IBM, Microsoft in race for market

Now that Microsoft has aired its Web-development plans for Windows 2000 and IBM is about to debut its latest spate of electronic-business tools this month, the race for best Internet-commerce vendor is on and running.

Currently leading the pack in the early stage of this race is IBM. The once stodgy Big Blue seems to have beaten the other major players -- Microsoft, Oracle, Sun Microsystems, America Online, BEA Systems, and SAP -- to delivering a comprehensive set of integrated tools by which enterprises and service providers can become dot-com entities.

"In terms of the products, services, partnerships, and general depth of experience in this market, IBM has to be considered the front-runner," said Sally Cusack, an analyst at International Data Corp., in Framingham, Massachusetts.

Analysts say the newest WebSphere-and VisualAge-oriented products, to be announced this week by IBM, do the dot-com job -- both for IBM legacy shops and for the new breed of Web-only start-ups.

"IBM's new product set is well suited for enterprises transitioning to dot-com," said Dave Kelly, an analyst at the Hurwitz Group, in Framingham, Massachusetts. "And this is true for companies that do not have an IBM legacy."

The e-business race, however, will not be over for years to come.

Last week, Microsoft announced a Windows 2000-based Web application package and services, due out next year, that uses Extensible Markup Language and messaging middleware, as well as its Babylon and BizTalk servers, to enable electronic commerce.

"If they can deliver and fulfill these services, it will open up the Microsoft platform and applications to a broader audience," said Kelly. "But Microsoft and other vendors have to integrate these new technologies."

To take advantage of the Microsoft solution, enterprises will have to upgrade their Microsoft platforms, but the arrival and dissemination of the major pieces of Microsoft's e-commerce solution are still 12 months away.

That means, for once, that timing seems to favor IBM.

"This is an important time," Kelly said. "I don't think that it means that IBM wins, because people will wait for new functionality. But top people are making strategic decisions now. They need to get their apps up and running."

There are literally dozens of vendors and alliances -- application-server makers, tools vendors, and middleware providers -- working to satisfy the e-commerce needs of Internet service providers and enterprises. But only a handful of major vendors are closing in on a comprehensive package of integrated solutions.

For example, Sun is currently cobbling together a platform from its acquisitions of Forte and NetDynamics and its alliance with AOL's Netscape subsidiary. Yet Sun has a number of integration and vision hurdles to overcome, placing its mature release of a comprehensive dot-com package as late as Microsoft's, analysts said.

"Sun needs to step up to the plate and provide a much clearer road map," Kelly said.

Oracle, for its part, is fast off the blocks with development and services tightly aligned with its Oracle8i database, but the reach of Oracle's offerings beyond its installed base will not come easily.

"Oracle's challenge is to continue to integrate their technologies and to articulate their platform strategy to ISVs and enterprises, and make it compelling," said Kelly.

Two other horses in this race are SAP and BEA Systems.

But SAP, which wants to make enterprise resource planing (ERP) applications a foundation for e-commerce, may have lost its momentum to the Web -- mySAP.com notwithstanding.

"If you have a proper ERP system, it does link the systems, but there are missing links," said Jeff Tarter, editor of SoftLetter in Watertown, Massachusetts.

Meanwhile, BEA Systems, with its Tuxedo and WebLogic offerings, must obtain a stronger tool set to complement its products and to show that its integration capabilities are on par with IBM's.

"The tough challenge for e-commerce is to plug into legacy systems," said Tarter.

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