Now that Microsoft Corp. has quieted a good deal of discontent among financial institutions, it has a lot of restless software vendors' feelings to worry about.
At a recent Microsoft-sponsored conference on Internet-based banking and brokerage initiatives, software people and technology consultants posed the hardest questions and voiced the loudest misgivings about where Microsoft is heading.
One technology company representative, noting that the components of the Microsoft Investor service could now be customized for financial institutions' Web sites, asked: "Given that you are offering content and hosting to banks and brokerages, why should they be thrilled about what we have to offer?"
In other words, Microsoft could be emerging as a competitor of companies it considers partners. Sound familiar?
Currently battling the Department of Justice over whether it is illegally tying its Internet browser to the Windows operating system, Microsoft has been accused before of using monopoly-like strength in one area to catapult into another.
Microsoft has apparently made considerable progress in convincing bankers that it is not trying to muscle them out of their core business. But the financial services projects Microsoft highlighted before an audience of more than 300-split evenly between financial industry practitioners and technology company representatives-went well beyond its major revenue generators-Windows 95 and Office desktop software and Windows NT and Back-Office server software.
Announced or previewed were version 2.0 of the Microsoft Internet Financial Server Tool Kit, familiarly known by its former code-name Marble; the Investor Platform Tool Kit; a real estate Web site named Home Advisor; and a consumer-oriented gateway to the Web called Start.
Also on display were the MSFDC bill payment and presentment system, which is a joint effort with First Data Corp., and the combination of the financial management software Money with its companion Web site, Insider.
Officials of the Redmond, Wash., software giant contend as always that they are not in the business of developing financial software per se.
"We have no intention of getting into these deep vertical areas," said Pete Higgins, group vice president of Microsoft's consumer-oriented interactive media group and a member of the executive committee that reports to chief executive officer Bill Gates.
The company's aim is to create a foundation on which more specialized developers can build applications.
Lewis Levin, general manager of the Microsoft desktop financial division, who reports to Mr. Higgins, put it another way when he said Microsoft believes in "high volume and low cost. When you count the lines of code in Back Office, you'll find it's a screaming deal."
"Microsoft is excellent at doing pilot projects that show people what you can do in an area," said Robert K. Fenstermaker, vice president of business development for Step Technology Inc., a software engineering firm in Portland, Ore.
"It raises the bar, opens up the technology door, and stimulates a whole new segment of the economy and the market," he said. Yet he still worries about how the Investor Platform Tool Kit could affect his financial institution system-integration business.
In the interactive travel area, Microsoft has sold the technology associated with its Expedia site to American Express and several airlines. Now it would do the same with Investor for banks and brokerages.
"Where does the overlap (between stimulating a market and selling actual applications) start and stop?" asked Tripp Johnson, senior vice president of Crestar Financial Corp.
"That is something that all the independent software vendors are looking at, and I think it is a valid concern," said Mr. Johnson, whose banking company relies on home banking software from Microsoft partner Corillian Corp., Beaverton, Ore.
"We like the Marble strategy a lot," said software executive John Backus, president of Intelidata Technologies Corp., Herndon, Va. "For us, Microsoft will do a lot of the heavy lifting" by providing the protocol and connection to computer servers. "It is very complementary to our business."
As a measure of the opportunity, Mr. Backus said, Microsoft charges $9,999 for its Marble package, but Intelidata charges $100,000 for the Interpose financial engine that it builds on top of Marble.
Sending another message about its bank-friendliness, Microsoft is making a small change in its home banking software. Rather than having the customer choose a financial institution from a list, the program establishes its first on-line connection only after the customer types in the name of a bank or other institution.
Likewise, officials said, the Investor Web site will list all the brokers through which on-line trades can be made and information obtained; it will not recommend one over another.
"Banks didn't want to be 'spreadsheeted' in a long list with a big bank on the bottom," said Matt Cone, business development manager at Microsoft, referring to the 175 institutions that offer connections to the Money personal finance software.
Left unsaid was the fact that near the end of an alphabetized list would be Wells Fargo Bank, one of Microsoft's closest banking industry friends.
Microsoft Money's link to Integrion Financial Network warranted a joint announcement by the organizations.
As with Intuit Inc.'s Quicken, which announced a similar agreement in October, customers of banks using Integrion's home banking system will be able to make transactions regardless of the fact that they may subscribe to different technical standards.
The agreement that bridges the gap between Microsoft's OFX (Open Financial Exchange) and Integrion's Gold will tide them over until a fully converged standard is published around August. The convergence agreement was announced this month with the Bankers Roundtable's Banking Industry Technology Secretariat, but that was too late for the next round of software releases.
The two sides are still discussing what to call a combined OFX and Gold. BITS had proposed "Financial Services Exchange," or FSX. But that trademark appears to be taken, said Mack McCauly, a Microsoft product unit manager.
He lightheartedly suggested NCSMCIAMOFXAIFNG, for "New Converged Standard Merging Checkfree, Intuit, and Microsoft's Open Financial Exchange and Integrion Financial Network's Gold."