Microsoft seems to be losing 'Net momentum

Not far from the ever-expanding Microsoft. campus is the Redmond Plateau, a neighborhood of suburban homes, many of which are occupied by Microsoft employees. But these days, 'Redmond Plateau' could refer to Microsoft's Internet strategy. A year and a half after Microsoft took a sharp right turn to 'embrace and extend' Internet standards, the company is running into several road blocks in its rush to the information superhighway.

Not far from the ever-expanding Microsoft. campus is the Redmond Plateau, a neighborhood of suburban homes, many of which are occupied by Microsoft employees.

But these days, "Redmond Plateau" could refer to Microsoft's Internet strategy. A year and a half after Microsoft took a sharp right turn to "embrace and extend" Internet standards, the company is running into several road blocks in its rush to the information superhighway.

Among the major impediments: delayed products, security problems, trouble scaling down rich, proprietary products to work with the Internet's simple protocols, and lack of support for emerging standards.

Internet Explorer 4.0, originally due last December, is scheduled to ship later this year, after being redesigned to add new functions and to address security problems, such as the bug uncovered last March in Version 3.0 that lets Web-page authors run friendly or malicious programs on visitors' computers by using .LNK and .URL files.

The security issues raise questions about the viability of Microsoft's plans to use the browser as a window into the desktop operating system as well as the Web.

"If the browser gets you down to the file system, it can get you into memory allocation, and with a Java component inside, it can do a lot of unknown things," says Lam Truong, chief information officer at LSI Logic, in Milpitas, California.

Internet Information Server (IIS) has also had security problems, exemplified by the bug found in June that enabled users to crash the company's own Web site.

Microsoft received points for slapping a Web browser front end on most of its products. But now that the company needs to get beyond superficial features, some observers say Microsoft is on slippery ground. The company needs to both embrace Internet standards and distinguish the advanced capabilities of proprietary products.

That won't be easy to do with products such as Microsoft's Exchange messaging platform. In April, officials confirmed that the company would merge Exchange Server and the Microsoft Commercial Internet System for mail and news into a common code base by 1998. But how?

"It's a tricky question, because you have a sophisticated system on the Exchange side, and the Internet side is somewhat slapped together and incomplete," says Eric Arnum, editor of Electronic Mail and Messaging Systems, in Washington.

Some products that were originally conceived to live in a Microsoft-only world have been scrapped and revived with the Web in mind.

Products such as the Blackbird multimedia authoring tool demanded a total overhaul after Microsoft's famous Internet epiphany, because its business has evolved around the standards that it set, rarely those established by others.

"As Microsoft moves into the wild, woolly world of the Internet, it is finding that things don't work quite as easily as in a world where it is the dominant player," says Dan Kusnetzky, an analyst with IDC Research.

Widespread adoption of Internet protocols as well as other existing protocols, such as the Object Management Group's Internet Inter-ORB Protocol (IIOP), has also helped to galvanise Microsoft's competitors on the standards front. For example, Microsoft is now the only major vendor that has not embraced IIOP for distributed application development, because IIOP competes with Microsoft's proprietary Distributed Component Object Model for Windows.

Ironically, the company's Internet plateau may come as a relief to some users.

"Attaching an Internet focus to every product may be carrying things further than people want," Kusnetzky says. "There's a large number of people, especially corporate citizens, who don't use the Internet on a daily basis and wonder if they are being penalised with increased memory and storage requirements just to be able to check the box that says `Internet-enabled.'"

One user believes that if Microsoft slows down its Internet push a bit, products can be better tested.

"Since we will not be rolling out Internet Explorer 4.0 and the Active Desktop for quite some time, Microsoft will have a chance to fix everything," says an IT manager at a large U.S. company who asked not to be identified.

Microsoft's pause could be the most prominent example of an emerging trend among vendors and users.

A recent study by Forrester Research predicts a looming slowdown in the breakneck pace of Internet innovation, according to Donald DePalma, a senior analyst.

"Of the organizations we spoke with, only 16 percent had anyone who they were able to point to as the keeper of their corporate Internet strategy," DePalma says. "These people are running into problems with their budgets."

These concerns have reached Redmond, and officials insist that they are not falling on deaf ears.

"The pace of `the browser of the day' does have to slow down," says Yusuf Mehdi, product manager in the Internet Tools and Platform Division at Microsoft.

Microsoft's general slowdown in Internet adoption may be perceived by competitors as an opportunity, but the company's biggest asset is its loyal developer base.

"Microsoft has an excellent developer relations program that keeps us informed about forward movement and strategies," says Bob Zurek, vice president of Web-development tools at Massachusetts-based Powersoft.

But others says the Internet interlude may also benefit Microsoft by giving it a chance to re-examine whether it has over-marketed the Internet at the expense of other features, such as ActiveX.

"They're exclusively marketing it as an Internet phenomenon, but ActiveX is a development phenomenon," says Mike McCamon, director of product marketing at Visual Components, in Lexena, Kansas, which bundles its First Impression, renamed MS Chart, with Visual Basic 5.0. "Some of our technology does not take advantage of Internet Explorer. ActiveX was not specifically designed for the Internet."

In fact, Microsoft is frequently at odds with itself. Microsoft's Java efforts frequently conflict with its commitment to ActiveX, as it seeks to ensure that the Java phenomenon doesn't overwhelm Windows. This leads to an "embrace and extend" strategy that adds proprietary hooks into its Java implementation.

For example, in July the company added J/Direct, which will let developers write Java directly to 32-bit Windows APIs and to the Java virtual machine in IIS and Internet Explorer. The trade off: While these Java applications will run faster on Windows, they are not portable like other Java applications.

Even Microsoft-haters, in weaker moments, admit to harboring some admiration for the way the gigantic company turned on a dime to focus on the Internet. Even before Bill Gates declared the Internet the target, the industry was wondering what was taking Microsoft so long.

Eyebrows were raised especially high over Microsoft's embrace of Internet protocols and its willingness to form partnerships with other companies. On both issues, Mehdi says, Microsoft has scored well.

"People are now shipping and building on top of Internet Explorer," Mehdi says. "We're now at almost 30% browser share, which, considering that we didn't even have a browser two years ago, is great."

Many users believe that Microsoft will overcome the challenges causing its plateau and will continue, albeit more slowly, toward Internet market dominance.

"Microsoft has proved its agility. If you told me a year ago it would be where it is today, I would have been surprised," said Chris Sagovac, a senior programmer and analyst at American Credit Indemnity, an insurance company in Baltimore.

Indeed, Microsoft's Internet about-face has proven that almost all questions, eventually, will be answered, either voluntarily or through pressure from the market.

"It is incredibly light-footed for a company that is so big," says Kusnetzky. "The music changes, and it changes from a two-step to a waltz so quickly that it is hard to believe. And so many people rely on it that, if it moves in the wrong direction, people will yell."

Bumps in Microsoft's Internet road

-- Internet Explorer 4.0 several months late

-- Security problems with Explorer 3.x that raise questions about browser-Windows union

-- Bugs plaguing Internet Information Server

-- Trouble convincing users to pay for content such as The Microsoft Network (MSN) and online magazine Slate

-- Caught between the merger of Exchange Server and Microsoft Commercial Internet System code

-- U.S. Justice Department's probe of Internet-related business practices

-- Blackbird technology, developed as proprietary development tool for MSN, becoming Internet Studio, then Visual InterDev

-- Unresolved strategy regarding whether to break up Office suite as components for use in browser

-- Confusion over role of Java

-- Java embraced by tools division as a programming language while Java-based NCs and Java OS may threaten Windows

-- Lack of support for Internet Inter-ORB Protocol

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