Aberdeen says Netscape a diminishing Internet star

Once the undisputed Internet star, Netscape is losing its ability to define Net standards and influence big customers, the Aberdeen Group, a Boston-based consultancy, says in a new report titled 'Netscape's Diminishing Role as an Internet Superstar'. The report states that Netscape is losing market share and will find itself competing with its partners Sun and IBM for Fortune 1000 accounts.

Netscape Communications has a dark cloud hanging over its head.

Once the undisputed star in the Internet world, Netscape is now losing its ability to define Internet standards and influence Fortune 1000 companies, the Aberdeen Group, a Boston-based consultancy, says in a new report titled "Netscape's Diminishing Role as an Internet Superstar".

The report, written by Tim Sloan, Aberdeen's director of research for Internet infrastructure, states that Netscape is losing market share, is no longer able to define Internet standards and will find itself competing with its partners Sun and IBM for Fortune 1000 accounts.

Netscape officials are angrily rejecting the report's conclusions.

"Tim based his analysis on false assumptions and as a result his conclusions are false," says Danny Shader, Netscape vice-president of industry and developer relations.

In the paper, Sloan says the majority of Netscape products installed in the Fortune 1000 are actually sold by vendor partners that include IBM, Hewlett-Packard, Sun and Digital Equipment.

"When Netscape announced that the SuiteSpot server will include email and Directory Servers, major vendors started to reconsider if they want to bring Netscape into their Fortune 1000 accounts because SuiteSpot will directly compete with their own mail, directory and security products," Sloan says.

He says Netscape has little presence in the Fortune 1000 and its distribution partners will push their own products to corporate accounts rather than offer Suitespot.

Wrong, says Netscape's Shader.

"We recently won 200 new companies making up 2 million seats for client-server systems," Shader says. "Fact is that the corporate sales came from our direct sales force and not from other vendors," he says.

Shader also says that Netscape is not losing market share, either on the client side or the server side -- another point Sloan makes in his paper.

While Sun and IBM will continue to partner with Netscape on the client side, on the back end, when it comes to linking the Web with legacy systems, the distribution alliances will run into problems, according to Sloan.

"We talked to 30 Fortune 1000 companies in the last two months and almost all of them raised concerns about how Netscape will tie into legacy business applications," Sloan says.

"They all love Netscape as Web servers but they have concerns about scalability and security and look to Sun and IBM for tying into the legacy systems."

Another issue Netscape is facing, according to Sloan, is that Sun's successful introduction of Java levelled the Internet playing field, diluting Netscape's domination of Internet software standards in times when competition is heating up.

"Netscape will find it impossible to drive Internet standards the way it once did," Sloan says. "Java is now the centre of the Web development and Sun with its 100% pure Java programme is in control."

Netscape, however, says it can't follow the analyst's reasoning, since Netscape is not at all positioned against Java, but instead is an active participant in Java's development.

"I don't understand where the notion comes from that we are somehow positioned against Java," Shader says. "We are not; we work closely with Sun on Java Beans and the Java Foundation Classes. We are firmly committed to Java."

Furthermore, the Aberdeen Group faults Netscape for not establishing an effective developer programme or brand-name campaigns.

In its interviews, Sloan says it became clear that many IS directors and ISVs do not understand the full range of Netscape's architecture, development environments, or partnership opportunities.

"We tend to think Netscape is one of the best-recognised brand and company names out there in the Internet world," Shader says. "Netscape is the Internet company."

He says that Netscape's developer programmes are growing and that the company has recently announced many development partnerships, including major enterprise resource planning vendors, which are at the heart of many corporate information systems.

Shader also cites a recent report published by the Hurwitz Group, of Newton, Massachusetts, which offers a positive view on Netscape's future. The Hurwitz Group did not return phone calls.

The Aberdeen Group in Boston is on the Web at http://www.aberdeen.com.

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