All the scope and power that Microsoft Corp.'s friends and foes admire and fear were on full display last week as the software company laid out its plans for guiding and shaping electronic commerce.
Microsoft chairman Bill Gates and other officials wowed an audience of press and analysts with what they called "a comprehensive strategy to accelerate participation of businesses and consumers in e-commerce."
It is a campaign reaching so far and wide and into so many nooks and crannies of the virtual world that even some of Microsoft's technology allies may be wondering when they might find themselves competing, instead of cooperating, with the colossus of Redmond, Wash.
"If this company has been cowed in any way by the Justice Department suit, one couldn't see it," said Credit Suisse First Boston e-commerce analyst Bill Burnham, who attended the briefing Thursday in San Francisco. "It looks like they want to go after everybody, and nobody's business is safe."
Much of the seamless networking that Microsoft wants to create is still months in the future, awaiting the slowed-down release of the Windows 2000 operating system, formerly known as Windows NT 5.0.
But by most accounts, the presentation and the vision were dazzling. For now, the hundreds of software companies, resellers, and systems integrators in Microsoft's family of partners seem to be happily sharing the attention and afterglow from the organization's most aggressive and wide-ranging assertion of its e-commerce ambitions.
Mr. Gates said Microsoft wants to smooth the way for "more than a million new businesses to get into e-commerce." To do that, "we need to help their software speak the language of business in a consistent way."
The proposed leveler is BizTalk, a technical framework designed to let businesses communicate and transact with what Mr. Gates called "a single vocabulary for describing business practices."
BizTalk is based on XML, the eXtensible Markup Language. Microsoft is taking something of a proprietary interest in that standard, which has crept into other transaction-related protocols such as OFX, or Open Financial Exchange, which had Microsoft's and others' support for home banking.
Mr. Burnham said XML is the foundation of the entire business and technical platform and indicative of how Microsoft wants to harness the power of the Internet.
"They are using it to pull together all the disparate pieces," he said, and he predicted it will provoke a competitive response from philosophical opponents such as the America Online-Netscape combination and Amazon.com.
Microsoft is supporting its XML thrust with BizTalk Server technology, which in turn is an extension of what many e-commerce companies have come to know in the Site Server Commerce Edition software.
Microsoft's Windows DNA-Distributed interNet Applications-for financial services and other industries would be linked in the "BizTalk schemas." Microsoft would put the technology to use itself in the MSN on-line network, which it hopes will become "the Web's premier marketplace."
MSN is also being enhanced with an on-line comparison shopping system, resulting from the acquisition announced last week of CompareNet Inc., and a one-click, wallet-like purchasing mechanism called Passport, the details on which are still somewhat sketchy.
The aim is to "allow customers to do some of the fastest, smartest shopping they've ever done," while sellers "promote their goods and services, reaching millions of customers with great impact," said Microsoft executive vice president and chief operating officer Bob Herbold.
"The infrastructure will be easily integrated into MSN," Mr. Burnham said. "They are using this to drive their own Internet presence."
Among those first in line for BizTalk is MasterCard International in collaboration with Clarus Corp., its business-to-business purchasing system supplier. MasterCard senior vice president Steve Abrams called it revolutionary.
Within months, MasterCard intends to have a "commercial card gateway" for the Clarus system that "captures line-item detail for reporting to corporations," Mr. Abrams said. "The ability to capture data independent of supplier-so there is no more need for supplier-by-supplier enablement-is something I haven't seen anywhere."
He also praised Microsoft for its emphasis on small businesses. Though not an exclusive one-Microsoft is trying to appeal to all size levels-the small-business part of the effort dovetails with both MasterCard and Visa's strategic emphasis on that fast-growing market for credit and charge cards and related accounting support.
"Front- and back-end integration has been a bugaboo for a lot of people in this field," said Mr. Abrams, and Microsoft is exerting considerable effort to take care of that while hoping much of the business world hops on its bandwagon.
"We will have more to say soon" about Passport, the wallet capability, Mr. Abrams said. "But it is important for enabling small- and midsize- business commerce." For a bank it will be equivalent to "getting the first card into a wallet in the physical world."
