dirk like most other people is very knowledgable in classical business, but unfortunatly classical business doesn't carry over to the Internet very well.
Everybody keeps looking at Microsoft as if each one of their new "strategies" is making a big dent in the Internet. The new strategies are still someone trying to use the shotgun approach in a medium where surgical precision is required.
So what if Microsoft takes over all of the big 3. Based upon the numbers that I have seen in the measurable past, AOL, CIS, Prodidy, *AND* MSN together, barely account for a drop in the bucket when it comes to Internet users. Microsoft will probably succeed in taking over all of the 16% that Netscape doesn't currently claim. That doesn't put them in the big league by any measure. As for Microsoft getting a 50% market share, not with their current feeble attempts.
As for Microsoft's "strategic" advances; they all appear to be tactical dodges to me. Strategy on the Internet has a lot more of a global meaning than it does in the classical business model. For everyone who thought that they were thinking in the strategic mindset in the real world, most of them still need to be an order of magnitude more abstract and visionary and innovative on the Internet. That is why Netscape got to where they are.
If Microsoft wants to really be strategic, they need to make some decisions and stick with them. I recently saw Marc Andressen quoted as saying "Microsoft is all over the road". It is true. Microsoft has waffled on anything close to being a strategic decision. If Microsoft wants to succeed, they need to first and foremost plant a stake in the ground as to where they are on standardization. They can't say they are for standardization and continue to press for OLE based technology that isn't "promptly" available for licencing for *all* contenders. They can't keep adding marques and colored text, and non-standard font control and claim that they are standards based. It has only been because they aren't a prime contender that they haven't received full censure for their actions here.
If Microsoft wants to be strategic, they have to also do something original. They can't keep being a "Mozilla compatible". They can't keep making their 2.0 browser 100% compatible with Netscape Navigator 1.1, and claiming some sort of advance from this. This is not to say that they can ignore the inroads that Netscape has already made. If they want to succeed they need to directly address things like Frames. They also need to start addressing other quickly evolving defacto standards like Java. Admittedly they have done a good turn by using the prevelent Netscape Plug-ins in addition to their own proprietary stuff.
The web is a new creation every 18 to 24 months. If Microsoft really wants to beat Netscape, they need to figure out some way to be uniquely superior to Netscape 18 months from now. Throwing money and current influence at the problem will not sway the people that find Netscape to be currently (and continously) superior. Netscape is superior in the browser by offering options that improve the Information Overload problem. Netscape is superior in the Intranet because they don't disenfranchise the Unix systems that are the right-sizing bridge between distributed networks and legacy mainframes. Netscape is superior in that they keep coming up with a significant advancement with each browser release. Despite the current flack with Netscape's lack of "standardization", Netscape has made great strides towards not antagonizing the community interested in standard. The only failing Netscape has in this area is their lack of implementation of style sheets to date and the piecemeal implementation of tags to make up for the lack of stylesheets. Netscape now only ventures into new territory where standards aren't even dreamed of, or implements someone else's current standards.
I'm not saying that Netscape is great and Microsoft is bad, just that Netscape understands the Internet, the need for standards and modularity, and the overwhelming need for radical innovation every release. Once Microsoft can understand this strategy and starts throwing their money and influence at this solution, they will regain their top dog status. Until then, they are just an "also-ran" nipping at the heels of the pack.
Mary E. S. Morris
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David,
Thanks for forwarding Mary's article. Fascinating reading. By the way,our URL: http://www.infragence.com?
These are my thoughts. The current reply is a view from the top. If you want I can reply to her specific statements, point by point. In a way this could be more correct and is more fun but I also think it misses the point. Everyone is always comparing technologies, statements etc. But that is not the point anymore. The war is fought on a different level.
One statement I take real issue with: I bet you that if you go to the most frequented (consumer) sites on the web the lion share of connections come through AOL, CIS etc. These guys are not a drop in the ocean. Otherwise why would MSFT and Netscape fight so hard for them?
I am not saying Netscape is bad and Microsoft is good. I think Netscape is a great company and I want them to succeed. What I tried to say was the fact that Microsoft was using all weapons to hurt Netscape in order to protect itself. I am not even saying that Microsoft is better than Netscape. I respect Netscape and I want them to succeed.
>From time to time I am afraid that this is difficult to imagine. Sometimes it seems that the success of Netscape is based on the very basic assumption that Netscape "gets it" (the Net) and that Microsoft "doesn't get it". This form of elitist "ostrichism" is dangerous. Never underestimate your competitor, especially if it is Microsoft.
I think both companies -and many more- fully understand the Internet and see what is possible. Both companies have great technology and have very smart people working for them. There is no reason to assume that only Netscape will "get" the Internet. Now or in the future.
The difference is how they apply their knowledge. Netscape tries to break the current paradigm, whilst Microsoft tries to leverage the current paradigm. That is the main difference. It is very simple.
