Citicorp has licensed software from Netscape Communications Corp. for use in electronic commerce services, the companies announced Tuesday.
Citicorp executives said it will give them a start on a new wave of Internet commerce, in which the bank will help business customers sell goods and services over the World Wide Web.
And this first major deal with an aggressive technology-deploying financial institution could give Netscape a shot in the arm as Microsoft Corp., its rival for Internet browser supremacy, must fight federal antitrust charges filed Monday.
Senior analyst Ted Schadler of Forrester Research said, "Citicorp's decision represents a level of credibility" for Netscape as it pursues the Fortune 1000 commerce market.
"If you consider what Citibank is, we are the essence of commerce-we connect the buyer to seller and offer a financial component to help facilitate business," said Edward Horowitz, corporate executive vice president and director of the Citibank advanced development group.
"As the world gets more wired, the demand is not just to provide the financial aspect of a transaction," he said. "It is to provide customers with the value-added information to facilitate and track the order."
Citicorp, which has a pending merger with Travelers Group that would make it the largest financial company in the world, would assume the role of what Netscape terms an "enterprise service provider."
Its offerings would extend beyond traditional banking functions into hosting Web sites and managing commerce-enabled intranets and extranets on behalf of customers.
"Citibank recognizes the Internet as a powerful tool for gaining competitive advantage," said Jim Barksdale, president and chief executive officer of Mountain View, Calif.-based Netscape. "We are excited that Citibank is in front of an important new trend."
Mr. Barksdale said Netscape's technology can help automate business processes, purchasing, customer service, and product development. The Internet promises to drive down the overhead costs while letting businesses reach millions of customers.
In praise of Netscape, Mr. Horowitz said it "had to go through a lot of hoops" to be able to meet Citicorp's global needs.
The banking company's decision to use the entire range of Netscape's CommerceXpert family, plus its application server and directory server software, continues its move away from long-held prejudices against outside vendors.
"There was a time when you needed to build and design and support your own software," said Mr. Horowitz.
"With the advent of Internet and 'thin client' software, we are finding we don't need to do that and are shifting to a strategy of buying off-the- shelf software"-modified to meet the needs of the bank's customers.
"This agreement provides us with a set of tools to accelerate the development of (electronic commerce) applications for both corporations and consumers," Mr. Horowitz said. u