A little more than a year after Chairman Bill Gates used Pearl Harbor Day 1995 to acknowledge that Microsoft had been asleep at the Internet switch, the software giant has incorporated Internet technology across the board. And it has promised much more in 1997.
Analysts and users generally give Microsoft high marks for the past year, and say delivering on those vows will be the key to the company's fortunes for the New Year. The company and its stockholders enjoyed dizzying financial success in 1996, an act that may be hard to follow.
But it will be equally important for Microsoft to continue to emphasize Internet technologies, cooperate on industry standards, and further hone its message, observers say.
"There's a lot more to the Internet than just having a Web browser with Java support," says Clay Ryder, director of Zona Research. "They're not done. No one's done."
Microsoft released a slew of products in 1996, including updates to Internet Explorer, its Web server, and development tools. And more are promised in 1997, including the Office 97 suite of applications, the Explorer 4.0 browser family, and Internet Information Server (IIS) 4.0 Web server.
Key Microsoft products due in 1997 include:
• Windows 97, with the beta due in the first quarter and shipment in the third;
• Internet Explorer 4.0, with the beta in the first quarter and shipment in the second;
• Office 97, in New Zealand now, shipping in january for the rest of the world;
• Exchange Server 5.0, due to ship in the first quarter;
• Transaction Server, due in the first quarter;
• IIS 4.0, due in the second quarter; and
• Visual Basic 5.0, due in the first quarter.
The anticipated next version of Windows - code-named Memphis - will offer Explorer as a desktop interface option, a key component of Microsoft's Active Desktop concept of a seamless integration of operating system and applications with the Internet.
"They need to merge their desktop technology with the Internet," says Nate Lynch, a software developer with Valinor Inc. in Bellevue, Wash. "Everything you're doing locally needs to be integrated. They also need to make collaboration across the Internet easier."
One Internet commerce success story, 1-800-Flowers of Westbury, N.Y., is pleased with both its migration to Microsoft's Merchant Server and the distribution channel it has gained through Microsoft Network, says Vice President Chris McCann.
"It's not just server technology, not just channels. They're taking industry leadership in attracting mass consumers on to the Internet, and that's going to help everyone," McCann said. Next year, McCann will look to Microsoft to "provide us with the technology, and also the opportunity or the channels to [reach] as many people as possible."
Many observers say Microsoft needs to address its own style, rather than the substance of its products. But even then, some disagree on whether the company should be more, or less, aggressive in the industry.
"They can't leave a good thing alone without changing the scope, relying on their desktop clout to force an issue through to general acceptance," says IDC analyst Dan Kusnetzky. "This is not an acceptable approach in the world of the Internet. There are too many players who say, 'We do it this way rather than your way.'"
But Ryder says Microsoft's hard-line business reputation sometimes makes the company tread lightly.
"They think, 'We don't want to look like bullies because people already assume we're doing bad things,'" he says. "They haven't defended themselves against Netscape and Sun and others, who often make outlandish claims that Microsoft would get tagged for."
Microsoft also will spend considerable energy fending off the network computer by pushing hard for its answer, the NetPC, as well as its Zero Administration Windows initiative - both aimed at cutting the cost of using and maintaining PCs.
Another focus will be content, exemplified by Microsoft's commitment to Microsoft Network (MSN) and MSNBC, as well as its recent deal with PointCast for the "push" delivery of information.
Kusnetzky says Microsoft must shore up its server technology in 1997.
"Microsoft has a very strong position on the client, and is trying to reach in on the server," Kusnetzky says. "They're trying to build credibility and a track record on the server. Oracle already has that, and Microsoft can't really show you the same high-end solutions yet."
Elizabeth Heichler, the Boston-based managing editor of InfoWorld affiliate the IDG News Service, contributed to this report.