Netscape positions their browser as the OS. Microsoft says that every (MSFT) application is a browser to the web. Better, MSFT thinks the OS is the browser whilst for Netscape the browser replaces the OS. (BTW: it seems that Apple will follow the MSFT model when it launches their new OS the end of this year).
Is the Microsoft route the classical way of doing business? Only so far that they try to maintain hugely profitable and reward their shareholders. Hence the reason they try to leverage the current paradigm, hence they are using all tools at their disposal to force Netscape to adapt to a strategy which is not necessarily detrimental to themselves. Also Gates, I think, is getting sick and tired of hearing that only Netscape "gets it" and Microsoft not.
Lets talk standards, In the beginning I thought Netscape behaved like Microsoft. With the same arrogance and aggression. What are standards anyway? Netscape is forcing many standards by hi-jacking future developments (i.e. HTML 3). That is a classic business method. If you have enough people following you, you become the de-facto standard.
That is why it is so important that you have as many browsers out as possible. The bigger your following the easier it is to "force" standards.
OK you say, but most Netscape standards are open, Microsoft wouldn't do that. Simply because it is much easier to make money when you can force -semi open- standards. Look at UNIX, why are there so many different flavors of what should be an open system? Shareholders, P&L and balance -sheets stand in the way of truly open standards. If there is no value add, how do you make money?
However sad it seems, the story isn't about who has the best technology. It is about how you implement that technology and at the same time make money on a consistent and sustained basis.
That is why Netscape tries to break the Microsoft model and that is why Microsoft tries to hurt Netscape at where it currently hurts most: their P&L sheet.
Profit, access to capital, rewarding and motivating both your employees and shareholders might be a classical way of doing business, it still is the most up to date business law.
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Dirk's response was interesting, and I do agree that a point by point match would be great fun. Name the time and place and I'll do it. :^)
In response to some of the big questions and issues that Dirk brought up, here are a few answers.
"I bet you that if you go to the most frequented (consumer) sites on the web, the lion share of connections come through AOL, CIS etc. These guys are not a drop in the ocean. Otherwise why would MSFT and Netscape fight so hard for them?"
The answer here is that the Internet is the ultimate niche market. Even the most popular web sites only get a single digit percentage of the web audience. Even 30-40% of 5% is still a pretty trivial share. As to why they fight for them, the answer is name recognition. It has nothing to do with market share. I had my book as a featured book in the Library of Computer and Information Sciences book club. I got diddly for the books themselves (and a lot of them sold). However, my name went out to something like 20-30 times as many people as actually bought the book through the book club. To have your name broadcast through a highly respected medium without making direct market share is good, because you still get mind share.
"I think both companies - and many more - fully understand the Internet and see what is possible."
I won't deny that many people and companies see what is possible with the Internet. However, I disagree strongly that many companies fully understand the Internet. If so many companies understand the Internet, wouldn't you expect a better success rate than the 20% listed as the most optimistic web site success rate to date? To understand something is to know how to use it for success. Netscape has been successful to date.
"Netscape tries to break the current paradigm, whilst Microsoft tries to leverage the current paradigm"
I'm not really sure what paradigm Dirk is talking about. The only paradigm that I have seen Netscape *break* is that of classical business, and that paradigm needs breaking. To paraphrase Tom Peters, "The Tom Peters Seminar", continuous process improvement isn't enough, only true revolution is.
In my opinion, Netscape holds to the Internet paradigm much better than MSFT. Netscape holds the "Stone Soup" philosophy, and that is what the Internet is all about. Netscape knows quite well that they can't rule the world, so instead they just make the strategic pieces and let others develop the rest.
"Profit, access to capital, rewarding and motivating both your employees and shareholders might be a classical way of doing business, it is still the most up to date business law"
As for profit, Netscape started turning a profit a full 9 months before they were expected to. Access to capital hasn't seemed to be a problem for them. Looking at each week's San Jose Mercury News leads me to believe that there aren't enough competant people to fill all of the roles and spend all of the money Netscape has. As for rewarding and motivating people, I'd say Netscape isn't doing too bad if they can retain many of the most competant in the valley. To my knowledge most of Netscape's stockholders are pretty happy to be holding stock in such an important new company. I haven't heard complaints.
FYI - My personal opinion is that if Microsoft actually caught up with Netscape enhancements AND implemented true stylesheets, they'd be over the edge and past Netscape on the browser side. If they could make a real Internet server that did email and DNS as well they could do some real work. And last but not least, if Microsoft had a good entry into the rightsizing market, they could tie up the Intranet world that Netscape (and the Unix world) have been making most of their profit off of. If Microsoft really wants to hit Netscape in the balence sheet, there's the place to do it, not posturing and announcing a new strategy three times in 4 months.
(March 1996) Back to Strom's home page