Microsoft persuades auto player to give .Net a ride

Microsoft will score a major customer win this spring when The Reynolds and Reynolds Co., a top auto retailer information management company, rolls out a series of Web services modules, the Generations Series.

The software giant will also get credence in a trillion-dollar industry that until now it has been unable to crack.

The Reynolds Generations Series is entirely based on .Net and it makes Reynolds a showcase in Microsoft's early-adopter program. Last year, Reynolds and Reynolds had more than a US$1 billion in annual sales.

Reynolds, whose suite of 100 solutions that touch most aspects of dealer management, will over time convert all of its services to the .Net platform, said Lloyd "Buzz" Waterhouse, chairman, president, and CEO at Reynolds.

"To name just three, we have a dealer management system, and a system that tracks consumer data, and one that tracks vehicle data, and the weakness was no integration [among them]. Adopting .Net deeply integrates the solutions in the Generations Series. We can build out around that environment," Waterhouse said.

As an early adopter of the .Net platform, Reynolds gets help in the creation of its software solutions from Microsoft, said Scott Carlton, general manager of Microsoft's automotive division in Redmond, Wash.

"If they need a particular feature we can write that feature and put it in .Net. If Reynolds needs it, someone else in the auto industry probably does too," Carlton said. "Likewise we provide sales assistance and sell together," he said.

Although Carlton said Microsoft benefits by "showing automotive [companies] what .Net can do to bring their supply chain into the 21st century," one analyst says Microsoft is the biggest winner in the deal.

"Microsoft is already leading as a software provider at work and in people's homes. The only environment it hasn't gotten though to is the automotive market and inside the vehicle," said Thilo Koslowski, senior analyst for Gartner G2 in San Jose, Calif. "Web services deployment with Reynolds is an important step for Microsoft rather than for the auto industry," Koslowski said.

As an early adopter, Reynolds and Reynolds will be the recipient of valuable Microsoft technology and resources, and even if this costs Microsoft more in dollars than it receives back from Reynolds, this is often the Microsoft business model, Koslowski said, who sites xBox as an example.

"Microsoft is operating [the xBox business] at a loss but the payoff is that over time consumers will start to use it to access the Internet and then perhaps they can be converted to become MSN subscribers," Koslowski said. Microsoft wants to become a leading player in the auto space and they are willing to invest a lot of money for a big payoff in the end, he said.

In the meantime, there are real business-to-business benefits for Reynolds, especially in an industry with old technology that needs to be updated.

Most auto dealers have as many as a half-dozen green screens in their dealership, and each terminal is a silo of information, Waterhouse said.

Reynolds hopes to integrate those discrete information silos so that a single action by a customer launches a number of simultaneous Web services.

For example, if a consumer goes to a manufacturer's Web site to find a local dealer, a Web service will make that dealer look like a dealership for only that manufacturer's models, hiding the other manufacturer's models that the dealer may sell. At the same time, the system will integrate with ERP systems and alert sales and service personnel that a customer is browsing the site, and if it exists, a history of that customer will also be displayed for the dealership.

Waterhouse said Web services have a number of appealing features.

"We don't have to rip out our dealer management system. Using .Net made it compatible to our old legacy system," Waterhouse said.

The Waterhouse also pointed out that the Web services will allow Reynolds to devise new services as well as new pricing schemes for its customers.

Until the rollout in April, Reynolds charges on a per store basis, with a fee negotiated by the size of the store. The price is fixed and subject to renegotiation when the contract expires.

Web services will allow Reynolds to use tiered pricing with fees more closely aligned to a usage model and number of modules. "It will be pay-per-use more than standalone," Waterhouse said.

The service will also integrate with broadband and wireless using the .Net Passport and .Net Alerts technology for single sign-on and authentication as well as for sending alerts.

Reynolds officials will roll out modules starting in April and continuing over the year with each module integrating with a previously released Web service.

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