A Who's Who of Internet-based marketers and systems companies-1-800- Flowers, Dell Computer, Eddie Bauer, Harbinger Corp., J.D. Edwards & Co., PeopleSoft, SAP, and Sterling Commerce-are among many others doing "early work" with BizTalk, Microsoft said.
The efforts promise to create "business scenarios that are not limited by software or enterprise boundaries," said Hasso Plattner, co-chairman and chief executive officer of SAP, the German software company that has been a longtime Microsoft ally.
"The Internet is bringing self-service to everyone," Mr. Plattner said, "and self-service requires easy-to-use and immediately understood user scenarios that seamlessly integrate different parties' systems into friction-free business processes."
"Microsoft offers the best e-commerce platform for customers and enables us to build a variety of solutions," said David Fry, president of Fry Multimedia Inc., which developed Eddie Bauer Inc.'s Internet site. "Microsoft provides the most comprehensive business and technical resources to help its channel partners succeed." He said his business has grown because demand for Microsoft technology is high.
Phillip Dunkelberger, president and chief operating officer of Vantive Corp., a sales automation company that was among the many firms announcing software integration with Microsoft Site Server 3.0 Commerce Edition, said the connection will "enhance the experience for the growing population of e-customers." Vantive clients "will be able to support the entire customer buying cycle on the Web."
"Microsoft technology is an important component in helping customers realize the true promise of electronic commerce," said Lloyd O'Connor, chief executive officer of Intelisys Electronic Commerce LLC, a Chase Manhattan Corp. affiliate that includes Ford Motor Co. among its purchasing-technology clients. "We can quickly and cost-effectively deploy applications that allow businesses to reap the benefits of on-line procurement."
Mr. Burnham said he needed time to study the potential impact on the many entrepreneurial Internet companies he follows, but said he was awestruck by the vast range of Microsoft's vision-from corporate procurement, to e-mail on the Hotmail platform, to the creation of commerce sites, to electronic data interchange, to the concept of the one-click digital wallet.
"It's impressive-it's really a vast land grab," Mr. Burnham said. "They threw everything in but the kitchen sink."
He described International Business Machines Corp., which competes with its e-business strategy, as "completely outflanked," though other analysts said Microsoft is still playing catch-up.
"The impact of Microsoft's entry into the electronic commerce market could be dramatic," said William Melton, founder and chief executive officer of Cybercash Inc., which has been one of the longest-standing supporters of Site Server Commerce Edition.
"Just as Apple revolutionized the desktop publishing business, Microsoft could help redefine the look of electronic commerce."
Cybercash, which is itself selling wallet software for on-line purchasing, was designated a Microsoft business application partner.
As part of its Complete Commerce initiative, announced in January, Cybercash made it possible for merchants to accept real-time payments through the CashRegister 3 service. The Reston, Va., company also upgraded its payment software for Site Server.
"We look forward to continuing to work with Microsoft on projects that will enhance the future of electronic commerce," Mr. Melton said.
Mr. Abrams of MasterCard said there is nothing mandatory about using Microsoft's technology. But the Clarus E-Procurement system, which MasterCard has credited for cutting the cost of processing a purchase order to $40, from $125, is built on Microsoft Windows NT, SQL Server, and Site Server Commerce Edition.
"We are learning a lot" from the Microsoft connection, Mr. Abrams said, and the prospect of Windows 2000 with the new e-commerce initiatives can "make systems richer and more functional."
Microsoft said it will join MasterCard and Clarus in a marketing campaign, with details to emerge at the GartnerGroup Internet and Electronic Commerce Expo in April and the National Association of Purchasing Management conference in May.
"Corporate purchasing cards have been embraced because they reduce costs and enhance data capture," Mr. Abrams said. "With this program, we will integrate these strengths with the real-time benefits that the Internet provides."
"Our joint customers (have) a unique opportunity to reduce the cost of corporate purchasing while making Internet commerce a strategic asset to their organization," said Rich Tong, vice president of applications marketing at Microsoft.